The Tricks of Planet Money
I want to write about producing a particular type of story that I’ve been calling the Idea Story. An Idea Story is often known by other names such as: complicated, confusing or boring. That’s because Idea Stories tend to be an investigation of a question (“…that got our reporters wondering, why is gold worth anything?“). An Idea Story can also be an explanation of something. (“…and to find out what exactly is ‘quantitative easing,’ we turn to…”).
The problem with Idea Stories is that they lack many of the elements that we know make great radio – characters, stuff happening to the characters and scenes that you can picture. You know, Story Stories. Idea Stories fail in a lot of these areas.
That said, this is the kind of piece that when done right can be hugely satisfying to listen to. When Idea Stories are good, people will thank you for explaining something they’ve heard second referenced in the news and never quite understood. There are lots of “whoa” moments in successful Idea Stories that explore a big fundamental question in a way that shifts your perspective.
Which is all to say it can be worth the work to take these character-less, narrative-less, complicated Idea Stories and make them feel like Story Stories. This involves a lot of dress up.
Here are five tricks we all use all the time:
Trick #1: Sign-Post
A complicated story should have a script that reads like a map with a very detailed route laid out for the listener. It should state the purpose of the story upfront, remind you of the destination throughout and loudly announce each and every turn before it happens.
Let’s start with the opening. Idea Stories need a statement of purpose. Most Story Stories benefit from this too but Idea Stories can’t live without it. You are asking listeners to follow some complicated explanation or theoretical idea on the radio. People zone out for 15 seconds here and there. There is no rewind. The destination (your question or idea) is what is driving the entire piece, so you need to state it early and repeat it many times. We will often spend half of an edit on the exact words that should follow “on the show today…”
For example, David Kestenbaum and Jacob Goldstein began a recent Idea Story podcast with a question:
David Kestenbaum: Today on the show…we want to try to answer the question ‘why gold?’ Why it’s served as money for millennia.
David Kestenbaum: We go through the entire periodic table of the elements. And try to answer that question.
From the beginning you know the question (red). Then they do you another service. They tell you how they’re going to go about answering it (orange). This is a sign-post. You have already been handed a map, this is the phrase that lets you know where we are going next.
Jacob and David take us through the periodic table of elements with a very charming chemist who nixes element after element explaining why each one would make lousy money. We are on this journey with David and Jacob and we are told (with a sign-post) every time we move from one group of elements to another:
Jacob Goldstein: So we pull out the periodic table of the elements. And we start on the far right.
The chemist, Sanat Kumar, ticks off a few, then:
David Kestenbaum: OK so if you are playing at home. You can cross out the rightmost column: Helium, down through Radon.
Jacob Goldstein: Big jump now. Rightmost to left mostly. Sanat swings now to the leftmost column of the periodic table.
In fact this piece is so good at stating the mission and sign-posting each transition, I’m just going to post the whole script below..
Trick #1A: Underlining and Foreshadowing
There are two more things sign-posts are really good at: underlining and foreshadowing.
A few weeks ago I turned in a piece about a trade war between Brazilian and US cotton farmers. It was a complicated, multi-step story with multiple twists and turns that eventually (20 minutes in) built to an outrageous agreement between the two countries. There was a good pay off at the end of the story but you had to stick with it a while to get there.
I tried to foreshadow this exciting twist with an opening that lay out everything that was about to happen:
Chana: Today’s show… how to buy four bales of cotton. And this story has it all. It turns out the search for cotton lands you right in the middle of a decade old international conflict. There’s an underdog named Pedro who took on the world’s largest superpower. There’s quiet money transfers, retaliation and a 147 million dollar bribe.
Planet Money Master Editor Alex Blumberg heard this piece once and tucked in 3 sentences throughout the script that gracefully plead “keep listening!”
One third of the way in is sign-post #1:
Chana: The reason Dahlin is so obsessed with Brazil, brought it up 3 times without being asked… there’s a back-story.
