Many regions have the paradoxical
combination of unemployment and too few people doing what needs to be done. It
is a tragedy that in communities with large-scale unemployment, money poured in
tends to pour out again.
It would be worth experimenting in
one devastated region, with a co-existing alternative currency that was not
legal outside the region or in banking transactions, but was designed purely
for the exchange of local goods and services, and commenced with say $5 for
every inhabitant 18 or over. Would it increase inflation? Would it run into a
sink? Would some-one collect it all as ticket-money for a football match (but
would then have to use it all in the community)?
Or would more people be able to
employ more fellow locals in repairs and services and products that would not
otherwise be available or that could not compete with imports? Could those who
could not provide services or goods still retain their part of the circulation
through the uses local authorities and agencies made of contributions to them
paid in part in local currency?
This proposal reinforces the
concept of community as an extension of one’s individual ego. Working for the
local community produces benefits for oneself that are visible – but for
too many people working for a company is viewed as being exploited for the sake
of profits by distant and even overseas faceless shareholders. Reverse the cry,
‘Look how the government is letting me rot,’ to a cry ‘I am not going to let
anyone rot me’ and this is a surer route for the instinct of self-preservation.
People all operated on subsistence
economies once. We now have the know-how to know what can be operated at the
local level and on a small scale with an overall greater efficiency, and we
know about Future Cost sustainability, and what is the really useful
contribution of mass production and international and national distribution.
The arithmetic of most service
industries is difficult – how the server can be paid the served without
the served having a greater discrepancy in earnings. How can a service given
such as child-rearing be given a value when it is not visible or related to the
cost of raw materials?
Extension of services within a
community can be extended further, rather than cut, to provide employment that
improves the quality of life in a community just as much, or more than, raising
the standard of living to buy more imported expensive throwaways.
Local economics is possible, while
a community is at the same time also participating in national economics, with
banks, supermarkets and imports of what cannot reasonably be supplied in the
This experiment should be tried
first in a region of say 50,000 people which has some potential in natural
resources and local know-how to have some prospect of succeeding. Only later
can it be extended to an apparently hopeless region with a long-helpless
It would depend on a form of
currency that was recognizable, not forgeable, and put out by the government
printer. The possibilities of rorting and scamming should be thought out
beforehand, to prevent them.
The regional currency is only
small-scale. Most of the region’s dealings are carried out in the national
currency. But the regional currency has the ability to act as money has been
supposed to act, as a means of exchange of goods and services, without anyone
‘making money’ from the operation. It enables the poorest at least to have $5
to spend to get something fixed, and to be able to earn $5. The costs of more
than $5 worth are paid in national currency.
The cost of such a scheme? Design
and production of 50,000 notes, with good publicity for the people of the region
to know what it was for, and how to use it without abuse of it. At the end of three years, if the
experiment was a failure for any reason, such as the money running into sinks,
the government would have to be willing to stump up $250,000 to buy the notes
back from whoever had them. This assurance of government backing would be
essential. Alternatively a philanthropic billionaire or even a mere millionaire
who liked gambling, could invest the $300,000 to see what would happen. That is
hardly the roll of a dice. But if it was a success, it could be allowed another
three years before looking at it again, then another three years . .
Examples of how people could spend
their $5 - people carrying out
services, mending things, making things, buying materials to make things, fresh
food grown in the area, paying agricultural labor, cooking, cleaning, pocket
money for older children, paying for local government services.
It would not be legal currency in
shops which carried imported goods, alcohol or cigarettes, garages, banks or
gambling. If all it meant was that someone charged the population $5 to see a
football match, that would run the money into a sink.
A joke going round the emails runs like this
Žt's a slow day in a dusty little Australian town.
The sun is beating down and the streets are
deserted. Times are
tough, everybody is in debt, and everybody lives on
On this particular day a rich tourist from down south
through town, stops at the local motel and lays a
$100 bill on the desk
saying he wants to inspect the rooms upstairs
to pick one to spend the night.
gives the visitor keys to a few rooms and as soon as the man
upstairs, the owner grabs the $100 bill and runs next door to
debt to the butcher.
The butcher takes the
$100 and runs down the street to repay his
debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill
the supplier of feed and fuel.
The guy at the
Farmer's Co-op takes the $100 and runs to pay his
drinks bill at
the local pub. The publican slips the money along to the local prostitute
at the bar, who has also been facing hard times and has
had to offer him "services" on credit. She rushes to the motel
and pays off her room bill to
the motel owner with
the $100. The motel proprietor then places the $100 back on the counter so
the rich traveler will not suspect anything.
At that moment the
traveler comes down the stairs, picks up the
$100 bill, states that
the rooms are not satisfactory, pockets the money, and leaves town.
No one produced anything. No one earned anything. However, the whole town
is now out of debt and looking to the
with a lot
more optimism. And that, ladies and gentlemen, is how a Government
stimulus package works.
A comparison can also be made with the Grameen system of
loans to poor women to start a business, which however involves larger
individual sums than this form of ‘regional currency’.