This local Bristol pound

Another one of these nef schemes.

Despite the naysayers, Mundy hopes hundreds of thousands of Bristol pounds will be traded in its first year, increasing to \”double figures of millions\” by the third.

A quick look around tells me that population of Bristol is 400k, average GDP per capita £23k, making city GDP (umm, GDA perhaps?) £9 billion. Double figures of millions, let\’s say £20 million shall we?

The aim therefore is to have 0.2% of area GDP transacted by the new Bristol pound.

Gosh, that\’ll make a difference, eh?

26 thoughts on “This local Bristol pound”

  1. Detlev Schlichter says something like this: some people think our hyper-efficient foreign exchange markets (hyper-efficient in that spreads are extremely low) are an example of capitalism at its best. But, in fact, they’re not. We used to have a single, worldwide currency: gold. Much more efficient.

    Local currencies means more local trading. More local trading means less division of labour. Less division of labour makes us all poorer.

    Conclusion: NEF are idiots.

    But we all knew that already.

  2. I’m agnostic on this, but didn’t we used to do this? I recall there were once dozens of banks issuing their own currencies. Eventually we got a centralised standardised bank and notes.

    Is this progress?

  3. Stuck-Record,

    Is this progress?

    I’d always assumed that LETS and local currencies were some sort of tax dodge. I remember talking to someone in favour who explained that they weren’t.

    “so, you mean rather than being able to spend money anywhere, I can only spend it in local shops?”
    “yes, but that means that you’ll shop locally”
    “couldn’t I just shop locally with British pounds?”

  4. It is odd that the same people who complain about Thatcherite financial deregulation (awful stuff like allowing building societies to offer cheque books and outlawing the closed shop in stockbroking) are so keen to embrace a pre-1844 Bank Charter Act free-for-all.

  5. A lot of people think they are tax dodges, but at least in NZ the tax law specifically states that income earned through such schemes is taxed under the same conditions as income earned in official NZ dollars. Id be very surprised if every tax department around the world didn’t take the same position.

  6. A lot of people think they are tax dodges, but at least in NZ the tax law specifically states that income earned through such schemes is taxed under the same conditions as income earned in official NZ dollars. I’d be very surprised if every tax department around the world didn’t take the same position.

  7. @Tim Almond: I don’t understand how this works, either. When Lewes did this a few years ago they did at least offer discounts to people using Lewes pounds, meaning there was some kind of incentive to use them, but essentially this is – as far as I can see – merely a much less liquid pound sterling, with any added value meant to be taken through civic pride.

    But then I don’t understand these things at all. I always used to wonder why a £10 book token cost £10, since the value to the retailer (it is guaranteed spend in their shop) is presumably slightly more than £10, whilst the value to the recipient (who could only use it to buy books) was slightly less. In my family, at least, this created a secondary market whereby I (a bibliophile) bought my brothers’ unwanted book tokens for slightly less than face value.

    Is this similar?

  8. sam (#11), you’re missing out the value to the purchaser, the Great Aunt who wants to make sure that Little Johnny buys a book rather than a ray gun.

    To her therefore the book token is worth more than face value.

  9. They’re not tax dodges. If you are a UK citizen and work in the UK for a UK company, but happen to be paid in Euros, you still have to pay tax to HMRC, in GBP, based on the spot rate at the end of each month.

  10. sam (#11), Richard (#12): No matter how rational it is to charge >£10 for a £10 book token, to do so would trip a person’s ripoff-detector, and no book tokens would be bought at all (or, only by economists).

    Timmy: Don’t mock too hard. I’ve always seen the whole local-currency malarky to be a fantastic opportunity for some cheeky sod to float a proper commodity-backed alternative currency. The right support it because it’s a gold standard, the left support it because it’s a ‘local currency’ and in the hands of the good-and-honest Local Government, rather than those evil capitalists. Win-win.

  11. Well, it will be interesting to see what HMRC regards as an acceptable month-end spot rate for Bristol Pounds to Sterling Pounds.

  12. sconzey (#14), I agree about the ‘rip-off detector’. But I wasn’t suggesting book tokens could be sold for more than face value; I was just giving a reason why they still sold them without offering a discount.

    The same issue for local currencies; it’s less flexible than sterling, there’s nothing you can do with it that you can’t do with sterling, so to persuade people to take it in more than tiny quantities you either need a discount or some other reason.

    Will local feeling be enough of a reason? I suspect not, but as Sam pointed out, book tokens manage to survive.

  13. @Richard (#12)

    Dam’ good point re Great Aunt Agatha, &c. Hadn’t factored that in. Also, I suppose, more gift kudos in giving a token than a grubby tenner.

  14. @sconzey (#14) I don’t think anyone was suggesting book tokens should be sold for *more* than face value, quite the reverse…

    You could be onto something regarding commodity-backed currencies. Also, the libertarian economic right (Rothbard types) should like it because it isn’t fiat money, whilst the eco-wingnuts will like it because there’s no fractional reserve element (which, they keep telling us, is killing the planet). Everyone’s a winner.

  15. If you think LETS money is a tax dodge, try claiming a reduction in your taxable income when you pay for your business expenses in LETS money. Funnily enough, they won’t accept it.

    The main benefit of a LETS system is to encourage local enighbourhoods to exchange goods and services between each other. It is, in some way, the most free labout market. I might not have £5, but I am willing to give time, or something of equal value. It increases the total income, and allows more specialisation.

    The benefit, of increasing the ease with which one can ask a favour of a neighbour, is also its greatest problem. Very soon, one bumps up against labour of high value (a plumber to mend the leak) against dog-walking or a reiki massage. You don’t get plumbers accepting LETS, on the whole. Besides the problems one gets with trading standards, guarantees etc.

  16. Nautical Nick, if you have time, or something of equal value, why not trade that for £5? And then you can get currency that your plumber will accept.

    (Sorry about double post earlier).

  17. @Stuck-Record, banks in England indeed used to issue their own bank notes but there were no geographic limits on their acceptability – the situation was more analagous to the notes issued privately by banks in Scotland and NI today, not to a “currency” the whole point of which is that it can only be used in a tiny area.

  18. I don’t understand why you are against them, Tim? It seems to be everything you like – competition, currency debasement, localism etc?

    Tim adds: Entirely delighted that anyone use any currency they happen to favour. Cowrie shells are just fine by me.

    My objection is to the assumption behind the nef justifications, that a localised trading market is a good idea. I’m in favour of globalisation for precisely the reason that once you’ve accepted that trade itself is a good idea then the only natural or logical limit to the trading area is the globe. Nef thinks absolutely the opposite: that local trade and only local trade is better.

    Note that the system allows payments by mobile phones. You cannot use Bristol pounds to purchase a mobile phone from the factories in Finland or Asia or wherever. Nor to purchase the tantalum from the Congo to make them. So they base their desired system on the very international trade they want the system to curtail.

    Fuckwits they are.

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