Do single currencies need political unions? Radio 4

I have worked with Radio 4 Analysis to produce a half hour programme arguing that a successful single currency needs a country to love and back it. This will be transmitted at 9.30 pm on Sunday 8th November. It is also already available on to listen to through the BBC Radio 4 Analysis part of the BBC website.

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19 Comments

  1. Posted November 3, 2015 at 9:59 am | Permalink
    • Posted November 3, 2015 at 1:02 pm | Permalink

      Many thanks for that.

  2. Posted November 3, 2015 at 10:16 am | Permalink

    When it comes to love there is none more ardent than that of the BBC’s toward the EU. So how did you manage to get them to air your views you a person with such considerable euro-sceptic credentials. Looking for your support when their Charter review comes up. No they would never stoop that low. Would they?

    • Posted November 3, 2015 at 11:45 am | Permalink

      Tokenism. Like they had one Conservative MSP on Have I Got News for You to balance the previous 10 Corbyn-supporting comedians they have had on this series.

    • Posted November 3, 2015 at 12:15 pm | Permalink

      Antisthenes, this programme has 6 listeners. No doubt the BBC would add this to John’s 3 minutes per year on the Today programme and claim the eu-sceptic voice is being heard.

      I’m sure the usual ‘IN’ crew (e.g. those who wanted us to join the Euro) will still be featured at large on the tv and the main radio shows.

      Reply Analysis is a flagship serious documentary programme. It goes out twice on air, and is available for a month on the BBC website.

    • Posted November 4, 2015 at 8:33 am | Permalink

      Perhaps they were hoping JR would moderate some of the less than favourable stuff on his blog. By the way, following their new Poldark last year, which no-one coud watch because all the actors were mumbling in bad Cornish accents, they have shown their latest effort after advertising it for a few weeks. It is a play called The Dresser and stars top luvvies.

      Normally when I can’t hear what is being said, I put it down to deafness in the upper frequencies, but my bird said she couldn’t hear the words too, and she can hear a pin drop. I flicked over to the Swedish dark crime programme and could hear all the Swedish and even understand the swearing, which seems to be in English- or perhaps the other way round. The Dresser seems to have been recorded with the microphones at a distance from the actors for some artistic effect. The play was about weird luvvies anyway so missing the dialogue was not much of a loss, except for the licence payer.

  3. Posted November 3, 2015 at 11:09 am | Permalink

    Fiat currencies are literally instituted by political decree. They have to be because they cannot stand alone in a free market. They are inferior currencies , hence existence by fiat alone. Ie there must be a political consensus underpinning the fiat currency. Ie there must be a political union if the fiat currency transcends borders.

    Of course, it is always better not to have a fiat currency but a sound currency that can stand on its own in the market. A currency that the market voluntarily chooses. That would be a commodity that has the most monetary properties ie portability, not counterfeit able, dividable, non ubiquitous, not consumed by industry, durable.

    • Posted November 3, 2015 at 11:35 pm | Permalink

      You mean going back on to a gold standard?

      The price of gold can be quite volatile. It’s now only worth, in US $ terms, about 65% of it 2011 value. Other commodities vary too so it really wouldn’t make any sense to tie the value of a modern currency to any one thing in particular.

      A fiat currency derives its value from an ability of a sovereign government to levy taxes and insist that those taxes are paid in that currency. If fiat currencies are badly managed we can have high inflation, asset price bubbles and/or high levels of unemployment in the economy. If they are well managed we can have low inflation and low levels of unemployment in a successful economy.

      A fiat currency is issued by government. It cannot receive more back in tax than it does issue and consequently a sovereign currency issuing government has to be in debt. If it taxed back everything it had issued there would be no currency left in circulation.

      • Posted November 4, 2015 at 7:18 am | Permalink

        Gold is priced in fiat. It is the fiat that’s volatile. See history. Every single irredeemable fiat currency eventually disappears in a inflationary flameout. The dollar and sterling has lost over 80% of value since Nixon defaulted on the gold standard in 1971.

      • Posted November 4, 2015 at 7:31 am | Permalink

        “A fiat currency derives its value from an ability of a sovereign government to levy taxes and insist that those taxes are paid in that currency.”

        Very largely true. I suppose that if a government insists that all other payments due to it must be in that currency, not just taxes but also for example the proceeds of asset sales, and if it insists on making all its own payments in that currency, then that will also entrench the currency.

        • Posted November 6, 2015 at 8:59 pm | Permalink

          Sterling is now, I believe, the oldest currency in the world. On the day war was declared in 1914 the Pound had exactly the same value as on the day Napoleon surrendered his sword after Waterloo. For 99 years the value fluctuated, but it retained its value. That 1914/1815 Pond is now worth about a penny. That just shows how the political class have debased the coinage. And we are far better off than most: the French and Germans saw their currencies made and remade. And lets not even mention the Greeks.

  4. Posted November 3, 2015 at 11:51 am | Permalink

    It was on last night ( Monday ) , John.

  5. Posted November 3, 2015 at 1:02 pm | Permalink

    Well done for getting them to even do it!

  6. Posted November 3, 2015 at 1:44 pm | Permalink

    Completely OT:

    Following the gleeful BBC reporting of England’s failure in the RWC, it’s funny how the England Rugby League team (completely manned and coached by Englishmen) managed to hammer New Zealand on Sunday yet hardly get a mention on our unbiased public service broadcaster.

    • Posted November 3, 2015 at 7:15 pm | Permalink

      Flicked through Corbyn’s Speech to the SNP MK2, seemed to talk about Wales Cities in England and mentioned Scotland plenty of times but seemed to have a problem with the word England, hardly surprising etc ed.

  7. Posted November 3, 2015 at 10:08 pm | Permalink

    I notice that Mr Lamont’s failure with the ERM was not mentioned in this programme or the likely implementation of capital controls restricting the withdrawal of individual savers cash at times of banking crisis. this marks the programme out as political point scoring rather than sober analysis of the relative merits of currency unions. I am disappointed as a serious review would probably have caused more to think about the future options for the UK.

    reply The ERM strengthens my thesis as it was a forerunner of the Euro. the UK and U.S. Did not impose capital controls during the last banking crisis. Greece did.

    • Posted November 6, 2015 at 9:01 pm | Permalink

      You should read Bernard Connolly’s ‘The Rotten Heart of Europe’. That is a critic of the ERM and he was spot on regarding the Euro.

  8. Posted November 5, 2015 at 1:25 am | Permalink

    Germany loves and backs the Euro. Does anybody else? Seriously.

  9. Posted November 8, 2015 at 10:02 pm | Permalink

    The central argument surely focuses on political will. The point was made when the unification between East and West was highlighted. The difference between this and say Greece is the lack of interest in political union. The situation in Greece is happening due to need and not desire and the fact that Germany is the main player suggests an unspoken united states of Germany and not Europe.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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