Sign-post #2, halfway through the piece:
Chana: If you’re Brazil there is only one option left. Retaliation. Not everyday lashing out retaliation, but a permitted, controlled retaliation process. And if you want to understand the bizarre state of global trade, just watch what happens next.
And to set up that final outrageous US/Brazil agreement:
Chana: Days after the Retaliation Master sent his list, the US sent a delegation to Brazil to negotiate. And here is where our story takes it last and final twist.
These three short phrases tell you where you are in the story and that it’ll be worth your while to keep listening.
Sign-posting can also be useful in telling listeners “here is where you should pay attention” or “this is where the lesson is.” Again Alex accomplished this in the same piece by throwing in a couple more lines:
Chana: This is the crazy thing about the WTO. It has a formal process, it has high powered lawyers and judges and 153 member countries. Countries bring major international disputes to its doors. The WTO comes out with a ruling and then…..that’s it. Nothing. If everyone wants to obey the ruling, that’s cool. If not, that’s OK too.
Imagine that graf as I originally wrote it, without that first line. I am just talking at you about the WTO process. I am hoping that you get that it’s bizarre. Alex’s line just tells people: hey this is weird.
You can do this in tape too. I interviewed an American lobbyist for the Brazil WTO story. Out of nowhere in the interview he starts thanking various officials for their work on this issue. At first I was annoyed because it sounded like (probably was) a boring prepared speech that I’d have to cut. Then I realized the whole reason I wanted to talk to him was to hear about him lobbying politicians. Here he was lobbying American politicians in the middle of our interview! So I made sure to point out what was happening:
By interrupting him I am able to underline what I want the listener to learn here. If you don’t think to do it in the interview you can always stop the tape and jump in with your underlining sign-post (“I want to pause here to point out…”).
- Your script should look like a map.
- It should begin with a statement of purpose and directions of how you plan to get there.
- You should announce clearly every time there is about to be a turn that there is about to be a turn. Even better tell us where it will take us.
- Use your sign-posts to keep the listeners engaged and to underline what we are learning and have learned thus far.
- Remind us throughout the piece of the original statement of purpose.
Trick #2: Find Characters
The worst part of Idea Stories is that they rarely come with obvious characters. Collateralized debt obligations lack characters, as do trade imbalances. They are important but frustratingly resistant to storytelling.
When I am beginning to research an Idea Story I try to lay out the mechanics in my mind. “OK so we buy Chinese stuff. Dollars go from here to China….then they pile up there in the banks….then they get used to buy US treasury bonds….” At some point early on I always ask who is the guy who does that? Someone has to put that money into the Chinese bank, someone at the bank manages it and sees it piling up, someone sits at a computer and buys US treasury bonds…who is that guy?
One time I decided I wanted to do a story about the economics of piracy. Somali pirates had just captured an American sea captain, piracy was on the rise and I kept thinking it must really be worthwhile to be a pirate. I could have put that question to a piracy expert at Brookings and done a serviceable piece. It would not have had characters though, which we know make a story memorable. So I started to play out the step by step. Some guy comes up with a business plan. Who is that guy? Some guy provides the financing. Who’s he? Then there’s the pirates of course. They take over the ship and start demanding money. Who do they demand money from? There’s some guy that negotiates with the pirates. I tried and failed to track down a pirate and a pirate financier. Eventually though, I did find a ship owner whose ship was hijacked. He could tell the entire story from the moment the pirate first called him, through the negotiations, to how he delivered the ransom:
Pirates have timesheets. Pirates have fax machines. The money gets dropped from a helicopter in the water! No one else but a guy directly involved can tell you those details and it’s those details that make the story stick. It’s worth it to try and find the guy.
Pirates are inherently exciting but getting the actual guy who does the actual thing can also be your way into an Idea Story that is technical. For instance, last year we were doing lots of stories on the economics of health care in the US. The legislation proposed barring companies from denying customers with pre-existing conditions. I was interested in how that would change the fundamental business of private insurance, a business that most people didn’t really seem to understand (evil private insurers vs. socialist death panels, you’ll remember). A health care economist could have explained why private insurers have to deny sick people, but you would have no reason to actually listen to that. The practice sounds so outrageous, as soon as an economist tries to tell you, it makes rational business sense you turn off the radio.
