Pros and Cons of a Universal Currency
The concept of a single worldwide currency has been suggested since the 16th century, and came close to being instituted after World War II -- yet the idea remains little more than that. Proponents argue that a universal currency would mean an end to currency crises like Zimbabwe's. A single currency wouldn't be subject to exchange rate fluctuations because there would be no competing currencies to exchange against. In other words, a universal currency would lose its value as a commodity bought and sold on open markets and would have value only for its worth in buying other commodities. To put it plainly, money would become just money. Its purchasing power would be the result of the adjustment of interest rates and other monetary policy tools in response to inflation or deflation.
Who would be responsible for adjusting those interest rates, though?
One of the chief fears among opponents of a universal currency is the creation of a central body formed to oversee the monetary policy for a single world currency. An extant international body, the United Nations (UN), provides an example of the potential pitfalls and strength a central global monetary body could expect. Successes like peace-building missions in nations as disparate as El Salvador, Mozambique and the former Yugoslavia attest to the power a unified international body can have to resolve conflict. On the other side of the coin, the UN's Intergovernmental Panel on Climate Change (IPCC) is widely accused of replacing science with diplomacy, as nations responsible for contributing to climate change aren't openly taken to task in IPCC reports.
These reasons and others continue to prevent the adoption of a universal currency. Perhaps closer on the horizon is the integration of separate currencies within regions into unified currencies. This has already occurred in some areas. The Euro is lauded as a successful regional currency and consistently trades at values above the dollar, despite being introduced only in 1999. Eight West African nations share a common currency, the Franc of the African Financial Community (CFA F). In the Western hemisphere, the creation of the amero has been suggested as a possible currency for a proposed currency union between the U.S., Canada and Mexico. Central American nations are also discussing a single currency proposal for the region.
Whether the proposed regional currencies will be instituted remains to be seen. They face the same criticism as a universal currency, albeit on to lesser degrees and on smaller, regional scales.
In the meantime, while the debate over regional and universal currencies continues, people like Mike Hewitt will have to count money the old fashioned way.
