Local Currencies: Theory, History and Practices
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Transcript of Local Currencies: Theory, History and Practices
Local Currencies:Local Currencies:
Theory, History, and PracticeTheory, History, and Practice
Local Currencies
Theory, History, and Practice
What is Money?What is Money?
What is Money?
a generally accepted means of exchange and a generally accepted means of exchange and measure of value.measure of value.
the official currency issued by a government the official currency issued by a government or national bank.or national bank.
legal tender.legal tender.
Theories of Currency
Theory of MercantilismTheory of Mercantilism
1500-17501500-1750 Land, labor, and capital began to be bought Land, labor, and capital began to be bought
and sold in marketand sold in market Rise of nation stateRise of nation state Zero Sum GameZero Sum Game Favorable balance of tradeFavorable balance of trade Accumulation of bullionAccumulation of bullion Government controlGovernment control
Theory of Classical EconomistsTheory of Classical EconomistsThe annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consists always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.
Classical EconomicsClassical Economics
Adam Smith promotes “Laissez Faire” and Adam Smith promotes “Laissez Faire” and unequal distribution of income.unequal distribution of income.
Labor as the source of wealth of nations.Labor as the source of wealth of nations. John Locke demonstrates ecomomic activity John Locke demonstrates ecomomic activity
depends on quantity of money / velocitydepends on quantity of money / velocity David Hume describes interrelationships David Hume describes interrelationships
among balance of trade, the quantity of among balance of trade, the quantity of money, and the general level of prices.money, and the general level of prices.
History of Currency
Colonial Farms Self SufficientColonial Farms Self Sufficient
Country PayCountry Pay
Pa.Pa. Md.Md. Del.Del. Va.Va. N.C.N.C. Ga.Ga.
WheatWheat Flour Flour PeasPeas TobacTobac TobacTobac TobacTobac
RyeRye TobacTobac MaizeMaize T.NoteT.Note CornCorn CottonCotton
TobacTobac HempHemp FishFish PorkPork BulletsBullets
FlaxFlax PitchPitch WheatWheat
HempHemp TarTar CornCorn
PorkPork
HidesHides
Early American MoneyEarly American Money
WampumWampum Spanish Silver DollarSpanish Silver Dollar Massachusetts: Pine Tree, Oak, Willow Massachusetts: Pine Tree, Oak, Willow
Shilling (1652)Shilling (1652)
“Not worth a Continental”
Central Banking in USACentral Banking in USA 1789 Constituional Convention1789 Constituional Convention Whiskey Rebellion (1791-1794)Whiskey Rebellion (1791-1794) 1791-1811:1791-1811: First Bank of the United StatesFirst Bank of the United States 1811-1816:1811-1816: no central bank no central bank 1816-1836:1816-1836: Second Bank of the United StatesSecond Bank of the United States 1837-1862:1837-1862: Free Bank Era Free Bank Era 1863-1913:1863-1913: National Banks National Banks 1913-Present:1913-Present: Federal Reserve System Federal Reserve System
““Between 1781-1863 there were 30,000 different Between 1781-1863 there were 30,000 different currencies in circulation”currencies in circulation”
The Practice of Local Currencies
LETSLETS
Local Employment and Trading System Local Employment and Trading System local, non-profit exchange networks local, non-profit exchange networks ““Mutual or community credit”Mutual or community credit” Debit / credit ledger systemDebit / credit ledger system Popular British Colombia / EnglandPopular British Colombia / England
Ithaca HoursIthaca Hours
Inspired by 19Inspired by 19thth century R. Owen’s Hours century R. Owen’s Hours each Hour would be worth the equivalent of each Hour would be worth the equivalent of
$10 (average wage in county).$10 (average wage in county). Several million in circulationSeveral million in circulation Loans and Grants.Loans and Grants.
Berk-SharesBerk-Shares
Self-Help Association for a Regional Self-Help Association for a Regional EconomyEconomy
Tied scrip to a local commodity—cordwoodTied scrip to a local commodity—cordwood BerkShares are placed in circulation when BerkShares are placed in circulation when
citizens exchange federal dollars for citizens exchange federal dollars for BerkShares at any of the BerkShares Exchange BerkShares at any of the BerkShares Exchange Banks. (Exchange rate: .90 per Berkshare)Banks. (Exchange rate: .90 per Berkshare)
Other ModelsOther Models
WomanshareWomanshare Time DollarTime Dollar BBC TimebankBBC Timebank Barter GroupsBarter Groups Virtual exchangesVirtual exchanges
Deli DollarsDeli Dollars Woodland CLT Labor Woodland CLT Labor
CertificatesCertificates CCI Community CCI Community
Investment CertificatesInvestment Certificates