Localized Currency?
I've heard various opinions supporting localized money systems as a way to strengthen local communities. Seems good in a theoretical level, but hard to see how it might work in practice. I mean if I have a business, do I charge one rate for dollars, and one for say "locales" or whatever? And once I accumulate locales, how do I exchange them for dollars for products that must be purchased outside the system?
It is easier to see maybe how a local currency might work in an economic depression where the local community has more labor than money. Usually local currencies are measured in the basis of "man hours", or one hour of work. A secondary intrinsic value is property. If have no money, but own property (without a mortgage) I can "borrow" against it. If I borrow a local currency, then I have local money to spend. I might use that money to start a business and if it is sucessful I can pay off the loan.
Easy to play games, but hard to see how a dynamic system can work without actually trying it as an experiment. There's questions I can't see - how the currency supply can increase and decrease (well, basically via borrowing), and how to control inflation or deflation of value.
Money is a deceptive system in that ultimately the RULES allow some to gain wealth and others may lose wealth and fall into debt they can never repay. Some transfers of wealth come through variations in skills and ability and motivation, some through general good management versus extragant spending. Money is supposed to also encourage risk taking to a degree that overall wealth of the community can increase.
The fun thing for me is to try to imagine making measures of local ownership of resources and productivity. Ultimately you can see two dual views of the economy between public and private wealth. That's sort of where it gets interesting. Private wealth allows individual freedom, and becomes a reward system for good work. Public wealth allows common assets to be recognized and decisions made that help strengthen the community and allow people without great private wealth to participate.
I'm not trying to promote "communism", but I see there are decisions that must be made between private and public ownership and "wealth redistribution" is always a "threat" when private accumulations of wealth threaten the public greater good.
Well, maybe easiest to see at the level of a "household". Starting perhaps with a married couple, you can imagine extremes of (1) Completely disjoint (private) resources (2) Complete union (public) resources. In extreme-1, money accounts are separated, and shared expenses might be split down the middle - even as each person writing half a check for every expense. In extreme-2, all money is collected in a common pool, and all discretionary spending must be done through consensus.
Now add a "local currency" to the household, say under the "union" system where all "external" money is shared. Perhaps external work and internal work are both assigned a pay value based on hours. This local currency could then be exchanged with discretionary money for external spending. If surplus external money starts drying up, then the exchange rate can increase.
So maybe a local currency makes sense if all external money is shared. In extreme-1 where there's no common money, it would seem to make more sense to use the external money directly for internal compensation. So if one person does more "in house" labor, that person can be paid for it.
A middle-system would have my-money, your-money, and our-money. This is clear without a local currency, and useful. The clear shared expenses come from our money, and each pays into "our money" based on external income, and gets out from "our money" based on labor or allowance system. Adding a local currency here seems complex, since then we have 5 or 6 accounts.
So a "pure" local currency (communistic style) would say that individuals within the community don't own ANY external currency, that all external currency is owned by the collective and exchanged as external income comes in, or external spending goes out. A very "local self reliant" collective can make this work well, while a collective that is in constant interaction with external currency would make this a real pain.
A system where we all individually have both external and local currency seems rather complicated - everything is priced twice and shifting exchange values means you're not sure what anything is worth. Ultimately the local currency isn't worth the administrative costs.
Hmmmmm
It is easier to see maybe how a local currency might work in an economic depression where the local community has more labor than money. Usually local currencies are measured in the basis of "man hours", or one hour of work. A secondary intrinsic value is property. If have no money, but own property (without a mortgage) I can "borrow" against it. If I borrow a local currency, then I have local money to spend. I might use that money to start a business and if it is sucessful I can pay off the loan.
Easy to play games, but hard to see how a dynamic system can work without actually trying it as an experiment. There's questions I can't see - how the currency supply can increase and decrease (well, basically via borrowing), and how to control inflation or deflation of value.
Money is a deceptive system in that ultimately the RULES allow some to gain wealth and others may lose wealth and fall into debt they can never repay. Some transfers of wealth come through variations in skills and ability and motivation, some through general good management versus extragant spending. Money is supposed to also encourage risk taking to a degree that overall wealth of the community can increase.
The fun thing for me is to try to imagine making measures of local ownership of resources and productivity. Ultimately you can see two dual views of the economy between public and private wealth. That's sort of where it gets interesting. Private wealth allows individual freedom, and becomes a reward system for good work. Public wealth allows common assets to be recognized and decisions made that help strengthen the community and allow people without great private wealth to participate.
I'm not trying to promote "communism", but I see there are decisions that must be made between private and public ownership and "wealth redistribution" is always a "threat" when private accumulations of wealth threaten the public greater good.
Well, maybe easiest to see at the level of a "household". Starting perhaps with a married couple, you can imagine extremes of (1) Completely disjoint (private) resources (2) Complete union (public) resources. In extreme-1, money accounts are separated, and shared expenses might be split down the middle - even as each person writing half a check for every expense. In extreme-2, all money is collected in a common pool, and all discretionary spending must be done through consensus.
Now add a "local currency" to the household, say under the "union" system where all "external" money is shared. Perhaps external work and internal work are both assigned a pay value based on hours. This local currency could then be exchanged with discretionary money for external spending. If surplus external money starts drying up, then the exchange rate can increase.
So maybe a local currency makes sense if all external money is shared. In extreme-1 where there's no common money, it would seem to make more sense to use the external money directly for internal compensation. So if one person does more "in house" labor, that person can be paid for it.
A middle-system would have my-money, your-money, and our-money. This is clear without a local currency, and useful. The clear shared expenses come from our money, and each pays into "our money" based on external income, and gets out from "our money" based on labor or allowance system. Adding a local currency here seems complex, since then we have 5 or 6 accounts.
So a "pure" local currency (communistic style) would say that individuals within the community don't own ANY external currency, that all external currency is owned by the collective and exchanged as external income comes in, or external spending goes out. A very "local self reliant" collective can make this work well, while a collective that is in constant interaction with external currency would make this a real pain.
A system where we all individually have both external and local currency seems rather complicated - everything is priced twice and shifting exchange values means you're not sure what anything is worth. Ultimately the local currency isn't worth the administrative costs.
Hmmmmm
posted by Ares Olympus at 6:55 AM
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