It occurred to me that someone in some office somewhere does the denying. That’s their job. A job they were maybe about to lose:
There’s something so satisfying about hearing the actual human beings. You still get your moral outrage but because you’re hearing from the deniers, you want to know how they justify what they do. You are paying attention as the deniers go on to explain the way an insurance pool works in the individual market. They explain that by denying high-risk people to the collective pool, they play a crucial role in keeping insurance affordable. Hearing from the actual humans means there’s an opportunity for them to make their case. It doesn’t mean listeners will like it, just that they’ll hear it, and that’s what you want.
Lastly, if your story is so technical and complex that there really aren’t any characters, make them up. David and I did an entire series on an anthropomorphized toxic asset. Alex, Adam and Caitlin acted out a bank balance sheet.
I was on a search for who was supposed to be watching AIG. That gave me a narrative format. Along the way I could stop frequently for a “discovery” (explanation).
Trick #3: Think Small(er)
The inspiration for an Idea Story is often big and broad. I often find if I allow myself to think smaller, there is a real world example, a step-by-step narrative that gets at the big idea. Take the Brazil WTO story. I couldn’t just talk to a trade economist in vague terms about WTO rules and the problematic nature of subsidies. That’s not a story. When I started learning about the Brazil WTO I realized global trade wars play out all the time and they are actual drama filled narratives. I could still get at the big ideas by weaving them into the narrative of one example.
Trick #4: Go on a Quest
If you can’t find a real story you need to make it feel like a story. The reporter’s “quest for an answer” technique is often overused but only because it’s so damn effective. You start with a compelling question and then you the reporter set out on a quest to find the answer. David and Jacob did this with the Why Gold podcast. They even made it a table of elements bingo game.
At the height of the financial crisis, Adam Davidson suggested I do a story about why the regulators failed to regulate AIG. It was clearly a very relevant question but unfortunately there are a million answers. There are too many different regulators; the big regulators pandered to the banks for their business, the banks played them off of each other. Oh, and Congress made it harder than it should have been for regulators to actually regulate. Each new thing I learned was so amazing to me, and that is how I wanted it to unfold for listeners too. Starting with the New York state insurance regulators who told me they were shocked AIG collapsed (despite the fact that AIG was based in New York State).
I was on a search for who was supposed to be watching AIG. That gave me a narrative format. Along the way I could stop frequently for a “discovery” (explanation).
Trick #5: Organize
Last and certainly least, you can go with bullet points. If all you’ve got is talking heads, the least you can do is organize them for your listeners. David and I did a show on China’s economy becoming the second largest economy in the world (bumping Japan). The question we get all the time from Americans about this is “should we be afraid?”. We tried to spice it up with people in China talking about how they were afraid too, but it just didn’t work. In the end we went bullet points. There are three possible reasons you should be afraid. It wasn’t the best radio but it made it possible to wrap your head around a complicated question.
- Find an actual example that gets at your big idea. The example allows you to tell a story and talk about the big idea at the same time.
- Take listeners on a reporting quest to find the answer to a compelling question.
- If all else fails, use lists and bullet points to help organize your points.
Lastly I’d say yes, Idea Stories are a pain in the ass, but they provide an enormous service. People feel so grateful when you clearly explain something complicated. It gives them an access point to all future stories on the topic. It can be powerful to hear a piece that gets at a big fundamental idea or question. It gets under people’s skin. There are obviously more than five tricks to take a boring or complicated topic and make it interesting. The point is if you’re fascinated by something but it seems really complicated, or if you can tell everyone is confused by something and you are too and you’re thinking it’s a monster to take on – do it. Find a way to make it work. It’s worth it.
Follow along with the Planet Money script for “Why Gold?”
Remember, red is each time they restate their purpose (“Why gold?”); orange are the sign-posts that tell us “here is where we are going to turn next.”
