by Finn Brunton
Charting the precursors to Facebook’s Libra coin
Review by Siddharth Venkataramakrishnan
Wall Street, 1929. Technocrats sought to end volatility in response to the Great Depression, while Extropians believed digital currencies could escape the government panopticon © Getty
Cryptocurrencies — once confined to niche chat rooms — have become a perennial news story, making headlines whenever prices rise. This month that was courtesy of Facebook, which announced plans for a new digital currency called Libra.
The faithful often ascribe almost miraculous qualities to digital currencies. John McAfee, the antivirus software creator and fugitive from the law, declared bitcoin bubbles “mathematically impossible” in 2017 (a year later, the price had fallen by three-quarters). The cultish feeling is heightened by the brand of cant surrounding crypto. Talk of HODLing, Lambos and whales can make forums seem like a foreign country. But the most important tenet for true believers is that fiat cash is on the way out. When it goes, those with cryptocurrencies will be the new elite.
Finn Brunton, an assistant professor at New York University, documents the pre-digital roots of that millenarian monetary theory. His main thesis is that money is a cosmogram: “A model of the universe and a plan for how to organise life and society accordingly.” Our current system of money assumes an “ordinary” future. Alternatives don’t just believe in the collapse of money: they fixate on the imminent collapse of society as we know it.
Despite the book’s subtitle, many of the stories here have been told before. What Brunton does is to draw the links between disparate political movements, united by a desire to form a new money and a new world.
The technocrats of the 1930s called for “autocratic master engineers” and proposed a stable currency tied to units of energy. The cypherpunks, a loose anarchist grouping including author Rudy Rucker and WikiLeaks founder Julian Assange, saw digital money as part of the struggle against state control. The extropians, whose dream of a healthier, smarter humanity seeped into Silicon Valley’s biohacking, also dabbled in online currencies — and they considered returning to the barter system.
These efforts each had elements of idealism, albeit one alloyed with mercenary desires — early adopters would naturally come out on top in the new order. The technocrats sought to end volatility in response to the Great Depression. Extropians and cypherpunks both believed digital currencies could escape the government panopticon. Even cryptocurrencies, at least at the start, were supposed to solve those issues.
Yet all the attempts chronicled ended as failures. Technocracy dwindled to a footnote in history. Philip Salin, a Hayekian ecommerce pioneer, lies cryonically frozen, awaiting a future in which he can be reawakened. The Atlantis project, which tried to create an offshore micronation, collapsed after its members were mistaken for pirates by the Haitian navy. There is an elegiac quality to the book: a history of would-be disrupters ending in obscurity.
Even within this long trail of grand ideas gone wrong, Brunton writes that cryptocurrencies are particularly flawed. He compares the energy-intensive “mining” process to create them to John Maynard Keynes’ tongue-in-cheek proposal to slow the dispersal of money by placing notes in bottles and burying them in mines. Bitcoin reflects “a society that could not figure out what to do with its technological inventiveness . . . except to squander it in creating new kinds of artificial scarcity.”
Libra was unveiled too late for it to be discussed. It is nevertheless striking how far Facebook’s utopian talk of financial inclusion and stability resembles earlier propositions for disrupting the monetary system. Facebook certainly has more financial and political clout than any that came before it, but that does not mean it has the escape velocity to break their cycle. Legislators have made clear their wariness of a system which risks becoming a parallel currency.
Innovative approaches to finance are necessary, not least as new technologies and capacities emerge. The Bank of England’s decision to expand access to its overnight vaults beyond commercial banks is a welcome sign. Brunton makes a convincing argument that for all their hype, cryptocurrencies cannot — and should not — be the future of money.
If history is anything to go by, movements that believe the end of money is nigh tend to end poorly.
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