You gotta have cash even in the future, otherwise you can't buy anything. Utopian socialist paradises excluded of course.

Traditionally, the unit of currency in science fictional futures is called the "credit". This is the futuristic equivalent of a dollar, Euro, or whatever. Using metric, one megacredit is a cool million credits.

And there are a few examples of science fictional socialist utopias where money is obsolete, e.g., Star Trek. Good luck with that.

You can find an amusing list of the names of various fictional currencies here

  • In SPI's RPG Universe and Star Trader, the unit of currency was the "Tran" or "transaction", where 1 Tran was equal to about $500.

  • SPI's Star Force had "LaborCredits".

  • In Karl Gallagher's Torchship the unit of currency is called Keynes or "Keys", named after Keynesian Economics.

  • In Philip E. High's The Prodigal Sun money was literally hours of work.

  • EVE Online has a little more complex a take on things. The currency, known as ISK (Inter-Stellar Kredits), is not so much a global currency as it is a global exchange currency. Planetary economies and sometimes individual planetary nations almost all have their own currencies, ISK was merely setup as an exchange medium to manage the obscene amounts of money being used at the interstellar level

  • In the Micronauts series of comic books, the evil Baron Karza has a monopoly on lifespan prolongation technology (the "Body Banks"). He issues his own currency called "Life Credits", with which a person can purchase extended lifespan. The underclass waste all their credits in gambling institutions, and can sell personal organs and other body parts in exchange for more life credits. The aristocracy is firmly under control of Karza, since they know he literally has the power of life or death over them.

  • In The Great Explosion by Eric Frank Russell, the planet K22g is a post-money utopian society, but they still have a medium of exchange. They use favor-exchange based on "obs" (obligations). This might explain the value of the poker chips you see in all those Star Trek poker games.

  • In John Morressy's Del Whitby series, the unit of currency was the cash-cube. These were cubical coins of precious metal which would stack into neat rectilinear piles.

  • In Diane Duane's My Enemy, My Ally, the Romulan's currency is in the form of chains of precious metal.

  • In John Brunner's Intersellar Empire series, the currency is in the form of rings of preciouis metal.

  • In Frank Herbert's novel DUNE, the Fremen's currency is based on liters of water, symbolized by metal rings. They tie the rings in strips of cloth so as to not make noise when they are sneaking up on an enemy.

  • In the Battletech universe, a common unit of currency was the C-Bill, redeemable for a certain amount of data transmission on Comstar's FTL communications network.

  • In the simulation game High Frontier, the unit of currency is "the most valuable thing in the universe", namely water. Water can be used for reaction mass, as a source of hydrogen and oxygen, radiation shielding, and a host of other uses. The unit is a 40 metric ton tank.

  • In Kim Stanley Robinson's Red Mars Trilogy, calories of heat were used as the basis of the Martian economy.

  • I am somewhat dubious about the Quasi Universal Intergalactic Denomination. Apparently it is intended to be safe in the space environment and will survive the space environment. This means it is constructed out of a space-qualified polymer, emit no toxic fumes, has no sharp edged, be resistant to high temperatures, and not use a magnetic strip like a credit card since cosmic radiation will render them inoperative.

  • Of course nowadays most people use credit cards and PayPal.


Money Functions

Money has four functions:

  • Medium Of Exchange: a way to avoid the double coincidence of wants problem inherent in the barter system. Or "he wants two coconuts for that shirt but all I got is this mango."

  • Common Measure Of Value (or Unit Of Account): a way to set a standard price tag on market value of goods, services, and other transactions. This is essential to allow commercial agreements that involve debt. The loan officer ain't gonna give you a loan for that used car if you are using the barter system. It is too hard to figure the car's value in tiger-skins.

  • Standard Of Value (or Standard Of Deferred Payment): using money to settle a debt sometime in the future. As Wimpey says "I'll gladly pay you Tuesday for a hamburger today"

  • Store Of Value: So you can bank your money, with the expectation that when you withdraw the money it is still worth something. This doesn't work with the Banana Standard, put a banana in a bank box and you will be dismayed to find in a few years it has turned into worthless moldy goo.

Medium of Exchange

Note that while Planet A and Planet B may both internally use a barter system instead of money, they might use arbitrary money (a nonstandard medium of exchange) when trading between each other. Using a medium of exchange avoids the problem of ensuring there is a double coincidence of wants, which is a problem inherent in the barter system.


Floyd the guitar player lives in a culture that uses barter. At his job at the local bar, he is paid with booze and food. Unfortunately Floyd's landlord will not accept booze and food for the rent. In this case there is no coincidence of wants: Floyd wants his apartment for the month but the landlord does NOT want booze and food. However, in that happy double coincidence of wants, if Floyd's landlord happened to be throwing a party and wanted some guitar music, and Floyd wanted his apartment for the month, the barter system works.

The point is that a double coincidence of wants does not happen very often, which makes the barter system rather awkward and impractical. If however you create some arbitrary money-like medium of exchange, you can avoid the whole mess. It also avoids the problem of when one of the things you are bartering has a shelf-life or is seasonal.

Sometimes you will see traders using Trade Tokens. These are basically money that is not issued by a government, but instead by a private company, group, association or individual. From the 17th to the early 19th century these were used by merchants because the local government was not up to the task of issuing enough coins to allow business to operate. Nowadays you generally see them in the form of casino chips, in video arcades, and car washes. But a hypothetical interstellar trading company might issue their own trade tokens if there were no local government in the trade area, or at least one single government recognized by all the trade planets.

And scrip is an even more localized form of trade tokens. You often see this in old time mining or logging camps. The employees were not paid in money, but instead in company scrip. The company scrip could only be spent in the company store. Due to this Truck system, the employees more often than not wound up owing their soul to the company store.

Historically coins were disc shaped because that's what you get when you roll out a measured ball of precious metal and flatten it with a stamp bearing the King's face. They are also convenient to carry, especially if they have a hole in the middle for stringing. You should mill the edges to prevent crooks from engaging in the crime of coin clipping (this does little to stop the crime of "sweating" coins). Though nowadays most US coins are composed of such worthless metal that the milling is purely decorative or as a aid to the visually handicapped.

Gold coins are generally composed of a gold alloy (Coinage Gold) because pure gold is too soft to hold up to the stress of being used as a coin (and makes it too easy for criminals to clip or sweat the coins). In modern times, a popular popular choice for silver-colored coins is the alloy cupronickel, due to its corrosion resistance, electrical conductivity, durability, malleability, low allergy risk, ease of stamping (metalworking), antimicrobial properties and recyclability.

In low-tech places, coins are manufactured by hammering or casting. In more modern-day tech settings, coins are machine-struck. In futuristic data-driven societies, physical coins are obsolete and instead virtual coins are used. Indeed, as previously mentioned, physical money may actually be illegal since the Police State cannot trace physical money transactions.

In medieval times there were so many currencies that merchants had to carry coin pan balances in order to determine the worth of a given coin.


(ed note: In the comedic medieval fantasy world of Terry Pratchett's Discworld, Sergeant Colon enlists new recruits for the Ankh-Morpork city guard. If you are not a craftsperson, a sequin is commonly 9 millimeters in diameter. Apparently the Ankh-Morpork government is on the gold standard, and has massively debased the coins.)

'Now, they've got to take the King's Shilling,' said Corporal Carrot.

'Right. Yes. OK.' Colon fished in his pocket, and took out three sequin-sized Ankh-Morpork dollars, which had about the gold content of seawater. He tossed them one at a time to the recruits.

'This is called the King's Shilling,' he said, glancing at Carrot. 'Dunno why. You gotta get give it when you join. Regulations, see. Shows you've joined.'

From MEN AT ARMS by Terry Pratchett (1993)

Monetary System

There are three basic monetary systems:

  • Commodity money: The currency is physical lumps of something valuable, e.g., solid coinage gold coins.

  • Representative or Commodity-backed money: The currency is paper bills or worthless coins that are backed by stores of something valuable in the treasury. Example: the Gold standard. Paper gold certificates can only be printed by the treasury up to the amount of gold in their vaults. Most nations on Terra abandoned the gold standard during the 20th century due to the inherent problems. Most current economists are not in favor of a return to the gold standard, and all efforts in the US to legislate such a return have failed.

  • Fiat money: when the paper bills have value because the issuing government says so. Most modern governments use fiat money because it allows flexibility during a financial crisis. It allows the government to adopt an expansionary monetary policy aka "printing money".

Unless all the planets you trade with are members of the same interstellar government, or there exists some sort of interstellar money-changing organization, the money used on one planet is worthless on another planet.

If you have a group of planets that share a common currency, for the planets sake it is vitally important that they share a common fiscal policy. The ongoing Eurozone crisis has been made much worse by the fact that while the Eurozone has monetary union (i.e., one currency, the Euro) it does not have fiscal union (e.g., different tax and public pension rules). This ties the hands of European leaders, making the crisis almost impossible to solve. When the Eurozone was proposed, the various nations were persuaded to surrender their currency, but reluctant to surrender control of their fiscal policy (give up their national sovereignty? Never!). The proponents figured to get around the problem by doing the Eurozone union in two stages, which in retrospect was an insanely bad decision.


Many assume that before currency existed, people would trade goods through a barter system. This idea was created by 18th century Europeans hypothesizing about how markets worked before a state regulated currency. But in reality, we have no historic or anthropological evidence that this ever occurred. None at all, even in isolated societies that don’t have money for their internal exchanges.

Let’s think about it for a minute. If you make hats for a living, you need to barter your hats for food. But if you’re a skilled haberdasher, making a quality hat will take you a day or two and use lots of materials. To survive, you need to find someone who doesn’t already have a hat and is willing to trade you several days worth of food for it. And it better be something that won’t spoil, since you can’t trade part of a hat for a single meal.

To make another hat, you need to find a cloth maker that either doesn’t have one of your hats or is well off enough to collect them. Once you’ve made hats for all of your suppliers, you’ll need to start making your own cloth and hat pins, etc. That means making a hat takes even more time. A haberdasher’s trip to the market soon looks like a run to CostCo!

As we can see, barter is impractical for supporting any degree of workforce specialization. Maybe you could make it work for absurdist fiction held together by logic similar to Terry Prachett’s Disc World. But the rest of us need something a bit more practical.

Small Communities and Mutual Obligations

Once we leave the imagination of Enlightenment thinkers and enter the real world, we see a few different stages of development for economic exchanges. On the smallest scale, we have systems of mutual debts. My hunting went poorly one day, so you share some fish with me. On another day fishing is scarce, so I share part of a deer with you.

This is often called an egalitarian society, characterized as not having individual ownership. When you look below the surface, however, you find it is a series of mutual obligations. If I’ve received help from you in the past, I am obligated to return the favor when you need it, and vice-versa.

The process starts because friends and family are reluctant to let each other die of hunger. Once this system of mutual debts takes root, the threat of ostracization perpetuates it. If everyone in your small community knows that you don’t fulfill your obligations, they won’t be willing to help you.

Trade and Accounting of Debts

An economic system of obligations requires a level of trust that is difficult to maintain on a larger scale. If a merchant trades with a large number of people on a frequent basis, they won’t trust everyone to repay informal obligations. To overcome this obstacle, people created ways of accounting for the value of goods and debts owed.

The concept of monetary value was introduced through units of standard goods. In ancient Sumeria, long before the shekel was a minted silver coin, it represented a weight of grain. As an early agricultural society, taxes collected from farmers and wages paid to workers were in grain. Shortly thereafter, the value of goods was priced in accordance to those payments. If one shekel was about 10 grams of barely, then an item priced at 100 shekels was worth one kilo of barley.

While goods were priced and some physical objects like coins may have circulated, the primary currency was credit. I owe you for the hat you made; you owe me for some eggs and milk, etc. Debts were recorded as a value tied to a commodity such as grain. Your trustworthiness was measured by your ability to repay your debts in a timely manner, rather than your willingness to share when your neighbors were in need.

This system for converting value helped traders make large one-time exchanges of goods. This was especially convenient for the farmers that actually grew the grain! But since exchange was based on credit, trust was still essential, and debts were still tied to the idea of personal obligations.