Hank Mendelsohn: You can’t live in it. You can’t eat it. And it doesn’t earn you any interest. So why do you want it?
David Kestenbaum: Hello and welcome to NPR’s PM. I’m David Kestenbaum.
Jacob Goldstein: And I’m Jacob Goldstein. That was Hank Mendolsohn you heard at the top. He’s the gold dealer who sold us a quarter ounce gold coin for $385 plus tax. The very same gold dealer who, when he sold us that gold, said he had no idea why everybody is paying so much for it.
David Kestenbaum: Today we want to try to answer that question. Why Gold? Why has gold been used as money for thousands of years? We’re going to go through the entire periodic table of elements. Because to me OSMIUM seems like the logical choice. I’m rooting for Osmium. The densest element.
Jacob Goldstein: I’m no scientist, but for some reason, I’ve really got my heart set on Lithium.
David Kestenbaum: Dude, that is not going to end well. But first, our PM indicator…
Jacob Goldstein: Today’s Planet Money indicator: $33. That’s likely to be the price, more or less, of one share of General Motors stock when the company has its IPO, its initial public offering, later this week. And, of course, David, you and I as U.S. taxpayers have a big stake in this thing. The government actually owns 61 percent of GM, which we got in exchange for about $40 billion in bailout money.
David Kestenbaum: So the question we all have is: are we gonna get that money back? So how does the math work out if a share is sold for $33?
Jacob Goldstein: The short answer is, at $33 a share, we’re gonna lose some money. Bloomberg News actually did this math, and they say the government needs to sell its stake at $44 a share to break even. The slightly longer answer is there’s still a chance, a chance, that the government could ultimately break even. That’s because the government is only going to sell about a third of its GM stock in the IPO this week. So it’s possible that if the stock goes way up, and the government sells the rest of its stock at some price well above $44, we could get our money back in the end.
David Kestenbaum: OK, thanks, Jacob.
Jacob Goldstein: Let’s get to the show.
David Kestenbaum: So a little bit of background. As you out there may know about a year ago we spent $1000 of our own money on a toxic asset. We did a bunch of stories about that, we ended up losing about half our money.
Jacob Goldstein: But we had a good time losing half our money. We liked this idea of buying something, doing a bunch of stories about it, unpacking it. So we had this cash at the end and we saw, OK, the price of gold has been going through the roof. We don’t really understand why. So we took the money we had and we bought as much gold as we could. Which turned out to be this little quarter ounce coin, that’s about the size of a nickel.
David Kestenbaum: There’s this quote that I really love, widely attributed to Warren Buffet: “Gold gets dug out of the ground in Africa, or someplace…Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
Jacob Goldstein: Now, that’s a little bit of an overstatement. Gold does have a few practical uses. People like it for jewelry. Occasionally it’s still used for dental fillings. And it has these uses in electronics, cellphones, it’s a good conductor. But still, a lot of the gold in the world it’s owned by people who aren’t doing anything with it. It’s just sitting there.
David Kestenbaum: And the question I had, I mean, before I was a journalist I was a physicist, right. The question I had is, WHY GOLD? It’s just this metal. We’ve got 118 elements in the periodic table. It’s just an atom. It’s got 79 protons. That makes it gold. But you know, you add one more proton, you’ve got Mercury. You add one more you’ve got Thalium. Is there really anything that special about it? Something so special that it deserves to be the thing that humans have valued for so long? So today we’re going to go through the entire periodic table of the elements. For those of you who haven’t seen a periodic table since tenth grade chemistry class – it looks kind of like a bingo card. It’s this grid, with a bunch of squares. Each square has an element in it — a type of atom. And there is a box for each element that exists. One for Hydrogen, Carbon, et cetera. It’s organized into columns. And the elements in each column have some similar properties.
Jacob Goldstein: And so today we are basically going to play periodic table bingo. We’re going to take the whole table and just try and start crossing stuff off. You’re welcome to play along at home. I put a link to a periodic table on our blog you can download. And so, you know, go print out your periodic table and take out a big red pen or something.
