Comment by vishnugupta | Hacker News Reader

Comment by vishnugupta | Hacker News Reader

David Graeber talks at length about this in his Debt book.

At various times in history "unit of account" and "means of settlement" have been two different things. We are used to having a single currency (INR/USD etc.,) perform both the roles; however that needn't be the case. Going back to the earliest times in Mesapatomia, the debt and payments were denominated in silver coins but the actual payment was done in kind (such as food grains, wood).

Roman currency continued to be a widely used unit of account in the Middle Ages despite there being no Roman Empire producing the currencies/coins. Because a wide swathe of population had gotten used to that unit of account they just continued; though the payment was settled using whatever they had with them.

Brazil used this phenomenon to their advantage to escape from a monetary hole[1]. They created a new currency purely as a unit of account i.e., they didn't print/issue them. Everything was denominated in this new currency so citizens got used to calculating everything in this stable new currency. And then they declared it as their official currency.

I am fascinated by history of money and it's interesting to see a phenomenon play out again and again in different contexts.

[1] https://www.npr.org/sections/money/2010/10/04/130329523/how-...

It's fascinating how persistent units of account can be.

In Romania, after rampant inflation in the 90s, our currency had stabilized in the 00s at a point where a loaf of bread was something like 5-7000 ROL, while a typical salary was maybe 50M ROL. 1 EUR was maybe 35k ROL.

The government then decided in 2005 to slash these extra zeroes, and replaced ROL with RON, at a fixed price of 1RON = 10k ROL.

The funny thing is, people got used to the new values for small purchases, but for bigger sums, you still hear plenty of people discussing about things in terms of "hundreds of millions" (implying old ROL) instead of the newer values, 17 years later. This is true even though larger sums are also commonly denominated in euros, and it's easy to compute 100k euros = 500k RON. Still, many still go the extra step and say = 5 billion ROL.

Note: both RON and ROL are named "leu/lei" in common usage, but I've used the currency symbols to make it clearer, and because I don't think most would know how to read "lei" (it's read like English "lay" ; for "leu" there's no equivalent, English doesn't have the "eu" diphtong).

It's also funny, in the context of this article, that this is the Romanian word for Lion - so I could say my house is worth five hundred thousand lions!

The actual etymology is based on a medieval Italian coin with a lion on one of its sides that was widely used in this region (don't remember from which Italian city-state).

I think that the coin that originated the name was - for some reasons - Dutch, the Dutch thaler called Leeuwendaalder, and it was later, 16th or 17th century, though possibly the actual coins that were used in Romania were some similar Italian ones, in practice "fakes" made with a lower amount of silver:

https://en.wikipedia.org/wiki/Romanian_leu#Etymology

https://en.wikipedia.org/wiki/Thaler#Dutch_Republic

Oops, you're right about the etymology, I was just misremembering.

Bulgarian currency (Lev) is also related to the lion

https://en.wikipedia.org/wiki/Bulgarian_lev

in france we've had (in 1963!) a re-evaluation where 100 old francs = 1 new francs ; obviously older folks kept talking in old francs but what i found funny is that in some families, children born after 1963 still learned to talk in old francs!

In Italian “euro” is masculine while “lira” is feminine, but some people still occasionally use the feminine when referring to euros.

Can you make an example? I am Italian and I have never heard anyone using feminine for Euro.

You may hear old people saying things like “ti restituisco le 10 euro che mi hai prestato”. Maybe it’s a thing of the south?

In Italian “euro” is masculine while “lira” is feminine, but some people still occasionally use the feminine when referring to euros.

Since we're talking about the language of euros, what is the correct plural of "euro?"

My native English-speaking sister-in-law lives in the E.U. and uses "euro" for both singular and plural. But when I watch European television, I hear both "euro" and "euros" used as the plural form.

Sometimes within the same program, so it doesn't appear to be based on the country.

I don't live in Europe, but it seems to me that "euros" is correct however since I've heard so many non-native English speakers say "euro" as the plural, it doesn't sound that odd to me anymore. For abstract sums ("that will cost many euros") I think "euro" sounds outright wrong though.

In Serbian, they are pluralised like a normal noun ("jedan euro" "pet evra").

In Italian “euro” is both singular and plural

> our currency had stabilized in the 00s

Indonesian Rupiah (IDR) is in a similar place at the moment. It was an interesting mental shift for me whenever I visited Jakarta from India. I also noticed quite a lot of restaurants dropped 00s in their menu card. And changes at-below 5000 IDR is written off as round off error. It's in fact rare to come across 5000 IDR notes. So maybe they too will drop 00s in near future.