Normalizing Physical Money

Money as we know it comes into play when there is a state. If you are the head of an early state, the most important resource is still food. You can pay your soldiers in grains, or you can make coins out of available metals. Declare a measure of this coin as equal to a shekel of barley, and you have currency. As an all powerful head of state, your people understand your credit is good and accept the coinage as payment from soldiers and other workers. They know that they can go redeem the coin for grains to eat.

It’s still all about trust, but so long as trust in the state’s ability to repay coinage is preserved, people accept the currency. Personal obligation and virtual credit diminish significantly. If I don’t know you well, I can simply demand coinage, in which case I am taking the credit of the state instead of gambling on the trustworthiness of your credit. Building relationships becomes unnecessary as long as everyone has currency backed by the state. The relationships and obligations between you and I are replaced with relationships and obligations between you and the state. As a result, large scale markets can form and trade takes off.


(ed note: this is from a satirical fantasy novel by Terry Pratchett. It is about microscopic people who live among the threads of a living-room carpet. The Dumii are like the imperial Romans, their capital city is "Ware." Pismire is a philosopher.)

Outside it, separated by a wall of sharpened hair stakes, was Merchants’ Ware, the city most people thought of as the real city. Normally its narrow streets were crowded with stalls, and people from all over the Carpet. They’d all be trying to cheat one another in that open-and-above-board way known as ‘doing business’. All sorts of languages could be heard, often very loudly. Ware was where people came to trade.

The Dumii had built their Empire with swords, but they kept it with money. They’d invented money. Before money, people had bought things with cows and pigs, which were not very efficient for the purpose because you had to feed them and keep them safe all the time and sometimes they died. And suddenly the Dumii turned up with this money stuff, which was small and easy to keep and you could hide it in a sock under the mattress, which hardly ever worked with cows and pigs. And it could be cows or pigs. Also, it had little pictures of Emperors and things on it, which were interesting to look at. At least, more interesting than cows and pigs.

And, Pismire had once said, that was how the Dumii kept their Empire. Because once you started using Dumii money, which was so easy and convenient and didn’t moo all night, you started saving up for things, and selling things in the nearest market town, and settling down, and not hitting neighbouring tribes as often as you used to. And you could buy things in the markets that you’d never seen before — coloured cloth, and different kinds of fruit, and books. Pretty soon, you were doing things the Dumii way, because it made life better. Oh, you went on about how much better life was in the old days, before there was all this money and peacefulness around, and how much more enjoyable things were when people used to get heavily-armed in the evenings and go out and make their own entertainment — but no-one was anxious actually to go back there.

Economic imperialism!” Pismire had once said, picking up a handful of coins. “A marvellous idea. So neat and simple. Once you set it going, it works all by itself. You see, it’s the Emperor who guarantees that the money will buy you things. Every time someone hands over or accepts one of these coins, it’s a little soldier defending the Empire. Amazing!”

No-one understood a word of what he meant, but they could see he thought it was important.

From THE CARPET PEOPLE by Terry Pratchett (1992)

In north-western Turkey, not far inland from the Aegean Sea, stands a mountain known in ancient times as Mount Tmolus, from which two rivers fall, one the Pactolus, the other the Hermus. Several factors combine to make these two rivers important in history. The gradient they follow is shallow, so they flow slowly; as they cross the coastal plain they fan wide and smooth, carrying loads of deposit brought down from Tmolus in the form of fine grains of soil mixed with gold, which are winnowed from the slopes of the mountain by the action of wind and temperature change, and washed away by the waters. According to the Greek historian Herodotus, writing in the fourth century B.C., these two rivers had for centuries been known as the richest source of panned gold in the world. Two thousand seven hundred years ago they lay within the boundaries of the kingdom of Lydia, and in one of them some unknown prospector, probably in the employ of the king, made one of the most fundamental discoveries in the history of mankind.

At the time, the standard method for retrieving and smelting the gold dust was through the use of sheepskins. The grease in the skins would trap the tiny particles of gold, and when the skin was fully laden it would be hung on a branch to dry, then thrown into a furnace where the heat would incinerate the animal material, leaving the gold lying in blobs among the fine ashes. It may have been this use of the sheepskin that gave rise to the myth of the Golden Fleece sought by Jason and his Argonauts. Be that as it may, the gold blobs were melted into blocks, or ingots; in this form they were used as a replacement for goods and as payment for services — a practice which goes back as far as the third millennium B.C. in Mesopotamia and Egypt, where the value of the ingot of gold (or copper, or silver) was determined by weight. The limitations of such a system are obvious. The ingots were bulky and difficult to transport. They could only be used for payment on a large scale such as took place between one state and another, or for settling accounts with mercenaries at the end of their period of service.

The discovery made by the man panning for gold in the Pactolus changed things at a stroke. Apart from fine grains of gold, the river also contains small, flat pieces of a flinty stone, black in colour, whose proper geological name is schist. The first reference to the use of schist is by Herodotus, who says that the Lydians cut the top surface of the stone flat, leaving it matt. If gold were rubbed on this matt surface it would make scratch marks. Pure gold would leave yellow marks, gold mixed with silver, white ones, and gold mixed with copper, red marks. The stone could thus be used to assay the quality of the gold, and its common name has passed into our language as a metaphor for evaluation: the touchstone.

The effect of this accidental discovery, made some time in the eighth century B.C., was to be immense. It gave the rulers of Lydia, probably starting with King Gyges (685 B.C.), the ability to ensure a standard quality to their precious metal, for the touchstone shows to even the most inexperienced eye a difference in quality of the smallest percentage. It had been the custom for centuries in the Babylonian and Egyptian empires to stamp ingots with some mark giving authority to the value of the metal, although such marks did not necessarily make the ingots more freely exchangeable, since they probably meant no more than that the man who issued the ingot would accept it back at the same value for which he had offered it in the first place. However, with standard quality metal made possible by the touchstone, and forgery easily detected by the same stone, the mark of the king's mint was now evidence of purity, weight and acceptability.

The need for smaller units of exchange took matters a step forward with the production of the Western world's first coin, the Lydian stater. Within a hundred years a set of coins, each one a fraction of the stater, had been issued. When Croesus of Lydia introduced the first standard imperial coinage in 550 B.C. Lydian money was already known for its high and unchanging standard. Other cities and states followed: Miletus, Phocaea, Cyzicus, Mitylene and Ephesus each founded official mints, and gradually their money began to be used and accepted outside the bounds of their own market-places, as monetary unions, like that between Lydia and Mitylene, were established. By the time of the Athenian Empire, in the fifth century B.C., money from Athens was accepted in most parts of the eastern Mediterranean.

As the use of coinage spread, it had two fundamental effects. The first was political: money issued by a central mint had a unifying effect on the users. The mark of the government on the coin was present in every transaction. Its presence defined the boundaries of governmental authority, and its value mirrored the health of the economy and the political stability of the country. The second effect of coinage was a consequence of the first. As the states developed and prospered, trade between them increased, and the use of coinage permitted more selective buying and selling of more diverse cargoes. Markets became more varied, and more widely scattered. It could be said that the introduction of the Lydian stater triggered the growth of trade in the Mediterranean because coinage made possible much more flexible trading methods.

From CONNECTIONS by James Burke (1978)

There is an old Streinveldtian fable about a man who tried to trick Toke, the death-god. The man demanded one million credits worth of precious metals. Toke gave it to him — all in one piece, a massive mountain of glittering brilliance.

At first the man was delighted, he danced in happy circles around his towering treasure; all too soon, however, he realized what a terrible trick Toke had played on him. This solid boulder of copper and silver and gold was too big for him to move — but he couldn’t leave it where it was. He didn’t dare leave it alone long enough to go after the tools necessary to break the metal into smaller pieces; somebody else might come along and discover it. He might come back to find others hammering and chopping and picking away at his fortune; he had no way to prove that this mountain of metal was actually his. But he couldn’t stand there with it and guard it forever —

At last, in krieing frustration, he summoned Toke again and demanded that the death god take away this cursed burden and instead give it to him in a form that he could carry. Toke smiled and snapped his fingers. The looming fortune vanished. In its place was a million-credit note.

That should have pleased the man — but it didn’t. He had his fortune concentrated all in a single scrap of paper; but now there was no way for him to spend it.

Who could change a million-credit note? If he took it to a bank, they might take it away from him; he still had no way to prove that it was his. That the treasure was now in such a portable form made it even easier to steal than the mountain of gold.

He summoned Toke again. This time, the man demanded that the money be both portable and definitely identifiable as belonging to him. Toke took back the million-credit note; he smiled, sat down, and wrote out a check for the same sum. At last the man was pleased —

— until he tried to cash it. Have you ever tried to cash a check signed by Toke, the death god?

From SPACE SKIMMER by David Gerrold (1972)

“This is where we begin.” Relling pointed to a small box-like device attached to the far side of the table. “Most of this will be more or less familiar. Pick up the printed menu, select your dish, note the number of your selection and dial it—simple enough. The meal will come up through the delivery chute in the centre of the table.” Relling paused and beckoned him closer. “Now we come to the tricky part. Having selected our meal, the device expects us to pay for it and will not serve the meal until we do. Right. Now, on top of this box you will note the following—a calibrated dial with a double set of figures, a small slot for an economic key and three blank dials. The first blank dial is marked STANDARD CHARGES that will show the cost of the meal; the second is marked BALANCE—which is obvious; and the third, ADJUSTED BALANCE, will be made plain when I pay for the meal. Now watch.” He leaned forward and inserted his economic key into the small slot and immediately the three dials lit. The dial marked STANDARD CHARGE showed 4.07 and the second dial marked BALANCE showed 6y-282d-19.08.

Relling smiled. “Yes, it looks confusing but really it is quite simple. Our economic system is based on a time/work unit system. The cost of the meal is 4.07 while my credit balance at the bank is 6 years, 282 days and 19.08 hours. Follow? I then set the pointers on this calibrated dial to the cost of the meal or the figures under STANDARD CHARGE, which act gives the bank authority to deduct that amount from my credit balance, as you will see Look”

Gaynor saw the dial marked ADJUSTED BALANCE suddenly display the figures: 6y-282d-15.01.

“Simple, isn’t it?” Relling withdrew his key. “Now let’s sit down and enjoy this meal while it’s hot—you can ask questions as we eat.”

Gaynor had so many questions that he never remembered the substance of the meal.

“What’s to stop me using your key?”

“Each key is exactly tuned to the personality of the owner. Use mine and your order will not only be rejected but the device will call the police.”

“I could hold a gun to your head while you used it.”

Relling grinned. “All these mechanisms incorporate an hysteria index of acute sensitivity. You’d still get a rejection—and the police. Sorry, Gaynor. We have all the answers—you can’t beat this thing. All these devices are hooked to the Robotic Bank, which retains and records the entire credit of every individual in the community. You go to work, you clock in and immediately the Robotic Bank begins ticking in your credit until such a time as you clock out. All the time you are working you are adding to your abstract credit balance, a balance which can never be lost or stolen.”

Relling pushed aside his empty plate. “You’ll find work rates only mildly confusing. For instance, the publishing houses offer you this reporting job at rates of six-to-one or, more aptly, six hours’ pay for one hours work—which, if not riches, brings near-affluence.”

From THE PRODIGAL SUN by Philip E. High (1964)

(ed note: ecu is economic-indexed credit unit. Sort of a futuristic Euro)

     Cantrell leaned forward at his desk to examine the plaster models that would eventually be reproduced an order of magnitude smaller as the one-, five-, and ten-ecu pieces issued by the Bank of Rosinante.
     "The bas relief of the Rosinante, Inc., logo is fine for the tails of all three coins—"
     "Reverse,” said Mordecai Rubenstein.
     "Whatever,” agreed Cantrell. “But it will do anyway. For the heads, the obverse if you insist, Galileo is fine for the one ecu, and Newton is excellent for the five, but I don't like the right profile of Einstein on the ten. Could you give me a full face, perhaps?"
     "You had remarked that you liked the Karsh portrait,” Mordecai said, reaching into his case to remove another plaster model, “but for coins, the profile is really the best. This is the Karsh Einstein, done in maximum relief. Beautiful, but look at the hologram in coin size.” He banded over a hologram showing the two Einstein coins, full face and right profile, side by side. Cantrell studied them for a while, and set them aside.
     "I see what you mean,” he conceded. “We'll go with the right profile."
     "Why is there a wreath of thirteen stars around the heads?” asked Marian.
     "For the six purlins, four caps, two sides, and one asteroid of Mundito Rosinante,” replied Mordecai, grinning. “I'm not one to be sentimental about the old regime, ma'am."
     "Of course not, Mordecai,” she said, “but coins travel, and we wouldn't want to give anyone the wrong impression, would we?"
     "What do you suggest?” asked the old machinist.
     "Your designs are very handsome,” said Cantrell. “Why not use the astronomical signs for the seven planets, separated by the six stars, as the wreath? That way you minimize the design change, and avoid using the thirteen stars of the old regime."

