Chatcasts

Audio Chatcast: Alternative currencies – can we create our own money to build local economies that sustain us?


You can now listen to an audio ‘chatcast’ of CHE’s first event of 2014: a discussion on ‘Alternative currencies – can we create our own money to build local economies that sustain us?’.

Leading the discussion, and sharing his knowledge is CHE’s Walton Pantland, who works for Unite, the biggest union in the UK. Walton is joined around the table by CHE colleagues and members of the public who also contribute.

Walton is South African, and before coming to Scotland worked with trade unions and community groups in South Africa. He wrote HIV-Aids manuals for COSATU and the ITF, and worked on projects for Workers’ World Media Productions and Ditsela.

 

Below are Walton’s notes of the presentation he gave.

Alternative currencies

Economics has an exhaustive amount to say on the flow of money, but very little to say about what it is, and why we use it. It’s a medium of exchange, and a store of value.

It is also a commodity – a thing that can be bought and sold.

Without money, we would all be bartering with each other, right?

Wrong: there is no evidence for this. Before money, primitive societies:

• Bartered ritualistically, for instance to celebrate a treaty

• Bartering is only common in populations that used to have money – for instance, in prisons and refugee camps. And they quickly develop a currency – for instance, the cigarette

• Primitive communism

• With the rise of mercantile city states we had the rise in debt, with for example landowners paying tax in wheat after the harvest had come in.

Later, debt chits were exchanged, and became money.

However, for most of human history, most people had little to do with it, taking from the land what was needed and sharing labour.

Money as measurement. No one ever said “I can’t pour you a glass of water because I have run out of millilitres”. If we look at money in this way, the solution seems simple: just make more.

What does it measure? Our social obligation to each other

Money has no intrinsic value. It no longer represents anything real. We use fiat currency now, which means its value is determined by the state.

Almost all money nowadays is electronic – it’s just a system of accounting maintained by banks, and is not backed by anything real, other than the authority of the state and central bank . It is sustained by faith – so what do we believe in?

Types of alternatives

• Local currencies – the Bristol Pound, Brixton Pound

Best for keeping money local. Work best in highly specific environments with a strong local identity, because it needs buy-in from business owners. – for e.g. a Southside Pound might work, to counter dominance of the West End

• Timebanks

Best for sharing skills in a community. For instance, the Greater Govan Time Bank. Service exchange with time as currency. It has limitations, for instance it is good for trading services of similar value, but not goods.

• LETS

Best as an alternative to the mainstream economy. Local Exchange Trading System – like the Cape Town Talent Exchange and Community Exchange System. Uses a currency to overcome some of the imitations of time banks.

• Crypto-currencies

Bitcoin and others – beloved of anarcho-capitalists and libertarians. Electronic money backed by software rather than any central government. Anonymous. Benefits the tech savvy.

Personal experience

CES: https://www.community-exchange.org/

Conclusion

The current system keeps most of the world locked in poverty, “owing” our labour to those who have engineered it so that they control the money supply. By reconceptualising money, we can begin to break some of this down.

MMT applies some of these insights to modern economies – instead of creating electronic money through QE and buying up the banks’ bad investments, use it

Further reading

Brett Scott: The Heretics Guide to Global Finance

David Graeber: Debt: the first 5,000 years

 

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