Monday, June 30, 2003

What does it take to define a nation?

My inexperience in matters European is criticized by correspondent "Paul." Informed by the history of New Europe, he writes my faith in the falling dollar's restorative powers is completely misplaced:

...I do not believe in the benefit of weak currencies. History shows that weak currencies have been associated with weak countries, and that this combination rarely resulted in anything good. I am for a strong dollar. As an alternative, we could consider adopting the Euro. (If nobody has yet advanced this idea, remember you heard it first from me.) This would eliminate any exchange advantages or disadvantages when trading with the EU, and we could then measure the results in purely competitive terms (price, quality, and service).

Frankly, I laughed this off. "Clearly the guy doesn't understand export prices," I thought dismissively.

But monetary union is an old idea that just won't die. It may be the next big thing. Consider what Bartley is saying in today's WSJ:

...if the euro can replace the franc, mark and lira, why can't a new world currency merge the dollar, euro and yen? The euro's recent recovery against the dollar almost certainly establishes its credibility as a permanent currency. While major eurozone economies remain troubled, practically no one so far is blaming the European Central Bank.

This suggests success for the grandest reform of all, a supra-national central bank. The ECB Executive Board and Governing Council could yet become political targets, of course, especially if much-discussed deflation actually sets in. But even with strikes in Germany and France, few politicians seek a way out in a little more inflation or currency depreciation; few complain about the loss of "monetary sovereignty."

World money, with a world central bank, seems a next logical step.

How are we to think about this? Try this approach. What is the essence the concept "nation?" If we had to list all the features of "nation," what would be left if we discarded everything that could be taken away?

Culture, language, history, all that stuff can get thrown out -- just two and only two features remain on the list.

The first is simple border -- an enforcible physical boundary. The second is currency -- an enforcible economic border.

So what must be discussed, it seems to me, is whether monetary union is genuinely "rational" or part of the irrational and highly suspect elitist European political movement that's come to be called transnational progressivism. If this makes me sound like the old wacko John Birch Society guys who ranted against the U.N. and the dangers of upcoming world government -- well, I guess I'll just have to live with it.

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