(ed note: the "old regime" is the former United States of America. Symbols of the regime, such as thirteen stars, are politically explosive.)

     “The coins. Do you want them in the NAU cupronickel sandwich?"

(ed note: cupronickel is a popular choice for silver-colored coins, due to its corrosion resistance, electrical conductivity, durability, malleability, low allergy risk, ease of stamping (metalworking), antimicrobial properties and recyclability)

     "No,” said Cantrell, “use pure nickel. The stuff is for local use only, and the less it looks like real money, the better."
     "Good enough,” agreed the old machinist. “A nickel coin is a lot prettier. Do you want to check the final designs?"
     "No, I trust your good taste. Oh, and look — take off that motto, ‘In God We Trust.’ Put on something like 'Fiat Lucre,' ‘Let There Be Money,’ instead."

From THE REVOLUTION FROM ROSINANTE by Alexis Gilliand (1980)

     “Meanwhile, we're going to need money, no matter what we decide. Set up a mint to run off that stash of bullion Vong turned in. Coinage gold, ten-percent copper, with one ounce of fine gold per coin.” He hesitated a moment. “Use the Rosinante logo on the reverse, milled edges, of course."

(ed note: Coinage gold is a gold alloy. It is used because pure gold is too soft to use as a coin.)

     "What do you want on the obverse?” Rubenstein asked. “A dead politician?"
     "No,” said Cantrell. “They turned up a bronze of Ceres in the Aegean Sea recently."

(ed note: the gold bullion was obtained from the mines of the asteroid Ceres)

     "A few kilometers north of Melos,” Skaskash said. “The Greek and Italian governments are arguing over who it belongs to. We have a holograph on file, at the request of Mr. Bogdanovitch."
     "The Ceres de Milo?” asked Rubenstein. “That would be good—hell, that would be outstanding. The right profile with the wreath of grain. I'll have the plaster mockup ready in a couple or three days. Do you still want the ‘Fiat Lucre’ motto on it?"
     "'Let there be money'?” Cantrell grinned. “Why not?"

     "You were cool to the idea of coining gold when I suggested it,” she said. “What made you change your mind?"
     "Maybe the Ceres de Milo,” said Cantrell. “That is one great head, and the name ‘Ceres d'Or’ is pure magic.”

(ed note: d'Or means Gold)

     "Why not put the bars of gold in the vault and issue paper and plastic like civilized people?” he asked.
     "Charles, Charles.” Marian shook her head. “We are in such trouble that I can't even worry about it any more. Who in hell would be dumb enough to take our paper?"
     "The militia, the union, the fleet...” Cantrell looked blank. “We haven't had any trouble."
     "Our citizens take our paper because they don't have any choice,” Marian said. “It buys what they need, and for the future, they hope for the best. But the Japanese from Yamamoto-Ceres I, for instance. What can they do with it? We want them to work for us, but they must figure that we are only temporary. So we mint gold coin to pay them with. It may be awkward, but that's their problem."
     "Right,” Cantrell said. “They have banks to stash it in."
     "Are you going to do something about the banks?” Skaskash asked. “They are part of the Japanese establishment, after all."
     "I'm going to leave them the hell alone.” Cantrell took a sip of coffee. “Maybe deposit a million or two ounces of gold bullion so they can issue some of our paper for us."

From THE PIRATES OF ROSINANTE by Alexis Gilliland (1982)

     Having made this mental calculation, I knew that my weight, being 150 pounds on the earth, should on this asteroid be an ounce and a half.
     Curious to see whether fact would bear out theory, I had myself weighed with a spring balance. Mr. Edison, Lord Kelvin and the other distinguished scientists stood by watching the operation with great interest.
     To our complete surprise, my weight, instead of coming out an ounce and a half, as it should have done, on the supposition that the mean density of the asteroid resembled that of the earth—a very liberal supposition on the side of the asteroid, by the way—actually came out five ounces and a quarter!
     "What in the world makes me so heavy?" I asked.
     "Yes, indeed, what an elephant you have become," said Mr. Edison.
     Lord Kelvin screwed his eyeglass in his eye, and carefully inspected the balance.
     "It's quite right," he said. "You do indeed weigh five ounces and a quarter. Too much; altogether too much," he added. "You shouldn't do it, you know."
     "Perhaps the fault is in the asteroid," suggested Professor Sylvanus P. Thompson.
     "Quite so," exclaimed Lord Kelvin, a look of sudden comprehension overspreading his features. "No doubt it is the internal constitution of the asteroid which is the cause of the anomaly. We must look into that. Let me see? This gentleman's weight is three and one-half times as great as it ought to be. What element is there whose density exceeds the mean density of the earth in about that proportion?"
     "Gold," exclaimed one of the party.
     For a moment we were startled beyond expression. The truth had flashed upon us.
     This must be a golden planet—this little asteroid. If it were not composed internally of gold it could never have made me weigh three times more than I ought to weigh.

     Mr. Edison suddenly turned the current of talk.
     "What do you suppose those Martians were doing here?"
     "Why, they were wrecked here."
     "Not a bit of it," said Mr. Edison. "According to your own showing they could not have been wrecked here. This planet hasn't gravitation enough to wreck them by a fall, and besides I have been looking at their machines and I know there has been a fight."
     "A fight?" exclaimed several, pricking up their ears.
     "Yes," said Mr. Edison; "those machines bear the marks of the lightning of the Martians. They have been disabled, but they are made of some metal or some alloy of metals unknown to me, and consequently they have withstood the destructive force applied to them, as our electric ships were unable to withstand it. It is perfectly plain to me that they have been disabled in a battle. The Martians must have been fighting among themselves."
     "About the gold!" exclaimed one.
     "Of course. What else was there to fight about?"
     At this instant one of our men came running from a considerable distance, waving his arms excitedly, but unable to give voice to his story, in the inappreciable atmosphere of the asteroid, until he had come up and made telephonic connection with us.
     "There is a lot of dead Martians over there," he said. "They've been cleaning one another out."
     "That's it," said Mr. Edison. "I knew it when I saw the condition of those machines."
     "Then this is not a wrecked expedition, directed against the earth?"
     "Not at all."
     "This must be the great gold mine of Mars," said the president of an Australian mining company, opening both his eyes and his mouth as he spoke.
     "Yes, evidently that's it. Here's where they come to get their wealth."
     "And this," I said, "must be their harvest time. You notice that this asteroid, being several million miles nearer to the sun than Mars is, must have an appreciably shorter period of revolution. When it is in conjunction with Mars, or nearly so, as it is at present, the distance between the two is not very great, whereas when it is in the opposite part of its orbit they are separated by an enormous gap of space and the sun is between them."
     "Manifestly in the latter case it would be perilous if not entirely impossible for the Martians to visit the golden asteroid, but when it is near Mars, as it is at present, and as it must be periodically for several years at a time, then is their opportunity."
     "With their projectile cars sent forth with the aid of the mysterious explosives which they possess, it is easy for them under such circumstances, to make visits to the asteroid."
     "Having obtained all the gold they need, or all that they can carry, a comparatively slight impulse given to their car, the direction of which is carefully calculated, will carry them back again to Mars."
     "If that's so," exclaimed a voice, "we had better look out for ourselves! We have got into a very hornet's nest! If this is the place where the Martians come to dig gold, and if this is the height of their season, as you say, they are not likely to leave us here long undisturbed."
     "These fellows must have been pirates that they had the fight with," said another.
     "But what's become of the regulars, then?"
     "Gone back to Mars for help, probably, and they'll be here again pretty quick, I am afraid!"

     The more we saw of this golden planet the greater became our astonishment. What the Martians had removed was a mere nothing in comparison with the entire bulk of the asteroid. Had the celestial mine been easier to reach, perhaps they would have removed more, or, possibly, their political economists perfectly understood the necessity of properly controlling the amount of precious metal in circulation. Very likely, we thought, the mining operations were under government control in Mars and it might be that the majority of the people there knew nothing of this store of wealth floating in the firmament. That would account for the battle with the supposed pirates, who, no doubt, had organized a secret expedition to the asteroid and been caught red-handed at the mine.

From EDISON'S CONQUEST OF MARS by Garrett Serviss (1947)

And then Hardin withdrew a two-credit coin from his vest pocket. He flipped it and its stainless-steel surface caught flitters of light as it tumbled through the air. He caught it and-flipped it again, watching the flashing reflections lazily. Stainless steel made good medium of exchange on a planet where all metal had to be imported.

“Let’s get back to business,” urged Hardin. “How would you take these so-called taxes, your eminence? Would you take them in kind: wheat, potatoes, vegetables, cattle?”

The sub-prefect stared. “What the devil? What do we need with those? We’ve got hefty surpluses. Gold, of course. Chromium or vanadium would be even better, incidentally, if you have it in quantity.”

Hardin laughed. “Quantity! We haven’t even got iron in quantity. Gold! Here, take a look at our currency.” He tossed a coin to the envoy.

Haut Rodric bounced it and stared. “What is it? Steel?”

“That’s right.”

“I don’t understand.”

“Terminus is a planet practically without metals. We import it all. Consequently, we have no gold, and nothing to pay unless you want a few thousand bushels of potatoes.”

“Well — manufactured goods.”

“Without metal? What do we make our machines out of?”

From FOUNDATION by Isaac Asimov (1951)

     The secretary inspected his fingernails and said, "Listen further, then. The general would not waste his men and ships on a sterile feat of glory. I know he talks of glory and of Imperial honor, but it is quite obvious that the affectation of being one of the insufferable old demigods of the Heroic Age won't wash. There is something more than glory hereand he does take queer, unnecessary care of you. Now if you were my prisoner and told me as little of use as you have our general, I would slit open your abdomen and strangle you with your own intestines."
     Devers remained wooden. His eyes moved slightly, first to one of the secretary's bully-boys, and then to the other. They were ready; eagerly ready.
     The secretary smiled. "Well, now, you're a silent devil. According to the general, even a Psychic Probe made no impression, and that was a mistake on his part, by the way, for it convinced me that our young military whizz-bang was lying." He seemed in high humor.
     "My honest tradesman," he said, "I have a Psychic Probe of my own, one that ought to suit you peculiarly well. You see this—"
     And between thumb and forefinger, held negligently, were intricately designed, pink-and-yellow rectangles which were most definitely obvious in identity.
     Devers said so. "It looks like cash," he said.
     "Cash it is — and the best cash of the Empire, for it is backed by my estates, which are more extensive than the Emperor's own. A hundred thousand credits. All here! Between two fingers! Yours!"
     "For what, sir? I am a good trader, but all trades go in both directions."
     "For what? For the truth! What is the general after? Why is he fighting this war?"
     Lathan Devers sighed, and smoothed his beard thoughtfully.
     "What he's after?" His eyes were following the motions of the secretary's hands as he counted the money slowly, bill by bill. "In a word, the Empire."
     "Hmp. How ordinary! It always comes to that in the end. But how? What is the road that leads from the Galaxy's edge to the peak of Empire so broadly and invitingly?"
     "The Foundation," said Devers, bitterly, "has secrets. They have books, old books — so old that the language they are in is only known to a few of the top men. But the secrets are shrouded in ritual and religion, and none may use them. I tried and now I am here — and there is a death sentence waiting for me, there."
     "I see. And these old secrets? Come, for one hundred thousand I deserve the intimate details."
     "The transmutation of elements," said Devers, shortly.
     The secretary's eyes narrowed and lost some of their detachment. "I have been told that practical transmutation is impossible by the laws of nucleics."
     "So it is, if nuclear forces are used. But the ancients were smart boys. There are sources of power greater than the nuclei and more fundamental. If the Foundation used those sources as I suggested—"
     Devers felt a soft, creeping sensation in his stomach. The bait was dangling; the fish was nosing it.
     The secretary said suddenly, "Continue. The general, I am sure, is aware of a this. But what does he intend doing once he finishes this opéra-bouffe affair?"
     Devers kept his voice rock-steady. "With transmutation he controls the economy of the whole set-up of your Empire. Mineral holdings won't be worth a sneeze when Riose can make tungsten out of aluminum and iridium out of iron. An entire production system based on the scarcity of certain elements and the abundance of others is thrown completely out of whack. There'll be the greatest disjointment the Empire has ever seen, and only Riose will be able to stop it. And there is the question of this new power I mentioned, the use of which won't give Riose religious heebies.
     "There's nothing that can stop him now. He's got the Foundation by the back of the neck, and once he's finished with it, he'll be Emperor in two years."
     "So." Brodrig laughed lightly. "Iridium out of iron, that's what you said, isn't it? Come, I'll tell you a state secret. Do you know that the Foundation has already been in communication with the general?"
     Devers' back stiffened.
     "You look surprised. Why not? It seems logical now. They offered him a hundred tons of iridium a year to make peace. A hundred tons of iron converted to iridium in violation of their religious principles to save their necks. Fair enough, but no wonder our rigidly incorruptible general refused — when he can have the iridium and the Empire as well. And poor Cleon called him his one honest general. My bewhiskered merchant, you have earned your money."
     He tossed it, and Devers scrambled after the flying bills.
     Lord Brodrig stopped at the door and turned. "One reminder, trader. My playmates with the guns here have neither middle ears, tongues, education, nor intelligence. They can neither hear, speak, write, nor even make sense to a Psychic Probe. But they are very expert at interesting executions. I have bought you, man, at one hundred thousand credits. You will be good and worthy merchandise. Should you forget that you are bought at any time and attempt to ... say ... repeat our conversation to Riose, you will be executed. But executed my way."
     And in that delicate face there were sudden hard lines of eager cruelty that changed the studied smile into a red-lipped snarl. For one fleeting second, Devers saw that space fiend who had bought his buyer, look out of his buyer's eyes.

