100 years ago, Henry Ford proposed ‘energy currency’ to replace gold - CoinTelegraph
( September 18, 2021; CoinTelegraph )
Ford, who founded Ford Motor Company in 1903, told the publication:
“Under the energy currency system the standard would be a certain amount of energy exerted for one hour that would be equal to one dollar. It’s simply a case of thinking and calculating in terms different from those laid down to us by the international banking group to which we have grown so accustomed that we think there is no other desirable standard.”
Read the rest from CoinTelegraph: 100 years ago, Henry Ford proposed ‘energy currency’ to replace gold
Not bad for a time when electronic, general purpose computers didn't even exist yet. I'm curious about how he imagined that it would be implemented. I found some more about that in a copy of the original article, here - Ford Would Replace Gold With Energy Currency and Stop Wars. Apparently, the proof of concept for his plan involved taking control of the Muscle Shoals Nitrate Plant and completing construction of the Muscle Shoals Dam (now Wilson Dam).
The reason he proposed this was to end war by wresting control of the money system away from the bankers. I'm still not sure how control of a nitrate plant maps to an energy currency, though... Maybe he just wanted to retool it as an energy plant, since it was close to the dam?
Henry Ford, by building the world’s greatest power plant here on the Tennessee River, expects to eliminate gold as the basis of world wealth and substitute for it something different — the units of power. And by doing this, he said, war would cease, for gold is the cause of war. “It’s very simple when you analyze it,” said Mr. Ford, “the cause of all war is gold. We shall demonstrate to the world two things, first, the practicability, second, the desirability of displacing gold as the basis of currency and substituting in its place the world’s imperishable natural wealth. “Almost everybody in the world except the newspapers and the bankers recognizes that civilization has entered on a new era.
Also noteworthy is that the article mentions he was inspecting the Muscle Shoals plant with Thomas Edison. It's not clear whether Edison was involved in the planned energy currency standard or not.
Reference:
-New York Tribune - Dec. 4, 1921
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I think, Henry Ford was talking about "natural wealth" and the creation of energy being money. BTC does not create energy, much the opposite, it consumes energy. I do love bitcoin, and I do see the basic parallel. But electricity is a tangible thing. Before lightning network, BTC was a meme coin.
Yeah, it is subtly different. As I understand it, Ford was basically talking about a credit system that was structured around use of a specific renewable energy source (a dam + power generating station, to begin). In contrast, bitcoin doesn't care what form of energy the miners use or who supplies it. Still, it was somewhat similar and very innovative for the time period.
How interesting that it was a natural position for Ford that details about the value of the energy currency would be worked out with congress!
Yeah, I noticed that too. Some related thoughts that crossed my mind when I was reading these articles last night:
Without a consensus mechanism like Bitcoin's proof of work, force of law was really the only way that something like this would even have been conceivable.
As a centralized solution to the problem, along with any good it might have done for society, Ford was also putting himself at the center of it... a nice little potential for conflict of interest. Maybe it was a noble endeavor, or maybe he was just a robber-baron with noble sounding ideas. ;-)
I'm not sure what made him think that the same people who were running the wars would turn around and support a currency that ended their ability to do so. That might well have been the fatal weakness in his plan.
Yeah, some of this occurred to me too. I thought that 1) true to his words, the idea really would have been simply to replace currency with units of energy while retaining the rest of the mechanisms that dictated control, etc while 2) shifting the balance of power toward capitalist centers, essentially away from banks to energy manufacturers (which would benefit a different segment of society perhaps, but not in a truly decentralized way). And 3) I wonder if he was betting on the idea that wars could be replaced by a more profitable venture.
It would be interesting to find more from Ford directly about the idea.
I definitely agree with this. I would also really like to know what Edison's connection was to the idea, if any. It seems weird that the article mentioned Ford & Edison visited the plant, but then said nothing else about Edison.
One major flaw with "energy" currency is its intangibility. It seems even more illusive than crypto-currency, which at least leaves some traces
Good point. I was thinking along those lines when I wrote that I was curious about his ideas for implementation. You'd have to trust someone to generate the electricity without rigging the meter readings. The only way it would have been conceivable at the time is probably to have it certified by government, but that might be a recipe for corruption.
I suppose it's possible to know a plant's output in real time (it is for hydro dams). But still you can't touch a kWh
This thinking about energy currency 100 years ago is really unbelievable. Thanks for this interesting information.
Electric money system is a perfect way for economic equilibrium. The current monetary system makes poor people slave and rich people richer.
Thoughts Ford that was brilliant in his day--100 years ago. Thinking of ending the war for gold by changing it to energy. Thanks for Henry Ford
Thanks a lot to Henry Ford because today our currency system is here for his brilliant thinking that time.
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The man much must have a great vision. He predicted energy currency 100 years ago.