If you’re interested in money – and who isn’t? – David Wolman’s [amazon_link id=”0306818833″ target=”_blank” ]The End of Money[/amazon_link] is a cracking good read. People think economics is all about money but actually very few economists think about money at all. If only more had done so – it obviously shouldn’t have been left to the bankers. I’ve always found that once you start trying, it quickly becomes rather mysterious and difficult, so I’ve always found it fascinating without entirely understanding how it works. There, I confessed.

[amazon_image id=”0306818833″ link=”true” target=”_blank” size=”medium” ]End of Money[/amazon_image]

The End of Money is a highly entertaining way to start thinking about the deep mysteries of money, which touch on how we organise ourselves in society, the role of government, our sense of identity. The key to money working at all, furthermore, is that not many people think about the mystery at all, given that it is a collective illusion. We emote about it but mustn’t analyse too closely.

The book is in fact about the end of cash, and the author’s Virgil on this journey is my friend Dave Birch, well known to readers of this blog and his own. (David Wolman describes Dave B as looking like a portly theologian, which is a little harsh. Which of us is not expanding around the waistline as the years go by? His picture is below so you can judge for yourselves.) Although the book gently makes fun of Dave’s enthusiasm for the death of cash, it reaches the same conclusion: modern technologies are inexorably making cash redundant.

Dave Birch

It’s a persuasive case, and I was particularly impressed that the author managed not to use cash for a whole year, but it seems to me that there are two big barriers to its general demise.

One is covered in the book, namely the psychological or emotional attachment we have to cash. It describes the behavioural finance findings about how much easier psychologically it is to spend on a credit card than by cash, and so on. Maybe, as the book suggests, there are clever technological ways around these human frailties, that could be built into the design of apps.

A second hurdle is raised but not easily resolved. That is that we have far greater trust in governments than in banks (ok, that’s not saying much). In October 2008, when it seemed to me highly likely that a big UK bank would fail and the ATMs and electronic payment systems would stop working, I withdrew as much cash as I could for a while. That danger has receded, but there are still trust barriers to relying entirely on plastic and the benevolence and efficiency of our banks and card companies. So although I agree with The End of Money‘s argument that we may see a proliferation of technology-based means of transaction, I’m not so willing to predict the End of Cash. No doubt Dave Birch will argue with me in the comments below….

It’s well worth making your own mind up. This is a really lively and interesting book, stuffed with interesting facts (such as the central role of North Korea in global counterfeiting – who knew?). It’s also timely reading in these times of perpetual financial crisis.