For full disclosure, I certainly do not agree with everything Paul Krugman says. However, on this occasion, I do. Granted, his Keynesianism and luddism disallow him from seeing the forest through the trees and embracing small “l” libertarianism which supports cryptocurrency.
Krugman whipped out a piece “Scots Wa Hae” here on the Opinion Pages of the New York Times.
It’s true, as pointed out here, that England, I mean the rump UK, I mean continuing Britain, whatever, can’t prevent the Scots from using the pound, just as the United States can’t stop Ecuador from using dollars. But the lesson of the euro crisis, surely, is that sharing a common currency without having a shared federal government is very dangerous.
In fact, Scotland-on-the-pound would be in even worse shape than the euro countries, because the Bank of England would be under no obligation to act as lender of last resort to Scottish banks — that is, it would arguably take even less responsibility for local financial stability than the pre-Draghi ECB. And it would fall very far short of the post-Draghi ECB, which has in effect taken on the role of lender of last resort to eurozone governments, too.”
Krugman rightly criticizes Scotland’s independence campaign’s stance on a shared GBP currency, which is that of the Scottish Nationalist Party. However, he doesn’t offer any better solutions. You wouldn’t expect him to either for he Keynesian, and therefore still believes that governments should be in the business of producing currency. From the early evidence, the Academic Entrepreneur can see that a monumental shift is underway, and the power will be returned to the people in this regard. In the not-to-distant future, the role of central banks and their ability to continue to reward the wealthiest people in society first by the running of their printing presses will be turned on its head. Scotland should embrace this coming technological change and embellish cryptocurrency, seeking a superior, entrepreneur- driven, decentralized, peer-to-peer tech currency model that will set the standard for the world.
Will the Academic Entrepreneur continue to beat this horse until its dead? Time will tell. As for Krugman, he has to ask himself what it means to be “liberal”, and is that with a small “l” or a capital “L”; and whether or not the central banking model jives with his self-definition.
-The Academic Entrepreneur