David Kestenbaum: So we printed out our own copies. And we went to visit Sanat [SAAHNOT] Kumar. He is Chair of chemical engineering at Columbia University. The first thing you notice about him are his glasses.
Sanat Kumar: Pink on the top, regular 1950′s style, plastic frames, plastic lenses.
Jacob Goldstein: These are dynamite glasses. He bought them in Soho. And he just looks like a million bucks in them. He’s like the hippest chemistry professor that I’ve ever seen.
David Kestenbaum: I can imagine someone like Kanye West wearing these glasses. So Sanat is perfect for this because he has a chemist’s perspective. But he also comes from a place where gold really does have this special status. His grandfather, who lived in the south of India, was fairly well off. Had a big house, a big family. And he owned a lot of gold.
Sanat Kumar: Growing up my grandfather had a goldsmith who would work in the back of the house; there were two of them. And they had this little bowl in which there was husk, and they would put a little bit of coal in the middle, and those nice little crucibles. They would melt gold and pour it. It was fascinating to watch them. They had these wonderful balances that I wish I’d kept because they were these really good old-fashioned balances that were good down to a milligram.
Jacob Goldstein: And what was the finished product? What were they making?
Sanat Kumar: Jewelry. More jewelry and even more jewelry. You understand the concept of dowrys and stuff like that. So if you have 7 daughters, you’ve got some dowry to take care of.
David Kestenbaum: So in India, GOLD REALLY IS A KIND OF CURRENCY, it was when you were growing up, it is now.
Sanat Kumar: It’s more than a currency. It’s how you measure. People talk about putting currency into your pillows and your mattress, right. This was our analog of doing that. You buy gold and you have these big safes. And you stored it. It was easier to store than putting money into a mattress. Because money didn’t mean a whole lot — it would burn. Gold wouldn’t burn. So they loved gold, even to this day.
David Kestenbaum:: Jacob, you know what I say to that? Yeah, so it doesn’t burn. Lead doesn’t burn either.
Jacob Goldstein:: OK, so let’s get to the bingo, then, right. So we’re there with Sanat, and we pull out the periodic table of the elements. And we start with the column on the far right. The elements in this column have a really appealing characteristic. They’re not going to change. They’re chemically stable.
Sanat Kumar: Helium, neon, argon, krypton, cenon, radon.
David Kestenbaum: Those are the noble gases.
Sanat Kumar: Correct.
Jacob Goldstein: So they’re good in a way because they’re nonreactive, they’re not going to change. Big drawback: a gas.
Sanat Kumar: That’s right. (Laughs).
Jacob Goldstein: You could have your money in a jar. But then if you open the jar, you’d be broke.
Sanat Kumar: Helium is one of those things that will actually leak away. People actually calculated that if you make a metallic container, and left it out there, Helium will diffuse through the container and go away.
Jacob Goldstein: Because the atom is so small.
Sanat Kumar: It’s so small, and it’s got very special quantum properties. For some reason, it’s just able to rush through metal. So you couldn’t even leave it sealed in a container. I mean, that’s just bad news all the way around.
Jacob Goldstein: So I’m feeling super-safe about my helium. Don’t worry about it. I’ve got it sealed in a metal box. But Quantum Mechanics and that means I’m broke.
Sanat Kumar: Basically, yeah.
David Kestenbaum: All right, so if you are playing at home. You can cross out the right most column: Helium, down through Radon.
Jacob Goldstein: OK, so right most column – gone. Now let’s jump on over to the leftmost column. It’s called Group 1A. Hydrogen is on top. That’s a gas. We can cross that out right away. Below that is my pick Lithium, and Sodium.
Sanat Kumar: I don’t know if you played with sodium, for example, it’s extremely flammable. That would be very bad. As you go down the table becomes more metallic, but they are still very reactive. So you can start ruling out group 1A, for example, as being the most reactive.
David Kestenbaum: And why don’t we want our currency to be reactive? Obviously exploding is bad.
