[lbo-talk] Why no world currency?

[Sean Andrews]

In my class last night we started talking about currency speculation
and capital controls and a student asked why all countries couldn't
just use the same currency.  I was obviously out of my element because
I couldn't come up with a satisfactory answer.  I could speculate on
the political reasons on the domestic side--desire for sovereignty,
inability to raise money for deficit spending, it being harder to
index the currency value in a particular country to other
fundamentals--but all of this seems like a lot of fairly imaginary
stuff (like the general equivalent itself) so could likely be changed
with some will and foresight.  In short, I really didn't know what to
say except that it would be hard to do.

I'm sure there are arguments about this and reasons given for and
against this kind of proposal.  I also assume there are far more
practical and pragmatic difficulties based on a lot of other aspects
of the global political economy that are connected to the current
system of national currencies.  On the other hand, the price of oil
(like the price of gold before) seems to be fairly important as an
index of the value of all other currencies and commodities and that is
theoretically priced according to a market even if the supply is
basically regulated by the cartel (though I can also see many problems
with this analogy.)

Anyway, I was hoping someone on the list could shed some light on this
question: why can we not have a world currency? Either through
references to other conversations or your own formal or informal
understanding.

thanks
s