Post-Capitalist Entrepreneurship by Boyd Cohen

Author:Boyd Cohen
Language: eng
Format: epub
ISBN: 9781351774123
Publisher: Taylor and Francis
Published: 2017-08-01T16:00:00+00:00

LOCAL PAPER CURRENCIES AND HYBRID PAPER-CRYPTOCURRENCIES

In some form or another, local currencies have been around for centuries, and of course predate modern, treasury-backed currencies at the national level. But since the widespread adoption of national currencies, local alternative currencies have had a place in societies around the globe. They have been commonly implemented in a grassroots fashion as a response to economic shocks, such as in Argentina after the economic crisis around the start of the 21st century. More recently, Spain, for example, witnessed the introduction of a dozen local currencies following the 2008 crisis and, similarly, as the Wall Street Journal reported in 2015, Greece has experienced a big boost in the alternative currency movement.

According to the Complementary Currency Resource Center, there are more than 300 local paper currencies or similar currencies around the globe.9 Perhaps surprisingly, local paper currencies are also flourishing in more than 50 communities throughout the United States.

While each local currency operates differently, these initiatives all seek to support local communities over foreign companies and investors. Local physical currencies are the epitome of weak currencies as they are virtually impossible to accumulate at any large scale that would give any single holder monopolistic rights. In fact, it would be useless to achieve such a position because local currencies are only valuable with a local, active exchange system. Therefore, I have uncovered no examples of private passive investors in local paper currencies, suggesting that this form of currency does not enable the same dispersion between corporate and investor gains without social gains. To further reduce such a risk, many local currency systems implement a negative interest rate mechanism that serves to significantly disincent their hoarding. Thus, the argument with local currency is that it has the potential to increase the velocity of local transactions and exchange of value in the community. The United Kingdom has a very active local currency movement, and researchers recently determined that local spending with local currencies leads to a 4× increase in value to the neighborhood as the money continues to circulate locally.10

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