Irish bank strikes

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pages: 275 words: 84,980

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives) by David Birch

agricultural Revolution, Airbnb, bank run, banks create money, bitcoin, blockchain, Bretton Woods, British Empire, Broken windows theory, Burning Man, capital controls, cashless society, Clayton Christensen, clockwork universe, creative destruction, credit crunch, cross-subsidies, crowdsourcing, cryptocurrency, David Graeber, dematerialisation, Diane Coyle, distributed ledger, double entry bookkeeping, ethereum blockchain, facts on the ground, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, index card, informal economy, Internet of things, invention of the printing press, invention of the telegraph, invention of the telephone, invisible hand, Irish bank strikes, Isaac Newton, Jane Jacobs, Kenneth Rogoff, knowledge economy, Kuwabatake Sanjuro: assassination market, large denomination, M-Pesa, market clearing, market fundamentalism, Marshall McLuhan, Martin Wolf, mobile money, money: store of value / unit of account / medium of exchange, new economy, Northern Rock, Pingit, prediction markets, price stability, QR code, quantitative easing, railway mania, Ralph Waldo Emerson, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social graph, special drawing rights, technoutopianism, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, wage slave, Washington Consensus, wikimedia commons

Debt What did these currencies, from barley to gold and from cocoa to sterling, measure? David Graeber makes a case for a simple answer: debt (Graeber 2011b). He observes that the difficulty in the ‘chartalist’ position (from the Latin charta, or token) is to establish why people would continue to trust a token, rather than a commodity, as society develops and points out that the chartalist version of currency (see the later discussion about the Irish bank strike) means providing sufficient token claims against different commodities, whether those are cocoa beans, sea shells, copper axes or anything else. However, in order to allow everyone even in a medium-sized city to be able to carry out a significant portion of their transactions in such a currency would require millions of tokens and associated guarantees (Graeber 2011b). I should say that while I agree that this would have mitigated against the continued use of tokens in the cities of the pre-industrial and industrial economies, I do not see this as a practical barrier to economic activity in a world of social networks, mobile phones and cryptography, but that is a discussion we will return to later in the book.

Imagine that there was a magnitude 9 earthquake and a tsunami in Woking******** and when I go round to Waitrose to buy some bottled water and rice my John Lewis MasterCard proves useless because the acquiring network is down and the ATM proves useless because the ATM has no power. The store manager at Waitrose can leave the food to rot on the shelves or he can accept a signed IOU. He could accept zero sales because of flaws in the electronic payments system or he could develop a rational fall-back strategy. I discussed this in Identity Is the New Money, with reference back to the already discussed case study of the Irish bank strike. The idea that we must, ultimately, rely on cash because there may be a nuclear war seems out of date. Here’s a quote from an NPR Planet Money podcast on ‘Paper or plastic’: I’m a retail manager. Please, please, please, for the love of god, let cash die already. It’s expensive to store, sort, count, and transport. It goes missing. It falls apart. It sticks together. It slows down the checkout process.

In the interconnected future, however, there is every reason to suspect that the social graph will resume its pre-eminent position since, as I will explore, it is the most trustworthy, reliable aspect of a persona. This is where the link with money begins to take shape. Far-fetched? I don’t think so. In 1696 there was no cash in England with the result that ‘no trade is managed but by trust’ (Levinson 2009). With trust, you don’t need cash, as demonstrated by the example of the Irish bank strikes (see page 108). The economy did not collapse in the absence of cash (which soon ran out), as personal cheques and IOUs provided the circulating means of exchange. There were, at the time, some 12,000 retail shops and (perhaps more importantly) some 11,000 public houses that provided transaction services. As Antoin Murphy’s seminal work on this reports (Murphy 1978): It appears that the managers of these retail outlets and public houses had a high degree of information about their customers – one does not after all serve drink to someone for years without discovering something of his liquid resources.

pages: 357 words: 110,017

Money: The Unauthorized Biography by Felix Martin


bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, call centre, capital asset pricing model, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, creative destruction, credit crunch, David Graeber,, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, fixed income, Fractional reserve banking, full employment, Goldman Sachs: Vampire Squid, Hyman Minsky, inflation targeting, invention of writing, invisible hand, Irish bank strikes, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, mobile money, moral hazard, mortgage debt, new economy, Northern Rock, Occupy movement, Plutocrats, plutocrats, private military company, Republic of Letters, Richard Feynman, Richard Feynman, Robert Shiller, Robert Shiller, Scientific racism, seigniorage, Silicon Valley, smart transportation, South Sea Bubble, supply-chain management, The Wealth of Nations by Adam Smith, too big to fail

Ours will be a mission to recover and analyse not bullion, coins, or the charred remains of tally sticks—or indeed any thing at all—but ideas, practices, and institutions; and, above all, the idea of abstract economic value, the practice of accounting, and the institution of decentralised transferability. As with any excavation, the first question is where to dig. We have seen that if money is indeed the operating system on which we run our societies and economies, the challenge of getting an objective view is an imposing one. Locating a case in which the official monetary system took a holiday, as it did during the Irish bank strike, might have been easy enough; and through it we learned something about the extent to which money really depends upon the state. If we wish to delve more deeply, however, we need to achieve an altogether more radical triangulation: we need to explore a time and a place where money never existed. That may sound like a tall order—but as it happens, we are in luck. Not only do we possess a vivid and detailed description of the age immediately before the invention of money, but that description happens to be contained in two of the greatest poems ever composed.