Originally published on Substack for Reboot
Cloudmoney by Brett Scott is a love letter to cash. The inherent friction of cash, Scott argues, serves as a bulwark against the automation and corporate capture of a monetary system increasingly ensconced within the cloud. With the on-the-ground lens of an anthropologist, Scott deconstructs the complex abstractions of finance and technology into scenes that play out in front of us from on our phone screens to ayahuasca tourism in Peru and the chama women's cooperatives of the Kenyan informal market.
"All of us have to survive in this world, and for the majority that means having to work within its existing structures. I often see those structures as having a logic that transcends the individual good intentions of those who find themselves employed by them, or even of those running them."
Cloudmoney's greatest strength is how it brings the abstractions of finance and technology down to earth. The book opens on the built environment: skyscrapers that house trading firms and fintech accelerators, multi-billion dollar data center complexes, and the fiber-optic cable networks that form the system's global connective tissue. "Every element of these buildings," Scott says of the towers of capital, "is designed to exude a sense of impenetrable power." "The architecture echoes our relationship with high finance; most people stand beneath these monoliths, on the outside looking up."
The payment networks and high-frequency trading algorithms that ferry money around the world all live somewhere. Take for instance the Visa card network, which is housed in a data center encircled by a moat and 24/7 armed guard in an undisclosed location in Fairfax County, Virginia. If corridors of server racks and backup generators comprise its flesh, miles of CAT6 Ethernet and fiber-optic cable make up the veins and capillaries of the global payments network. Yet for all the technological infrastructure that makes up the backbone of global finance, Scott reminds us that all of this is derived from the land. Without the earth and nature, there would be no economy.
"High finance feels ever present and yet ever divorced from our lives, but the complex networks of finance can always -- in the end -- be traced back to our bodies, and to the earth. Indeed, everything in the final analysis is derived from our ecological systems, without which we perish."
Scott breaks down the financial system into three layers of money: state money, bank money, and fintech money. Here in the United States, the Federal Reserve acts as the first layer of money creation, printing money out of thin air by fiat. Banks then act as the second layer of money creation, taking deposits and loaning them out, increasing the amount of money in circulation thanks to the accounting magic of fractional reserve banking. Finally, fintech money—cloud money—exists as a third layer of money Elmer glued on top of the traditional banking system.
To Scott, cloud money represents the antithesis of cash, presenting a vision of money founded in legible efficiency and ephemerality as opposed to dog-eared, physical tangibility. Unlike cash in hand, cloud money exists insofar as a database record somewhere on a Virginia server farm says it does. Scott compares your Cash App balance to a pile of casino chips being shuffled around before they are returned to the house to be counted and paid out. He argues that the uploading of our finances into the cloud and behind a screen has turned our relationship with money impersonal and removed from warm-blooded reality. Rather than restructuring finance, much of consumer-facing fintech has only succeeded at reskinning and rebranding finance: the rise of identity-based neobanks, banks personified as chatbots, and slick mobile apps. "Branch counters were the original 'user interface' for banks," Scott argues. "Increasingly, though, we cannot see financiers, or shake their hands. Rather, the only thing your hand may end up touching is the interface of a digital finance app." Given this focus on redesigning not finance's fundamental workings but only our means of interfacing with it, Scott's assessment of fintech comes into clear view: "When I take a step back and consider the fintech industry, I see not an attempt to redesign Big Finance, but rather an attempt to automate it." However, there's just one thing standing in the way of this automation: cash.
The crusade to automate finance depends on removing the human element. Technology has swapped bank tellers for mobile apps and chatbots, replaced telephone stockbrokers with online brokerage websites, and rendered extinct the boisterous, broad-shouldered floor traders that once crowded the pits of the Chicago Mercantile Exchange. Yet, corners of life brokered in cold, hard cash have remained tantalizingly out of automation's reach. Scott draws upon the imagery of gentrification, juxtaposing the storefront of a Sweetgreen proclaiming its (now illegal) cashless policy with the mom and pop Chinese restaurant across the street that asks its customers to pay in cash in order to avoid credit card processing fees. "To modern digital giants, the elderly shopkeeper in a small English town, or the traditional fabric merchant in Mumbai, is just human friction standing in the way of the large-scale profits that will accrue from large-scale automation."
In delivering a clear and earnest defense of cold, hard cash, Scott lays out practical and political arguments for cash's importance in upholding monetary diversity. But in its most social essence, cash mediates ways of life and relationship that wouldn't otherwise be possible.
When I'm short on change for my lamb over rice, my halal guy knows I'll make up the difference next time. If my phone's out of battery and my credit card declines because I'm out of country, I can scrounge my pockets for a €20 banknote just short of the taxi fare—"Lo siento, no tengo—" "No pasa nada, cuídate por favor." On the other hand, there's the very specific kind of guy who will Venmo request you $2.58 for the Uber Pool and keep a detailed ledger of outstanding transactions on a color-coded spreadsheet he leaves open on his vertical second monitor. The all-or-nothing atomicity of digital payments leaves no room for slack or small, unbothered moments of grace.
I would have loved for Scott to have written at further length about alternative monetary systems. He points to rippling credit as "the place to be for any person looking to get involved with idealistic-yet-practical currency innovation." Such experiments in mutual credit, from the grassroots Sardex project in Sardinia to the Circles universal basic income project in Berlin, reject zero-sum competition in favor of an interconnected, collaborative economy built on mutuality. "This is perhaps the most profound," says Scott, "of all the concepts that could create an entirely parallel monetary system." However, he stops short where a researcher or technologist might want to learn more about the latest horizons in redesigning money. However, this isn't that kind of book.
At its heart, what Cloudmoney calls for doesn't require any technological innovation. Rejecting tech-solutionist prognostication, Scott keeps his thesis simple: Cash is what will save us from the extinction of monetary diversity, its inherent friction a site of resistance against relentless financialization and extraction. Scott makes a vigorous defense of cash in terms that are practical and political but ultimately borne out of a fundamentally human ethos. In his words:
"Deep down I am fighting for something personal. The right to be dirty and physical. We are not immortal super-beings with our brains plugged into an AI cloud-complex, and neither would we want to be. We are messy and contradictory, and that is a spirit better protected by a more down-to-earth incarnation of money."