From FOUNDATION AND EMPIRE by Isaac Asimov (1952)

"If you're basing the system on abundance and free trade, you won't need money, for example ..."

"Oh, but we do and will. It's one of the greatest of all human inventions. With it, we can trade with or for something in the future that doesn't exist yet. And since it's only score-keeping, we can use the comm/info net to do it."

I was out of my element, and I knew it. Money was something that was fairly easy to come by if I worked for it, and it was primarily useful for buying bread and butter. I didn't try to fathom the "Free-and-Twenty-One" economics where the actual value of money slipped and slid around, depending upon buying power. My standard of exchange was breakfast. Anywhere in the U.S., a good breakfast cost about ten dollars, and I used that yardstick to figure the value of currency when I was in other countries. I considered my primitive method of determining monetary value to be basic economics.

"Yes, the wording is such that the boycott will affect all space commerce activities carried on by the Commonwealth and its registered space facilities," Trip Sinclair observed, "even the League of Free Traders, Kevin."

"How about our Lagrangian operations?" Ursila Peri's video image wanted to know. "How can they boycott trade operations off-planet?"

"Is your air bill current, Ursila?" Trip asked her.

"Yes, but even if it wasn't, nobody out here would cut off another person's life support. If the credit line got over-extended too much for too long, we'd put the debtor on a ship home. We work together because there's a lot of nothing waiting for everybody beyond the bulkhead," she said. "They're going to have trouble enforcing tariff arrangements and trade boycotts out here, that agreement sounds exactly like something written up by a bunch of people who always have pressure around them and gravity to keep their feet on the floor. Earthworms!" She made it sound like an insult.

"Sandy, this is Jeri Hospah. Don't let his attempts at humor put you off; sometimes he means what he says. Jeri, find a sack for Sandy and issue him some chits. Then fake up some paperwork that will keep the Ell-Five people happy," Ali instructed us...

...Uncountable hours later, I awoke in the wan sleeping light of the personal compartment and was momentarily confused until I remembered where I was. I felt physically refreshed but still mentally fatigued. That's a dangerous condition in space because little things can kill a careless person.

Somebody had left a flight suit and a Remain-Over-Night kit. Jeri Hospah was either thoughtful or had a well-trained station crew. I took a sponge bath, put on the flight suit and slippers, and decided I might live if I could find breakfast.

The RON kit had a pack of chits—air, meal, water, airlock cycles—as well as an L-5 facilities directory and a visitor's card for the Free Traders' Lounge.

A note was in the kit. "Call me at 96-69-54 and I'll chit you breakfast—Jeri."

From MANNA by Lee Correy (G. Harry Stine) (1983)

(ed note: the superintendent explains the facts of life to the new voluntary exiles to Mars. Keep in mind that on Mars, the air you breath is NOT free, it has to be manufactured and you have to pay for it.)

     "Hear and believe," Farr said. "Okay, chums, let me give you the facts of life. Number one. Don't try to escape. There's no place to go. If you make it outside, you'll live about fifteen seconds. There's no air out there, and your blood will boil away in your veins. It's not a pretty way to go, and I'm told it's painful as hell.
     "Number two. Don't try to escape. You may think you're smart and see a way to get a p-suit. You may even be able to operate it. And then what? You can't make air, and you can't carry enough to get anywhere worth going. Running out of air's not a lot better than going out without a suit.
     "Number three. Don't try to escape. Sure there's a town here, and sure there are a lot of people in it. But you'll pay for everything, and I do mean everything."
     He lifted an orange disk that hung from a chain around his neck. I'd noticed that everyone except us newcomers wore one, but they weren't all the same color. "Air-tax receipt," Farr said. "Mine's orange because I'm due to have it recharged. If it turns red, that's it. Pay up or go outside. You'll need air medals, because God help you if anybody catches you in town without one."
     "Why? What happens?" someone demanded.
     "Outside," Farr said. "Not even a chance to pay up. Just out."
     "And who's to put me out?" Kelso demanded.
     Farr grinned. "Every man jack who's paid his taxes, that's who. Might take several for you, but they'll do it."

At Central Processing they charged our air tags to bright green, forty days' worth. They gave us a hundred Mars dollars, worth about half that in Federation credits. We changed our coveralls for new ones, with a choice of blue or orange.

I found a tunnel end to sleep in. They'd been digging out to expand the city, but this project was halted for lack of a labor force. Nobody bothered me. I figured I had nothing worth stealing, anyway. That turned out to be stupid: I had a charged air tag, and that would be worth my life if there was anybody around desperate enough to cut my throat for it. Nobody was, just then.

I'd been there ten days and my air tag was turning from green to yellow, It was getting time to move on. I figured another couple of days would do it.

From BIRTH OF FIRE by Jerry Pournelle (1976)

(ed note: Lucas Trask is trying to civilize a colony world that has fallen back to about horse and bow-n-arrow technology)

"The first order," Trask said, "is that these people you have working here are to be paid. They are not to be beaten by these plug-uglies you have guarding them. If any of them want to leave, they may do so; they will be given presents — and furnished transportation home. Those who wish to stay will be issued rations, furnished with clothing and bedding and so on as they need it, and paid wages. We'll work out. some kind of a pay-token system and set up a commissary where they can buy things."

Discs of plastic or titanium or something, stamped and uncounterfeitable. Get Alvyn Karffard to see about, that. Organize work-gangs, and promote the best and most intelligent to foremen. And those guards could be taken in hand by some ground-fighter sergeant and given Sword-World weapons and tactical training; use them to train others;, they'd need a sepoy army of some sort. Even the best of good will is no substitute for armed force, conspicuously, displayed and unhesitatingly used when necessary.

"And there'll be no more of this raiding villages for food or anything else. We will pay for anything we get from any of the locals."

"We'll have trouble about that," Valkanhayn predicted. "Our men think anything a local has belongs to anybody who can take it."

"So do I," Harkaman said. "On a planet I'm raiding. This is our planet, and our locals. We don't raid our own planet or our own people. You'll just have to teach them that."

The labor-guards, a score in number, were relieved of their duties, issued Sword-World firearms, and given intensive training. The trade-tokens, stamped of colored plastic, were introduced, and a store was set up where they could be exchanged for Sword-World items. After a while, it dawned on the locals that the tokens could also be used for trading among themselves; money seemed to have been one of the adjuncts of civilization that had been lost along Tanith's downward path.

From SPACE VIKING by H. Beam Piper (1963)

(Planet) Blessed would not have been on my route other than for business reasons. Interstellar trade is economics stripped to basics. You can't make money by making money because money isn't money other than on its planet of issue. Most money is fiat; a ship's cargo of the stuff is wastepaper elsewhere. Bank credit is worth even less; Galactic distances are too great. Even money that jingles must be thought of as trade goods — not money — or you'll kid yourself into starvation.

I had worked the first leg, Landfall to Blessed, successfully... Anyhow, I got such a nice price that I temporarily had too much money.

How much is "too much"? Whatever you can't spend before you leave a place you are not coming back to. If you hang onto that excess and come back later, you will usually find — invariably, so far as I recall — that inflation or war or taxes or changes in government or something has wiped out the alleged value of fiat money you may have kept.

From TIME ENOUGH FOR LOVE by Robert Heinlein (1973)

(ed note: Lazarus Long is immortal, at the time of the novel he is a bit over two thousand years old. He has experience with almost every job that had ever been invented.

He and his partner Zaccur are setting up a colony on the planet New Beginnings. His partner has departed for a second load of colonists while Lazarus runs the New Beginnings Bank of Commerce and the Top Dollar Trading Post under the name of Earnest Gibbons.

One fine day the town selectmen decide to nationalize the bank. Earnest/Lazarus is not surprised, this often happens. The selectmen get a quick lesson in "Be Careful What You Wish For." )

     Gibbons had plenty of time to be ready before the murmurings about his monopoly of the banking business came to a head. The New Beginnings Bank of Commerce was a bank of issue; he (or Zaccur) always set up such a bank in each colony they pioneered. Money was necessary to a growing colony; barter was too clumsy. Some medium of exchange was needed even before government was needed.
     He was not surprised when he was invited to meet with the town's selectmen to discuss the matter; it always happened. That evening, as he trimmed his Vandyke and added a touch more gray to it and to the hair on his head in preparation for the confrontation, he reviewed in his mind proposals he had heard in the past for making water run uphill, the sun to stand still, and one egg to be counted as two. Would there be some novel numbskullery tonight? He hoped so but did not expect it.
     Three hours later Gibbons had settled one point: No one had been able to think of any new way to debase currency that he had not heard at least five hundred years earlier—more likely a thousand—and each was certainly much, much older in history. Early in the meeting he asked the Moderator to have the Town Scribe write down each question so that he could answer them in a lump—and was allowed to have it his way by being balky.
     At last the Moderator Selectman, Jim "Duke" Warwick said, "That seems to be it. Ernie, we have a motion to nationalize—I guess that's the word—the New Beginnings Bank of Commerce. You're not a selectman, but we all agree that you are a party with a special interest, we want to hear from you. Do you want to speak against the proposal?"
     "Not at all, Jim. Go right ahead."
     "Eh? I'm afraid I didn't understand you."
     "I have no objection to the bank being nationalized. If that's all, let's adjourn and go to bed."
     Someone in the audience called out, "Hey, I want my question about New Pittsburgh money answered!"
     "And mine about interest! Interest is wrong—it says so in the Bible!"
     "Well, Ernie? You said earlier that you would answer questions."
     "So I did. But if you are nationalizing the bank, wouldn't it make more sense to put questions to your state treasurer, or whatever you decide to call him? The new head of the bank. By the way, who is he? Hadn't he better sit up here on the platform?"
     Warwick pounded his gavel, then said, "We haven't got that far, Ernie. For the time being the entire Council of Selectmen is the finance committee—if we go ahead with this."
     "Oh, by all means go ahead. I'm shutting down."
     "What do you mean?"
     "Just what I said: I quit. A man doesn't like to have his neighbors dislike him. The people of Top Dollar don't like what I've been doing or this meeting would never have been called. So I've quit. The bank is closed; it will not reopen tomorrow. Nor ever, with me as president of it. That's why I asked who your state treasurer will be. I'm as interested as anyone in finding out what we are going to use for money from here on—and what it will be worth."
     There was dead silence; then the Moderator had to pound his gavel and the Sergeant at Arms was very busy, all to shouts of
     "What about my seed loan?"
     "You owe me money!"
     "I sold Hank Brofsky a mule on his personal note—what do I collect?"
     "You can't do this to us!"
     Gibbons sat quietly, not letting his alertness show, until Warwick got them quieted down. Then Warwick said, wiping sweat from his brow: "Ernie, I think you've got some explaining to do."
     "Certainly, Mr. Moderator. The liquidation will be as orderly as you will let it be. Those who have deposits will be paid ... in banknotes, that being what was deposited. Those who owe money to the bank—well, I don't know; it depends on the policies the council sets up. I suppose I'm bankrupt. I can't know until you tell me what you mean when you say my bank is being 'nationalized.'
     "But I have had to take this step: Top Dollar Trading Post is no longer buying with banknotes—they may be worthless. Each deal will have to be barter. But we will continue to sell for banknotes. But I took down the posted prices just before I came here tonight ... because the stock I have on hand may be all I ever have with which to redeem those banknotes. Which could force me to raise prices. It all depends on whether 'nationalize' is simply another word for 'confiscate.'"

