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                   Asymptotically Ideal Money

     One cannot logically feel confident of the adoption internationally of an ideal system of currency or currencies in an achievement analogous to the achievement of the metric system or of "the euro". Such a result would necessarily have a political content since it is the states that control and supply the various currencies that are in use at the present time. And projects requiring political support may be difficult to achieve or comparatively easy to achieve depending on elements of "political reality" which may differ considerably from the actual merits or lack of merits of the projects (as evaluated from, say, a scientific or economic or medical viewpoint).
     So it occurred to me to think that the improvement in the quality
of forms of money or currency being used in the world might result by
a process of evolution instead of as a result of an analogue of the 
adoption of the metric system or of the "euro". And of course, after a certain degree of progress by evolution the rest of the progress could possibly be realized by a convention thus, in effect, by "fiat" of some
sort.
     And there was a specific development observable in the actual
behavior of "central bankers" and/or "money managers" that suggested some interesting possibilities.

          A Symptom of Current Attitudes Towards Inflation

    In relatively quite recent times a scheme, or perhaps a "line"
(analogous to a "political line"), has emerged which is called
"inflation targeting". Although of course this doctrine, if honestly used as a program, naturally tends to comparatively restrain the inflationary options of central bankers and treasuries, yet it is
popular with many of them. This "line" seems to have originated in 
New Zealand where it is observable that their dollar is the most depreciated of all national dollar-named currencies.
     (It seems conceivable to me that the very fact of the maximally
depreciated value of the NZ$ put political and psychological pressure
on the state authorities there so as to force them towards a modest
degree of reform. Clearly, New Zealand is not an impoverished "3rd 
world" country.)
     To me it seems a striking paradox that central bankers and their
economist advisers can think in terms of having a "targeted" rate for inflation without realizing that that rate should be zero!
     This paradox, or my perception of it, was what led me to the concept of "Asymptotically Ideal Money". Suppose that there were, formerly, "free Keynesians" and then, later, there came to be "restrained Keynesians" whose freedom to freely issue additional money and credits however they might please to do so would have become a bit restrained by the need to support a doctrine of targeted inflation.
Then the "customers" (as it were) of the treasury and central bankers 
would become in a position to ask, seeing the program of "inflation
targeting" in operation, "Why should not the target rate be set lower so that we would have more stable prices?". And I ask, rhetorically,
"Why, indeed? That seems like a good question."
     So it seems to me that no actual target rate for inflation could
be justified for an indefinite length of time. Perhaps if the managers
could replace the word "inflation" with an euphemism of politically
correct appearances they might more easily maintain the scheme or
"line" of justification for inflation. 
     And I have made also the observation that among the assortment of
states where already there has been, to some extent, the adoption of
the use of a "line" of inflation targeting, that the rates chosen for
the targeting have, perhaps unsurprisingly, simply varied with the
"common sense" external or international appraisal of the historical
quality of the money of each of those states. And thus to pretend to
be a state with high quality money a state would need to choose a
comparatively lower rate for its inflation rate target.

                      Political Evolution
 
    There perhaps will always be "politics", like also "death and taxes". But it is sometimes remarkable how political contexts can evolve. And in relation to that I think that it is possible that "the Keynesians" are like a political faction and that they may become less
influential as a result of political evolution. The "Keynesian" view
of things did not come into existence until after the time when what
we can call "bolshevik communism" had become established in Russia. And
by this label we wish to differentiate between any theoretical or ideal
concept of communism and the actual form of governing regime structure
that came to exercise state power in Moscow. (All over the world
varieties of states make claims to have governments very properly or
even ideally devoted to the interests of the citizens or nationals of
those states and always an externally located critic can argue that
the government is actually a sort of despotism.)
     The Keynesians implicitly always have the argument that some good
managers can do things of beneficial value, operating with the treasury
and the central bank, and that it is not needed or appropriate for the
citizenry or the "customers" of the currency supplied by the state to
actually understand, while the managers are managing, what exactly they
are doing and how it will affect the "pocketbook" circumstances of these customers.
     I see this as analogous to how the "bolshevik communists" 
were claiming to provide something much better than the "bourgeois democracy" that they could not deny existed in some other countries.
But in the end the "dictatorship of the proletariat" seemed to become
rather exposed as simply the dictatorship of the regime. So there may
be an analogy to this as regards those called "the Keynesians" in that
while they have claimed to be operating for high and noble objectives
of general welfare what is clearly true is that they have made it 
easier for governments to "print money". 
     So I see the Keynesians as in a weak sense comparable to the
"bolsheviks" because of the support of both parties for a certain 
"lack of transparency" relating to the functions of government as
seen by the citizenry. And for both of them it can be said that they
tend to think in terms of government agencies operating in a benevolent
fashion that is, however, beyond the comprehension of the citizens of
the state. And this parallel makes it seem not implausible that a
process of political evolution might lead to the expectation on the
part of citizens in the "great democracies" that they should be better situated to be able to understand whatever will be the monetary policies which, indeed, are typically of great importance to citizens who may have alternative options for where to place their "savings". 

         Possible Evolution of the Quality of Currencies
 
     It seems possible and not implausible that leading currencies in the future will evolve in such a way as to become of improved quality
with regard to inflation. Here we use the "common sense" viewpoint of
an observer located in a land politically independent of the country
issuing the currency that is appraised. Thus less inflation corresponds
directly with higher quality.
     There may be a time of wide usage of the "line" of inflation targeting. And there may be a comparatively small number of "leading"
currencies, such as the US dollar, the "euro", the Japanese and Chinese
currencies, and the British pound. If in each of the corresponding states the authorities were using, in some sense, "inflation targeting"
then necessarily they would have some sort of a price index that could
be related to their issued currency. But it would ALSO be very natural
for each state to look at the comparative behavior, in terms of value,
of the other leading currencies.
     Thus a form of second order index comparisons is possible where the authorities in a state would look not only at domestic prices but also at international value comparisons.
     And now we have only to imagine that a "groundswell" of "popular demand" for minimal inflation (and thus for money that would be viewed
by foreign observers as of higher quality) could sufficiently influence
the responsible authorities and governments so that they would so control the "supply side" of their money management activities so as 
to achieve that (supposed to be popularly desired) result.
     Here we can look at the early behavior of the "euro" as an example. It came out as a unit with unit value less than that of a
British pound unit but worth more than a dollar. It would SEEM that in
Frankfurt they EXPECTED that it would simply "float" at a value level
above that of the US dollar unit. This did not occur, and it then began
to seem as if it might be drifting relentlessly downward, like with the history of the old Italian lira. But then, after a time, for various reasons, presumably including supply restraint controls directed from Frankfurt, the decline was reversed and the euro regained enough value to have a respectable appearance. So we can see examples where the "asymptotic" behavior of a value under comparison can be different from
an earlier apparent pattern.
     Thus I think that "asymptotically ideal money" is a real possibility and that it is not very difficult of achievement because of
problems of political coordination. But also, if there is in the first
stage of progress the advent of "asymptotically ideal" currencies then
after that level of what might be called "rationalization" is achieved
there would be the possibility of an international collaboration to set
up value standards analogous to the standard measures used in the
internationally accepted "metric system".
     And here a side remark can be made, partially humorously, and just
for illustration, that a POSSIBLE standard of value would be simply the
cost of making a duplicate, of precisely the same composition and weight, of the "standard kilogram" located at Sevres near Paris.

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