Sanat Kumar: Well, Lithium is, for example, known very well, you have lithium ion batteries. And if you expose lithium to air, it will cause a huge fire that can burn through concrete walls. So I had a colleague of mine, who works in new batteries, and he had a Lithium leak, and it burnt its way through three feet of concrete wall. So that created a few problems. I don’t think you want your currency to be sort of doing that in your pocket… (Laughs).
Jacob Goldstein:: All right. So I’ll give up on my dream of a Lithium standard. But when Sanat says reactive he doesn’t always mean it’s gonna blow up or make a hole in a concrete wall. Sometimes it will just kind of corrode.
David Kestenbaum: And that’s one thing about gold is that it stays gold. You’d think, you’ve got gold coins sitting on the bottom of the ocean they’re gonna corrode, or get all messed up. But you can find them hundreds of years later, brush them off and they’re unchanged. Nice shiny gold. After centuries on the ocean floor.
Jacob Goldstein:: And it turns out this is a pretty rare quality of elements on the periodic table. So Sanat really get some momentum going now, he starts crossing off a lot of stuff. Because it turns out that most of the elements on the periodic table are pretty reactive. They like to bond with each other, or some kind of chemical reaction happens when they’re around each other.
David Kestenbaum:: So Sanat crosses out the left hand column. And the next one and the next one. And five more columns on the right. I ask him then about these two weird rows at the bottom. They’re always kind of broken out separately from the main table. And the elements there have some awesome names. Promethium, Einsteinium. Kestenbaumium.
Sanat Kumar: You wish.
David Kestenbaum: No, there’s no Kestenbaumium.
Sanat Kumar: Nice try, though, nice try. You almost got it past me.
David Kestenbaum:: These are referred to as the Lanthanides and actinides.
Sanat Kumar: And many of them, for example, the actinides are all radioactive.
David Kestenbaum: So these are again things that would not make a very good coin. Because you would come back a half a second later and it would have half decayed. Or you’d come back a year and 2% of it would be gone.
Sanat Kumar: And maybe more that that. But in the process you would be dead as well.
David Kestenbaum:: OK, alright you’ve convinced me, we can cross those off.
Jacob Goldstein: So we’ve eliminated the columns on the left side. And we’ve gotten rid of the ones on the right side. And now we’ve crossed out those rows on the bottom. And I feel like we’re converging on this sort of sweet spot at the center of the periodic table. In all, by now, if you’re following along at home, we’ve crossed off 78 elements. We’ve still got 40 left.
David Kestenbaum:: So to summarize our criteria this far. If you want something to serve as money: 1) It should not be a gas. 2) It shouldn’t be very reactive. It shouldn’t burst into flames, or corrode. 3) It should not disappear through radioactive decay.
Jacob Goldstein:: Also, #4: Should not kill you if you hold it in your pocket. Now Sanat gives us a new requirement. #5: You want the thing you pick to be rare. And here again there’s this very elegant way the periodic table is set up that can help us. As a rule of thumb, rarer elements tend to be more toward the bottom of the table.
David Kestenbaum:: TThat weirdly is because of stars and supernovas. Turns out all the elements in the periodic table pretty much are forged in stars or stellar explosions. And it gets very hard to make heavier elements because you’ve basically got to stick together a bunch of light stuff. So there are fewer of the heavier elements out there in nature.
Jacob Goldstein:: So this gets rid of a bunch of the light stuff toward the top of the periodic table. Like, say, Silicon, which is the key ingredient in sand.
Sanat Kumar: Silicon is the most common thing on earth, I mean, after carbon. Maybe it’s even more than carbon. I mean Silicon and Iron are probably the two most ubiquitous things on earth. So that makes it have almost no value.
Jacob Goldstein: I could go to the beach, pick up a bunch of sand. And be as rich as anyone else.
David Kestenbaum: For that matter it would be like hyper inflation, right? Wait, I’ve got all this sand. Now it’s not worth anything.
Sanat Kumar: But I think in the end, more than– That’s one reason, but it’s also the reactivity that would come back to play.
