Soft currency
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Soft currency and hard currency are two forms of money in use around the world.
Soft currency begins initially with nations unable to enjoy the rewards of hard currency without the penalty of inadequate consumption by the poor and inadequate national infrastructure with which to support human and environmental rights, civilized values, and often national defense.
Such poorer nations are condemned to employ other nations' currencies or soft currency of their own.
Once they use soft currency, poorer nations often try to harden it by using soft currency (cheap money) to motivate higher production from year to year and high rates of savings. Savings allow capital investment and more machinery to raise production in a virtuous circle.
In practical terms turning a poor nation into a rich one requires time and expertise in production and governance of both the nation and its economy. There is an ongoing debate over where expertise and decision is best located: Is it in private hands who then produce economic output and manage the money system? Which is to say: Is there a market in which prices, in effect, should make decisions with minimum management by lawmakers and ministries? If market prices lead to economic success and hard currencies that is what will prevail -- that will decide the debate.
If economic failure, in terms of high rates of poverty, unemployment and political discontent prevail in a democracy, government will be compelled to endorse a soft currency regime in hope of future success.
The full description of a successful soft currency regime may be found in the financial experience of America as the arsenal of democracy from 1942 to 1946. But the soft currency that was rapidly hardened by military victory and the destruction of all other economies that normally can compete with America, make the wartime financial regime a controversial plan for use when war is over.
From 1947 until today, America's and the world's use of soft currency to motivate a successful war on want has declined. Rather than make war on want, most of the global economy remains committed to the belief that governments lack the expertise and honesty to manage their political economies better than market forces and market prices.