     Gibbons spent several days explaining to Warwick the elementary principles of banking and currency, patiently and with good humor—to Warwick by Hobson's choice because the other selectmen found that they were too busy with their farms or businesses to take on the chore. There had been one candidate for the job of national banker or state treasurer (no agreement as yet on title) from outside the selectmen, a farmer named Learner, but his self-nomination got nowhere despite his claim of generations of experience in banking plus a graduate degree in such matters.
     Warwick got his first shock while he was taking inventory, with Gibbons, of the contents of the safe (almost the only safe on New Beginnings and the only one of Earth manufacture).
     "Ernie, where's the money?"
     "What money, Duke?"
     "'What money? Why, these account books show that you've taken in thousands and thousands of dollars. Your own trading post shows a balance of nearly a million. And I know you've been collecting mortgage payments on three or four dozen farms—and haven't loaned hardly anything for a year or more. That's been one of the major complaints, Ernie, why the selectmen just had to act—all that money going into the bank and none coming out. Money's scarce everywhere. So where's the money, man?"
     "I burned it," Gibbons answered cheerfully.
     "Certainly. It was piling up and getting too bulky. I didn't dare keep it outside the safe even though we don't have much theft here—if somebody stole it, it could ruin me. So far the past three years, as money came into the bank, I've been burning it. To keep it safe."
     "Good God!"
     "What's the trouble, Duke. It's just wastepaper."
     "'Wastepaper'? It's money."
     "What is 'money,' Duke? Got any on you? Say a ten-dollar bill?" Warwick, still looking shocked, dug out one. "Read it, Duke," Gibbons urged. "Never mind the fancy engraving and the pretty paper that can't be made here as yet—read what it says."
     "It says it's ten dollars."
     "So it does. But the important part is where it says that this bank will accept that note at face value in payment of debts to the bank." Gibbons took out of his sporran a thousand dollar banknote, set fire to it while Warwick watched in horrified fascination. Gibbons rubbed the char off his fingers. "Wastepaper, Duke, as long as it's in my possession. But if I let it get into circulation, it becomes my IOU that I must honor. Half a moment while I record that serial number; I keep track of what I burn so that I know how much is still in circulation. Quite a lot, but I can tell you to the dollar. Are you going to honor my IOU's? And what about debts owed to the bank? Who gets paid? You? Or me?"
     Warwick looked baffled. "Ernie, I — just don't know. Hell, man; I'm a mechanic by trade. But you heard what they said at the meeting."
     "Yeah, I heard. People always expect a government to work miracles—even people who are fairly bright other ways. Let's lock up this junk and go over to the Waldorf and have a beer and discuss it."

     "—or should be, Duke, simply a public bookkeeping service and credit system in which the medium of exchange is stable. Anything more and you are jiggering with other people's wealth, robbing Peter to pay Paul.
     "Duke, I did my best to keep the dollar stable by keeping key prices stable—seed wheat in particular. For over twenty years the Top Dollar Trading Post has paid the same price for prime seed wheat, then resold it at the same markup—even if I took a loss and sometimes I did. Seed wheat isn't too good a money standard; it's perishable. But we don't have gold or uranium as yet, and it has to be something.
     "Now look, Duke—when you reopen as a treasury, or a government central bank, or whatever you call it, you're certain to have pressures on you to do all sorts of things. Lower the interest rates. Expand the money supply. Guarantee high prices to the farmer for what he sells, guarantee low prices for what he buys. Brother, you're going to be called worse names than they call me, no matter what you do."
     "Ernie—there's only one thing for it. You know how ... so you've got to take the job of community treasurer."
     Gibbons laughed heartily. "No, sirree, bub. I've had that headache for more than twenty years; now it's your turn. You grabbed the sack; now you hold it. If I let you put me back in as banker, all that will happen is that they will lynch both of us."

From TIME ENOUGH FOR LOVE by Robert Heinlein (1973)

(ed note: this seemed science-fictional back in 1972, but has become a reality today)

Two humans, big, muscular fellows, were pushing their way ungently to the stage. The one on Flinx's left wore glasses—not for their antique therapeutic value, but because in some current fashion circles it was considered something of a fad. He extended a credcard.

"Can you accept this, boy?"

Flinx bridled at the 'boy.' but extracted his card meter. "Indeed I can, sir. Ask your question."

The man opened his mouth, paused. "How do I know what to pay you?"

"I can't set value on my answers, only on your question. Whatever you deem it worth, sir. If I give no answer I will refund your credits." He gestured to where the minidrag rested alertly on his shoulder. "My pet here seems to have a feel for the emotional states of others which is quite sensitive. Even more so than myself. A swindler, for example, exudes something that he is especially sensitive to. I am rarely swindled."

The man smiled without mirth. "I wonder why?" He dialled a setting on the card, extended it again. "Will a hundred credits do?"

Flinx was quick to stifle his reaction. A hundred credits! That was more than he sometimes made in a month! For a moment he was tempted to lower the figure, mindful of the laugh Mother Mastiff might have if she found out. Especially after his comments on her priceings this morning. Then he reminded himself that, after all, the man had set the price and surely would not cheat himself. He tried but could detect no trace; of humour about the man. Nor his companion. Quite the contrary. And he hadn't heard the question yet. What if he couldn't answer it?

"A ... a hundred credits would be most satisfactory, sir." The man nodded and stuck his card in the little black meter. The compact machine hummed softly and the amount, one-oh-oh-zero-zero, clicked into place on its tiny dial. There was a. brief pause and then it buzzed once, the red light on its top glowing brightly. It noted that the amount of so-and-so, card number such-and-such, was good for the amount dialled, and that credits numbering one hundred (100) had been transferred to the account of one Philip Lynx (his given name in the city records) in the Royal Depository of the sovereign Republic of Moth. Flinx returned the box to its place in his pouch and looked back to the two expectant men.

"Ask your question, sirs."

From THE TAR AIYM KRANG by Alan Dean Foster (1972)

A family got up to leave. The wife paid Rosaria with three separate credit chips. From the prices chalked beside the serving window, the five dinners totaled less than ten pesos—one and a half Frisian thalers. The citizens of Potosi didn’t have easy access to credit terminals which could have combined the small amounts into a single chip for convenience.

“So our Frisian visitors arrive,” Peres caroled, “they clean up our problem. They board the ship we provide, though they don’t know the ship’s ours. And the ship never gets home. The credit chips are aboard the same vessel, so they’re never presented for payment. End of story, yes?”

From THE SHARP END by David Drake (1993)

Debased Currency

Debasing a currency means making a nation's money worth less. Generally this is done by the nation in question in order to gain some financial advantage at the expense of its citizens. The historic method was to secretly reduce the precious metal content of each coin, assuming a government unsophisticated enough to actually think that the gold standard is a good idea. If the goverment is not on the gold or other valuable element standard, it can engage in the more modern method of currency debasement by printing more paper money.

Soon Gresham's law rears its ugly head. The old more valuable coins will vanish from circulation as people horde them, and the new less valuable coins will become widely used.

Obviously criminals will engage in do-it-yourself unofficial currency debasement, aka "counterfeiting". If the local government is on the gold standard the crooks will clip the coins, basically reducing the gold content of the coin by making the coin smaller, and melting the little trimmed or filed off bits into ingots. If the govenment uses paper money it is time for the eternal war between crooks cranking out counterfeit money with commercially available printing technology (paper and 3D) and governments trying more and more high-tech anti-counterfeiting measures. Counterfeiting is always illegal, and the penalties are severe. The government is of the opinion that it is the only one authorized to debase the currency, and it is real touchy about unfair competition.

And some reckless criminals will engage in the insanely dangerous crime of counterfeiting those trade tokens known as "casino tokens". This is outrageously risky for two reasons: [1] the tokens have anti-counterfeiting measures and counterfeit detection technology orders of magnitude more sophisticated that government measures, and [2] since many casinos are owned and operated by organized crime they will simply murder you instead of bothering to call the cops.

In science fiction debasement sometimes happens for more radical reasons. Some science fictional means suddenly destroys the value of the material used for the standard; e.g., some idiot invents a device that cranks out tons of gold, thus blowing the gold standard out of the water and crashing the entire economy. Alternatively another idiot invents some new and improved method of counterfeiting money, commonly by inventing a matter-duplicator which can make perfect duplicates indistinguishable from the original.

  • In James Blish's Cities in Flight the OC Dollar was based on the Germanium Standard, because of its vital use in transistors and computer chips. This worked fine, until some joker figured out how to synthesise germanium and thus obliterated the economy of the whole galaxy.

  • In George O, Smith's "Pandora's Millions", the invention of a replicator crashed the economy of the solar system. Replicators mean there are no longer any rare metals to base your money on, and all material goods become basically free. The only thing of value are personal services (such as those of a surgeon or doctor). The only thing that prevents utter disaster is a synthetic element that cannot be replicated (because replication causes it to explode). The element allows one to create cheques, legal tender, and other critical items that cannot be counterfeited by a replicator.

  • In the Star Trek universe, the Federation is a post-money society that uses replicators. The Ferengi use "gold-pressed Latinum" as the basis of their currency, since Latinum is the one element a replicator cannot create.

  • In the Demon Princes pentology by Jack Vance the currency 'SVU' or Standard Value Unit was a printed note equal in value to one hour of common labor. A device called a "fake meter" is used to detect counterfeits. In the second novel the protagonist discover how to fool the fake meter, and hilarity ensues.

(ed note: the protagonist is traveling with a naval courier. Said courier is doing a bit of smuggling on the side. The unit of currency is called a "conmark". When the war started, they switched over to a devalued conmark that was little better than scrip.)

     The Captain wasted little time on us. He spoke with the courier briefly. The courier opened that huge case and passed over a kilo canister. The Captain handed him some greasy Conmarks. They were old bills, pre-war pink instead of today’s lilac gray. The courier shoved them inside his tunic, grinned at me, and went outside.
     “Coffee,” he explained. And, “A man has to make hay while the sun shines. A local proverb.”
     My glimpse inside the case had shown me maybe forty more canisters.
     It was an old, old game with Fleet couriers. The brass knew about it. Only their pets received courier assignment. Sometimes there were kickbacks. My companion didn’t look like a man whose business was that big.
     “I see.”
     “Sometimes tobacco, too. They don’t raise it here. And chocolate, when I can make the contacts back home.”
     “You should’ve loaded the boat.” I didn’t resent his running luxuries. Guess I’m a laissez-faire capitalist at heart.
     He grinned. “I did. Can’t deal with the Captain, though. After a while one of the sergeants will notice that nobody has patrolled that part of the plain lately. He’ll make the sweep himself, just to keep his hand in. And I’ll find a bale of Conmarks when I get back.” He hoisted his case. “This’s for special people. I sell it practically at cost.”
     “Conmarks ought to be drying up out here.”
     “They’re getting harder to come by. I’m not the only courier on the Canaan run.” He brightened. “But, s**t. There had to be billions floating around before the war. It’ll come out. Just got to keep refusing military scrip.

