One currency for the world?

[phil_20686]

I would like to think that a high-speed train between LA and SF would be a good infrastructure investment, but, having lived in CA for my entire life (well, except for 1½ years in NW New Jersey that I'm still trying to forget), I can say with some certainty that they won't get the ridership to justify it. Rightly or wrongly (wrongly, in my opinion), Californians don't seem particularly interested in mass transit apart from airplanes.

 

People often say this, but its well established than once a major infrastructure project is completely residential patterns chance and people move so that they will use it. Roads create their own traffic and all that.

[whereagles]

One currency would require one government, one culture, one nation. At the present stage, it cannot be done.

 

An example of what might go wrong is the eurozone at the moment :)

[S2000magic]

People often say this, but its well established than once a major infrastructure project is completely residential patterns chance and people move so that they will use it. Roads create their own traffic and all that.

Frankly, if they build the high-speed rail (and they're quite gung-ho about it), I hope that people do move and change. You're right historically, but Californians have proven to be a stubborn lot wrt mass transit.

[jdeegan]

Seems to me what you "gotta have" is respect for your fellow citizens and respect for their rights. "Law and order" for its own sake is a dangerous road.

:P A number of my ancestors were frontier sheriffs. Evidently it was pretty much like the mythology of the old west relates. Bringing law and order was the bringing of civilization. As you might imagine, people who chose to migrate to the edge of the world did not in any way cotton to an oppressive degree of law and order. Distaste for that was why they were where they were in the first place.

[kenberg]

This thread has meandered a bit, as well it might since the premise of one world currency seems (to me) extremely far-fetched. The current problems of the Euro have been mentioned but perhaps there is another example. Back a while exchange rates were set by law or treaty or something. At any rate they were fixed. In many ways, this amounts to one currency. Maybe it was called a buck here, a quid there, but if the ratio was fixed then paying in Francs, Pounds or Dollars really was no different than paying in ones or fives. Except, of course, that the fixed rates got badly out of whack with reality and so got redrawn. One currency would have the problems of the fixed exchange rate without the option of fixing the inevitable troubles. Doesn't sound right to me.

 

 

By the way, from the quoted article above, I nominate "I think Matthew Yglesias' response to Josh Chafetz' exercise in wishful thinking was about right, even if Brad DeLong's is more nuanced" for the title of "The first sentence of an article that is most likely to discourage readers from going on to the second sentence".

[phil_20686]

This thread has meandered a bit, as well it might since the premise of one world currency seems (to me) extremely far-fetched. The current problems of the Euro have been mentioned but perhaps there is another example. Back a while exchange rates were set by law or treaty or something. At any rate they were fixed. In many ways, this amounts to one currency. Maybe it was called a buck here, a quid there, but if the ratio was fixed then paying in Francs, Pounds or Dollars really was no different than paying in ones or fives. Except, of course, that the fixed rates got badly out of whack with reality and so got redrawn. One currency would have the problems of the fixed exchange rate without the option of fixing the inevitable troubles. Doesn't sound right to me.

 

Its not quite true, you are thinking basically of the bretton woods agreement I think. THere is a famous trilemma. You can do two of three things in an economy, free capital flows, fixed exchange rate, fixed (controlled) interest rate

The bretton woods treaty worked great until people started liberalising capital flows, then it started to get out of whack. In the end we chose to freely float exchange rates whereas in the past we had controlled capital flows. You can read about it here http://en.wikipedia.org/wiki/Impossible_trinity.

 

This was a result of a changing economic consensus that balance of payments didn't matter, and would be countered by exchange rates. Unfortunately, this has not proved to be the case. I think a more thourough analysis would show that free movement of labour would add a fourth piece to this trilemma, and might let you do all three, as seems to happen in US states. OTOH, fiscal transfers complicate matters too.