In the long term I favour a Europe—indeed, a world—of much smaller states. I don’t just favour breaking up the UK; I favour breaking up the United States, India, and China.
That is Charlie Stross, writing on the Scotland independence referendum. Read the whole thing. I thank a reader for the pointer.
In the long term I favor a world with no nation states at all, with government small, free of corruption and cronyism, responsive, rational, and always and everywhere respectful of and protective of citizens rights and freedoms. In a such world whether some city is part of an independent Scotland or a unified UK or part of a United States of Europe would not matter at all. What would matter is how the residents of that city think the locally unique attributes of that city should be administered.
Of course, in this fantasy of mine, there is no war, no terrorism, no racism, no groups seeking to employ force to either impose religion upon, or enslave, others. Murders, rapists, burglers, frauds, and pimps are swiftly dispatched to jail. The rest of us are left alone.
It’s a nice dream.
How do currencies work in a world made up of smaller states?
In the absense of legal tender laws or taxes demanded in sovereign notes, there is little need for sovereign currency. Of course it may still be issued and used, but markets themselves do a fine job of determining currency and money to facilitate exchange.