Jacob Goldstein:: Another element that’s too abundant is copper. It sounds promising; we make coins out of it. But there’s this weird back-story here. Sweden it turns out has a lot of copper. Back in the 16-1700s they decided they’d use it as money. But because copper was so abundant, they had to make their coins really big. There’s actually one coin worth 10 dalers, whatever that means, it weighed 43 pounds.
Sanat Kumar: So I’m going to just knock these things out. Titanium…chromium, manganese…zinc. So I’m just going to knock these out. Titanium, chromium, manganese… zinc.
David Kestenbaum: Now, we’re looking for an element that’s rare, but we don’t want it to be TOO rare. And unfortunately, that is why my favorite, Osmium — a nice, blue grey metal, the densest of all the elements — Osmium gets the ax.
Sanat Kumar: Osmium is probably one of the rarest things around.
David Kestenbaum: Why?
Sanat Kumar: I have no clue. It apparently comes in with meteorites. Osmium and Uranium are found in meteorite rock. And so, you can find them, but they’re very, very hard to find and very hard to mine for that reason.
Jacob Goldstein: So David, we shed a tear for Osmium. And we’re down to just 5 elements.
David Kestenbaum: Ladies and gentleman, our final contestants are: (DRUM ROLL) Rhodium, Palladium, Silver, Platinum. And… GOLD.
Jacob Goldstein: And David, this is really impressive. Because Sanat has just – based on chemical reasoning and the structure of the periodic table — he’s ended up with a list of what actually are ‘precious metals’. They’re rare, they’re stable, they don’t react. And they’re all expensive. Rhodium sells for more than $2000 an ounce.
David Kestenbaum: From this point forward, though, things get a little tougher. Silver, which is on the list, has been used as money. But Sanat throws it out because he says it tarnishes. Now, you can polish it off. But the tarnish has silver in it. So when you polish it, you’re actually losing some silver. It’s not the best choice. So we throw silver is out.
Sanat Kumar: The way I think about it is that Rhodium, Palladium, Platinum, Gold are the four choices you would come down to.
David Kestenbaum: Take that gold. You thought you were special, you’re not that special. I’m imagining some parallel universe now where the US had fights about whether we should go off the Rhodium standard. Or where medieval kings had chests of palladium they were fighting wars over.
Jacob Goldstein: I like the idea of medieval kings and chests of Palladium, but there are a couple of sort of historical problems here. A big one is that Palladium and Rhodium weren’t even discovered until the early 1800s.
David Kestenbaum: That’s fine. But that still leaves you with Platinum and Gold. And Platinum turns up in streams, just like Gold. So it could have been Platinum.
Jacob Goldstein: It could have been Platinum, but say you’re in ancient Egypt or whatever, you want to make your Platinum coins, you’re gonna need some sort of magical furnace from the future.
David Kestenbaum: Can we look at what’s the melting point of Platinum?
Sanat Kumar: We can certainly look at its high.
[SFX: click, click]
Sanat Kumar: Melting point of platinum is 1772 degrees centigrade.
David Kestenbaum: Yeah, Jacob, that’s over 3,000 degrees Farenheit. In fact we visited this guy in the jewelry district who told us that melting platinum is a real pain. You have to use this special crucible, which you can only use once. And it’s really expensive. Gold it turns out is much easier to melt into bars and coins. Just by chance it melts at a much lower temperature that you can get just by burning coal.
Jacob Goldstein: And one other pretty compelling historical argument here for picking gold over platinum. One thing you want for your element that’s going to serve as money, you want to be able to test it. So if someone says, “Hey, trust me, this is money,” you want to know you’re not getting ripped off. Platinum looks like a lot of other stuff. It’s kind of silvery in color. And Gold really looks special; it looks like Gold.
David Kestenbaum: And it turns out, gold is something that’s actually pretty easy to test. This is something we went and saw with our own eyes.
David Kestenbaum: We went back to visit Hank Mendelsohn, in the NY jewelry district with our coin. And I said, “How do we know that this isn’t not a fake? You sold it to us. I want you to test it.” And he did this really simple test. He took out a black stone and some sort of pumice.
