-
[ Pobierz całość w formacie PDF ]
The most sensible, but clearly also the most politically radical, op-
tion for developing countries looking to integrate their economies globally
is simply to retire the local currency in favor of one in which the local popu-
lation actually prefers to save and borrow, such as dollars or euros. Dollar-
ization eliminates the financial crisis dangers of currency mismatch, reduces
local interest rates, simulates local saving and investment, and safely opens
the economy to capital flows. Globalization is transformed almost
overnight from threat to opportunity. Iceland, for example, which has been
wildly buffeted by currency speculation, has more than enough foreign ex-
change reserves to euroize the country unilaterally, quickly and painlessly,
just by swapping, at the current exchange rate, euros for the krona its peo-
ple currently hold. From then on, Iceland s current account deficit would be
of no more interest to speculators than Florida s deficit.
Yet surrendering monetary sovereignty is unthinkable for most govern-
ments and many macroeconomists who still believe that the road to
progress is paved with national monetary and exchange rate policies. Such
policies become meaningless in countries without their own currency.
While people around the globe persist in seeing timelessness and uni-
versal value as the main characteristics of any money worth the name,
many simultaneously attach great importance to the maintenance of their
country s monetary sovereignty without noticing the inherent contradic-
GLOBALIZATION AND MONETARY SOVEREIGNTY 131
tion in their beliefs. This clash between the psychology and the mythology
of money is poignantly illustrated in this e-mail message received by one
of us regarding an article he had published in Foreign Affairs, arguing that
the world had too many monies:17
Just the mere mention in an article of your remarks on the obsoles-
cence of many nations currencies brought my heart into my
throat. I ve been fighting for years to garner acceptance for Gold
Coins, The Liberty Dollar and just about every other alternative
currency I could find in America that hasn t been outlawed by the
Federal Government. I m abhorred by the thought that you would
want to dissolve individual, sovereign nations currencies based on
the fact that they are unstable or obsolete. . . . I will fight to my
death for the continuance of the dollar, but on the terms that it is
backed by an un-manipulatable physical source of value.
Our impassioned correspondent did not seem to realize that while he be-
lieved himself a defender of a sovereign U.S. dollar, he was in fact arguing
for a return to nonsovereign gold money money for which sovereignty
was limited to patriotic symbols imprinted on bills and coins. He was in re-
ality pining for the days of the global gold standard, when the value of each
currency, including the dollar, was defined in terms of gold. In those days,
money was not actually the dollar, or the pound sterling, or any other na-
tional currency, but a commodity. Dollars and pounds were vouchers ex-
changeable for the commodity at a fixed price.
This contradiction in beliefs is very common in developing countries,
where people typically think it normal for themselves and their neighbors
to hold their savings in dollars, but simultaneously think it inconceivable
that the country as whole could do so which would naturally imply no
need for a national money.
Since the days of the ancient Lydian tyrants, governments have issued
currencies, and, for most of this time, they have insisted on a formal mo-
nopoly of issuance. Through their control of the supply of money, they
have defined what thing would be used as money as well as the rate at
which it would be created. This, at least, is how things have been on the
surface. Reality has been more complex than this, since the acquiescence
of the people has always been essential for the workings of the system.
132 GLOBALIZATION AND MONETARY SOVEREIGNTY
When individuals have not agreed that what governments called money
was actually money, because it failed to sustain its purchasing power
through time, they have developed, legally or illegally, alternative monies
and mechanisms of valuation. In our times, technological advance is tip-
ping the scale increasingly toward individuals and away from govern-
ments. That is, it is becoming ever easier for people to transform the
denomination of their savings from one money to another.
Minds and Money
The most important feature marking out a legitimately useful
currency is that it succeeds in becoming a standard of value in the minds
of its users. Such a currency establishes credibility that it will keep its
value through time. Its users willingly use it in large transactions and
long-term contracts. More abstractly, its users think in that currency.
They measure value in it. They keep their accounts in it. They plan their
futures in it.
Few of the world s currencies actually make the grade on this basis.
The monetary world can usefully be divided into three groups of curren-
cies. The first, elite group is comprised of a handful of currencies that are
widely accepted by foreigners. The U.S. dollar is clearly first among these.
In Asia, as seen in Table 5.2, over two-thirds of exports and imports are in-
voiced in dollars. In Europe, the figure is roughly a third. The euro is also in
this first category of currencies, but its attraction outside the eurozone is
much more geographically limited, concentrated around its perimeter.
There has been no general uptrend in noneurozone use of the euro, in trade
invoicing or debt issuance, in recent years. The euro share of global central
bank foreign exchange reserves has also been stable at around 25%, com-
pared with 65% for the U.S. dollar. Ten to 15% of euros in circulation are
held abroad, compared with 60% of U.S. dollars.18 The Japanese yen, the [ Pobierz całość w formacie PDF ] - zanotowane.pl
- doc.pisz.pl
- pdf.pisz.pl
- matkadziecka.xlx.pl