My Take | The perils and promises of going cashless and paperless

The Future of Money: How the Digital Revolution is Transforming Currencies and Finance, by Eswar Prasad, The Belknap Press of Harvard University Press

The future of money is digital. Of course, everyone knows that, though physical cash may still have limited use for a long time to come. In a new book, Indian-American economist Eswar Prasad explores what all that means, for consumers and producers, investors and regulators, retailers and wholesalers, and big countries and their economies and small countries and theirs. What are the social and political implications? Does it spell the end of privacy? Will this new age of finance favour the private or public sector? The author offers some suggestions and signposts, but no definitive answers or predictions. Wise!

Professor Prasad kindly sent me his book to review; I must confess I would not have read it on my own. But having read it now, I realise the extent and depths of my ignorance about digital money and the revolution in finance. “Fintech”, the broad term which roughly covers this revolution, will surely affect – has already affected – every one of us, for better or worse.

As luck would have it, before opening Prasad’s book, I had been studying the work of Canadian economic historian and media theorist Harold Innis. There are obvious parallels between the evolution of communication media from physical to digital, and that of money from the gold standard to bitcoin. A “paperless” society and a “cashless” society are two sides of the same digitised coin, no pun intended. Allow me to digress a bit.

Often called one of the founders of contemporary media or communication studies, Innis most famously argues that cuneiform script inscribed in clay, papyrus and parchment with the pen, and paper and printing presses tracks the evolution of civilisation. Each type of media favours a certain type of political regime, social organisation and religious belief.

Fellow Canadian Marshall McLuhan would extend Innis’ study to cover the modern radio and television; and their contemporary followers to the internet, and digital and social media. It is not just that “the medium is the message”, but that every technological medium has always already biased its users – all of us – to certain social practices, beliefs and views about each other and the world. This is what Innis means by “the bias of communication”. For example, McLuhan once famously observed that Hitler could only have risen to power through the radio but not TV; while John F Kennedy would have failed on radio but TV won him his presidency.