White hope
rr he Prime Minister's patron sage, Fried- .1 rich Hayek, argues the case for the denationalisation of money. He maintains that competition would bring about a kind of reverse Gresham's Law, in which good money would drive out bad. Anyone who has offered hard-currency notes in soft- currency countries — paying in dollars, for instance, in Morocco — has agreeably ex- perienced Hayek's Law in action. Should we, then, privatise the note and coin business? It would offer the Treasury a choice, now familiar from the examples of Telecom and British Airways — between selling a monopoly, at a high price, or opening the business up to competition and selling it for what it will fetch. Precedent makes the likely choice all too obvious. But a Government which believes in the democracy of the market-place should let us do the choosing. We had the choice, for a while, between the pound note and pound coin, and we seem to have preferred the note. The Americans, similarly, were offered a dollar coin, did not take to it, and are back with the dollar bill. We, though, must eat what we are given. Equally, a Government which proclaimed in the Queen's Speech its faith in sound money should think it worth while to make our money look and feel sound. Does the pound in our pocket — either variety of pound — pass that test? Do our banknotes compare with the banknotes of Germany, or Switzerland, or even France? If they pass muster in their new state, how do they seem when they have had to stand wear? It is at least a tribute to the Chancellor's management of the currency that the un- official privatisers still find the £20 note worth forging. A replacement arrives this week, but the great opportunity remains to be seized. What we need is the return of the finest banknote design ever seen — the stiff, crackling, handsome, heavy, utterly creditworthy Bank of England note, re- membered in its last surviving variant as the White Fiver. That would be money, and out of £1,198 million, it wouldn't cost much
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