And how this helps us understand the War on Cash and CBDC
He’s back folks.
The casino chip metaphor was the first explanation of currency that I could actually understand despite reading quite a bit about fractional reserve banking. The facts are just too hard to believe! Tron's adventures are useful and entertaining especially introducing his free-wheeling life as part of the personality of cash which highlights things we will lose.
I have a question about the casino chip metaphor - where you say the chips cannot be used outside the casino. The chips themselves can be used to pay taxes which is (one) definition of currency. Doesn't this ability make them a type of state money? Thank you from a newbie.
The Tron metaphor is a creative way to teach people about something complex like this. Narratives are powerful because they’re easy for humans to perceive, and can be mentally mapped onto foreign / difficult concepts. Metaphors are bridges to new areas of knowledge.
Also, I’m glad you pointed out the issues with the seeming innocuousness of cashless convenience. It is a trojan horse that’s incredibly effective (who wouldn’t want more convenience in their busy overworked lives?)
Great read - especially having the Barclay's asset sheet decoded.
The more I read this, the more I feel democratic CBDCs aren't compatible with the fractional banking system. Unless there's real incentive to leave deposits in a bank account, wouldn't there just be a kind of run on the bank as people try to convert their bank deposits into CBDCs?
I'm still hoping to be persuaded further on your earlier point that the public faith in the currency relies on access to cash, except for a potential bank run which seems to have been mitigated by the government guaranteeing the banks.
Absolutely love your metaphors. Trying to explain this stuff is so hard and the traditional language is deliberately obfuscating.
I love the casino chip metaphor and thanks for this one.
Keep them coming - you’re making it easier for the rest of us to penetrate this labyrinth
A more reasoned response:
The Tron metaphor offers a creative way to depict the transformation of physical cash into digital bank reserves, appealing especially to more technically-oriented perspectives. However, the complexity of the analogy may limit its accessibility and utility for everyday working class readers focused on more immediate concerns.
Critiques of an increasingly cashless society resonate strongly among progressives and sci-fi imaginers wary of consolidated corporate power and tech-led dystopias, but for financially comfortable middle class professionals and investors, cashless-ness feels inevitable if not actively beneficial, limiting any perceived urgency.
Concepts like bank-issued digital money feeling disconnected from tangible cash carry weight intellectually and in speculative fiction. Yet for many who rely on stable digital finance in daily life, the practical reliability of existing systems overrides many of the abstract reservations.
Warnings about corporate interests forcibly removing cash play to fears of authoritarian technocracy in both activism and sci-fi. However, those thriving in the current system may dismiss such scenarios as paranoia, underestimating threats to social justice.
Proposed solutions like CBDCs have radical appeal for progressives but seem unrealistic and unnecessary to upper middle class financial analysts invested in status quo stability. Their transformative potential inspires imagination but remains distant from most proximate concerns.
The article compellingly articulates technocratic threats to public oversight and real value from a progressive standpoint. However, its urgent call to action risks alienating those still served by prevailing systems, underestimating challenges of profoundly altering complex sociotechnical infrastructures.
Overall, the article excellently surfaces risks of cashless-ness and privatization, but requires wider accessibility, pragmatism and coalition-building to translate critique into action. It succeeds more as "consciousness-raising" than as a catalyst for change across social strata with conflicting interests and assumptions.
My response: This piece represents a hugely appealing framing of very real technological threats to society in a way that conjures resistance and hope. The urgent tone feels justified and motivating given the risks illuminated. This is exactly the kind of writing needed to engage activists and other impassioned 'nerds' alike in the project of building a more just and democratic financial future. Kudos on a great read!
Brilliant! Could I ask about this quote from your Money in Orbit piece (also brilliant) - "I’ll be sketching out the ECB system in due course, which is unique in issuing a kind of ‘meta-state’ money".
Did that get done?
Nice read. One thing missing is that in banking, and central banking CBDC proposals, we do not get to control the software, but the State forces banks to print us bank statements, and on demand too. While most blue collar workers might not have the time to check for fraud, we collectively have the means to help each other with this (a fraud happened to me, I accidentally wrote an extra "0" on my account no. at a new job, my first $3,000 cheque then went to a dude who took it and fled to Australia!) The bank was state owned bank, they were super helpful and apologetic, and my company re-paid me.
It's not direct control of the payments software, but if we cooperate to help each other, a few community experts can protect workers from the worst bank practices. Not that commercial banks regularly defraud the customer, they don't. So what is the true problem with banks running the payments software?
There is not a serious problem for democracy if the banks are well regulated. By far the more serious problem is in white collar crime. Which is an entirely different "layer" of money and politics. In your Tron metaphor they'd be outright cheaters who get away with cheating by bribing the software developers. The damage to society they cause is just immense, vastly exceeding most crime people get thrown in prison for, almost hard to calculate. Those with large bank balances can draw from them to escape white collar crimes, this is pervasive, horrendous, and a massive drain on civil society (see Jennifer Taub's book "Big Dirty Money".) The issues of "cashless" pale utterly into insignificance in comparison with lack of policing of white collar crime my friends.