Thomas Alva Edison too had a plan for monetary stability…

JP Koning is not just letting us know what economists have written on history of money and monetary system. He is also telling us about what experts from other fields have written about monetary systems. There was an earlier tweet on Copernicus writing about money.

Now there is another tweet which tells us Edison too had a solution for reinventing the US monetary system in 1920s. He suggested that instead of gold backed dollar, dollar should be backed by agri commodities like wheat, oats etc. Edison thought the gold backed dollar mainly favored the Eastern part of US economy. A crop backed Dollar would be beneficial to Southern and Western parts which had significant agri base.

The article says think of this as Bill Gates advocating similar standard and asking to dismantle the Federal Reserve.

The plan was that government would set up 12 warehouses across the country which will store 36 crops grown in the country. The farmers could store their crops and get a certificate against the same. This certificate will be equivalent to cash leading to monetisation of the crop. The farmer will hen take the certificate to a bank and get it exchanged for currency (50% of crop value and so on…).

The plan did not get much support from economists and the quality of responses (harsh language) led Edison to be disappointed and drop the idea. The plan was obviously ahead of its times and if not money, it is just like call option or warehouse financing of today.

There are more details in the article.

Superb stuff..

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