Most agree the vision-shift began with the final collapse of the Eurozone in 2019, an event which had been forecast for some time. The surprise was that the unraveling had begun with Italy, instead of Greece as everyone had expected. It turned out to be the hot Italian blood that first reached a boiling point over the crippling cruelty of the long imposed austerity: the island of Sicily threatened secession and deadly street riots broke out in Rome, Naples and Milan—and then everywhere else. The government capitulated on September 12, 2018, declaring not only that pensions would be reinstated—with payments made in “the Italian national currency”—but also would be increased by 10%. It further declared a twelve month federal tax holiday: income and value-added taxes were put on hold for what was called the “National Transition.”
The dire predictions of hyper-inflation never materialized. Instead, people went back to work picking up the garbage and debris that had piled up for months, working for Lira, rebuilding burned out buildings and repairing roads and utilities that hadn’t been maintained for over a year. What caught everyone by surprise, however, was a decision by the Italian Ministry of Finance about how to affect the transition from Euro to Lira: Why go to the expense and trouble of printing Liras again? they reasoned. Cell phones for some time had been capable of making credit and debit card transactions. Why not, the Ministry decided, dispense with cash Lira entirely, and issue to every Italian citizen a “Digital Lira Card” (DLC) which could be loaded with Lira at any ATM machine, and then debited by any vendor with a cell phone. Why not indeed?This story is a great example of what Nassim Nicholas Taleb calls 'antifragility'. As he puts it:
The European Union is a horrible, stupid project. The idea that unification would create an economy that could compete with China and be more like the United States is pure garbage. What ruined China, throughout history, is the top-down state. What made Europe great was the diversity: political and economic. Having the same currency, the euro, was a terrible idea. It encouraged everyone to borrow to the hilt.Whether our currency union will eventually become a real monetary union remains to be seen. I wouldn't want to bet on it. But what I would bet on is the 'antifragile' value of having more than one currency in circulation. Just in case. Which is why Ireland needs the ePunt.
This was reinforced for me by David Halpern's presentation last week to the Irish Economics and Psychology Conference in Dublin. Halpern heads up the Behavioural Insights Team at No.10 Downing Street. In his talk he spoke about the economy of regard (first coined by Avner Offer), which refers to the observation that:
...what really makes a nation happy, once its basic needs are met, are the giant web of relationships that we have with family, friends, and fellow citizens. These relations usually take the form of long circles of gift-giving, which more or less even out in the end. We do these things for others not for money, but for regard - our regard for them, and theirs for us.
The economy of regard... is much larger than the economy of monetary exchange. Indeed, quite a bit of what we work for and buy is to give to others out of regard. Happy nations have a healthy economy of regard. Since we work much harder and better at measuring the economy of monetary exchange than we do at measuring the economy of regard, the major wealth of nations is hidden.Halpern describes the concept in detail in his recent book On the Hidden Wealth of Nations and proposes that complementary and alternative currencies will help unlock the potential value of this hidden wealth.
And we don't have to wait until 2020 to do it.