At the newly married\’s request. A new local currency (there are any number of them around the country) called the Brixton Pound.
Great, lovely idea, use whatever you wish as the intermediary in your exchange of goods and services. Cowrie shells, cows on the hoof, local scrip, whatever.
There are a few problems of course: the localism it is designed to encourage is an insane idea. We want the goods of the world at our doorstep, not just the goods of Brixton. So convertibility will be a requirement quite antithetical to those who have set up the scheme.
However, the largest problem will be, as Paul Krugman has pointed out, the absence of a central bank or of some other limitation upon the issuance of currency.
My bet is that the Brixton Pound will fall victim to either hyperinflation or simply fail altogether.
Ah, what\’s this?
nef (economics as if people and the planet mattered – Lambeth-based economic think-and-do tank)
OK, I\’ll go with hyperinflation.
If you look at the Brixton Pound site, it’s even funnier. They spent money to hold a poll to see which persona should grace the Brixton Pound and the winner by a large margin, (72%) was “other”, which was a bit awkward.
This has resulted in the usual Lambeth democracy with everyone squabbling to try and get their local councillor / drug dealer / Grandmother onto the note.
Anyway, they’ve now decided risen above all that and decided to approach the other original candidates for permission to put them on the notes instead. Bit of a waste of their first Brixton Pounds, I’d have thought, holding a poll that didn’t have a workable outcome.
Let’s see if they can do better when it comes to the “secure printing” that they mention. I bet it will be copyable on my new Kyocera colour copier.
From the website:
“The currency’s sterling backing is held by Lambeth Savings and Credit Union (LSCU), who provide access to low interest loans for the local community. The B£ supports LSCU as a form of banking that is non profit making and an alternative to the global credit crisis.”
How does that work then? And has anyone given Messrs Brown and Darling the good news?
What could be more comforting than the idea that the Brixton Pound will be backed by Richard Murphy.
I give it a month. Two, tops…
However, the largest problem will be, as Paul Krugman has pointed out, the absence of a central bank or of some other limitation upon the issuance of currency.
Tim, you surprise me. I thought you were a classic liberal but Krugman is pro-CB, as shown in that series of vids he did at … where was it … Princeton?
CBs must be dismantled, bonds replaced with Treasury issued notes, withdrawal from the IMF and BIS and then we can start getting into some classic liberalism.
you can look up the ithaca dollar used in ithaca NY ..
and all the publicity about it says it’s wonderful…
a university/college town..
Merci, Tim. I hadn’t thought of that. The leaflet says the B£ is ‘backed by sterling held by LSCU.’ Is it too much to hope they mean sterling silver, thus limiting the possible money supply?
Perhaps they are just getting in early before the effects of the government printing money to pay for current expenditure hits. Taking a wheel barrow of cash to your dealer might be a little bad for business.
Is it too much to hope they mean sterling silver,
I think it’s a safe bet that the answer to that question is “yes”.
If they peg their pound to the British pound they may be able to maintain it for a while. They will just outsource their central bank to the BoE et al.
Hmmm. But we all know that there will soon be a market to exchange the Brixton pound for real ones. People will want real money to buy non-local things and besides, the DofSS doesn’t pay out in Brixton pounds. Changing money is an annoyance though. So what this will do is act as a very small tariff barrier – there are costs in changing and so people might be tempted to buy local to avoid the trouble.
Otherwise I don’t see any use to it at all.
A look at the Totnes Pound site reveals that they’re Peak Oil nutters attempting a “Transition” which, as ever with anglo-socialists, comes down to the hope of reverting to a romanticised ruralist autarky.
I wish that just one of these loony leftright groups would actually have an original idea. They’ve been banging on with this back to the village peasant life bollocks for two centuries now.
The limitation on the issuance of currency is that eventually you have to buy it back. Governments only get away with it because they’ve got unlimited access to other people’s money.
Anyone can write an IOU – and if people generally think you’re good for it and are willing to accept and exchange them, that is in effect ‘printing money’. Cheques for cash, gift vouchers, book tokens, “money off” store vouchers, mobile phone top-up cards; they’re all forms of money.
This bizarre idea that only the government can create ‘money’ – that stuff with the Queen’s head on it – underlies a lot of the nonsense talked about alternative currencies. There’s no magic to it. It’s fair enough that only the elected government can create government money. Nobody else should be able to commit the taxpayer to repay.
To be fair, the government do also impose an onerous pile of regulation on anyone else who wants to do their own on a large scale, supposedly to prevent swindles and failures, that a libertarian could legitimately object to. But if you can meet the conditions, issuing your own formal currency has technically always been allowed.
Money does not need to be centrally controlled to work. That’s the myth of central planning. But it does require payment of debts to be enforced, and it does require the widespread distribution of trustworthy information on the credit-worthiness of the issuing banks.
I would agree that backing it with Sterling is arguably a bit pointless if you want to transition to a post-oil “Mad Max” world. (That’ll be those regulations.) But in a more ideal world it doesn’t have to be backed by metals, either. A farmer’s market can back their currency with groceries – sides of bacon or milk and butter, or even better (for stability), by a ‘shopping basket’ of a wide range of staple goods, for example. Proponents of alternative currencies need to be a bit more imaginative. There’s no magic in gold and silver either.