This comprehensive book traces the role of money in the creation of the state. Starting in the early modern era, Paul Wilson explores the monetary systems of empires and new states in the age of nation-building in the eighteenth and nineteenth century. Spanning a wide geographical and historical range from the creation of the United States of America to the establishment of the European Union and the breakup of the Soviet Union and beyond, the author examines changing attitudes toward monetary sovereignty as dozens of new states created new currencies since the end of the Second World War.
Wilson analyzes the decision–making of newly independent states in their choice of an appropriate currency, considering the complex factors involved—ranging from the purely economic to questions of security, international recognition, and outright nationalism that have played a part. The author challenges the notion that each country must necessarily have its own currency and explains why some newly independent countries have chosen to adopt the currency of another state. Citing the examples of international currency unions of the nineteenth century and the present day, he contends that sharing a currency does not represent a surrender of political sovereignty. Instead, Wilson argues for a more rational attitude toward money as a facilitator of transactions rather than as a symbol of national identity.
After serving in the British Army and Diplomatic Service from 1976 to 1994, Paul Wilson joined De La Rue PLC, the world’s biggest commercial banknote printing company. Until his retirement in 2015, Wilson was responsible for De La Rue’s relationships with the British government and parliamentarians. His books include Hostile Money: Currencies in Conflict.
2The Money of Nation Builders
3International Monetary Unions in the 19th Century
4Money and Empire
5The End of Empire
6Secession and Accession
7Countries and Currencies in Waiting
8Modern Multinational Monetary Unions
9Money and the Making of the State
Paul Wilson skillfully sifts through the ever-changing, shifting sands of monetary sovereignty to produce a clear, coherent portrait. What do we see? That monetary sovereignty is all about the right to determine a unit of account, a means of payment, and, yes, the right to produce money.
The subject of money has intrigued us for millennia and has been treated in many books, but none like Paul Wilson’s fascinating account of how money helped fashion nations. The historical breadth of coverage is breathtaking and engrossing. The choice of monetary regimes has sometimes been determined by economic and sometimes by political considerations. Unsurprisingly, a distinct national currency has often been an important symbol of nationhood for newly independent countries, whether its value was linked to gold, another currency, an inflation target, or nothing at all. But as Wilson engagingly documents: ‘There is no single solution to the question of which currency regime should a new country adopt.’ Wilson traces more currency history than you probably thought you needed to know, but by the time you finish his absorbing account, you will be glad that you read every word.
Any central banker who wishes to set the monetary history of his or her state in historic perspective and in its relation to broad international trends will find this stimulating book essential reading.
The primary challenge through all of the stories recorded in the book is how to ensure stability in the value of the currency. Irrespective of whether the currency is based on a tangible object such as gold and/or silver, or linked in some way to another currency, citizens will seek out stable value. This book tracks the constant struggle of nations to do this, particularly where they lack scale, wealth or stability. Given the rise of cryptocurrencies, this book challenges the link between money and sovereignty. Monetary independence is separate from having your own currency.
12/10/21, Central Banking: The book and author were featured in this article.