Wednesday, August 01, 2007

Yeah, but which Nobel? 

Craig Newmark is arguing that Robert Mugabe should win the Nobel Prize in Economics for his solution to the problem of scarcity.
"Where money for projects has not been found, we will print it," Mugabe was quoted as saying.
Brilliant! This has worked so well. Mike at Lamplighter points out to me that the Zimbabwean government has begun the process common in most hyperinflations: You drop a few zeros off the currency to make the numbers a little more manageable.

I sent a note to James the other day -- if I have his email address right -- that this 10 Brazilian cruzeiros note he has in his fabulous Curious Lucre collection has been stamped to make it worth only one centavo. That is equivalent to dropping three zeros too. Of course, they kept switching between cruzeiros and cruzeiros novo and cruzados and cruzados novos, littering the countryside with zeros along the way. When it comes to dropping zeros, the Brazilians were the champions, until they got real. By that time, eighteen zeros had been deleted.

When I was in Ukraine in 1995 and 1996, I saw street vendors using abacus to calculate bills for customers. At that time a dollar was about 180,000 karbovanets; the country had had 10,000% inflation in 1993 alone. I don't recall the abacus operators troubling over the zeros. When the national bank there finally introduce its new currency -- here Mitch, try to pronounce this: hryvna -- five zeros landed in the dust. 1 hr = 100,000 karbs. (Wish I could get on that diet!)

So no, Mugabe doesn't really deserve a Nobel for the dance of the zeros. That's old beer. But the idea that he can create whole buildings just by printing paper? If he can do that, he's more deserving of a Peace Prize than most of the previous recipients. We can only hope the Nobel committee has more sense than that.

UPDATE: Courtesy the Mises blog, I note that a new Z$200,000 note has been issued, which the BBC dutifully reports can buy a kilo of sugar. And then it states:
The new note is worth US$13 at the official exchange rate or $1 on the black market.
No word on how Mugabe makes the sugar appear. Surely a Nobel is not enough for this god.