Paper is becoming less important in some respects, but its strengths — prestige, utility, permanence, and security — are more essential than ever.
s paper obsolete? A Canadian who had a stash of new-style polymer $100 bills probably would disagree. He kept them in a coffee can near a radiator and they melted. Others have complained that Canada’s new individual notes stick together and resist folding. Canadian authorities insist problems are exaggerated and that the new plastic money is much harder to counterfeit than traditional rag-content paper. Still, it’s only a matter of time before counterfeiters imitate the technology, as they have with other safety features from watermarks to holograms, at least well enough to fool time-pressed cashiers.
Could the solution be to eliminate all currency in favor of digital transactions? Barron’s ran a cover story asking if we’ve reached “The End of Cash?” The author called the disappearance of cash “slow but inexorable.” Yet he had to acknowledge at the outset that the federal government printed a record 8.4 billion notes in 2011. While the piece asserted that “upscale merchants are doing away with cash registers,” the only one it mentioned was Apple stores. And even they do accept cash, despite urban legends otherwise.
Paper is definitely becoming less important for financial transactions. The Federal Reserve Bank of Cleveland’s website makes this point graphically. Cash accounts for only 0.2 percent of the value of funds transferred; the volume is overwhelmingly electronic. But that doesn’t mean paper money has been withering. Nearly half of all transactions — 49.4 percent, according to the Fed — are still in cash. Somebody has failed to inform tens of millions of consumers about the “post-cash, post–credit card economy.” Most futurist gurus and journalists who extol it, whatever their politics, have little contact with the 25 percent or more of the population who, according to the Fed, are “unbanked or underbanked” and rely almost entirely on cash payments, with the exception of the debit cards now encouraged by Social Security and other government agencies.
And paper remains invaluable even for the millions of people with ample credit. Globally, the increase in Chinese consumption of paper over the last five years has more than offset the decline in U.S. production, according to the Environmental Paper Network, a nonprofit promoting conservation and recycling. And according to the Economist, global paper use per capita is up by 50 percent since the dawn of the personal computing age in 1980. (Thanks to the prodigious paperwork of the expanding European Union, Brussels’s multilingual bureaucrats have brought Belgium to the number one world per-capita rank in paper use.) Paper may be less vital for conveying breaking news than it once was — according to the Times Literary Supplement, Charles Lindbergh’s 1927 solo transatlantic flight alone increased newsprint consumption by 25,000 tons — but it can offer four advantages: prestige, utility, permanence, and security.
As routine communications have become largely electronic, paper’s role as a mark of status has only grown. Can an exclusively electronic diploma, passport, or military commission document even be imagined? Will the bride’s family announce a wedding with advertising-supported Evites, and will the photographer supply only digital files recording the event? The more important the gesture, the more imperative a handwritten note, in part precisely because people find handwriting more difficult now. Even a commercially produced card signals that the sender has taken the trouble to visit a shop, select the proper design, find a stamp, address it, and mail it. One recent European experiment showed that even for a high-technology job announcement, many more potential applicants replied to postcards than to email announcements. And America’s continued printing of one-dollar bills signals support for the U.S. note as a reserve currency. (At the other end of the range, the $3 billion in hundred-dollar bills printed last year are used mainly overseas.)