Economic meltdown is fertile ground for re-invoking a revamped local exchange system

With macro-economic indicators getting worse by the day, scaling down to the local is looking saner and more attractive.

One example of many is local currencies.  Though our local currency, the NCPlenty, is barely in existence, it may be time to re-vamp it. The global and national economic climate may provide the environment necessary for making a local  currency adaptive and succesfull. 

In November the nation's official unemployment reached 6.5%.  This is a figure that would change to 12.5% if included were those who are too discouraged to look for work any longer or those working fewer hours than they would like.

12% may be a significant number;  As pointed out in Beyond Greed and Scarcity by Bernard Lietaer:  In France, years ago,..

..[local exchange] systems - which arose exactly when and where the unemployment levels reached about 12 percent - facilitate exchanges of everything from rent to organic produce, but they do something else as well. Every fortnight in the Ariege, in southwestern France, there is a big party. People come to trade not only cheeses, fruits, and cakes as in the normal market days, but also hours of plumbing, haircuts, sailing or English lessons. Only local currencies accepted!

This article from 'yes!' magazine Summer of 1997 is a must read.  In it, not only was the current global financial meltdown predicted and the collective psychology of money is described using Jungian theory, but, more practically, a key concept for making the resurgence of local money self-sustaining and succesfull is provided: Whereas,

"under our current system it makes sense to cut down trees and put the money in the bank; the money in the bank will grow faster than trees. It makes sense to "save" money by building poorly insulated houses because the discounted cost of the extra energy over the lifetime of the house is cheaper than insulating.
We can, however, design a monetary system that does the opposite; it actually creates long-term thinking through what is called a "demurrage charge." The demurrage charge is a concept developed by Silvio Gesell about a century ago. His idea was that money is a public good - like the telephone or bus transport - and that we should charge a small fee for using it. In other words, we create a negative rather than a positive interest rate.

... Money is like manure; it's only good when it's spread out." In the Gesell system, people would only use money as a medium of exchange, but not as a store for value. That would create work, because it would encourage circulation, and it would invert the short-term incentive system. Instead of cutting trees down to put the money in the bank, you would want to invest your money in living trees or installing insulation in your house.  ... When you can't keep savings in the form of money, you invest them in something that will produce value in the future. So this form of money created an extraordinary boom.

This is one idea of many to make our local currency --and us-- more resilient in these times.  Any other ideas for getting a more permanent local exchange system? ..

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Total votes: 90
 

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