Banking on a fact

On an uncharacteristically lavish saturday afternoon, I found myself on a boat eating nice food (I ate an oyster, which I found isn't my favourite food: they had loads of extras and I wanted to see if I liked them or not. I hear they are really nutritious), drinking so-so bottle wine (I've always been more of a box person) and Australian (south of the beer line*) beer, diving in the sea and hanging out with some Dili expats.

*It is not certain where the beer line is exactly is, but some facts about it cannot be disputed: Germany is north of the beer line, Spain is south of the beer line.

I'll spare you the details of the afternoon, but here is an interesting story I picked up. Quinn is English descended, I believe, and grew up in Zimbabwe, doing Safaris first and later becoming a contract pilot (flying in Brazil, South Africa, and Timor among other places). He was adamant that the quality of life and value for money are unparalleled in Zimbabwe and really enjoyed living and growing up there.

This challenges my dystopian picture of the country, and he's not the first person to tell me this. I met another Zimbabwean on a flight to Ghana once who told me the same. Anyway, White Africans are another story for another time and something I don't know much about anyway. On to the story:

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Blown somewhat out of proportion by international news, hyperinflation only lasted a few years in Zimbabwe. Certainly, the inflation was terrible (being able to watch shop employees change the prices of goods in real time) but it isn't as much a key part of history as we might perceive.

An interesting feature of those time was an economy that developed organically in Zimbabwe that is (a little) reminiscent of a movie that some of you might have seen: the gasoline economy.

Because Zim dollars had such an unstable value and were worth less and less every second you held them in your hand, Zimbabweans settled on a different currency. They would buy petrol as quickly as they could spend their money, sometimes storing up hundreds of thousands of litres. Because petrol is relatively durable, held its value (and often appreciated) it was a safe way to store . People would trade a few litres of petrol for services rendered and thousands of litres for big jobs.

I think it's absolutely brilliant that this system evolved on its own without planning or agreement, or government approval. It seems to have spread virally, if you will.

The neatest thing about this is that it is an (possible the one) instance in history that a currency had great practical value. Paper money, other than the numbers printed on them, aren't good for much other than scribbling notes on, wiping up messes or snorting...stuff through. Petrol, on the other hand, is used everyday. Compared to the utility of petrol, coins and bars of gold and silver are but shiny paperweights.

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I'm trained in economics and also an instinctively practical person: I often have a hard time reconciling the need for a quickly, easily portable and tradable currency with the fact that we (today) are, in fact, exchanging bits of paper with ink on them (or worse yet, electronic records of them). That governments "guarantee" their dollars isn't the most reassuring thing for people (such as myself).

Needless to say, I was terribly excited to hear this story. It made the whole day on the boat worthwhile.