DW I think that's totally fair. Another way to say that is, as another economist who wrote a review on a book had said, "People trust governments more than they trust banks." Which isn't saying much, but it's true. I think that's fair, and I'm not eager to dismiss that anxiety because I feel it, too. I don't think it's just American Express, though, it's American Express, Visa, MasterCard, Discover, PayPal —
RN Oh yes, yes.
DW — and a whole host of new payment processors, square from this guy Jack Dorsey from Twitter is coming on. I think they will eat at the fees of the credit-card companies in a pretty substantial way. It's promoting innovation, and it's up to the consumer to go find the start-ups that are behaving more ethically, toward them and with their money.
RN It would be really interesting to see some of the "fixers" who operate between China and Africa for instance, coming up with their own way of solving the exchange-rate problem, by trying to have an African hawala system, where money gets transferred without the currency transaction that destroys a tremendous amount of value in the African currencies. Where somehow without all the profit centers with each transaction so that they can just do it once, and send their money there, and their money is there when they get to China.
YOU GUYS ARE BOTH NOT ONLY TALKING ABOUT ALTERNATE METHODS OF PAYMENT, I.E., CREDIT CARDS OR CASH, WHICH WOULD BE TRANSACTED IN DOLLARS OR EUROS OR POUNDS. BUT YOU'RE ALSO TALKING ABOUT COMPETING CURRENCIES SO, I COULD PAY YOU BY PHONE IN AIRTIME MINUTES, OR BY THE HAWALA SYSTEM, IN SOME OTHER UNIT.
DW I have a nice anecdote, which gets past the wonky talk. The ability to bounce between currencies is going to be fabulous for people in ways they can't even conceive, and I think it strikes at the heart of this question of what is real value. The example in the book is you have an upcoming family trip to Disney World, so maybe you want to get paid in Disney Dollars from someone, so much so that you would be offering a discount on the actual price of the thing, if they are willing to pay you in Disney Dollars.
RN The difficulty with all of this in my thinking of it, is the universal acceptance of the thing. So, for instance, I can see that everyone on the MTN or Globacom or other network in Nigeria being able to trade minutes. The problem is how do you trade minutes with China Mobile? The costs are different, and so you still need a unit of exchange and you're still dealing with a kind of currency, it's just virtual, it's airtime.
DW Or it's a US dollar even. Part of my thesis isn't to get rid of national currency, I mean I bring up the idea, but it's more to get rid of the analog, physical representations of it. Maybe to bounce from MTN airtime minutes to China Mobile, you want to go through a national currency because they've achieved this great level of universal acceptability, and that's just not so bad.