Another instance of those oh-so-clever Oxford boys highlighting their own ignorance and lack of common sense.

The key difference that they're missing between airmiles and conventional currencies is the much, much greater risk of it dissappearing without trace. How often does a currency, through hyperinflation or sovereign default vanish like a corporation's debts will?

Currcies have to perform certain functions to really be considered currencies. Off the top of my head I can think of at least three. They have to serve as 1) a unit of account, 2) a medium of exchange, and 3) a store of value. Frequent flyer miles don't do any of those things particularly well. 1 and 2 are clearly out. Nobody goes into a grocery store and asks "How many frequent flyer miles for that watermellon?" And as for 3, if for some reason you decided to put your life's savings in a frequent flyer miles account you are welcome to do so, but I doubt that many people will follow your example.

I haven't read the article, but I suspect it was strictly tongue-in-cheek.

While it's six months since I read the article, I can confirm it was entirely tongue-in-cheek...

Oh boy, another example of why Americans don't get irony.

An obvious sign of irony is apparent on the article's face - they say $700 billion in frequent flier miles is the largest currency because it's more than the number of dollar bills and coins in circulation. That would make (dubious) sense if I could carry around a wallet full of frequent flier certificates, but as far as I know they are entirely electronic. At the very least they are better compared to the full M1 money supply, including checking accounts. Considering the illiquidity of FF miles, M2, with mutual funds thrown in, is best of all. The size of M1 is about $1.3 trillion, M2 is $6.5 trillion.

The Economist would not have made such a basic mistake. And as the previous commentor noted, the tone was clearly a snarky one, primarily interested in the effervescent nature of FF miles, not their total "value."

Incidentally, Dan, if you have a paper subscription you DO have an electronic one. You need only enter the code from your subscription label into the online registration form to activate it.

They were trying to be cute.

They were trying to be cute.

I never feel completely comfortable contradicting the Economist.

And for a good reason...

It's been a while since I thought of how to define a currency...

UPDATE: [...] If the logic underlying the humor doesn't hold up, however, then I'm not sure how funny it is.

Mmh, when was the last time you checked the definition of humor?

Or, alternatively, when exactly is humor consistent with logic?

PS: I'll take everything back if your update was an exercise in irony...

I am using www.AwardWallet.com to keep track of all of my air miles. I think this is the only smart way to handle your miles as otherwise I forget about some of the award programs that I am participating in and hence I don’t redeem the miles that I have. I have seen airlines cutting off on miles lately too; for example, with Lufthansa if you buy discounted tickets you only get half of the miles flown.

FF miles are in the same economic utility category as public lotteries and bottles of liquor to corporate buyers. They are just con jobs on the innumerical and/or would-be con men.

Ultimately, someone pays - FF is a way to make it look like someone else is footing the bill.