That is interesting, because Poland has gone through the exact same thing until the Polish zloty was slashed by like 1PLN = 10k PLN, but in my entire life I have never heard people refering to anything using the old denomination like in your example. I wonder why that is, why did people in Romania stick to the old values so much but people in Poland didn't.

Interesting. Not even older people? In Romania it's definitely more prevalent among those over 60 say.

Ha, you reminded me that it used to be common in the Netherlands (mainly among those over 40) to convert amounts in Euros to Guilders, mainly to express shock.

"It costs how much? 500 Euro?! That's 1000 guilders!!"

I can confirm that the same happened (and sometimes, nowadays rarely, still happen ) in Italy, the conversion rate from Lira to Euro was 1936.27, so everyone used 2,000 for simplicity, i.e.:

"It costs how much? 500 Euro?! That's 1,000,000 Lire!!"

the conversion was 2002, so only little more than 20 years ago, people 40 and over have grown up "in local money".

I'm trying to remember if people like my grandparents did, but nope, maybe I was too young for it. But it's definitely not something that exists to this age.

It's definitely disappearing in Romanian as well, so perhaps Poland simply did this a longer time ago, or moved on faster (or you and I are living in slightly different bubbles within our respective cultures - one of my grandparents is still alive, so maybe I'm actually only hearing it from her and accidentally generalizing).

I'm from Poland and I used to hear a lot more old denomination style in countryside up to 10 years ago. Not so much today.

For most people the longest surviving artifact of the denomination was the TV quiz show called "Miliard w rozumie" (A billion in the mind) which had a grand prize of 1 000 000 000 old zł, i.e. 100 000 new zł)

It was a great show, pity it's long gone. Certainly better than shitty entertainment we got now - and at the same time not as pretentious as "Wielka gra".

When Canada first adopted a coin for its $1, loads of names were thrown around. I remeber it was about a year, until the name "loonie", named after the bird on it stuck.

When the $2 coin happened, lots of people called it the dubloonie (in most canadian minds, what pirates used). Eventually though, it settled on "twonie".

This sort of cultural change is dynamic, and very influenced by things happening during the transition.

No history book, no movie, etc accurately captures the "word on the street", what the average joe thought at the time.

So, who knows why? Living through the above changes, I simply noticed more and more people settling on one term or another, and eventually.. it just was.

And it only gets more fascinating the more you read about it. I remember Graeber also brought up the example of criminal fees somewhere in western Europe being measured in actual human women even until fairly recently. Maybe at some point did people actually settle damages by transacting in women, but the measurement lived for far longer than the practise. It was just well known how many pigs corresponded to a human woman, and how many grains corresponded to a pig. (This was something scholars studied and found agreement on.)

Graeber speculates that this whole idea of precisely measuring what one person owes to another started with criminal codes, fueled by a deeply human sense of tit-for-tat. Only quickly people realised an actual, literal, eye-for-an-eye is impractical, and it's better to conduct the transaction in something other than the specified fee.

>Brazil used this phenomenon to their advantage to escape from a monetary hole[1]. ... And then they declared it as their official currency.

You know, looking at their inflation rate (which is in the double digits), they should have kept that dual "currency" system and let people withdraw the inflationary currency as cash and keep the non inflationary currency in bank accounts with negative interest rates.

Why? Because inflation is a lie, you think your money is safe because you don't see it wither away (you do feel it wither away, but by how much? nobody really knows), a negative interest rate is the raw honest and ugly truth.

See also: The relationship between Guineas and Pound Sterling in British auctions.

Your bid is in Pound - but you pay in Guineas (which are worth 5% more) - the difference in worth is the auctioneer's fee.

Of course, noone's paying in actual Guineas - those are too rare, and noone's carrying gold coins around. The Guinea value is being converted to Pound value - but the Pound value is the amount the former owner of the object to be sold will receive.

5% is an insanely low auctioneer's fee. Is that for really high-ticket items only? The place I usually buy from in the US, it's 22%, and while that's on the high end, I don't think I've ever seen less than 15%. These are largely items in the $500-$5000 range, with a few in the $5-20k range and occasional big-ticket items going for a bit over $100k.

Brazil is a highly successful case for taming chronic inflationary processes.

Printing money is a crime there nowadays (and similar creative financial operations). A head of state lost its office once for disrespecting it.

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