Money as a Common Currency
When the European countries agreed to move from national currencies to a “common currency,” one can assume that they thought of money primarily as a means of exchange, as a currency. If we want to talk (trade) with each other, why not use the same language (money)? Not a bad idea. Today it appears that they have failed to protect the “common” nature of money.
The “common” refers to resources or provisions that we share. They are not treated as commodities. Today, much of the commons, such as fresh water, needs to be protected from being turned into a commodity, into something that is only available to those who can own it.
As a common currency, money would belong to various systems of provision—such as the food or housing system—and function in these systems as a means of exchange and as credit. As a means of exchange, it performs the same function for all participants in the system: it enables exchanges among traders. As credit, money would enable citizens to create and expand their provisions for others. One could easily imagine a global currency that would perform these functions much like the Euro was supposed to for the European Union. The likelihood of this happening, however, is not much greater than the likelihood of erasing the border between the United States and Mexico.
In our current situation, the two institutions preventing such expansion of a common currency and are even threatening the existence of the Euro are banks and governments. Banks (and other financial institutions) have privatized common currencies and turned them into commodities that they buy and sell. As long as banks see themselves as belonging to the financial sector (Wall Street) instead of the various systems of provision (Main Street), we will continue to suffer from their private ownership of our common currency.
Governments are a different story. First of all, they need money in a way that banks do not. In fact, the best account of the origin of money, as I argue in Civilizing the Economy, is that governments created money to cover their expenses. In many cases, of course, these expenses were the costs of war. In representative governments, one could say that legitimate expenses would be those selected by the people. Before we expect such democratic processes, however, we need to address two other issues.
Any multi-national currency requires a multi-national civic government to protect it, which does not exist today. Even more importantly, governments seem more beholden to financial markets than to the systems of provision that provide people with what they need. What we see, in other words, is a privatization of government, where ownership is more important than membership, and property rights override civic rights.
In this context, less government or government austerity is not the answer because it doesn’t relate to the real question. The real question is whether we can still create effective democratic institutions in a world where our common currency has been privatized.