Preamble: Welcome to the Story of Money Podcast week here at RollingAlpha.com. We’re five episodes in – and so it felt like a good time to remind everyone to go and check it out. In particular, we’re desperate for your ratings and reviews. Thanks to everyone who’s given us feedback – it’ll help us improve things going forward. In this series of posts, I’m doing some selective highlights.
Zimbabwe's School Fees, Payable in Goat Money
Zimbabwe has been caught up in a cash crisis for the last 18 months or so. That is: people can't really withdraw their money out of their bank accounts (which is a luxury that only really matters to you once you lose it).
One of the official responses to the crisis has come from the Ministry of Education. The education minister announced that the government schooling system would be open to accepting school fee payments in livestock.
Now obviously, this sounds like a parody of money.
But is it the worst idea in the world?
Much as I don't like admitting this, I'm forced to say "no". Zimbabwe's rural economy has a significant asset base built up in its livestock. Livestock are mobile. They're not especially seasonal. And they're also income-producing (in that they can give you milk and/or they can be bred).
In addition, there is also a type of historical precedent (albeit not an especially PC one). Traditional bride prices are set in cows.
Back in December 2013, I wrote about a potential "cow bank" in Zimbabwe. The project seems to have been re-invigorated of late. In June 2017, the trust was back to accepting 'steer deposits' as collateral for loans.
Of course, the reality is that a livestock-backed currency is quite a hard thing to sell. It has a lot of costs associated with it (these are living creatures, after all).
But it's probably worth discussing.
After all, farmers have been measuring their wealth in terms of herd size for centuries…
For more, check it out. Episode 5.
Rolling Alpha posts opinions on finance, economics, and sometimes things that are only loosely related. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha. Also, check out the RA podcast on iTunes: The Story of Money.