In this chapter, three main approaches to creating a new, more stable monetary system, which is under wide discussion today, are considered in turn. First, the feasibility of reviving the use of gold as backing for currencies is a never-ending controversy, kept very much alive by those who argue that “In a crisis, there is nothing else.” Second, the rapidly growing use of the internet for decentralised finance or “DeFi” services is offering the public a growing range of new, reliable, low-cost financial services. Among these is the use of “crypto-currencies,” which are growing rapidly but which still suffer severe instability and uncertainty. Third, the world's central banks are developing their own internet-based currencies, known as central bank digital currencies (CBDC). However, these are unlike private crypto-currencies since their use would give government control over all transactions – a degree of power which would risk enabling tyranny.
Top5.1 Centralization Or Decentralization
This dichotomy is indeed one of the major issues discussed in comparing different possible monetary systems, as well as more generally in comparing different forms of government, and particularly different forms of democracy. Broadly speaking, individual freedom is generally best served by decentralizing political power to the maximum extent practical (although the meaning of the word “practical” in such discussions is itself the subject of debate). As a rule, as larger and larger political systems become centralized, from town to county or state, to nation to supranational organisations, the overall system becomes less and less responsive to people at lower levels, while the possibility of meaningful democratic control, transparency, or redress for wrongs that occur becomes weaker and more diluted.
Since the Bretton Woods system was established, the growth of world trade, which has contributed greatly to economic growth, has been aided by international treaties. However, as international corporations have grown larger and larger relative to the size of national governments, nowadays having annual revenues of even $100 Billion or more, their lobbying and provision of expertise and personnel have led to their dominating the process of formulating trade and other policies. In parallel, the reporting of these activities in the news media, which are also owned by large multinational corporations, becomes more and more biased towards supporting these powerful vested interests.
In the years following the end of WW2, increasing international political cooperation in various fora also led to a trend towards “internationalization” of policy making, based on the argument that many problems were beyond the powers of governments of individual countries to solve. This led to government staff developing expertise in working within international organizations, and the gradual subordination of national governments to international organizations. This trend of internationalization has recently been superceded by the idea of “globalization”, implying the development of international cooperation in various fields to “one size fits all” policies for the whole world. These are now continually advocated by the news media and large “global” corporations, which coordinate in advocating globalization as a means to facilitate their operations, regardless of different countries’ preferences.
However, another decades-long trend that has grown in parallel with internationalization / globalization is the trend towards an ever-widening gap between rich and poor in most countries. The “Occupy Wall Street” movement, which started in New York City in late 2011, maintained a permanent demonstration for several weeks, arguing for greater recognition of the rights of the 99% of the population being impoverished by the richest 1% – until it was violently suppressed by the New York police! The trend towards worsening inequality and lessening freedom of speech has continued since then. This has given rise to the phenomenon of wealthy cosmopolitan elites continually defaming those resisting globalization as petty, narrow-minded nationalists, similar to the disdain with which “city slickers” traditionally cheat “country bumpkins”, who are unsophisticated in financial matters, and so easily defrauded.