The devil’s in the details of a “single currency”, if it means one single centralized monetary policy and one single centralized banking/finance regime, then it will probably be extremely harmful.
The USA, despite having a “single currency” for a very long time, did not have a single centralized monetary policy and single centralized banking/finance regime until the latter 20th century and I’d bet most people would, if they really saw them, agree with the arguments that its been harmful. It played a key and necessary role in us transforming into a centralized and financialized economy.
Just like I bet they’d agree the Euro has been harmful.
Now a single continental trade currency, maybe, but the devil’s always in the details.
Very interesting reflections. Thanks for sharing them. What are the strongest arguments against centralized monetary policy in your opinion?
If I've understood your response correctly, I suppose the issue with a 'laissez faire' approach to currency is Africa is it presumes outside parties will adopt a similar attitude.
But its an interesting idea. Do you even need a central bank for a healthy economy? I've got a new article coming on Zimbabwe, a country where that is a serious question!
HI! I’ll first give very dumb rough and extremely incomplete over view of the beginning of the creation of the US central bank and the advent of the current US era. The central bank was in actuality a compromise between three rough forces, Big Finance who wanted private very centralized system, Big Gov Technocrats who wanted a very centralized government controlled one, and a very diverse “populist” spectrum of “regular” people and businesses, including mid sized firms and small and mid sized banks who wanted a decentralized system with a very limited but still strong in some ways center (it didn’t actually take its first really big leap towards strong centralization until the Banking Act of 1935 which removed open market functions from the regional Federal Reserve Banks and placed them entirely in the hands of the national center).
Then after decades of slow centralization (much of it linked to international business) we made a big leap between the latter 1970s and mid 1980s. Before then we had interstate (sometimes inter region) capital flow inhibitors back then (we had them for every day of the nations existence until they were done away with between the latter 1970s and mid 1980s), we had state level usury laws, we had multiple classes of banks with some of them having geographic or sectoral capital allocation biases (we dont have those anymore despite appearances, like, they literally changed the laws for credit unions all the way back in, again, the latter 1970s to mid 1980s and made them fundamentally mostly not credit unions anymore, among other examples).
The big conceptual problem is, in my opinion, that we conflate “central bank” with “banking/finance regime”, there is, one way or another, always a banking/finance regime, even if its not stated, there is always an Order.
The key questions, or at least some of them, are how diffused is power and decision making, how much access, even if very indirect and slight, can “regular” people and businesses have to its decision making, and very importantly do you maintain some amount of geographic biases in the system in order to prevent huge capital flights from areas and capital concentrations into a small minority of areas and then by extension huge power concentrations. There are many different forms and configurations banking/finance regimes can take, and the devil’s always in the details…
The devil’s in the details of a “single currency”, if it means one single centralized monetary policy and one single centralized banking/finance regime, then it will probably be extremely harmful.
The USA, despite having a “single currency” for a very long time, did not have a single centralized monetary policy and single centralized banking/finance regime until the latter 20th century and I’d bet most people would, if they really saw them, agree with the arguments that its been harmful. It played a key and necessary role in us transforming into a centralized and financialized economy.
Just like I bet they’d agree the Euro has been harmful.
Now a single continental trade currency, maybe, but the devil’s always in the details.
Very interesting reflections. Thanks for sharing them. What are the strongest arguments against centralized monetary policy in your opinion?
If I've understood your response correctly, I suppose the issue with a 'laissez faire' approach to currency is Africa is it presumes outside parties will adopt a similar attitude.
But its an interesting idea. Do you even need a central bank for a healthy economy? I've got a new article coming on Zimbabwe, a country where that is a serious question!
HI! I’ll first give very dumb rough and extremely incomplete over view of the beginning of the creation of the US central bank and the advent of the current US era. The central bank was in actuality a compromise between three rough forces, Big Finance who wanted private very centralized system, Big Gov Technocrats who wanted a very centralized government controlled one, and a very diverse “populist” spectrum of “regular” people and businesses, including mid sized firms and small and mid sized banks who wanted a decentralized system with a very limited but still strong in some ways center (it didn’t actually take its first really big leap towards strong centralization until the Banking Act of 1935 which removed open market functions from the regional Federal Reserve Banks and placed them entirely in the hands of the national center).
Then after decades of slow centralization (much of it linked to international business) we made a big leap between the latter 1970s and mid 1980s. Before then we had interstate (sometimes inter region) capital flow inhibitors back then (we had them for every day of the nations existence until they were done away with between the latter 1970s and mid 1980s), we had state level usury laws, we had multiple classes of banks with some of them having geographic or sectoral capital allocation biases (we dont have those anymore despite appearances, like, they literally changed the laws for credit unions all the way back in, again, the latter 1970s to mid 1980s and made them fundamentally mostly not credit unions anymore, among other examples).
The big conceptual problem is, in my opinion, that we conflate “central bank” with “banking/finance regime”, there is, one way or another, always a banking/finance regime, even if its not stated, there is always an Order.
The key questions, or at least some of them, are how diffused is power and decision making, how much access, even if very indirect and slight, can “regular” people and businesses have to its decision making, and very importantly do you maintain some amount of geographic biases in the system in order to prevent huge capital flights from areas and capital concentrations into a small minority of areas and then by extension huge power concentrations. There are many different forms and configurations banking/finance regimes can take, and the devil’s always in the details…