From PASSAGE AT ARMS by Glen Cook (1985)

There was money aboard the (starship) city, but no ordinary citizen ever saw it or needed it. It was there to be used exclusively for foreign trade—that is, to bargain for grazing rights, or other privileges and, supplies which the city did not and could not carry within the little universe bounded by its spindizzy field. The ancient herdsmen had accumulated gold and jewels for the same reason. Aboard Scranton, the equivalent metal was germanium, but there was actually very little of it in the city’s vaults; since germanium had been the universal metal base for money throughout this part of the galaxy ever since space flight had become practical most of the city’s currency was paper—the same “Oc dollar” everyone used in trading with the colonies.

They were also to use city facilities to refine the necessary power metals, chiefly thorium, of which Heaven had an abundance beyond its ability to process. After the economy was revamped, the Archangels hoped to have their own refineries, and to sell the pure stuffs to other planets. Curiously, they also had enough germanium to be willing to pay for the job in this metal, although it too was notoriously difficult to refine; this was fortunate for them, since without any present interstellar trade, they were woefully short of Oc Dollars.

The other factor was economic: The rise of the metal germanium as the jinn of solid-state physics. Long before flight into deep space became a fact, the metal had assumed a fantastic value on Earth. The opening of the interstellar frontier drove its price down to a manageable level, and gradually it emerged as the basic, stable monetary standard of space trade.

(ed note: Mayor Amalfi and the starship city of New York return to the civilized part of the galaxy, after being away for a bit more than a hundred years)

     "Why?" Amalfi asked, in a reasonable one. "You shot at us first. We've done nothing wrong."
     "Nothing but pass a bum check! Around here that's a crime worse than murder, brother. I checked you with Lerner, and he's frothing at the mouth. You'd damn well better pray that some other squad gets to you before his does!"
     "A bum check?" Amalfi said. "You're blowing. Our money's better than anything you're using around here, by the looks of you. It's germanium—solid germanium."
     "Germanium?" the dockman repeated incredulously.
     "That's what I said. It'd pay you to clean your ears more often."
     The garageman's eyebrows continued to go higher and higher, and the corners of his mouth began to quiver. Two fat, oily tears ran down his cheeks. Since he still had his hands locked behind his head, he looked remarkably like a man about to throw a fit. Then his whole face split open.
     "Germanium!" He howled. "Ho, haw, haw, haw! Germanium! What hole in the plenum have you been living in, Okie? Germanium—haw, haw!" He emitted a weak gasp and took his hands down to wipe his eyes. "Haven't you any silver, or gold, or platinum, or tin, or iron? Or something else that's worth something? Clear out, bum. You're broke. Take it from me as a friend, clear out; I'm giving you good advice."
     He seemed to have calmed down a little, Amalfi said. "What's wrong with germanium?"
     "Nothing," the dockman said, looking at Amalfi over his incredible nose with a mixture of compassion and vindictiveness, "It's a good, useful metal. But it just isn't money any more, Okie. I don't see how you could have missed finding that out. Germanium is trash now—well, no, it's still worth something, but only what it's actually worth, if you get me. You have to buy it; you can't buy other things with it.
     "It's no good here as money. It's no good anywhere else, either. Anywhere else. The whole galaxy is broke. Dead broke."
     "And so are you."

He shelved it to consider what he had learned about his own bad check. Germanium never had had the enormous worth in real terms that it had had as a treasure metal. It did have properties which made it valuable in many techniques: the germanium lattice would part with an electron at the urging of a comparatively low amount of energy; the p-n boundary functioned as a crystal detector; and so on. The metal found its way into uncountable thousands of electronic devices—and, it was rare.

But not that rare. Like silver, platinum, and iridium before it, germanium's treasure value had been strictly artificial—an economic convention, springing from myths, jewelers' preferences, and the jealousy of statal monopolies. Sooner or later, some planet or cluster with a high technology—and a consequently high exchange rate— would capture enough of the metal to drive its competitors, or, more likely, its own treasury, off the germanium standard; or someone would learn to synthesize or transmute the element cheaply. It hardly mattered which had happened now.

What mattered was the result. The actual metallic germanium on board the city now had only an eighth of its former value at current rates of sale. Much worse, however, was the fact that most of the city's funds were not metal, but paper: Oc dollars, issued against government-held metal back on Earth and a few other administrative centers. This money, since it did not represent any metallic germanium that belonged to the city, was now unredeemable—valueless.

From CITIES IN FLIGHT by James Blish (1970)

      "So what,” a rather harsh voice declared. “I'm T. Semyon Braunstein, Administrator of NAUGA-State, and we want to talk to you about our gold which you have been dispensing in a very cavalier fashion."
     "You want it back, I take it?"
     "Damn straight! We know you made a big haul when you took over NAU-Ceres I and we do indeed want it back."
     "Well, now,” Cantrell said, “how much of your treasure am I supposed to have plundered?"
     "We frankly don't know,” Braunstein replied, “and the presumption is that all the gold you have is ours in absence of proof to the contrary."
     "That would appear to be arguable,” said Cantrell. “Let's stick to the facts."
     "How much did you take?” Braunstein asked.
     "One million four hundred and eighty thousand ounces. That's what, five tons? The entire lot was minted into Ceres d'Or and put into local circulation."
     "You issued gold-backed paper, too,” McQuayle said, “a lot more than any one and a half million ounces, by damn!"
     "So what? Gold-backed paper is paper, not gold."
     "We want the gold that's backing it up,” Braunstein said. “That's our gold, you pirate!"
     "Don't be such a (expletive deleted) fool,” Cantrell snapped. “Ceres—all the mines on Ceres—never produced more than about twelve million ounces a year. That's what—maybe forty tons. Today, here at Castillo Morales, I am depositing five thousand six hundred and sixty tons of gold. How did I get my hands on one hundred and forty-one years’ worth of your peak production, hey? Answer me that, clown!"

     There was a rather long pause as McQuayle and Braunstein digested the information. “Where did the gold come from, then?” Braunstein asked.
     "We used the big laser to refine a cubic kilometer of nickel-iron. It took us nearly a year."
     "How much gold was there?” asked McQuayle.
     "The nickel-iron assayed 0.75 ppm gold by weight,” replied Cantrell. “What's the weight of a cubic kilometer of nickel-iron, 8×109 tons?"
     "And you could run off another five or six thousand tons of gold next year?” Braunstein asked.
     "And the year after,” Cantrell agreed. “And the (Japanese) won't bother me about it because they have big lasers on most of their space stations, and most of the space stations with big lasers are close to large masses of nickel-iron. I've given them the whole technology."

     "The gold standard,” McQuayle said weakly, “you've just shot the gold standard in the ass—one location producing five thousand tons of gold a year! Fifty would produce—what? Two hundred fifty thousand tons? And more would be coming on stream all the time ... we pegged the dollar at eight hundred fifty to the ounce ... we can't hold it there ... we can't limit production—my God! What's our money going to be worth?"
     "I suggest you get a handle on the paper,” Cantrell said, “because if you stick with the gold standard, you're in for one hell of an inflation."
     "The gold mines on Ceres seem to be a bit redundant,” Braunstein remarked at last. “Do the Japanese realize that the gold you're dumping on them isn't worth (expletive deleted)?"
     "No. They think, like you did, that it was stolen from the NAU.” Cantrell paused for a moment to watch the forklift trucks moving the pallets of gold bars. “Premier Ito will be announcing our agreement in about ten minutes, at 1900. I told him we'd work out the details when I got back to Rosinante."
     "Well, goddamnit, get my financial advisors!” Braunstein yelled.
     "I beg your pardon?"
     "I wasn't talking to you, Cantrell."
     "You've totally destroyed the economy of the world,” McQuayle said. “What did you get out of it, Cantrell?"
     "Survival. The Japanese Fleet is already heading away from Rosinante. Besides, I expect the economy of the world will survive."

From THE PIRATES OF ROSINANTE by Alexis Gilliland (1982)

     "Okay; what do you want firstest and mostest of, now that copper and uranium are out of the way?”...
     "...Deston did not say anything and after a moment the older man went on, “Platinum and iridium, of course. Osmium, tungsten …”
     “Tungsten isn’t too scarce, is it?”
     “For the possible demand, very much so. I’d like to sell it for fifteen cents a pound. Beryllium, tantalum, titanium, thorium, cerium—and, for the grand climax to end all climaxes—rhenium.”...
     ...Deston caught the paper and read it. “Is that all?”
     “Isn’t that enough? You’re a brute for punishment.”
     “I’m surprised, is all, that gold isn’t on it.
     “Gold!” Maynard snorted. “Besides currency base, jewelry, and show, what’s it good for? We’ve never touched it and never intend to—produce a few tons too much and you upset the economy instead of benefitting it.
     “I never thought of it that way, but that’s right. Okay, chief, we’ll flit. I’ll keep you posted."

From SUBSPACE EXPLORERS by E. E. "Doc" Smith (1965)

Our Heroes have made Terra's first interstellar voyage to the planet Osnome (remarkably like Edgar Rice Burrough's Barsoom, except the human-looking people are green, not red). They are given gifts of alien gems called "faidons", which are indestructable glowing gemstones totally unknown on Terra. Richard Seaton and his best bud Martin Crain are worried about what happens when their wives wear the gems on Terra.

     "These jewels rather puzzle me, Dick. What are they?" asked Martin, as the four assembled, waiting for the first meal. As he spoke he held up his third finger, upon which gleamed the royal jewel of Osnome in its splendid Belcher mounting of arenak as transparent as the jewel itself and having the same intense blue color. "I know the name, 'faidon,' but that's all I seem to know."
     "That's about all that anybody knows about them. It is a naturally-occurring, hundred-faceted crystal, just as you see it there—deep blue, perfectly transparent, intensely refractive, and constantly emitting that strong, blue light. It is so hard that it cannot be worked, cut, or ground. No amount of the hardest known abrasive will even roughen its surface. No blow, however great, will break it—it merely forces its way into the material of the hammer, however hard the hammer may be. No extremity of either heat or cold affects it in any degree, it is the same when in the most powerful electric arc as it is when immersed in liquid helium."
     "How about acids?"
     "That is what I am asking myself. Osnomians aren't much force at chemistry. I'm going to try to get hold of another one, and see if I can't analyze it, just for fun. I can't seem to convince myself that a real atomic structure could be that large."
     "No, it is rather large for an atom," and turning to the two girls, "How do you like your solitaires?"
     "They're perfectly beautiful, and the Tiffany mounting is exquisite," replied Dorothy, enthusiastically, "but they're so awfully big! They're as big as ten-carat diamonds, I do believe."
     "Just about," replied Seaton, "but at that, they're the smallest Dunark could find. They have been kicking around for years, he says—so small that nobody wanted them. They wear big ones on their bracelets, you know. You sure will make a hit in Washington, Dottie. People will think you're wearing a bottle-stopper until they see it shining in the dark, then they'll think it's an automobile headlight. But after a few jewelers have seen these stones, one of them will be offering us five million dollars apiece for them, trying to buy them for some dizzy old dame who wants to put out the eyes of some of her social rivals. Yes? No?"
     "That's about right, Dick," replied Crane, and his face wore a thoughtful look. "We can't keep it secret that we have a new jewel, since all four of us will be wearing them continuously, and anyone who knows jewels at all will recognize these as infinitely superior to any known Earthly jewel. In fact, they may get some of us into trouble, as fabulously valuable jewels usually do."
     "That's true, too. So we'll let it out casually that they're as common as mud up here—that we're just wearing them for sentiment, which is true, and that we're thinking of bringing back a shipload to sell for parking lights."
     "That would probably keep anyone from trying to murder our wives for their rings, at least."

From THE SKYLARK OF SPACE by E. E. "Doc" Smith (1928)

(ed note: After Richard Seaton manages to single-handedly save the nation of Kondal on the planet Osnome, the Kondalians reward him. As it turns out Osnome is very rich in heavy metals, so they give him a bit of platinium.)

"How much are you loading on, Dunark?" asked Seaton, when the large compartment was more than half full.

