Before declaring its independence on 9 July 2011, becoming the world’s newest officially recognized nation-state, the Republic of South Sudan chose a flag, an anthem and a currency. Within a week of the secession, the South Sudanese pound was in circulation, bearing the portrait of the dead rebel leader John Garang de Mabior. By September, the currency of neighboring Sudan was no longer considered legal tender.
The Bank of South Sudan didn’t have to print banknotes, let alone pay the South African Mint to mint coins showing themes of national pride, from giraffes to oil tankers. Neighboring Kenya already had years of experience handling payments through a mobile banking system called M-Pesa, and the blockchain had begun to host a range of cryptocurrencies beyond bitcoin. The decision to follow tradition was a political one, equivalent to the choice Eritrea made in 1998, shortly after secession from Ethiopia. Even more than a flag or an anthem, a national currency communicates national identity.
The South Sudanese and Eritrean banknotes are currently housed in the Smithsonian National Museum of American History along with dozens of other coins and coins from around the world and throughout history, in a permanent exhibit aptly named The value of money. Built on solid monetary foundations, the report becomes more relevant with every slide of the economy and free fall of cryptocurrencies. Even more valuable is a new branch opened this year for children coming of age at a time when they may never have to pocket a pound or a penny. Beneath their impressive surface sheen, both reports – and their comprehensive online supplements – implicitly ask what money does when it does not simply quantify an economic transaction.
If cryptography has a premodern origin, it can be traced back to the Western Pacific island of Yap, where large stones have been used in important transactions for centuries. The stones are usually made of imported calcite, carved into a ring and set into the ground. Many are too heavy to lift and never physically change hands. The islanders simply remembered who owned what, a public ledger based on shared trust.
Unlike cryptocurrencies, the Yapese rei has resisted external manipulation. A 19u century, an Irish sailor’s plan to import identical stone rings by ship resulted in an increased quantity with more attention paid to when and how each ray came to the island. Stones that are older and require more effort to insert have a higher value: proof of work before the letter.
Rai would not be viable in a modern global economy given the complexity and number of participants. (Even in Yap, most transactions use US dollars.) However, the rai provides valuable perspective on modern economics because it shows that accountability involves more than accounting. Stones have origins. Each rai is the non-exchangeable product of all previous transactions: a mnemonic device as much as a monetary instrument. The properties that make rai work are anathema to crypto. More than a technical fix, a sociocultural reckoning may be needed to make cryptocurrencies stable.
Even more profoundly, technological gimmicks make transactions frictionless can undermine the economy. Despite the obvious inconvenience of cash – and the ease of exchanging bits – the value of money must be understood as more than just a transaction. Throughout history, money has been a form of communication with multiple layers of meaning. From the ancient market to the Mall of America, the market is a forum for ideas.
Some of the earliest money was minted in China, where coins were cast in the shape of tools such as clubs and knives. Inherently useless, these symbolic objects recalled real tools with real utilitarian value, objects traditionally traded for animals and land. The change to a fantastic version in 7u century BC it increased trade by easing trade – that is, friction reduced the load in a flash – but these coins reminded people in every trade that money was merely symbolic. Knife-and-shovel money, well represented in the Smithsonian collection, has arguably faced the removal of wealth and the consequent distortion of values.
In the Near East, money evolved independently, following a completely different trajectory. Around the same time that China was casting miniature tools in bronze, the kingdom of Lydia (located in modern Turkey) began minting coins in a natural alloy of silver and gold. Previously, most transactions in the region involved the exchange of gold, which required weighing and determination at each exchange. With the stater and its fractions – soon struck in pure gold or silver rather than an alloy of electrum – Lydia standardized monetary units while attesting to authenticity.
Lydia was defeated by the Achaemenid Empire in 547 BC. Learning metallurgy and coinage from their new subjects, the Achaemenid kings began issuing their own coins in precious metals with a difference in marking: Unlike the lions and bulls that adorned the Lydian staters, the new sigils depicted the monarch, depicting him as a kneeling archer. with a drawn bow. Wherever Achaemenid coinage spread, it carried an implicit threat of colonization.
Since then, most coins have been minted with subjects ranging from political propaganda to visions of the future. The value of money includes an Athenian tetradrachm, which became the de facto currency throughout most of ancient Greece in the 4thu century BC, radiating the prestige of the city and spreading the glory of its patron deity with an impressive portrait of a helmeted Athena. The exhibit also includes a colonial US cent from 1786 that prominently displays the Latin motto E Pluribus Unum (“Out of Many, One”), reinforcing the call for common purpose articulated by the Founding Fathers. And a map of Europe appears on a euro coin dating from the year 2000, charting an alliance that was still in the making, implicitly seeking to link the continent economically.
There is a danger of overestimating the rhetorical power of money. This becomes particularly evident when money must stand by itself, without intrinsic value. China secured currency acceptance and pioneered paper money through the power and discipline of a central government. For a long time, the United States and European nations imbued paper with the spirit of precious metals, officially guaranteeing the redemption of gold notes and pounds sterling for cut gold bullion. But as Germany found in the early 1920s, no amount of formality or fancy engraving can counter people’s mistrust. Within a few years, hyperinflation added so many zeros to the German mark that stacks of trillions of marks had to be wheeled into the market on a wheelbarrow.
Although not as extreme, inflation has also hit the South Sudanese pound and other newer currencies such as the Venezuelan bolivar. In the case of the latter, the Smithsonian shows how artists have used the colorful money as raw materials for origami sculptures that can sell for far more than their face value.
As charming as it is, the origami bolivar turns the currency’s rhetorical power against itself, undermining national dignity far more effectively than a burning flag or an anthem sung out of key. When the currency is eviscerated or debased by the people, the nation’s values are subject to renegotiation.
The physical properties of money always convey meaning, whether that is what the issuing authority intended or not. Because meaning is manifested in every transaction, every transaction is a mode of interaction. Even more than the friction that gives pause for reflection, the exchange of ideas may be the biggest value of money and the most significant loss that we can face if the world succumbs to cryptocurrencies or even turns to Apple Pay.
Far from obsolete, money is an ideal platform for social progress and economic innovation. Money can refocus national identity through the images it portrays. Heads turned from the dollar coin with Sacagawea. The proposed Harriet Tubman $20 bill promises to make an even deeper impression, as Tubman’s face will replace Andrew Jackson’s.
The form money takes also has the potential to affect the terms of trade. Imagine a coin with a mirror finish, facing the spender with a reflection of their facial expression. (Would it make people more honest?) Imagine a bill printed with an optical illusion that makes it look more impressive to the recipient than to the giver. (Would people become more generous?) The ergonomics of money can be shaped to influence spending habits. Alloys can be modified to remember how transactions are handled.
One of the more modest coins in the Smithsonian exhibit is a fine silver denarius dating from the year 46 BC. On the obverse is a portrait of the goddess Juno Moneta, in whose temple money was struck (and whose name is the etymological root of money). The back, not visible in the exhibition or on the website, shows the tools used in the cutting process – tongs to remove molten metal from the furnace and a hammer to strike a pattern into it – effectively demystifying the process by which money is created. Juno may be supernatural, but making money isn’t magic.
Over two millennia after it was struck, the honesty of this dinar remains unsurpassed, in stark contrast to the cryptic ways of encryption. In our fragile economy, short-term planning for future money can start by asking for money to explain itself. Until that happens, we’ll have to collect what we can from the Smithsonian’s numismatic galleries.