I have been wondering about the relevance of so many Financial Information Systems, if the world had a more ideal and unified system for money. Would we need such complex software if our coins and cash were simple in the first place? For example, in our daily FIS assignments, we wouldn’t be having the ‘Company code’ related problems during currency conversion if the world shared a common currency!
If ERP systems find it difficult to enable you to have a vendor in Croatia and a plant in Germany and customers in United States, wouldn’t it be far more complex in real life for actual industrial expansion to occur in the countries hosting their native currencies? So I feel that instead of designing solutions on top of complex systems, why not eradicate the root cause and design a permanent solution for an ideal world? Who knows, 10 years down the line the world might just adopt it (advent of the bitcoin is a hint!)
Although printed currency works well in goods exchange in an economy, there is no automatic linkage to guarantee there will be a corresponding increase in real goods to match the increase of the printed cash.Throughout history, majority of economic crises had a monetary cause and were not due to a breakdown of production of real goods. The actual collapse of societies on the other hand is related to the breakdown of the fundamental good creation system. So ideal concept of money should be reflecting the health of industrial systems, but currently it only obscures the real problems.
Ideal money should have stable value over a long time.Hence, gold or silver is not a good substitute. “A possible nonpolitical basis for a value standard that could be used for money would be a good industrial consumption price index(ICPI) statistic. This statistic could be calculated from the international price of commodities such as copper, silver, tungsten, and so forth that are used in industrial activities.” John Nash said in his lecture. I hope we can integrate ICPI to a bitcoin like crypto-currency standard, thus eliminating hard cash. Listing reasons why this would be the advent of the ideal world:
- The money in an economy will reflect the actual health or it’s capacity to produce goods and services for it’s people.It will ensure a fair flow of prosperity across the world.
- ‘It is a solution to the Triffin dilemma which is generally about the conflict of economic interests between the short-term domestic and long-term international objectives when a currency used in a country is also a world reserve currency in the meantime.’If we have a unified currency for the world that is decentralised like bitcoin and not governed/policed by few banks, it overcomes this dilemma.
- No taxes, 3rd party transaction fees, crypto currency cannot be stolen or counterfeited. Clean transactions with no time-related distortions could start an era of free trade and industrial growth.
References:
https://en.wikipedia.org/wiki/Ideal_money
http://www.lietaer.com/2010/09/what-is-the-problem-with-our-current-money-system/