"My order called for about twenty tons, in your weight, but I changed it later—we may as well fill that room full, so that the metal will not rattle around in flight. It doesn't make any difference to us, we have so much of it. It is like your gift of the salt, only vastly smaller."

"What are you going to do with it all, Dick?" asked Crane. "That is enough to break the platinum market completely."

"That's exactly what I'm going to do," returned Seaton, with a gleam in his gray eyes. "I'm going to burst this unjustifiable fad for platinum jewelry so wide open that it'll never recover, and make platinum again available for its proper uses, in laboratories and in the industries.

"You know yourself," he rushed on hotly, "that the only reason platinum is used at all for jewelry is that it is expensive. It isn't nearly so handsome as either gold or silver, and if it wasn't the most costly common metal we have, the jewelry-wearing crowd wouldn't touch it with a ten-foot pole. Useless as an ornament, it is the one absolutely indispensable laboratory metal, and literally hundreds of laboratories that need it can't have it because over half the world's supply is tied up in jeweler's windows and in useless baubles. Then, too, it is the best thing known for contact points in electrical machinery. When the Government and all the scientific societies were abjectly begging the jewelers to let loose a little of it they refused—they were selling it to profiteering spendthrifts at a hundred and fifty dollars an ounce. The condition isn't much better right now; it's a vicious circle. As long as the price stays high it will be used for jewelry, and as long as it is used for jewelry the price will stay high, and scientists will have to fight the jewelers for what little they get."

"While somewhat exaggerated, that is about the way matters stand. I will admit that I, too, am rather bitter on the subject," said Crane.

"Bitter? Of course you're bitter. Everybody is who knows anything about science and who has a brain in his head. Anybody who claims to be a scientist and yet stands for any of his folks buying platinum jewelry ought to be shot. But they'll get theirs as soon as we get back. They wouldn't let go of it before, they had too good a thing, but they'll let go now, and get their fingers burned besides. I'm going to dump this whole shipment at fifty cents a pound, and we'll take mighty good care that jewelers don't corner the supply."

From THE SKYLARK OF SPACE by E. E. "Doc" Smith (1928)

Somalia has long played host to one of the world's strangest monetary phenomenon, a paper currency without a central bank. I explored the idea of Somalia's "orphaned currency" more fully four years ago, but if you're in a rush what follows is the tl;dr version. Despite the fact that both the Central Bank of Somalia and the national government ceased to exist when a civil war broke out in 1991, Somali shilling banknotes continued to be used as money by Somalis. Over the years, Somalis also accepted a steady stream of counterfeits that circulated in concert with the old official currency, a state of affairs that William Luther explores in some detail here.

The story is worth revisiting because apparently Somalia's newly restored central bank is on the verge of re-entering the game of printing banknotes after a quarter century absence. With the help of the IMF, the Central Bank of Somalia (CBS) plans to issue new 1000 shilling banknotes, the introduction of higher denomination notes coming later down the road.

Old legitimate 1000 shilling notes and newer counterfeit 1000 notes are worth about 4 U.S. cents each. Both types of shillings are fungible—or, put differently, they are accepted interchangeably in trade, despite the fact that it is easy to tell fakes apart from genuine notes. This is an odd thing for non-Somalis to get our heads around since for most of us, an obvious counterfeit is pretty much worthless. The exchange rate between dollars and Somali shillings is a floating one that is determined by the cost of printing new fake 1000 notes. For instance, if a would-be counterfeiter can find a currency printer, say in Switzerland, that will produce a decent knock off and ship it to Somalia for 2.5 U.S. cents each (which includes the cost of paper and ink), then notes will flood into Somalia until their purchasing power falls from 4 to 2.5 U.S. cents… at which point counterfeiting is no longer profitable and the price level stabilizes.

Below is the long-term price of Somali shillings, which I've snipped from Luther's paper. You can see how the purchasing power of a 1000 shilling note has fallen to what Luther calculates to be the cost of producing a new banknote, around 4 cents. His chart goes up to 2013, but if you look at the IMF's most recent report on Somalia (see Figure 3) you'll see that the exchange rate hasn't moved much.

So with a new official banknotes on the way, what will happen to the old legacy notes and counterfeits? According to the IMF mission chief Mohammed Elhage, the IMF is in the midst of trying to determine at what price it will convert old notes for new official ones. So rather than repudiating counterfeits, the normal route taken by central bankers, the CBS will buy them up and cancel them. It will have to offer a decent price too, say like 5 or 6 U.S. cents for each 1000 note. If it makes a stink bid, say 3 U.S. cents, Somalis may simply ignore the appeal to bring in their old currency and keep using the old stuff. Because the buyback decision validates the work of counterfeiters, it just seems wrong. However, keep in mind that for the last twenty-five years it has been counterfeiters who have been willing to take on the risk of providing Somalis with a very real service, the provision of a working paper medium of exchange.

There is another good reason for buying up old legacy notes and counterfeits and cancelling them. If the CBS lets the old notes stay in circulation, then Somalia's ragtag multi-currency system will only get more confusing, with old legacy and counterfeit notes circulating concurrently with new shillings and U.S. dollars. With the new issue of shillings having a different purchasing power than the old ones, yet another floating exchange rate will be added to the mix. Who needs that sort of confusion? Better for the CBS to absorb the cost of buying up fakes in order to promote a more homogeneous currency.

As I pointed out in my old post, there's an old and nagging question in monetary economics that has never been satisfactorily answered: why is fiat money valuable? Somalia serves as a great laboratory to investigate this question because its situation is so unique. One famous answer to the riddle of fiat money is that governments use force to ensure that fiat money is valued. But this can't be the case in Somalia: it hasn't had a government since 1991, yet shillings continue to be accepted.

A second answer is that once money is valued—say because it a central bank has been pegged to an existing store of value like gold—then once the central bank disappears and the anchor is lost, those orphaned notes will continue to have value by dint of pure inertia and custom. This theory certainly seems to fit Somalia's experience.

The last theory is that when a central bank is destroyed, the money it issues will quickly become worthless... unless citizens expect a future central bank to emerge and reclaim the orphaned currency as its own. If so, it makes sense to keep using the currency since it isn't actually orphaned—it's on the way to being adopted. If the expectation is that this future central bank will also adopt counterfeit notes, it makes sense for people to accept all knock-offs as well. So we can tell a story that shillings, both real and fake, never fell to zero because enough Somalis had a hunch that a future body would reclaim them, a hunch that is on the verge of being realized as a newly-christened CBS seems set to buy old and fake shillings back. Were Somalis really this good at predicting the future? I don't know, but like the second theory, the last one seems to explain the data.

Personally, I think introducing a new paper currency is a bad idea. For some time now Somalia has been partially dollarized economy. U.S. dollar banknotes are the most popular paper currency, with old shillings being used in small payments and in the countryside. Mobile payments are extremely popular, but they are usually denominated in U.S. dollars, not shillings, and tend to be prevalent in cities where network coverage is best.

There are several problems with dual-currency systems like Somalia's. First, they impose a small but steady stream of currency conversion costs on the population, both the actual cost of shifting one's wealth from one to the other as well as the mental gymnastics involved in converting prices in one's head. Secondly, there are fairness issues. Civil servants are usually paid in the domestic currency and those in rural parts deal in the stuff. Urban private sector workers tend to earn dollars. In developing nations, dollars are usually more stable than domestic currency. As a result prices of houses, cars, and rent are often set in dollars. The class of folks who are paid in dollars make out better than the class that is earning shillings. Dollar earners never have to leave the much stabler dollar loop while those earning domestic currency suffer from constant slippage due to conversion costs and chronic inflation.

Now the IMF might argue that new shillings will completely expel dollars, thus forcing everyone into the same shilling loop and removing any monetary inequalities. But that's hog wash. The literature on dollarization teaches us that once the dollar begins to be used by a country—usually because the domestic currency has suffered from high inflation—it is very hard to remove it. Long after the local currency has been successfully stabilized, dollarization continues, an effect referred to by economists as hysteresis. Bring back the shilling and the dollar will stick around.

While bringing back new shillings doesn't make much sense, some sort of currency reform is probably worthwhile. While cities seem to be already well-served by dollars and mobile money, the rural population still relies on old and deteriorating shilling notes. Instead of foisting new shillings on these people, why not replace them with locally-minted small denomination dollar coins? I call this the Panama solution. For those who don't know, Panama is a dollarized nation. Due to the high costs of shipping in coins form the U.S., Panama mints its own dollar-denominated small change, paper money printed by the Federal Reserve taking care of the rest of the nation's physical money requirements. 

By adopting the Panama model all Somalis would get to deal in U.S. dollars, thus removing any monetary class divisions. Gone too would be the headache of constantly converting between shillings and dollars, since with U.S. coinage there would only be dollars. And poor Somalians living in rural areas without phone coverage would finally get clean and homogenous small denomination cash.

Admittedly, there's far less for a central banker to do if he/she issues a narrow range of small denomination U.S. denominated coins, say 1¢, 5¢, and 25¢, rather than a full range of banknotes. It's certainly not sexy. But it would be cost effective. Coins, after all, last much longer than notes. This durability means that coins are a cheaper circulating medium for a central bank to maintain than paper. There is also the national ego that must be satisfied. What nation doesn't have its own currency? The worst reason to adopt a new shilling is because some concept of nationhood requires it—Panama has been using the dollar for decades, and this hasn't prevented it from becoming one of Central America's most successful nations.


Illegal Cash

In some science fiction, physical money is illegal since the Police State cannot trace physical money transactions (see Cashless Society). By law all money transations must be via credit cards or debit cards. Intangible electronic numbers transferred from one bank ledger to another through traceable internet connections (credit cards or debit cards), so the state can keep a close eye on all your purchases. To the very last penny.

Naturally people wanting to bribe somebody or purchase illegal goods had to find some physical untraceable alternative. Purchasing illegal drugs with your bank card will just get you busted by the narks.

Such illegal currency is related to the concept of money laundering.

In the science fiction show The Expanse, Detective Miller accepts bribes in the form of casino chips. One of the authors said: "Why do they use casino chips as money on The Expanse? It's how you get a black market economy when everything else is traceable e-money."

In the real world, events overtook science fiction when some genius invented a way to transfer money over the internet, but encrypted in such a way that the authorities could not track it. Specifically they can see the transaction but have no idea of the identity of the sender or receiver. This is called Bitcoin (BTC), symbolized by , Ƀ, or ฿. Bitcoin is the first cryptocurrency that is decentralized.


His total assets were quickly converted to New Yen, a fat sheaf of the old paper currency that circulated endlessly through the closed circuit of the world's black markets like the seashells of the Trobriand islanders. It was difficult to transact legitimate business with cash in the Sprawl; in Japan, it was already illegal.

In Japan, he'd known with a clenched and absolute certainty, he'd find his cure. In Chiba. Either in a registered clinic or in the shadowland of black medicine. Synonymous with implants, nerve-splicing, and microbionics, Chiba was a magnet for the Sprawl's techno-criminal subcultures.

From Neuromancer by William Gibson (1984)

…In the economist’s imagining of an idealised free market, rational individuals enter into monetary-exchange contracts with each other for their mutual benefit. One party — called the ‘buyer’ — passes money tokens to another party — called the ‘seller’ — who in turn gives real goods or services. So here I am, the tired individual rationally seeking sugar. The market is before me, fizzy drinks stacked on a shelf, presided over by a vending machine acting on behalf of the cola seller. It’s an obedient mechanical apparatus that is supposed to abide by a simple market contract: If you give money to my owner, I will give you a Coke. So why won’t this goddamn machine enter into this contract with me? This is market failure.

To understand this failure, we must first understand that we live with two modes of money. ‘Cash’ is the name given to our system of physical tokens that are manually passed on to complete transactions. This first mode of money is public. We might call it ‘state money’. Indeed, we experience cash like a public utility that is ‘just there’. Like other public utilities, it might feel grungy and unsexy — with inefficiencies and avenues for corruption — but it is in principle open-access. It can be passed directly by the richest of society to the poorest of society, or vice versa.

