Instead of corrupting everything it touches, the currency of the future will come with a conscience— and a mind of its own

ERIC LONERGAN

What would it be like if money had a mind of its own? What if instead of notes in your wallet, guaranteed by the Bank of England, you had digital “coins” that prohibited you from buying cigarettes? What if this intelligent money could tell you whether the shop you were spending it in was paying its taxes, or reveal the working conditions in the factory that made the clothes you are about to buy? What if the pound in your pocket regulated itself, by multiplying during a recession, to increase your spending power?

We use our existing money to pay for our essential needs, for schools, hospitals, charities and the arts. But the same money finances pollution, crime, human trafficking, even violence and warfare. If money could think for itself, if it could decide what it wanted to be spent on, it might well conclude that it didn’t want to get its hands dirty.

In the distant past, different mints and different banks would vie with each other in issuing forms of money. And with the advance of technology this is happening again, as we have seen with Bitcoin. My contention, however, is that whereas in the past it could be said that the bad money would drive out the good, we are entering an era of real smart money, where the good just might be able to win out. Instead of corrupting everything it touched in the time-honoured fashion of money of old, a new generation of currency could, I believe, enable us to clean society up.

Is the idea of money as a tool of social policy absurd? Assuredly not. After all, money is, and always has been, a social construct. For the philosopher David Hume, the nearest thing to it was language. Why? Because like language the value of money depends on how many people use it. There are far simpler and more consistent languages than English, but we use it because everyone else does. Money is social in the same way—we’re all prepared to accept it to settle accounts because so is everyone else.

A tool of social policy, however, is one thing—an agent of social policy is quite another; for agency implies a mind. Coins and banknotes are, of course, strikingly simple things, with none of the complexity that might lead you to ascribe acumen to a calculator or, at a push, a car. But bear with me. Bitcoin, the digital currency that became a great talking point around Christmas, as it blew up into a bubble and then burst, has given us an intriguing taste of what truly smart money could look like. It might sound paradoxical to bring it up in the context of nudging people and businesses into better behaviours, because if you’ve read about Bitcoin, it is probably in connection with the Silk Road on the dark web, where people can trade drugs and guns. My argument, however, is that the same sort of technology that was first put to use in evading the law and dodging taxes might in the future be used to make society more orderly and ethical instead. Bitcoin embodies innovation that is not going away, and which will soon lead us in some very different directions.