Time for a world currency?
A Talking Economics Evening in Stroud 8/5/06
The prospect of a global currency is on the horizon, but what or who actually stands behind it? The idea that there is, or should be, just one currency in the world is gaining strength with the perception that the economic life of humanity is a single global affair.
However the question less often asked is whether such a currency is to be of a political or of an economic nature. In the same way that a political state is being purposefully built on the Euro, there are those who, in advocating a world currency and supposing that this must be accompanied by a central bank, leave unspoken the deeper intention, seen as an inevitable consequence, that a corresponding political entity must later emerge to manage it.
Yet the economic logic tells another story, as accounting can clearly show. By analogy, think of symphonic or choral music: the composition is of one piece, yet the voices and instruments remain distinct. What unites them, or rather allows them to share in a language, is the musical notation. So too, accounting allows humanity to come on to the same page and participate in a musical conversation, but does not force it to do so. Nor indeed should a conductor, if one is needed, favour one section of the orchestra beyond or to the detriment of all others.
In this image the underlying thought is that people can work together in partnership - a fact that accounting demonstrates unequivocally, because on the other side of ‘My’ transactions (both income and expenditure, and balance sheet) ‘I’ find the ‘Rest of Humanity’ without whom, economically speaking, ‘I’ do not exist.
In the absence of such imagery, the underlying direction of much present thinking is a 19th century construct of a world ruled by powers, in which the super-power has the ultimate say. In this scenario, the rush to bring about a world currency is perhaps motivated by the perceived need to create a political world government modelled on the US before China ascends to the economic throne, with all the consequences that such a change would bring.
Behind the currency issue stands a more fundamental one: how is the world formed, out of partnership or out of power?
The role of the British in this is, of course, historic, if one looks at the gold standard or Keynes’ attempts to create a new basis for world partnership through his ideas that were rejected in favour of the American dominated Bretton Woods institutions. But how is one now to understand the current allegiance of the United Kingdom to the pound and its stubborn refusal to be neither the euro nor the dollar but to remain resolutely itself? Could there be more to it than national identity, notwithstanding the fact that most people think of economic sovereignty as a national affair, reinforcing this perception with the picture of the monarch on coins and bank notes?
In a global economy, the reference must always be wider than one's own situation. The value of one's own currency can only be seen realistically in the reciprocal context of other currencies, and not by separating it out in a unilateral declaration of independence. By mathematical implication all currencies are no more than articulated expressions of an implied but invisible universal currency, which they point to, or from which they derive. If one were to understand money as accounting, the reality of our new economic situation in a global economy would then stand before us, revealing currency beyond gold as dynamic bookkeeping. This revelation might allow us to build the road from a now outdated 19th century mode of economic imperialism to a 21st century world of partnership based on a universal declaration of interdependence in the economic realm.
While remaining the author’s own views, this introductory piece owes a substantial debt to a paper given by Christopher Houghton Budd on 9 July 2004 at the First Annual Meeting of Single Global Currency Association, at Washington Hotel, Bretton Woods, New Hampshire, USA, entitled ‘A Single Global Currency - A political or an economic money?’ available from chb@cfae.biz, Centre for Associative Economics, Forge House, The Green, Chartham, Canterbury CT4 7JW, England.
