A recent piece by Ben Block at Worldchanging suggests that alternative currencies seem to pop up in bad times, but may not have a real impact on local communities, even in the worst of times:
[from Worldchanging: Bright Green: Local Currencies Grow During Economic Recession by Ben Bolt]
At least 4,000 complementary currencies are now estimated to be in circulation worldwide, compared with fewer than 100 in 1990, according to Bernard Lietaer, a co-founder of the Euro and now a local currency proponent.
The currencies take on various forms. Many function similar to the traditional currency but are distributed at a discounted rate to encourage participation, such as the Berkshares or the cimarrón in Venezuela. Others are designed so that each paper note reflects the per hour labor required to create the product, such as Ithaca Hours in New York or Community Oriented Mutual Economy in Hong Kong.
In Switzerland, the WIR (the German word for "we") functions as a mutual credit system. When a buyer makes a purchase from a WIR participant, the seller receives credit in a WIR account. The credit can then be spent by purchasing something from another participant.
Economists have monitored the WIR since it began in 1934. "Whenever the economy goes up, the turnover in WIR decreases.... When business people cannot sell goods in Swiss Francs, then they go onto the WIR," said Margrit Kennedy, a German-based consultant on complementary currencies. "At the present moment, people are much more open to these types of ideas."
Pilot projects similar to the WIR are now under way in Belgium, France, and Germany, Kennedy said.
In order for alternative currencies to succeed, organizations, institutes, or individuals need to be committed to the currencies' additional demands. Not only must the currency be counted separately, but businesses must be convinced to accept the currency and know where they can, in turn, spend it.
In Canada, the Toronto Dollar circulated about $90,000 worth of paper currency last year, less than in years past. Organizers are now attempting to shift to an electronic version to simplify its management. "The labor involved in tracking notes and doing all the accounting involved is too onerous for a volunteer community organization," said David Walsh, the Dollar's co-founder.
Robert Costanza, an ecological economics professor at the University of Vermont, said local currencies support "buy local" programs, but he has not found any currency that has had a significant impact on a region's overall economy. "There are several examples of currencies that survive. They keep going," Costanza said. "But the question is, at what scale?"
Obviously, if the goal is to, say, slowing the movement of money out of a community, you'd have to actually measure that to decide if the alternative currency was doing that. (For example, by RFID tracking of the money, if people would agree to that sort of surveillance).
But this begs two questions:
- Does an alternative currency have to be in large scale use? Is it possible for it to be a 'success' at small scale?
- Do alternative currencies have to stand for something? Do they have to represent a strong position on some issue or social cause?
Regarding the first question -- which I think of as "is small the new big" -- we have to return to what we know about social systems. The overwhelming majority of alternative currencies are associated with some alternative organization: like the Berkshares, Inc organization behind Berkshares. Although these groups are formed to do something other than what national governments do, they in effect are setting themselves up as a simulicrum of a government, or at least the part of the government that circulates money. And I think this is an impediment to the socialization of alt cash.
I think that successful alt cash will have to take a strong stance on some issue, like putting a higher value on local economic resilience than maintaining a level playing field with national chains. In essence, I think successful alt cash will have to be almost subversive -- will have to be involved in a fight against something, a fight against specific forces -- and will have to drop any semblance of neutrality.
Alternatively, we could have personal money: social money. Imagine if there were an online (perhaps open source) mechanism to allow anyone to create money, backed by their own reserves, like that envisioned by the Open Money Development Group (to be reviewed in detail in a later post). I might create 1000 @stoweboyd bucks, and circulate them to those I know. Perhaps I have a personal cause, and the money is designed so that when someone takes it out of circulation by exchanging it for US dollars or Euros a small percentage is allocated to a fund, and then directed to the cause I care about. People that know me would be likely to accept this money from me -- especially if this practice were commonplace -- and could pass it along to others that know me. If this were taken up by celebrities, say Oprah or Al Gore, even retail chains would accept the money.
This money could be printed out, with appropriate bar codes and other information, so that people could check that money is authentic, what it stands for, and who stands behind it. Cell phone pictures could be directed to the currency platform website, and all the info would bounce back to the phone in real time.
Or the money could be purely digital, being passed via messages, or from cell to cell.
Such an open money platform would have to support all varieties of tinkering: for example, I might opt for 'demurrage' on my @stoweboyd bucks, meaning that the value of the bucks decreases a little bit each month, incenting people to spend it quickly, or to convert it back into dollars. Also, others could accept these @stoweboyd bucks, and turn them into their own personal money, through the platform.
I find it interesting that nothing like this has emerged, which is one of the reasons I am working on the Neo.org project.
The second question is a bit more complex. I doubt that any value-neutral alt cash can make it. Even something apparently benign -- like support for a regional economy -- is decidedly political, as shown by Bruce Sterling's strong aversion to them in his recent interview on the future of money. Sterling stated baldly that these systems were anti-immigrant, suggesting that locally well-established families and businesses were in essence using the alt cash as a way to block other businesses from entering the economy. These new businesses could be corner stores run by Mexican immigrants or Walmart, but they are not 'locals'.
I find his comments have merit, on reflection. And to generalize, I think that successful alt cash will have to take a strong stance on some issue, like putting a higher value on local economic resilience than maintaining a level playing field with national chains. In essence, I think successful alt cash will have to be almost subversive -- will have to be involved in a fight against something, a fight against specific forces -- and will have to drop any semblance of neutrality.
This means that successful alt cash is not going to be used by all members of some locality, because it will have to be partisan. Those who don't agree with what the money stands for will not use it. Those that do use it will agree with the principles it stands for, and are opposed to the interests of those that the cash is designed to counter.
Future philanthropy might come in the form of alt cash. Imagine if the Google twins decided to create Google bucks, a purely digital money backed by a few of their countless billions, where a penny per dollar would be diverted from every tenth exchange of cash, and directed toward better battery research. Every bithead and dweeb on the planet would stand in line to get this money, and they would ostentatiously try to use it at every opportunity. But people outside the tech world wouldn't care. Gates could create money that supported malaria prevention. Soros would mint his own cash, dedicated to the goals of the Open Society foundation. (Come to think of it, he should implement open money of the sort I suggest here.)
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Via /Message (Stowe Boyd)
Personal comment:
Après les "micro-nations", la "micro-monnaie"? Une réflexion de Stowe Boyd sur la question, qui se développe vers des points de vue intéressants: une monnaie "open source"?