We see currency as a national concept. By why not regional, or even city-based currency?
I happened to be reading the Havas “14 trends for 2014” by Marian Salzman and noted with interest her point about post-nationalism, countries breaking up and London becoming independent from the UK. I’m sure some of the people reading this thought it a little far-fetched, but I don’t. A long time ago, I read a book by the Canadian author Jane Jacobs. It was called “Cities and the Wealth of Nations“. It was of those books that you come across now and then that makes you change your world view soon as you start reading it, because you immediately recognise that the author’s perspective is correct. Jane’s book definitely had that impact on me, and it made me see the dominance of London and its hinterland in a different light.
You may wonder why I’m bringing up the issue of cities and their hinterlands now. Well, I’ve brought it up before, and so have other people in the context of thinking about the future of money. Remember, for example, Gill Ringland’s work on “Long Finance” scenarios for 2050? — G. Ringland. I”n Safe Hands? The Future of Financial Services”. SAMI (Dec. 2011).
Having listened to Gill and the audience response to her scenarios, I’m more convinced than ever that the world of the “C50” (the organisation of the 50 richest city-states that will replace the G20 as the mechanism for “managing” the world economy) which comes from her “Many Hands” scenario, will be the most likely basis for the future economic organisation of a successful, functional world.[From Search for “gill ringland” – Tomorrow’s Transactions]
Gill said that in this scenario, cities might become the source of money and identity, the two things that interest me most and the platform for almost all of Consult Hyperion’s customers’ businesses, so I asked her along to our 2012 Forum and she gave a terrific presentation. I’m sure many in the audience saw her ideas as being somewhat speculative, just like Marian’s, and I suppose that may have been understandable. Well, understandable until it was written over at the Financial Times that:
To make wise decisions, investors and policy makers need to view the world not so much as a collection of countries but a network of cities.[From Cities, not countries, are the key to tomorrow’s economies – FT.com]
Indeed. In my podcast with the brilliant Felix Martin (the author of “Money: An Unauthorised Biography” and keynote speaker at our 2014 Forum) he talks about the “bargain” around technology and money, the bargain between sovereign and business, the bargain that the late Professor Glyn Davies said (at the very first Consult Hyperion Forum) has always served to weaken the power of the sovereign. Felix talks about the Bank of England using something like Bitcoin to issue an electronic currency, Bank-of-England-coins or something like that. I discussed why this might be a good idea recently. But suppose we combine these two sets of ideas and argue for electronic currency issued not by countries, but by cities or regions? Now in the podcast, Felix sensibly attempts to refute some of my crackpot theories about London having its own money and Scotland launching the first wholly virtual fiat currency, but I feel that the tectonic plates underlying currency have shifted in my direction. Once again, let’s pop over to the Financial Times to see what the great and good are thinking, as distinct from wide-eyed techno-determinists like me.
“London is far richer [than Scotland], and could easily be fiscally self-sufficient. It is the nation’s cash cow. This is the age of cities, not of national economies. It is high time London became a true city state.”[From Capital gains fuel visions of a breakaway London – FT.com]
Scatchamagowza, as Greg the Bunny would say. How true this is. And the right place to start would be to stop London from distorting the UK economy further by making it have its own money. We already have two economies in the UK — London and everywhere else — so we should recognise that and take London out of the Sterling Zone as soon as possible!