alternative currencies

February 8, 2009 8:32 AM

Hard up for cash? Roll your own :P

just like Walmart and Amazon coexist with Costco and Craigslist, or like closed and open source software and operating (eco)systems often feed off of one another (and keep each other 'honest') to make a more vibrant market (and community), I think having various kinds of 'complementary' currency systems and transaction mechanisms alongside fiat central banking would help encourage and enable a greater multitude of economic activity than is currently the case.

like having the right tool (or program) for the right job, I think it only makes sense that some currency systems are better suited for certain applications and activities than others, and people would therefore benefit from having a choice (freedom to choose!) of currency to use and conduct business in...

along with, for that matter, what laws and accounting frameworks they are governed by and where they reside (freedom to move ;) [incidentally as it stands, (some) privileged people, corporations and 'capital' already enjoy these freedoms and benefit from practising regulatory arbitrage; I do not see why this cannot be extended to everyone]

btw, post inspired by pharm, thanks!

posted by kliuless (36 comments total)

Ahh, but the federal government likes to collect taxes- Isn't one supposed to report the dollar value of barter in taxable income? Kind of ridiculous, really.

that said, i think those ron paul dollars were idiotic.
posted by dunkadunc at 8:48 AM on February 8 [1 favorite has favorites]

Pfft, the government. What would they do with Pez and bottle caps? Mis-manage them like all their other resources.
posted by filthy light thief at 8:52 AM on February 8

Great Barrington, Massachusetts.
posted by gman at 9:04 AM on February 8

Shit. Talked about in the first article.
posted by gman at 9:05 AM on February 8

I've read about a few U.S. towns (progressive, usually) that have local scrip. It is, of course, illegal...unless you declare all these transactions on your IRS form every year.
posted by kozad at 9:05 AM on February 8

I, for one, think returning to a barter system sounds like a great idea.

And by "great," I mean depressing.
posted by paisley henosis at 9:06 AM on February 8 [1 favorite has favorites]

How very timely for me. I'm starting a new artspace in Brooklyn and we're going to create our own currency - the natural extension of "drink tickets". :-D
posted by lupus_yonderboy at 9:08 AM on February 8

(for "I" read "we".... coffee hasn't taken hold yet...)
posted by lupus_yonderboy at 9:09 AM on February 8

I like the way they're working it in Great Barrington; I think I read about that a week or two ago. It seems like a win-win type of thing. The local businesses get more business, and the local buyers save a bit when buying locally made items. We have no such thing in my city, but I do try to spend locally when possible. I'm not going to eat a huge loss to do so, but sometimes I will accept a minor loss just to help out a local business. If we had some LocalBux, I'd buy some.
posted by jamstigator at 9:25 AM on February 8

We're in the basement, learning to print
All of it's hot!
10-20-30 million ready to be spent
We're stackin' 'em against the wall
Those gangster presidents
posted by Sailormom at 10:02 AM on February 8 [1 favorite has favorites]

I'm always surprised that Canadian Tire money hasn't become an official scrip yet.
posted by five fresh fish at 10:52 AM on February 8

(By which I mean, "hasn't become a commonly exchanged alternative currency.")
posted by five fresh fish at 10:53 AM on February 8

Why not fully exploit taxes as a shadow currency? If a person has a tax liability they can disperse it widely to employees as social bonuses, to be used for non-profit services, such as health care or education (where it then converts to an institutional credit of some type). That way the employer has incentive to state his profits, and employees get a cut of them while the accounting is done in real time, reducing government oversight of benefits (and lowering fraud at the point of services). People can also gift these bonds to each other without missing their house payment, so to speak, which would be a milestone in the spreading of wealth without doing immediate harm to the gifter.
posted by Brian B. at 11:22 AM on February 8

I honestly can't count the number of times I'll start my day with MeFi, then randomly see the MeFi item I just read about later that day. Today, whilst looking for board games in Toronto, I came across Toronto Dollars. I had no idea my city had it's own currency...
posted by kaudio at 11:38 AM on February 8

If anyone is interested in selling some items in exchange for Flunkiebucks, you know where to find me.
posted by Flunkie at 12:05 PM on February 8

Yeah, then we can slice the tax liability bonds up, package them as securites so complex no one can understand them, give them triple A ratings, and sell'em off to the rest of the world! Let's start planning for the *next* global financial catastraphuck right now!
posted by jamstigator at 12:09 PM on February 8

cries out for a caption
posted by Rhomboid at 12:15 PM on February 8 [1 favorite has favorites]

"What the hell is this one doing in here? Like I need toilet paper or sumpthin'"
posted by Balisong at 12:24 PM on February 8

Hempscrip, man, that's the ticket. Let's use the green for green!
posted by five fresh fish at 1:07 PM on February 8

My favourite holiday escape has its own legal currency that exists side-by-side with the Canadian dollar.
posted by illiad at 2:32 PM on February 8

Hempscrip, man, that's the ticket. Let's use the green for green!
posted by five fresh fish at 1:07 PM on February 8 [+] [!]

There's already a brisk trade on craigslist.
posted by 445supermag at 3:12 PM on February 8

The basic problem with local currency's (LETS in the UK) is that basically they are still a form of money, only a much more restricted one. Basically there are fewer things you can spend your money on, hence a captive market. This makes them attractive to people who produce things that are harder to sell (through low demand,a surplus of production or just not being something that people would pay actual money for). However it leaves a problem: If you are selling something that's in high demand why would you chose to trade in the alternative currency, and restrict what you can buy, when you could use real money and buy all the same things plus a lot more?

