Squillions
2nd June 2026
London Review of Books, a Voice of the Crust.
So where is all that cash, who’s using it, and for what? The answer proposed by Bullough is bizarre: nobody knows. ‘The number of banknotes is increasing, and the question of why the value of banknotes has increased so markedly remains unanswered.’ Central bankers don’t have much interest in the question. It is immensely valuable for any country to be able to produce currency that’s in worldwide demand: for the cost of printing a few bits of paper, a developed economy receives billions of dollars of value in pounds, dollars or euros. This is called seigniorage, and central bankers are as keen as anyone else on what is in effect free money. But the incuriosity they’ve developed around the question is remarkable. Especially when you home in on what all that cash is actually being used for. According to the Financial Action Task Force, which was set up in 1989 to fight financial crime at a global level, ‘it does not seem unreasonable to suggest that the total amount of cash physically transported for money laundering purposes globally is in the order of hundreds of billions of dollars.’ This seems to be the amazing answer to the question of the missing cash: it’s being used in criminal transactions.
One thing that comes clear in the article, and which the article appears to ignore, is that money laundering is totally a problem for government; no private citizen or business gives a damn where you got your money. And the reason governments worry about where you got your money is becuase they want to steal as much of it as possible from you through taxation. Who hates billionaires the most? Politicians, who don’t think that they are getting their Fair Share of Jeff Bezos’ money.
The rules are extensive, complicated and very expensive to transgress. The result is that in the US alone, banks file ten thousand SARs every single day. That’s 3.8 million reports a year. It is impossible for the authorities to act on every one of those. The outcome is a system that flags so much activity it functionally resembles one that doesn’t flag any activity at all. The scale of the system is flaw number three: all of this is extraordinarily expensive. Compliance – the process of following the rules – costs $206 billion a year globally, according to the research company LexisNexis. That’s a lot of money for a system that looks in the wrong place, doesn’t work even when it’s looking in the right place, and causes enormous amounts of friction to the law-abiding, who are the ones who ultimately bear the cost. Its processes are hugely intrusive (Bullough rightly wonders at how little fuss there is over the privacy implications of SARs), create bureaucratic obstacles to ordinary citizens and businesses, and don’t do what they are supposed to do: prevent money laundering.
Not to mention the eternal truth that evolution works even when you don’t want it to. All of this regulatory friction affects mostly the innocent bystanders, and rarely touches the objects of government affection. Natural selection works even faster in a hostile environment than in a comfortable one; all that these regulations do is speed up the process of eliminating the least clever.