"It is a sad commentary on our species that we haven't been able to design and maintain a fiat currency that adequately serves the function of money over any length of term"
It is true that modern times have not seen any examples of long lasting fiat currencies that serve the function of money. The Romans managed to do this for hundreds of years with bronze.
"We still don't have a fiat that works, and there's a reason we don't - any construct of human beings will be subject to whims and fashions of human beings, and we've learned through hard experience not to trust each other to quite this extent, without an external framework for guidelines …"
Adam Smith may have thought money was crucial, but he doesn't shed much light on this subject with stuff like this:
"After the fullest explication which I am capable of giving it, appear still in some degree obscure … and after making the utmost pains that I am perspicuous, some obscurity may still appear to remain upon a subject in its own nature extremely abstracted." "The Wealth of Nation," p.13.
Thank you, Adam. Next contestant, please.
According to Benjamin Franklin, the colonists of colonial Pennsylvania managed to create a successful fiat currency. So did the Continental Congress and the French with their Assignat during their revolution. The British, who understood these things quite well, counterfeited both mercilessly and into oblivion. The US Congress created the Greenback during the US Civil War and it performed quite well. It, too, was finally torpedoed by the European bankers through their agent, August Belmont. see: Message 24239713
The Germans in the 1920s and 1930s also succeeded in unwinding the disasters caused by private ownership of their central bank during Weimar and then created a true fiat currency under Hitler. see:
Message 24568048
Message 24568905
They had to abandon the Anglo-Dutch tradition of money-as-debt to accomplish this.
We are not congenitally incapable of creating a fiat currency that works well. But we are prone to ignoring history, being greedy and are heir to all the failings of the flesh. Money has a history and is a science, as Stephen Zarlenga has documented beautifully in "The Lost Science of Money." |
