Buddy, can you spare me a euro?
Town & Country Planning,
January 2001
It's a strange thought, but the euro is now two years old.
It hardly seems yesterday that most of continental Europe linked their
currencies inexorably together. Not long now and they'll even have notes
and coins.
And if that last sentence sounded just a little ironic, it was supposed
to. The most ardent euro-fanatics across the continent now generally believe
their baby would be a good deal more popular if they had hurried up this
particular phase a little faster.
There's quite a lot of private hand-wringing about the whole thing. If
only the currency was more popular. If only it hadn't been sinking like
Richard Branson's hot air balloon in slow motion.
But then, swapping the entire coinage of Europe is a big job. As many
as 80 lorries a day for three months will be needed to shift the coins
currently in circulation to make way for the euro. And that's just in
Belgium.
Still, it's too late to change that now. The timetable was fixed long
ago, and with dwindling support of the people using it, the focus has
shifted onto the issue of how the euro can be made to work as a continental
social glue. I had personal experience of just such a debate in Paris
at the recent European Finance Convention - and a strange business it
was.
I sat next to a former president of the European Investment Bank and a
former French cabinet minister, both of whom were enthusiastic about the
idea of micro-lending and social banking. The massed ranks of European
financiers even listened to me politely talking about parallel currencies
- though one Belgian Euro-MP did perk up after snoozing through the first
three speakers and complain that nobody had addressed the real issues.
It transpired that what he meant by this was a paean of praise for the
euro as the best possible way forward for social inclusion. I found this
a little depressing because - pro or anti-euro - there's no doubt that
there's a problem with big currencies. This is so just as much for Argentina,
if it links to the dollar as it is for any of the euro-zone, but it's
there nonetheless - and it won't go away just by ignoring it.
Of course, if there is no role for fluctuating currency values, we needn't
worry about this. We can relax and let the currency traders do what they
dare. But what if there is? This is how Jane Jacobs - author of the trenchant
Death and Life of the Great American Cities - describes the problem:
"Imagine a group of people who are all properly equipped with diaphragms
and lungs, but share only one single brainstem breathing centre,"
she writes.
"In this goofy arrangement, through breathing they would receive
consolidated feedback on the carbon dioxide level of the whole group,
without discriminating among the individuals producing it... But suppose
some of these people were sleeping, while others were playing tennis...
Worse yet, suppose some were swimming and diving, and for some reason,
such as the breaking of the surf, had no control over the timing of these
submersions... In such an arrangement, feedback control would be working
perfectly on its own terms, but the results would be devastating."
Currencies rising and falling in value provide us with a self-regulating
feedback that lets disadvantaged areas lower their relative value. Different
currencies, different interest rates, suit different cities and communities
- just as they suit different sectors.
This is of course also true of national currencies, but the distortion
is bound to be bigger for multinational currencies like the euro. Hong
Kong and Singapore had their own money, says Jane Jacobs. Detroit didn't.
Somehow we have to find ways of making sure the currency doesn't throttle
the money supply to socially and economically distant people and places.
That needn't rule out the euro - but it does mean we may need have to
have another currency layer underneath, underpinning different aspects
of people's lives.
Does that sound an unlikely prospect? If so, consider three examples of
the future that have already arrived:
Loyalty points programmes like beenz and air miles are playing an increasing
role in our lives. The latest loyalty card from Boots has space on it
for more than 20 different loyalty currencies. And in case you didn't
think this is money: until recently Northwest Airlines used to pay their
entire worldwide PR account in frequent flyer points.
Second, international barter is getting increasingly sophisticated, involving
some of the biggest companies in the world, and increasingly using electronic
barter currencies like trade dollars. And when each local exchange can't
immediately find what they need, they use an international currency called
universal to barter it from elsewhere.
Third, if you have one of the dual-track HeroCards in Minneapolis, you
can buy products at the Mall of America - the biggest mall in the USA
- partly in dollars and partly in a local currency based on time, earned
by helping out in the local community, tutoring in schools or giving lifts
to the elderly.
They're small examples, but faced with the titanic business of making
the euro work for everyone, I think we'll be seeing more like them.
