Banking, money, tallies, trust and apps

The Banking episode of 50 Things That Made the Modern Economy is a good 9 minute listen, giving an interesting history of modern banking and insurance. Seriously, it’s interesting! It has Knights, Warrior Monks, Inquisition and people being burned to death and everything!

It’s particularly interesting to me though after wondering so much about banks and our relationship with money over the last few years, inspired by experiences of communal office lunch IOU’s, and by the number of payment apps, aiming to help ‘friends’ instantly pay each other, with an effective plan to eliminate IOU culture.

Turning IOUs into micro banks

These experiences fuelled the idea of what was finally realised in the form of ‘54Bank’, which was basically and IOU tally for anyone wishing to participate in our old office at Studio 54B. The plan was simply to record communal lunch buying, and create a ledger that didn’t need to be settled, meaning that, so long as everyone knew how much they owed each other, that there was no real need to settle or keep paying small amounts back and forth, turning everyone involved into a sort of micro bank.

So, instead of thinking that Bob owes you £5, you think that you have £5 in the Bob bank. Then, if Bob ever buys you a £3.50 lunch, your balance in the Bob bank becomes £1.50.

The original idea was simply to keep track of ongoing and fiddly IOU tallies, and prevent occasional hard cash juggles, between those who owed someone for a previous lunch, those who had exact change on the day, and those who only had a £20 note, but where prepared to cover for someone who didn’t have any cash that day. While I was, and still am, a fan of IOU culture as I call it, this awkward tally made it more difficult, though still nicer I think, than exchanging bank details or instantly settling micro debts as though you don’t trust the colleagues and friends around you.

Banking and Newspeak

It was a simple idea, and in many ways, highly unoriginal. Like a super basic and stripped down version of M-Pesa or Bitcoin, or more recently Venmo, or more classically PayPal. 54Bank was just a tally. A ledger. A record. Like any regular bank. The difference and the thing that was most interesting though, was the suggestion that it need not be settled. People mostly hated that!

Some wouldn’t participate for that reason alone. Some joined in but admitted feeling uncomfortable with the ‘debt’, which they struggled to switch their view of. If they owed money then it was a debt. And if someone owed them, then they wanted their money back. Owing and debt. Two words that seemed inescapable for 54Bank. But why not with regular banks?

Do you think that your bank owes you your balance? Do you see your balance as debt held by your bank? I bet not. And if you’re thinking along the lines of it being different, because a bank is an institution or more secure or something, then realise that means you’re saying that you trust banks. You know, those institutions run by bankers, that charge you interest and fees at far higher rates than they pay you for giving them all your money ‘to look after’.

While I’m not quite suggesting a conscious conspiracy theory here – that banks deliberately used language to manipulate perceptions of money, trust and security – I do think there’s something interesting in the way our relationship with money has evolved over the years, and that it’s within the nuance of those definitions that new relationships with transactions can evolve.

Abstracting value

You never give me your money
> You only give me your funny paper
> And in the middle of negotiations
> You break down
> Lennon-McCartney

Thinking more as I write, I’m reminded of these Beatles lyrics from You Never Give Me Your Money. I always liked how they called money ‘funny paper’. Reading more about the song today though, I realise that funny paper is more abstracted from actual money than I thought:

’Funny paper’ – that’s what we get. We get bits of paper saying how much is earned and what this is and that is, but we never actually get it in pounds, shillings and pence. We’ve all got a big house and a car and an office, but to actually get the money we’ve earned seems impossible. > George Harrison, 1969, Anthology

It’s all just funny paper. Ledgers, as per the idea behind 54Bank. Ways of recording and agreeing ownership of stuff. To that end, just for the record, not to settle, not owed, here are my 54Bank balances after closing doors on 54B last year:

£4.87 in the Bank of Anna
£4.99 in the Bank of Calum
£8.91 in the Bank of David
£24.39 in the Bank of Erin
£5.49 in the Bank of Jenifer
15p in the Bank of Tom
-£5.11 in the Bank of Jamie

£43.69 in total in 54Bank, and with people that I trust more than my ‘real’ bank.

Further listening: There 50 Things… M-Pesa episode is also worth a listen if you’re not familiar with it.