Currency

Been reading through The Whiskey Rebellion and liking it. One of the interesting things I came across was how, at the time of the Whiskey Rebellion (1790s), it was not uncommon for whiskey to be used as currency in the rather isolated regions of the Western United States (at the time, that would be the Appalachian region). Paper currency was still not too hot at the time because there had been a lot of currency devaluation (namely printing reams of money) during the Revoluationary War and people were only just learning to trust the dollar; and Gold and silver weren't practicable because very little of it made it out that far. So, people were left with what they had, and they found whiskey to be the best available currency.

There's a lot of currencies that people have used over the years, whether it be tobacco, grain, shells or canned fish, people tend to find a workable currency, even in rather limited and difficult circumstances, like living in a prison. Gold has tended to be the preferred currency throughout history when people can get at it and there are a number of reasons why. It's 1) rare, 2) divisible, 3) portable, 4) durable and 5) recognizable. Compared to gold, whiskey's less than optimal, but it still stacks up pretty well. It's not as rare as gold, but in the isolated regions of the Appalachians it was more than sufficiently rare (especially since people like to drink away their stock); it's divisible; it's portable (much more so than grain), it's fairly durable (it has a very long shelf life, but as a liquid it is subject to being lost by spillage) and it's recognizable (in that part of the country they started learning to recognize the taste of whiskey from a young age). And if we look at other currencies widely used, we usually see that they stack up pretty well, or at least better than available alternatives.

The strange thing, though, is that some fiction authors simply don't understand the nature of money and come up with some truly poor choices of money. Most fiction authors, if they need a made up money, will just simplify it by using a fiat currency which works pretty much like our dollars and call it something uncreative like "credits," but some authors try to get creative and use a commodity currency. The problem is they don't know what makes a good commodity currency. The worst offender I think I've come across is the graphic novel Bone by Jeff Smith, which partly takes place in a village that uses chicken eggs as currency. That definitely would fall low on four of the five qualities of a good money: eggs are easily breakable, they're common, they have only a modest shelf life and they're not divisible. A simple agrarian economy would probably find a much more workable form of money, like grain or spirits or, if available, precious metals.

Another example is the 1951 The Day the Earth Stood Still, in which Klaatu's alien civilization uses diamonds for currency. I imagine the writer thought he was being clever and trying to show that these aliens were wiser than us because they'd latched onto a currency superior to ours, since it's more durable and much more portable. It's true that it is portable - a high quality 1 carat diamond, weighing in at 200 mg would cost thousands of dollars, whereas 200 mg of gold, at today's prices would only cost about $11 - but what it makes up for in portability it loses in divisibility. Even the smallest diamonds are out of the price range of most normal purchases, and are so small as to be inconvenient. They also fail on recognizability, not because it's not distinct, but because it can be too easily forged. Cubic Zirconia is simply not distinguishable by most people from diamond and small diamonds are difficult to examine. Gold can be faked too, but it's color is distinct enough that faking usually comes in the form of covering a cheaper metal with a thin veneer of real gold or by mixing it with baser metals. But even more important, gold can be stamped. A distinct and difficult to forge stamp from a reputable mint goes a long way towards preventing forgery. Such is not the case with diamonds. You could probably mitigate the problem of inconvenience and forgery by putting small diamonds in the assay cards they use for small gold bars, but that complete undermines the portability aspect. In other words, though we could imagine that, due to the drawbacks of diamonds, even in the limited space of an aircraft, you could find a place to stuff a few pounds of gold coin. Only a few pounds would be worth more than most people in this country earn in a year.

So, I guess I'm just saying, if you want to get creative and imagine a fictional universe using an alternative commodity currency you need to bear in mind what makes a good currency, and even then, boring ol' cliche gold is still probably your best option (King David used foreskins to buy the love of his wife, so I guess there's always that [1 Samuel 18:25-27]).

Been reading through The Whiskey Rebellion and liking it. One of the interesting things I came across was how, at the time of the Whiskey Rebellion (1790s), it was not uncommon for whiskey to be used as currency in the rather isolated regions of the Western United States (at the time, that would be the Appalachian region). Paper currency was still not too hot at the time because there had been a lot of currency devaluation (namely printing reams of money) during the Revoluationary War and people were only just learning to trust the dollar; and Gold and silver weren't practicable because very little of it made it out that far. So, people were left with what they had, and they found whiskey to be the best available currency.

There's a lot of currencies that people have used over the years, whether it be tobacco, grain, shells or canned fish, people tend to find a workable currency, even in rather limited and difficult circumstances, like living in a prison. Gold has tended to be the preferred currency throughout history when people can get at it and there are a number of reasons why. It's 1) rare, 2) divisible, 3) portable, 4) durable and 5) recognizable. Compared to gold, whiskey's less than optimal, but it still stacks up pretty well. It's not as rare as gold, but in the isolated regions of the Appalachians it was more than sufficiently rare (especially since people like to drink away their stock); it's divisible; it's portable (much more so than grain), it's fairly durable (it has a very long shelf life, but as a liquid it is subject to being lost by spillage) and it's recognizable (in that part of the country they started learning to recognize the taste of whiskey from a young age). And if we look at other currencies widely used, we usually see that they stack up pretty well, or at least better than available alternatives.

The strange thing, though, is that some fiction authors simply don't understand the nature of money and come up with some truly poor choices of money. Most fiction authors, if they need a made up money, will just simplify it by using a fiat currency which works pretty much like our dollars and call it something uncreative like "credits," but some authors try to get creative and use a commodity currency. The problem is they don't know what makes a good commodity currency. The worst offender I think I've come across is the graphic novel Bone by Jeff Smith, which partly takes place in a village that uses chicken eggs as currency. That definitely would fall low on four of the five qualities of a good money: eggs are easily breakable, they're common, they have only a modest shelf life and they're not divisible. A simple agrarian economy would probably find a much more workable form of money, like grain or spirits or, if available, precious metals.

Another example is the 1951 The Day the Earth Stood Still, in which Klaatu's alien civilization uses diamonds for currency. I imagine the writer thought he was being clever and trying to show that these aliens were wiser than us because they'd latched onto a currency superior to ours, since it's more durable and much more portable. It's true that it is portable - a high quality 1 carat diamond, weighing in at 200 mg would cost thousands of dollars, whereas 200 mg of gold, at today's prices would only cost about $11 - but what it makes up for in portability it loses in divisibility. Even the smallest diamonds are out of the price range of most normal purchases, and are so small as to be inconvenient. They also fail on recognizability, not because it's not distinct, but because it can be too easily forged. Cubic Zirconia is simply not distinguishable by most people from diamond and small diamonds are difficult to examine. Gold can be faked too, but it's color is distinct enough that faking usually comes in the form of covering a cheaper metal with a thin veneer of real gold or by mixing it with baser metals. But even more important, gold can be stamped. A distinct and difficult to forge stamp from a reputable mint goes a long way towards preventing forgery. Such is not the case with diamonds. You could probably mitigate the problem of inconvenience and forgery by putting small diamonds in the assay cards they use for small gold bars, but that complete undermines the portability aspect. In other words, though we could imagine that, due to the drawbacks of diamonds, even in the limited space of an aircraft, you could find a place to stuff a few pounds of gold coin. Only a few pounds would be worth more than most people in this country earn in a year.

So, I guess I'm just saying, if you want to get creative and imagine a fictional universe using an alternative commodity currency you need to bear in mind what makes a good currency, and even then, boring ol' cliche gold is still probably your best option (King David used foreskins to buy the love of his wife, so I guess there's always that [1 Samuel 18:25-27]).

Currency