The Stone City

Words Made to Last

Tuesday, March 06, 2007

Aversion Therapy

A loyal Marginal Revolution reader asks:
What is currency and what are the potential implications of a completely digital currency that could have unlimited meta information attached to it? [Some obvious implications would be tracking transactions and the government's ability to enforce taxes, etc., some more esoteric stuff would be attaching conditions much like covenants, say that a particular payment could only be used to buy products that were carbon neutral, possibly down the road having policy implications.]
This is a control fantasy. Here is what to do when you are tempted by ideas like this: imagine a team of wealthy, rude, and immensely cheerful investment bankers bantering with the masseuse in First Class on their way to explain to their client how to get around your regulation.

It works for me.

[Mr. Cowen's far more thoughful answer is here.]