What are the main characteristics of modern national currencies?
National currencies • are geographically attached to a nation-state • are chosen by a central authority when it declares that something is the only medium of exchange acceptable in payment of taxes (the only valid “legal tender” for all private and public debts) • are “fiat currencies,” created by bank debt, and issued in scarce supply as “debt money derives its value from its scarcity relative to its usefulness” (Jackson & McConnell Economics. Sydney: McGraw-Hill, 1988.) • and bear interest, a feature which in turns: • creates structural competition between participants (see the story of The Eleventh Round) and • encourages short-term planning via “discounted cash flow” Effects of national currencies: • they bolster national consciousness by facilitating economic interactions with fellow citizens rather than with foreigners; • they encourage competition and facilitate concentration of wealth (which was key to catalyzing the industrial revolution) • they have proven flexible enough to