Hence the situation I've seen in every alternative currency I have come across: 20 aromatherapists and 1 plumber.
posted by tallus at 4:22 PM on February 8 [2 favorites has favorites]

But who needs an aromatherapist more than a guy who spends his day armpit deep in shit? It's a win-win situation!
posted by five fresh fish at 4:59 PM on February 8 [1 favorite has favorites]

I find the wära savings tax idea quite intriguing, but it doesn't seem wise over the long term.
posted by jeffburdges at 5:03 PM on February 8

"2,500,000 rubles' worth of premium underwear for any automobile," As economy sinks, bartering returnsIn Russia.
posted by adamvasco at 12:30 AM on February 9

The Ithaca Hours is the first alternative currency I ever heard of although I never figured out how it works.
posted by Rarebit Fiend at 8:29 AM on February 9

Homer: One adult and four children.
Woman: Would you like to buy some Itchy and Scratchy Money?
Homer: What's that?
Woman: Well it's money that's made just for the park. It works just like regular money, but it's, er..."fun".
Bart: Do it, Dad.
Homer: Well, OK, if it's fun...let's see, uh...I'll take $1100 worth.
posted by Uther Bentrazor at 9:22 AM on February 9

I’ll stick with the imperial currency of the real United States , thanks (good in Mexico too).

Smedleybucks are incredibly valuable. Given the genuine one’s are so rare (want proof? Just try to find one).
posted by Smedleyman at 11:21 AM on February 9

You know what would be awesome is if companies could issue their own currency. The company could then have some kind of store, or maybe rewards program, where you could exchange company-issued money for goods at a discount. This would allow companies to pay their workers with real goods, essentially almost a barter system. It would be much better for everyone involved than the current system of debt-backed imaginary money.
posted by heathkit at 12:42 PM on February 9

The company could then have some kind of store, or maybe rewards program, where you could exchange company-issued money for goods at a discount.

They have no incentive to offer a discount with their little monopoly. You've actually described the horrid "company store" system of the old plantations.
posted by Brian B. at 4:00 PM on February 9

Whenever I receive Smedleybucks, I lick the bill and then stuff it down the front of my underwear. It's something special!


heathkit: Google "Canadian Tire Money." It's a company that issues its own money. You can then purchase goods with that money. (Look upthread; I think I linked to the Wikipedia article.)
posted by five fresh fish at 5:47 PM on February 9

Ron Paul has suggested before that we should at least have viable alternative currencies to the dollar. Here are a couple quick links I found: Competition in Currency: Ron Paul’s “Nutty” Idea; The New Ron Paul “Adopt an Alternative Currency” Bill Sits with Congress
posted by vsync at 9:56 PM on February 9

Oh and here's a good speech to the House: The End of Dollar Hegemony. Some highlights:

The pressure at home to inflate the currency comes from the corporate welfare recipients, as well as those who demand handouts as compensation for their needs and perceived injuries by others. In both cases personal responsibility for one’s actions is rejected.

When paper money is rejected, or when gold runs out, wealth and political stability are lost. The country then must go from living beyond its means to living beneath its means, until the economic and political systems adjust to the new rules-- rules no longer written by those who ran the now defunct printing press.

posted by vsync at 10:03 PM on February 9 [1 favorite has favorites]

The Economist article hints at an idea for solving recessions using scrip that economists have been tossing around for a few years. Since many recessions are caused by consumers being reluctant to spend money, why not invent a parallel currency that encourages consumers to spend?

Imagine the government gave out a debit card to each citizen with 500 Fundollars on it. These Fundollars can be spent at par value at stores that people usually go to spend their discretionary income: electronics stores, airlines, and restaurants, but not grocery stores or gas stations. Employees of these stores are then paid mostly in dollars, and partly in credits to their Fundollars account.

Here's the trick: Fundollars are electronic, and the government magically decreases their value by 1% at the stroke of midnight each night. Each person then has a very strong incentive to get rid of their Fundollars as fast as possible; you're punished if you save your Fundollars.

A regular stimulus check is only partly effective, because I will save some of my stimulus check and spend the rest, as will the guy who gets my money, and the guy who gets his money. Fundollars are hot potatoes: each person who gets them will want to spend them all as fast as possible. They'll encourage more spending than a regular stimulus check of $500.

It would also trigger riots in the streets, since people don't like being paid in a rapidly depreciating currency. That's why it's a thought experiment.
posted by miyabo at 5:01 PM on February 10

Well, those Fundollars you describe would certainly go a long way toward ensuring the worst paid citizens (WalMart cashiers and Chinese factory slaves) remain employed.

Can't see as it would actually help America on the whole, though. You need to invest that money in things that benefit everyone, for a long time, in useful ways. Like bridges, alternative energy power plants, technology research, things like that.
posted by five fresh fish at 5:34 PM on February 10

five fresh fish: This is somewhat OT, but you bring up a really interesting point. Economists advocate spending money on bridges, power plants, etc. during a recession, but not because these things are cost-effective in their own right. After all, if they were cost-effective, why wouldn't we do them all the time, not just during a recession?

The reason economists advocate spending money on infrastructure during a recession is that government spending creates more jobs than individual spending. If the government sends you a tax rebate of $500, you'll probably choose to save some fraction and spend the rest. If the government spends that same $500, all of it will get spent.

Think about other things the government does: it spends money on teachers, police, and soldiers (none of whom can afford to save very much money); it buys large items like bridges, ships and aircraft; it sends out money to poor people (who presumably don't save any of it). Many economists argue that this kind of spending has a greater effect on the economy than sending out checks to everyone, because a smaller fraction of the total amount winds up sitting in bank accounts.

So ideally Fundollars, a depreciating currency, are even more effective than government spending or regular individual spending, because absolutely none of the money ends up sitting in bank accounts.
posted by miyabo at 8:58 AM on February 11