Alongside this, we have a separate system of digital fiat money, in which our money tokens take the form of ‘data objects’ recorded on a database by an authority — a bank — granted power to ‘keep score’ of them for us. We refer to this as our bank account and, rather than physically transporting this money, we ‘move’ it by sending messages to our banks — for example, via mobile phones or the internet — asking them to edit the data. Money ‘moves’ to your landlord if your two respective banks can agree to edit your accounts, reducing your score and increasing your landlord’s score.

This second mode of money is essentially private, running off an infrastructure collectively controlled by profit-seeking commercial banks and a host of private payment intermediaries — like Visa and Mastercard — that work with them. The data inscriptions in your bank account are not state money. Rather, your bank account records private promises issued to you by your bank, promising you access to state money should you wish. Having ‘£500’ in your Barclays account actually means ‘Barclays PLC promises you access to £500’. The ATM network is the main way by which you convert these private bank promises — ‘deposits’ — into the state cash that has been promised to you. The digital payments system, on the other hand, is a way to transfer — or reassign — those bank promises between ourselves.

This dual system allows us the option to use private digital bank money when buying pizza at a restaurant, but we can always resort to public state money drawn out of an ATM if the proprietor’s debit card system crashes. This choice seems fair. At different times, we might find either form more or less useful. As you read this, though, architects of a ‘cashless society’ are working to remove the option of resorting to state cash. They wish to completely privatise the movement of money tokens, pushing banks and private-payments intermediaries between all interactions of buyers and sellers.

The cashless society — which more accurately should be called the bank-payments society — is often presented as an inevitability, an outcome of ‘natural progress’. This claim is either naïve or disingenuous. Any future cashless bank-payments society will be the outcome of a deliberate war on cash waged by an alliance of three elite groups with deep interests in seeing it emerge.

The first is the banking industry, which controls the core digital fiat money system that our public system of cash currently competes with. It irritates banks that people do indeed act upon their right to convert their bank deposits into state money. It forces them to keep the ATM network running. The cashless society, in their eyes, is a utopia where money cannot leave — or even exist — outside the banking system, but can only be transferred from bank to bank.

The second is the private payments industry — the likes of Mastercard — that profits from running the infrastructure that services that bank system, streamlining the process via which we transfer digital money between bank accounts. They have self-serving reasons to push for the removal of the cash option. Cash transactions are peer-to-peer, requiring no intermediary, and are thus transactions that Visa cannot skim a cut off.

The third — perhaps ironically — is the state, and quasi-state entities such as central banks. They are united with the financial industry in forcing everyone to buy into this privatised bank-payments society for reasons of monitoring and control. The bank-money system forms a panopticon that enables — in theory — all transactions to be recorded, watched and analysed, good or bad. Furthermore, cash’s ‘offline’ nature means it cannot be remotely altered or frozen. This hampers central banks in implementing ‘innovative’ monetary policies, such as setting negative interest rates that slowly edit away bank deposits in order to coerce people into spending.

Governments don’t really mention that monetary policy agenda. It isn’t catchy enough. Rather, the key weapons used by the alliance are more classic shock-and-awe scare tactics. Cash is used by criminals! People buy drugs with cash! It’s the black economy! It supports tax evasion! The ability to present control as protection relies on constant calls to imagine an external enemy, the terrorist or Mafiosi. These cries of moral panic are set in contrast to the glossy smiling adverts about digital payment. The emerging cashless society looms like a futuristic sunrise, cleansing us of these dangerous filthy notes with rays of hygienic, convenient, digital salvation…

…The psychological assault is working. The Netherlands — where I face my vending machine — has become one key front in the war on cash. Here cash is becoming viewed like an illegal alien on the run, increasingly excluded from the formal economy, drawing dirty looks from shop assistants. Signs say ‘Card only’. Who is Card? Card is a glamorous socialite, welcomed into stores. Card is superior. Look at the bank adverts showcasing their accessories for Card. Nobody is building accessories for Cash.

The frontlines, though, are now creeping to poorer countries. India’s recent so-called ‘demonetisation’ was a brutal overnight retraction of rupee notes by the prime minister Narendra Modi to bring discipline to the ‘black economy’. It was an exercise that necessitated choking the poorest Indians, who depend on cash and who often lack access to bank accounts. Originally cast in popular terms as an attempt to stem corruption, the message was later ironically altered to cast cashlessness as a way to create economic progress for India’s poor.

This message is given humanitarian credentials by the UN-based Better Than Cash Alliance, which promotes ‘the shift from cash to digital payments to reduce poverty and drive inclusive growth’, and which counts Visa, Mastercard and Citi Foundation as key partners. The Modi action was also preceded by the initiation of the Cashless Catalyst programme, ‘an alliance between the Government of India and USAID, to expand digital payments in India’, backed by a panoply of digital payments companies. These official alliances of states, corporations and public academics are impressive. In India, well-heeled urban elites who applauded Modi’s actions from the sidelines can safely point to Rogoff’s Financial Times-nominated book of the year to justify it…

…The attempt to present the cashless bank-payments society as a benefit to marginalised people is tenuous at best. If you’re a vulnerable denizen of the informal economy, an off-the-grid hustler, or a low-income precarious worker, banks and payments intermediaries have little interest in prioritising you. The bank-payments society will not process the activity that takes place in the peripheral cracks that form the basis of your livelihood. Indeed, it is intended to shut down those spaces. That might be characterised as ‘progress’, but equally we might say you’re being firewalled out of the economy in an act of economic cleansing. Under the guise of destroying the ‘shadow economy’, the underclass, the unwatched, the eccentric and the untamed will be coercively corralled into the hands of the state-corporate mainstream.

…What I care about is the unaccountable callousness of this vending machine, the one that has just blocked me from engaging in free trade.

Old vending machines didn’t do this. They had a little slot for coins, one that allowed even a ragged beggar to convert his tiny income into sustenance. Look closely at the machine. It’s actually two machines. The Payter device fused into its body does not work for the cola seller. It works for payments corporations. You see, the cola seller has one bank account, but there are many people with many accounts at different banks approaching the vending machine. Those banks need to identify which of their account holders wishes to transfer how much money to which account at which other bank. The device is there to deliver my card information into the transmission lines of the card payments networks, where it will be — in theory — routed to facilitate the transfer of money tokens from my account into the seller’s account, for a small fee.

This is no longer a deal between me and the seller. I am now dealing with a complex of unknown third parties, profit-seeking money-passers who stand between us to act as facilitators of the money flow, but also as potential gatekeepers. If a gatekeeper doesn’t want to do business with me, I can’t do business with the seller. They have the ability to jam, monitor or place conditions upon that glorious core ritual of capitalism — the transfer of money for the transfer of goods. This innocuous device exudes mechanical indifference, reporting only to invisible bosses far away, running invisible algorithms in invisible black boxes that don’t like me.

If we are going to refer to bank payments as ‘cashless’, we should then refer to cash payments as ‘bankless’. Because that’s what cash is, and right now it is the only thing standing between us and a completely privatised money system…

…The most we can hope for, then, is a benign oligopoly of payments corporations, heavily exposed to the geopolitical aspirations of the states they reside within. The Chinese state encouraged the creation of China UnionPay precisely because they don’t want US payment megacorps installing themselves as gatekeepers into transactions made by Chinese citizens.

When mounting a defence, there are always two options. You either block an incoming attack, or you launch a strategic counterstrike, sometimes summed up as ‘offence is the best defence’.

In the former strategy, you focus on pointing out that the arguments against cash are either exaggerated, inaccurate or incomplete. Exaggeration and inaccuracy are both present in anti-cash tirades, but incompleteness is crucial. For example, let’s say we agree that criminals prefer cash. Does that translate into ‘We should ban cash’? Banning everything that criminals favoured would almost certainly lead to a constrained, suffocating existence for everyone. Congratulations, we ended crime, but only at the expense of ending privacy and free creative space too. The end of crime comes accompanied by an overbearing surveillance state, always standing next to you, reaching into your most private moments, treating you like a small child that cannot be trusted. Enjoy your life.

The second mode of defence-as-offence involves attacking the proposed alternative. We point out that the new bank-payments society, firstly, does not actually solve the old problems — crime just goes digital, and your account gets hacked rather than your wallet stolen — and, even worse, causes a whole range of new problems that were not explicitly mentioned in Mastercard’s marketing material. Let me reveal the fine-print written in invisible ink: Did we mention that in removing the ability to transact with cash we can now see everything you do and can also censor you? Cheer up, if you have nothing to hide, you have nothing to fear!

Oh yes, I can use scare tactics too. I can point out that removing cash takes us one step closer to potentially realising the most powerful and automated state-corporate financial control complex the world has ever seen. Very few people either seem to understand this, or care. Like a slow-boiled frog, we don’t seem to notice the process of locking ourselves into daily dependence on an alienating, unaccountable infrastructure that makes us increasingly subservient to bureaucratic processes we cannot see…


The core concept to remember I think is that there are two ways to pay for things:
  • Ways that involve cash or cash equivalents
  • Ways where a purchase requires the permission of someone else
Just think of the word authorization, which is a required element of essentially all non-cash transactions. It has the word authority embedded right in it. If you're OK with that concept, you are necessarily OK with the idea that someone you have never met and don't control has the ability to stop you from using your funds in the way you'd like to at any time.

A cashless society is, at a fundamental level, not free.


Such a system replaces a relationship between two parties with relationships between those parties and the bank. If either party falls out of favour with the bank, they can't do business with each other.


For an immediately ready example, I present Paypal Seller/Buyer disputes on eBay.
From IN PRAISE OF CASH by Brett Scott (2017)

…But this universe is missing one of the fundamental aspects of human civilization. A world without paper money is a world without money. Money belongs to its current holder1. It doesn’t matter if a banknote was lost or stolen at some point in the past. Money is current; that’s why it’s called currency! A bank deposit, however, grants custody of money to the bank. An account balance is not actually money, but a claim on money.

This is an important distinction. A claim is only as good as its enforceability, and in a cashless society every transaction must pass through a financial gatekeeper. Banks, being private institutions, have the right to refuse transactions at their discretion. We can’t expect every payment to be given due process.

This means that politically unpopular organizations could easily be deprived of economic access.2 Past attempts to curb money laundering have already inadvertently cut off financial services for legitimate individuals, businesses, and charities. The removal of paper currency would undoubtedly leave similar collateral damage.

The crime-fighting case against cash is overstated. Last year, a risk assessment of money laundering and terrorist financing conducted by the U.K. government found that regulated institutions such as banks (like HSBC) and accountancy service providers (like the Panamanian tax-shelter specialist Mossack Fonseca) posed the highest risk of facilitating the illicit storage or movement of funds. Cash came in a close third, but if we’re going to cite unlawful transactions as a rationale for banning cash, it only makes sense to ban banks and accounting firms first.

The one benefit of replacing cash with claims on cash is that a claim can be discounted, canceled or seized. That doesn’t sound terribly beneficial to most people, but this attribute is attractive to a growing contingent that wants to send interest rates into negative territory.

As Rogoff explains, negative-interest-rate policy is an important tool for central banks to restore macroeconomic stability. During times of slow economic growth, a lower cost of borrowing gives companies an incentive to invest and consumers to spend. Physical currency gets in the way of negative-interest-rate policy because people who don’t want to accrue negative interest can simply store their cash in a safe. By confining the national currency to regulated account holdings, the government can impose a tax on savings in the name of monetary policy.

Now if there’s one thing the population is good at, it’s tax avoidance. That’s a good part of why we’re having this conversation in the first place. If interest rates fall too far below zero, it’s possible that citizens would find an alternative form of cash. Drug traffickers certainly would. Money has been repeatedly reinvented throughout history, as shells, cigarettes and cryptographic code. Humans are resourceful.

Rogoff acknowledges this risk, and states that the removal of paper money will only be effective "provided the government is vigilant about playing Whac-a-mole as alternative transaction media come into being." This sounds a lot like a policy employed in 13th-century China, where the use of gold or silver as a medium of exchange was punishable by death. Such is not the hallmark of a free society, but neither is the abolition of cash.

A cashless economy violates the basic laws under which currency has operated since before the Industrial Revolution. The justification for giving up a fundamental freedom is that it would clear the way for an experimental policy designed to place a tax on currency. Money may be a shared illusion, but cash abolitionists are in a hallucination all their own.

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