Broken Money

Gabi's Review 

Lyn Alden’s Broken Money might seem restricted to readers with a specialised interest in the history of money, but her work raises crucial ethical questions about the kind of society in which we would like to live. It’s also a particularly timely book in the current context of ongoing trade wars and the rising challenge to the US dollar’s status as the world’s reserve currency because of active resistance of the BRICS alliance (comprised of Brazil, Russia, India, China, South Africa). Alden’s work provides a historical lens to understand the root causes of these shifts, and she argues that modern fiat money is fundamentally “broken” due to its structural imbalances, potential for corruption, and the unjust power dynamics it fosters.

Alden starts by exploring money’s origins as a solution to the friction of trade beyond trusted networks, tracing its evolution from commodity money—such as shells and gold—to paper currencies and eventually to digital dollars. She emphasizes the trade-offs of each transition, using her recurring question “Who Controls the Ledger” to expose the vulnerabilities and manipulations inherent in every system. For instance, gold shifted from a medium of exchange to a store of value, while the USD’s decoupling from the gold standard in the 1970s ushered in a fiat era. This shift gave governments and central banks unprecedented spending power, leading to rampant debt, collateral inflation, and a system that disproportionately benefits those near the “money printer” while taxing the poor through inflation.

The book critiques the fiat system’s inefficiencies, particularly in cross-border payments, and its inequities, exemplified by the IMF’s exploitative loan terms to developing nations—mirroring colonial resource extraction. Alden illustrates how central bank control has historically been leveraged for power, such as funding wars, sowing inequality, and creating economic fragility.

A significant portion of Broken Money focuses on technological advancements reshaping money. The telegraph digitised dollars, enabled faster cross-border settlements, while blockchain technology now offers instantaneous transactions and decentralised ledgers. Cryptocurrencies like Bitcoin emerge as a promising alternative, providing a finite-supply, inflation-resistant store of value accessible globally, free from central control. Alden also examines stablecoins, which peg to the USD and serve as a bridge between traditional and digital finance, offering secure, trustless verification—especially valuable for nations with hyperinflating currencies. However, she notes strenuous resistance from banks, who see these innovations as threats to their revenue and control, prompting the development of central bank digital currencies (CBDCs).

Alden also warns that CBDCs, while leveraging blockchain’s transparency, risk perpetuating the same issues of supply manipulation and corruption if controlled by central banks. Worse, their transparency could enable surveillance, posing a double-edged sword for individual privacy. Meanwhile, the BRICS nations’ push for a USD-alternative token, combined with global adoption of blockchain and crypto fintech, signals a seismic shift in financial systems.

Broken Money ultimately suggests that while money’s history is fraught with exploitation, emerging technologies like blockchain could foster more equitable, individual-empowering systems. As central banks roll out CBDCs and some nations ban independent cryptocurrencies, the future remains uncertain but fascinating.

Broken Money is available to order for $49.99.

Publisher's Review

A Comprehensive Overview of the Past, Present, and Future of Money

Broken Money explores the history of money through the lens of technology. Politics can affect things temporarily and locally, but technology is what drives things forward globally and permanently. The book's goal is for the reader to walk away with a deep understanding of money and monetary history, both in terms of theoretical foundations and in terms of practical implications.

From shells to gold, from papyrus bills of exchange to central banks, and from the invention of the telegraph to the creation of Bitcoin, Lyn Alden walks the reader through the emergence of new technologies that have shaped what we use as money over the ages. And beyond that, Alden explores the concept of what money is at its very foundation to give the reader a framework to analyze and compare different types of monetary technologies and monetary theories.

The book also takes a distinctively human look at how money impacts the lives of real people, and how new monetary technologies shape the power structures within society.

In the modern era, energy abundance and technological enhancements have broadly improved human well-being, but the global monetary system has been slow to keep up. There are over 160 active currencies in the world, each with a local monopoly over its own country, and with little or no acceptance elsewhere. Many of them are rapidly diluted, which continually devalues the savings and the wages of the billions of people who live and work within those jurisdictions. Being born in the "wrong" country makes saving money far harder than it needs to be.

Nigeria has a population of over 200 million people and has averaged 13% annualized inflation over the past decade. Egypt cut its currency in half relative to the dollar twice over the past decade, which instantly devalued the savings and wages of its 100 million citizens. Dozens of countries have experienced at least triple-digit year-over-year inflation within the past four decades, including Brazil that outright hyperinflated in the 1990s while it was the fifth most populous country in the world.

Europe and Japan had $18 trillion worth of negative-yielding bonds in 2019, right before a wave of inflation wiped their purchasing power away. In 2021, the chairman of the U.S. Federal Reserve dismissed the idea that the sharp rise in the money supply from the pandemic stimulus would lead to price inflation. By 2022, as major inflation emerged, the chairman rapidly changed his outlook and tightened monetary policy so quickly that it led to the failure of some of the largest banks in the country.

How did we get to this point? Why isn't our money better than this in the 21st century? Broken Money answers these questions by examining the current mix of technology that has led to these limitations, and then explores emerging technologies that may be able to provide us with a monetary system that is fit for the modern era.