What does it mean that money is an allegory?

This is an interesting time to read about money. It occurred to me as I began Frederick Kaufman's The Money Plot: A History of Currency's Power to Enchant, Control, and Manipulate that I have not used actual money—coins and bills—since early March. I've bought stuff—groceries, gas, books, shoes—but paid with a credit card or the click of a mouse. What happened to the money? Where's the money?

Kaufman is a New York-based writer, editor, and educator. He teaches at the City University of New York and its Graduate School of Journalism, where he serves as a professor of English. He is a contributing editor to Harper's magazine, and frequently writes about food and food culture. Earlier books include A Short History of the American Stomach (2008) and Bet the Farm: How Food Stopped Being Food (2012).

He acknowledges that the book's origin came out of a pitch meeting to his agent. Money is not a natural subject for an English professor with a background in food culture, and I had a sense at times that Kaufman was straining to make his research connect intelligibly with his thesis.

Worse, it was not clear to me what exactly the money plot is, which, I admit, may well be a reflection of my own ignorance. He does try to explain: "The symbols engraved upon the dollar [bill] . . . are allegorical. For not only is allegory germane to the earliest forms of money, but to the nature of modern finance. And the same can be said for its plot." An allegory's plot does not drive the story to a solution; in an allegory there is no goal, no solution. "The stubborn lack of resolution to the plot has defined the challenge posed by modern money."

What is money? It's whatever we agree it is. If we don't agree that shells, beads, Redbacks (Republic of Texas dollars), cigarettes (prison currency), and more and more and more have a value that can be exchanged for groceries, gas, books, shoes, it's not money. Money is an illusion, a metaphor.

When I was stationed in Korea and Japan after the war, the US troops were paid in script. Paper nickels, dimes, quarters, half dollars, dollars, etc. Good at the PX, good at the barber, good at the company club. Twice during my three years overseas, we were confined to quarters and had one day to exchange all our script for a new version. Yesterday's currency was so much colored paper.

Why does money, any money, exist? Well, for one thing, it makes it easier to translate something abstract like a service or labor into something tangible like food, beer, and shoes. It is also a way to insure the future and control reality. Money may not buy happiness, but without it, it's difficult to be happy, no matter what Porgy says in the song.

The Money Plot is filled with interesting factoids: The first "coins" were shaped ostrich shell . . . the copper in a hundred per-1982 pennies is worth around $2.20 (pennies were debased with zinc in 1982) . . . in 1982 Ronald Reagan signed a law removing interest-rate caps at savings banks and more than 1,500 savings and loan institutions failed in the next ten years. Thales, the Greek philosopher, invented options—a way to risk a small sum to obtain a large one—in 585 BC. 

Kaufman embeds the factoids in stories about money: The kula rings of Melanesian outriggers. The buying and selling of women. The origin of Bitcoins. The role of gold. Richard Nixon, John Connally and the decision to abandon the gold standard. 

In 1971 we had roughly $10 billion worth of gold in Fort Knox. Foreign banks held roughly $30 billion gold-backed dollars. The Bank of England asked for $3 billion of its dollars to be converted into gold. If other central banks followed, the US would not only be out of gold, we would be in default and no one knew the effects of that—except that it would be terrible. So we said we're not going to back dollars with gold any more—and the effects were not terrible. Today the dollar "floats."

"By describing the illusion of money the light of primitive belief, classical mythology, Christian ethos, and political propaganda," Kaufman concludes, "my hope is that going forward we might no longer be locked into believing cant of financiers, the deceit of free and competitive markets as the essence of economic life. Instead, we might begin to understand that those who control money are less scientist than shaman, seer, storyteller, and soothsayer—those who spun ancient tales about sticks and stones, convincing others of their fiction."

It may not answer the question I asked above—Where's the money?—but The Money Plot tells a fascinating story nevertheless.