Here’s What I Think About Your New Currency System

And I have some suggestions for what you could do next.

I’m an economist and I do a lot of work explaining and promoting the idea of introducing a Basic Income system. And when I write a Basic Income article (or perhaps some other Economics article), I frequently get people who respond by trying to convince me that what we really need is some new form of currency — perhaps a cryptocurrency — or even an entirely new money system.

They usually have the idea that there is a fundamental injustice at the heart of our economies and that our money system is one of the central causes of that injustice. They may believe that our major economic problems are caused by the government or central bank having a monopolistic control of the money creation process. Sometimes they’re inspired by ideas related to ‘Modern Monetary Theory’ (MMT).

And the solution they evangelically propose usually involves a new currency and/or a new system for creating and distributing money, which they say will be much fairer and more equitable than our current system. They believe their system will solve all sorts of problems and make us much better off than we are at the moment. They may say it will eliminate poverty. They may claim it will end unemployment. They may say their system guarantees there will never be another recession. And some of them may be firmly of the opinion that it will be disastrous if we don’t adopt their particular scheme as a matter of urgency.

Some such enthusiasts get rather exasperated — or even angry — with people who don’t rapidly ‘see the light’ and wholeheartedly endorse their particular proposal.

So, what’s my perspective, as an economist, on these schemes and the people who promote them so vigorously?

Well, I’m not closed-minded when people suggest a new currency or a new money system. And I understand that many of the individuals in question have very noble intentions. They may be good people who are genuinely concerned about the money problems a lot of people have and the economic injustices that are indeed widespread in our societies. And so, when people present their schemes to me, I am usually quite generous in terms of the time I am prepared to spend discussing their ideas with them.

Nevertheless, after our initial discussion, I have to make a judgement about whether I should spend any further time exploring their ideas, when that time might be better spent in other ways — such as on explaining and promoting the idea of a conventional Basic Income system.

I’ve had many people try to convince me that their special idea for a new currency or new money system is a good one. But they often fail to present a clearly described plan, fail to use clear, rational arguments and fail to respond intelligently and reasonably to my queries and suggestions. In such circumstances, I think it is perfectly fair of me to firmly limit the amount of my time I am prepared to spend exploring their ideas.

So, if you think you’ve got a great idea for a new currency system, new money system or an alternative economic system, my suggestion to you is that you should briefly summarise your idea, in plain English, in a single webpage or other document. I (and others) can then make a judgement about whether it is worth investing more time to explore the idea further.

You should clearly explain such things as;

• how your system would operate.
• why you think it would be a good idea.
• the practical steps involved in introducing such a system.

The blunt truth, unfortunately, is that, in most cases, the proposers of these schemes are basically just peddling nonsense. They don’t understand Economics (despite firmly believing that they do) and are unable or unwilling to explain and discuss their ideas rationally, intelligently and coherently. They reel off one unsubstantiated claim after another. They don’t seem to understand the meaning of the terms they are using. And they appear to be strangers to the basic principles of how to construct and present a logical argument.

They may claim to have some great insight into what’s wrong with our money system, but they’ve usually just made some silly mistakes and based their arguments on flawed assumptions. They will often claim all sorts of things are ‘obvious,’ despite those things not actually being true. And when flaws in their logic or understanding of Economics are pointed out to them, instead of being willing to learn, they may be all too ready to take offence and start flinging around childish insults.

They usually admit they are not trained as economists, but firmly believe they have an excellent understanding of Economics anyway, despite all the evidence to the contrary. And if you point out that they may have just misunderstood a lot of things, as a quite understandable result of not being a skilled economist, they don’t take kindly to that at all.

Why do people behave this way? Perhaps they want to feel important. They want to think they’ve got this great solution to share with the world. This is not necessarily a problem in itself. The trouble is that they don’t have the right expertise for the job, but they’re too arrogant to admit it.

What I want to suggest to these people is that, instead of imploring people on the internet to believe in their ideas, it would be better for them to first spend their time going back to basics to improve their general thinking skills, learn how to develop and present a logical argument and learn about Economics. The trouble is that if you make this suggestion to them — even very politely — they may misinterpret it as nothing more than a cheap attempt to insult them.

The irony here is that such people are often purporting to understand complex matters of economics, but don’t seem to have appreciated the wisdom of investing enough of their own time in learning the basics of logic or appreciating the fundamentals of Economics.

Of course, if you’re someone who has made an effort to develop a reasonable understanding of Economics and has made the effort to construct and present a logical argument, I’m happy for you to share a link to where I can learn more about your ideas. But please do try to be open-minded about any feedback I might offer to you. I try to be generous with my time, but I appreciate people making a reasonable effort not to waste it.

And don’t be surprised if my feedback is that you probably don’t understand Economics as well as you think you do and you should go back and study some more. That tends not to be what people want to hear and they may consider it patronising. But I just try to be honest.

Anyone wishing to improve their understanding of Economics may wish to make use of these articles:

If you clapped for this article, you might also like to read some of these articles: