Douglas Carswell's Blog

Competing currencies - what's there not to like?

Yesterday I blogged about my 10 Minute Rule Bill designed to allow competing currencies in Britain. I have had a tremendous response – many positive, some asking questions, others raising objections.  Here's my reponse to some of the issues raised:

1.  This is not about scrapping the Pound – with competing currencies, the Bank of England will keep issuing pounds as it does today.

2.  Nor is this some cunning scheme to adopt the Euro. I’ve fought three general elections pledged never to sign up to the Euro – and I've even gone so far as to oppose EU membership all my adult life.  Far from wanting to join a single currency, my proposal is that we scrap the idea of there being one single currency at all.   

3.  “But we’d have to carry all sort of different cash”. No you would not. Non-cash payments have exceeded cash payments since 2004 – and are likely to become the norm for most transaction for most people. Making payments in a multi currency country would be as easy as using a debit or an oyster card.

Objecting to the use of different kinds of cash on the grounds it is too complicated is a bit like suggesting we should only have one channel on the television because it is too complicated to switch channels. Both can be done at the touch of a button.

4.  “But we can already hold foreign currencies”, say others. Of course we can. You can have a bank account in pretty much any currency you want these days. 

But this proposal is about changing the laws of legal tender. That means that the state would have to accept various different currencies (the supply of which it did not control), as payment of debt and taxes. Doing so means that if the state wildly prints off more Sterling, the government, rather than the people, pay the price for the devalued currency

5.  “Why do you want to force us to use foreign money.” I don’t. If you happy with the way things are, there will be no change.  This proposal does not force anyone to buy or sell to someone on terms that are not freely agreed to by both parties.  If you are not happy using a currency that is set to halve in value over the next 14 years, however, my proposal would allow you to do something about it.

6.  “This would help the rich”. At the moment, rich people are able to hire financial advisers to insulate themselves against rising prices.  Who do you think has all the Old Masters?  Big businesses, too, can hedge against monetary mismanagement.  My proposal would give everybody the ability to insulate themselves from inflation in a way that today only wealthy, powerful people can.

7.  "But it wouldn’t work anyway”, suggest others.  All new ideas go through three stages; first, innovative suggestions tend to be dismissed as madness by people hearing them for the first time.  Then comes the stage when they are dismissed the the grounds that however “good in theory, it won't work anyway”.  Finally, you get to hear folk telling you it was their idea all along. 

As banks tank and fiat currencies fall flat, I suspect that a lot more people will start to ask how our 40 year experiment in paper money has worked our after all ....

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