A Conspiracy of Paper

Elias sucked on his lower lip. “Give me a shilling,” he said at last. He waved his hand impatiently at my quizzical look. “Come now, play along, Weaver. Put a shilling on the table.”

Elias picked it up before returning it to the table. “That’s a sorry shilling,” he observed. “What’s happened to it?”

It was indeed a sorry shilling. Most of the edges had been filed away until it was a shapeless hunk of metal and only a fraction of its original weight.

“It’s been clipped,” I told him. “The same as every other shilling in the Kingdom.” . . .

“Our shillings are clipped and filed, and the excess silver melted down and sold abroad. Now you have a shilling that contains perhaps three-fourths of its original metal. Is it still worth a shilling? Well, it is, more or less, because we need a medium of exchange for the nation to function smoothly.” He held up the coin between his thumb and index finger. “This clipped shilling is but a metaphor, if you will, of the fiction that the idea of value has become in this Kingdom.”

. . . “Thus the rise of the banknote,” I observed. “At least in part, from what little I understand. If the silver does not circulate, but stays safely where it cannot be harmed, the representation of the silver provides a secure measure of value. The fiction is thus replaced by reality, and your anxiety over these new financial mechanisms undoes itself.”

“But what would happen, Weaver, if there was no silver? If silver was replaced by banknotes — by promises? Today you are used to substituting a banknote for a large sum of money. Perhaps tomorrow you may forget that you ever dealt in money proper. We shall exchange promises for promises, and none of those promises shall ever be fulfilled.”

“Even if such a preposterous thing were to happen, what would be the harm? After all, silver only has value because everyone agrees it has value. It is not like food, which has a use unto itself. If we all agree that banknotes have value, how are they less valuable than silver?”

“But silver is silver. Coins are clipped because you can take your silver to Spain or India or China and exchange it for something you desire. You cannot do that with a banknote, because there is nothing to support the promise outside of its point of origin. Don’t you see, Weaver, these financial institutions are committed to divesting our money of value and replacing it with promises of value. For when they control the promise of value, they control all wealth itself.”

(David Liss, A Conspiracy of Paper, a novel set in 1719)