The Future of Private Money?
by Dariush Rusta, November 10, 2003
Two weeks ago, on October 27 - 29, I attended The Future Of Money conference at the Omni Interlocken hotel here in Broomfield. The conference was sponsored by The DaVinci Institute and it featured a plethora of speakers, panelists and exhibits about financial matters. Most topics at the conference centered around current realities, current trends, and future opportunities in banking, trade, encryption, computer privacy, risk management, financial services, investments (U.S. and offshore), and international standards of value. In short, how will money look like in the future? How will it be exchanged?
Being the capitalist on steroids that I am, I couldn't resist attending. [Editor's note to the DEA: The author is not literally "on steroids." He is writing metaphorically to describe a heightened state of intellectual and emotional interest, which, to my knowledge, remains legal.] My mouth never watered so much in any three-day period; I was almost jealous of the information and knowledge that many people there possessed.
One fellow in particular who caught my attention was Bernard Lietaer [see also COFREE]. He is an international currency trader and banker who recently moved to Boulder to set up a foundation to bring a new currency onto the world stage. Most notably, he was instrumental in the design of the Euro, and now he is interested in forming a currency that is not tied to any geographical or political region. His idea is to create a non-national, commodity-backed, electronic currency that will always have value and will be extremely flexible to trade with. It will always have value because it will be tied to several staple commodities -- which are necessary for human survival -- and whatever the value of those items is, that will be the value of the currency. As long as this "basket of goods" doesn't plummet in value, neither will the currency. It will be flexible to trade with because it will be electronic and using it may end up being as easy as using email. An important point here is that this currency would not replace any existing national currency. It will merely co-exist as an alternate trading unit along with the many other currencies already available to buyers and sellers worldwide.
Although I have no clue whether Mr. Lietaer is a libertarian or not, I'm planning on putting this information in the hands of several libertarian-minded folks. Why? Well, how much competition is there today with regard to which currency you or I will deal with on a daily basis? There is no competition in this country and in most other countries. Virtually every currency in just about all nations is printed or coined either directly by a government or by some quasi-governmental, highly regulated entity. What makes this currency "different?" It will be PRIVATELY issued, privately created, privately traded, privately managed, privately everything. Who cares if the man behind it is a libertarian or not. His invention, service, product -- call it what you will -- is going to bring competition into the currency marketplace. To a libertarian, every bit of liberty helps.
I don't believe this currency project has it as a goal to advance economic or personal liberties. Mr. Lietaer simply wants to smoothen out the international business environment and make it less volatile and risky. He wants to minimize wild and unpredictable currency fluctuations which currently cower many companies out of trading internationally. He believes that if companies had a more reliable currency to trade with, their risks would then diminish, and they would be more willing to engage in deals that they are currently shying away from making. What I gather so far is that improving international trade, not necessarily creating currency competition for governments, is the intended outcome that Mr. Lietaer is hoping to achieve. I am simply looking at the implications of such an achievement through libertarian lenses. Like I said, every bit of liberty helps, and if this sort of a currency has the convenient side effect of taking existing government currencies out of certain business transactions, well then so be it.
If choosing to trade with a private currency will necessarily make government currencies less valuable, necessary, or relevant -- all the better. Just like the Internet, for example. Even though the Internet is fundamentally a technical marvel, those savvy enough to recognize its implications can use it creatively to advance their own personal freedom. Likewise, a private, commodity-backed currency can have the intention of being a more efficient business tool, but will also present opportunities to do business without (as much) government "help."
Could this currency be the "financial Internet?" Well, I dare not speculate about what we may now be at the beginning of. All I know for sure is that the man behind the idea is for real. His reputation in the global financial arena cannot be questioned. He is a specialist in currencies, if you will. This currency project however, is just a baby at this point in time. It is only an idea. It could turn into nothing or everything. Mr. Lietaer just recently moved to Boulder to set up his non-profit foundation and to start working on this currency. He and his foundation are the "newest kids in town." Mr. Lietaer's organization is called the Access Foundation and it is in fact in Boulder now. How refreshing it would be if Boulder had a CAPITALIST claim to fame for a change!
In Liberty and Truth,