Hank Mendelsohn: This is what we do. (Scratch, scratch, scratch).
Jacob Goldstein: What you hear there is Hank taking our coin and scraping the edge against the stone. And it leaves this gold smudge. And then he goes fishing around in his desk drawer.
Jacob Goldstein: You have this drawer in your desk, and you’re rummaging around. And there are all these bottles with clear liquid. What are all these different liquids in the bottles?
Hank Mendelsohn: It’s some form of acid. So here, this is 22 karats. So let’s see what happens here.
David Kestenbaum: So what he’s got is this little bottle. It’s a particular strength of acid that he can use to test to see if the gold has a purity of 22 karats. And he puts a drop of it on the stone, where he scratched our coin. And the smudge stays there. So that means our coin is 22 karat.
Jacob Goldstein: But then he picks up this gold pendant, which he says is 14 karats. So that’s less pure. And he does the same test. He scratches it and there’s a smudge, and he puts the acid on it. But the result is really different this time.
Hank Mendelsohn: Just turns and…
David Kestenbaum: Oh, wow, it totally just vanished!
Hank Mendelsohn: Yeah, so it’s the… So I do a scratch test on every piece of gold I buy. To make sure that it’s gold. This is a very treacherous business. You buy wrong, you’re making 2 or 3 percent here, you buy one thing that’s not gold you can lose a whole day’s worth of profit.
David Kestenbaum: So you don’t need fancy equipment. You’ve just got a stone here and some acid, little bottle of acid.
Hank Mendelsohn: That’s right. That’s what everybody does. Even the little, the small jewelry store, and mom and pop store, this is what they use.
Jacob Goldstein: So you’ve heard the expression “acid test” — this is the kind of thing that expression is referring to. And apparently there are writings dating all the way back to ancient Greece about using a touchstone to judge the purity of gold. And basically you rub the gold against the stone. And by looking at the smudge it leaves you can tell how soft the gold is. And how pure it is.
David Kestenbaum: Alright. Alright. So I was really at the beginning of this thinking that gold was totally arbitrary. But it turns out you can make a pretty strong case for it. Gold is stable. It’s non-toxic. It is rare, but it’s not too rare. It’s easy to test. And Sanat the chemist…with the pink glasses… points out: It was obtainable. You could find it just sitting in rivers. This beautifully colored golden thing.
Sanat Kumar: It’s things like that, I mean, it’s all these things that brought it together that makes gold unique.
David Kestenbaum: So imagine we’re on earth. We get to rewind the clock and lay out history again. Maybe it goes a different way. Do you think it would go a different way? Or do you think probably again humans would settle on gold?
Sanat Kumar: I’m convinced, given what we know now and reconstructing it, for the earth, with every parameter we have, Gold is the sweet spot. And it would come out no other way.
David Kestenbaum: You can find a picture of Sanat Kumar, in his hipster glasses on our blog: NPR.org/money.
Jacob Goldstein: Another story we’re working on for this series, frankly one I’m excited about, is the history of gold as money, and the gold standard. Because really if you think about it, for most of human history, money has been some physical thing and quite often gold. And it’s really only in the past few generations that we’ve decided… you know what, we can all just agree and use pieces of paper. So historically speaking, we’re living in this really weird, anomalous time.
David Kestenbaum: Let us know what you think of the show today. Let us know what you’d like to hear. Send us Email: Planet-Money-at-N-P-R-dot-org. I’m David Kestenbaum.
Jacob Goldstein: And I’m Jacob Goldstein. Thank you for listening.
About Chana Joffe-Walt
Chana Joffe-Walt a reporter for NPR’s global economics team Planet Money. She has done stories about FDIC bank takeovers, global piracy (the kind with boats), toxic assets and post earthquake Haiti. She recently won the Daniel Schorr Journalism prize for her investigative segment on AIG and the roots of the 2008 financial meltdown.
Prior to Planet Money, Joffe-Walt covered education in Seattle for member station KPLU. She has a B.A. from Oberlin College.