Since you seem to agree that Alan Green$pan was right to think that he made a mistake assuming that shareholders would be interested in their own financial well-being and would act to protect their own financial well-being by ensuring the managers of their companies would not assume bad risks, you would surely agree that it is a vastly larger mistake to assume that electorates will vote to protect their own interests.
The tragedy of the commons is a very old problem in shared communities and common resources. Even though people might know it is the end of the line to grab the last female salmon full of eggs and eat it rather than letting it go to breed and create thousands of hatchlings, it makes sense to eat it because if they don't do it, somebody else will.
Electorates do the same thing - they vote to take opm and impose depredations and regulations on other people even though they are killing the goose that lays the golden egg.
Unfortunately, there is no regulation that electorates will accept limiting their own power. While the baying mobs are currently demanding regulations to solve a non-problem, they are totally ignoring the real and vastly huge problem of electorate self-destruction. Amusingly, it's the same people. They will get what they want, and they will get it good and hard.
One of the favourite things for electorates to do is vote themselves rich. Since almost none of them have a clue what money is and how it works - all they know is that governments have a LOT of the stuff which should be given to them - it is not surprising that politicians and central bankers absolutely love having their very own personal money tree. As a child I recall the idea of money trees and it was highly appealing. In fact, I think Carl Barks who made Donald Duck and Uncle Scrooge comics covered the topic.
It's like putting heroin addicts and alcoholics in charge of the poppy fields and distillery. They will and do ramp up production.
There is a pretence of separation of powers, but in a democracy, the mob rules.
Here are some problems with garden variety state run monopoly money.
1.....They dilute it, sometimes at extraordinary rates such as in Zimbabwe, Germany, France, Italy and other places.
2.....Each little fiefdom wants their own money tree so that they can dilute it and spend the profits of control themselves.
3.....There are high exchange rate costs as people buy and sell from one fiefdom to another.
4.....There are delays in moving money around. Even though computers can think really fast, it still takes days to move money from one fiefdom to another and even from one bank to another in the same fiefdom.
5.....There are of course fees, imposts, charges, taxes, duties to have banks hold and move money.
6.....Security is dodgy at best, with identity theft, credit card theft, fraud, outright theft and robbery, forgery and other crime.
7....."Trust in God" is fine for the mystical who hope to benefit when they are dead, but on a bank note it's not so reliable as it's doubtful that any supernatural being is particularly concerned about the trustworthiness of state monopoly money and it seems gratuitously dishonest and therefore untrustworthy to use those words on the notes.
8....."Trust in Gold" makes more sense and perhaps the state monopoly money printers hope that nobody will notice the slight shift in spelling which represents an enormous transition from a non-corroding metal to a rapidly corroding political promissory note. Gold was fine for Aztecs and some governments, but it's from another era and belongs there. Monkeys and Aztecs find wealth, humans create it out of thin air, or aether.
9.....Electorates control central bank money and can and will do any damn thing they like, so the people who are silly enough to hold the monopoly money are very likely, if not as a metaphysical certitude, to be ruined by the mindless mob. Trusting a state-run monopoly money is to trust the electorates who appoint the politicians who define the monopoly.
10.....Because of high dilution rates, the interest rate required to risk holding state monopoly money has to be high. Since taxation is based on the actual interest rate paid rather than the after-inflation/dilution interest rate, taxes are high on holding monopoly money. Since we all have to hold at least some money so that we can go grocery shopping, and in case of a rainy day, we are stuck with high taxes on whatever interest we are paid. This is part of the dilution aspect but is worth keeping in mind.
Qi solves all of those problems.
<if it needs any kind of control by government etc. >
The control by government would be simply the enforcement of any contracts that people might make. So a person might agree to buy a car from somebody at a particular price, payable over 4 years, with a particular interest rate payable. If one defaults, they would appeal to their government to enforce the contract. The producer of US$ takes no part in that process and neither would the inventors and owners of Qi take part in the enforcement of contracts. The inventors of silicon processors and radios don't control what people do with the bits and bytes, hertz and megahertz. They just provide the function for people to do what they like.
Mqurice |
