Sir Mervyn King Envisions A World Without Money: Is It A Possibility?

By Hema Senanayake - January 13, 2014

Hema Senanayake

“Great minds discuss ideas, average minds discuss events and weak minds discuss people.” This is a quote attributed to both Eleanor Roosevelt and Socrates. Some observers do not agree with it and they say that everyone discusses everything at one point or another. But some people observe that everyone discusses all those things at some point, but the saying is clearly referring, to the proclivities of said minds or in other words it explains a tendency to do something regularly by those minds.

Whatever the case is, we just cannot ignore when an idea is expressed by Sir Mervyn King who retired in 2013 as the Governor of the Bank of England. He had been the Governor of the Bank of England from 2003 to 2013 and before 2003 he had been the Deputy Governor of the Bank from 1998 to 2003. Therefore, his expertise in the area of central banking and money, it seems, is unquestionable.

His new idea is that he has envisioned a world without money. One of his recent quotes in regard to this idea has been posted in a website call “Beyond Money.” He is obsessed with this idea for quite a long time. In 1999 he said that, “Societies have managed without central banks and their monopoly of the supply of money in the past, and may well do so again in the future.” This idea was briefly discussed in the book titled “The Nature of Money” published in 2004 and the book was written by Professor Ingham who has been attached to the Cambridge University for over 40 years. In the middle of 2013, another economist published a whole new book on this subject titled “The End of Money.” So, it seems that King’s idea is being increasingly discussed at least in academia.

I thought that this discussion is intelligible to CT readers. I think they will find it interesting. Other than that they will also find the true role of money in the economic system in this discussion.

Before Mervyn King, a few centuries ago the economist David Ricardo had envisioned an advanced economic system without money. As a result this question it seems was discussed by Karl Marx making a strong argument against Ricardo. In early 1930s Soviet regime has had experimented a socialist economy without money and it failed within a few years. Leon Trotsky wrote briefly but enlighteningly of the Soviet regime’s bad experiment. In this context, King’s idea virtually is not new but his vision has an extra dimension which dimension being the computing power of new generations of computers.Read More