Money. It’s a constant preoccupation, whether anyone wants to admit it or not. People obsess about how to get it or daydream about what could be done with it: a new car, a meal at a fancy restaurant, a child’s college education. But most of us rarely stop to contemplate a larger question. What is money, really? Is it the change in your pocket, the bills in your purse, the vaporous flicker of a bank balance on a computer screen? Or is it something more substantial, like gold and silver?
One of the strangest incarnations of this ancient question has surfaced recently, in the development of real-life markets for virtual goods. Internet game players can go on eBay and pay real U.S. dollars for magic powers, enchanted weapons, or goblin gold—rare and precious items that exist only in the fantasy world of online gaming. This raises some peculiar questions. If your gaming alter ego defeats a dragon and wins a virtual pot of gold, do you have to pay income taxes on its market value? Will the IRS accept virtual gold as legal tender for the payment of taxes?
Odd as this may seem, virtual gold is only the latest permutation of a subject that has been a constant obsession in American history, from the founding of the first colonies to the present. If, as some historians argue, capitalism arrived with the first ships, so, too, did monetary experimentation, arguments about what money was, and debates about how it could legitimately be used. The experimentation was less a choice than a necessity: the first settlements were rich in promise but poor in precious metals. The imperial powers of Europe may have been awash in gold and silver from the mines of the New World, but their coins rarely lingered long in colonial coffers, thanks to imbalances in trade. The colonists necessarily developed what may seem (by today’s standards) a bewildering diversity of substitute currencies—everything from wampum to tobacco to gunpowder.