Re: Why is local currency good or bad or neither?
On 2003-10-30, Fred Foldvary uttered: So basically this is a response to credit constraints. Another reason people may be inclined to use local currencies is that the narrow circulation and informal accounting usually associated with them make it difficult to collect taxes on the associated transactions. At least in some cases we can analyse local currencies as instances of tax evasion. Another common reason why local currencies are used is unemployment. When people are unable to earn a living on the open market, they'll have to rely on friends and neighbours for help, which easily leads to reciprocal trade in services. That can easily spread and give rise to a new, local currency when bilateral trade no longer suffices. From this perspective local currencies can also be a means to circumvent labor market rigidities. I've heard of a couple of examples here in Finland where the system has basically started out as a mutual help collective, then undergone expansion and the usual problem with a commons, and finally adopted some unit of accounting. A list of currently operating LETS's (Local Community Exchange Group) in Finland lives at http://hammer.prohosting.com/~msurakka/suomi.htm . It seems that a dislike for hard currency is a big part of why they exist. What I can't fathom is why these people engage in indirect trade, use what is essentially money and even compete, but still think that it's somehow more neighbourly or human to do all this in an alternative currency. The funniest part is that in many cases local currencies are started by different kinds of socialist collectives who wish to fix the hourly wage or simply do not like hard currency. It's really quite funny to see a bunch of sworn communists denounce money, only to reinvent it in another form a couple of months later. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Why is local currency good or bad or neither?
--- Sampo Syreeni [EMAIL PROTECTED] wrote: On 2003-10-30, Fred Foldvary uttered: So basically this is a response to credit constraints. Another reason people may be inclined to use local currencies is that the narrow circulation and informal accounting usually associated with them make it difficult to collect taxes on the associated transactions. At least in some cases we can analyse local currencies as instances of tax evasion. So why not just use federal paper dollars for that? Another common reason why local currencies are used is unemployment. When people are unable to earn a living on the open market, they'll have to rely on friends and neighbours for help, which easily leads to reciprocal trade in services. That can easily spread and give rise to a new, local currency when bilateral trade no longer suffices. From this perspective local currencies can also be a means to circumvent labor market rigidities. Again, why not just use federal cash? What I can't fathom is why these people engage in indirect trade, use what is essentially money and even compete, but still think that it's somehow more neighbourly or human to do all this in an alternative currency. What is more neighbourly is the local organization and the relationships it fosters. The use of LETS or local currencies is incidental to this. Fred Foldvary = [EMAIL PROTECTED]
Re: Why is local currency good or bad or neither?
On 2003-10-31, Fred Foldvary uttered: At least in some cases we can analyse local currencies as instances of tax evasion. So why not just use federal paper dollars for that? Because if you get caught, you'll pay for it. In case of local currency, the tax authorities do not bother as easily because of the cost and the trouble with drawing the line between mutual help and legally taxable transactions. (From the econ standpoint, there's no such line. If we were to be perfectly logical about it, tending to your children is a service to your spouse with a taxable value.) From this perspective local currencies can also be a means to circumvent labor market rigidities. Again, why not just use federal cash? Because it isn't always available if the relevant markets are rigid. Local cash on the other hand can be created on demand, and even neglecting that, is somewhat decoupled from the ordinary cash economy. What is more neighbourly is the local organization and the relationships it fosters. So why not just use federal paper dollars for that? -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Why is local currency good or bad or neither?
this also reminds me of the internet currencies created during the dotcom boom (i.e. flooz beenz) and also of e-gold (which is still around: www.e-gold.com), all of which use tokens rather than dollars (which are tokens too). these always seemed to me to be ADDING a step to transactions rather than making them easier. and the argument that e-gold solves the fiat money problem is, to me, false because you're stuck with gold's value being determined by a market that's priced in ... dollars. for some reason the gift certificate still seems to work as a money substitute, and has been ported to the online world with relative ease (i.e. amazon.com gift certificates) - perhaps because it's clear there is no secondary market in gift certificates (is there?) and so they really are a gift and not just money. etb
Re: Why is local currency good or bad or neither?
In a message dated 10/31/03 12:21:31 PM, [EMAIL PROTECTED] writes: So why not just use federal paper dollars for that? Because if you get caught, you'll pay for it. In case of local currency, the tax authorities do not bother as easily because of the cost and the trouble with drawing the line between mutual help and legally taxable transactions. (From the econ standpoint, there's no such line. If we were to be perfectly logical about it, tending to your children is a service to your spouse with a taxable value.) People also often suffer from a confusion between income and money. They tend to think of the two as synonymous, that anything not received in money isn't income and therefore isn't taxable.
Re: Why is local currency good or bad or neither?
On 2003-10-31, [EMAIL PROTECTED] uttered: People also often suffer from a confusion between income and money. They tend to think of the two as synonymous, that anything not received in money isn't income and therefore isn't taxable. Precisely. If we drop the distinction, we can for instance easily see that all sex is actually prostitution of one kind or another. Not that I'd easily argue that in public... ;) -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Why is local currency good or bad or neither?
--- Burns, Erik [EMAIL PROTECTED] wrote: and also of e-gold (which is still around: www.e-gold.com), all of which use tokens rather than dollars (which are tokens too). Gold is not a token. Gold is a real commodity. Tokens are substances of little intrinsic value which can be exchanged for something of real value, like a ticket to a movie, or like fiat paper money. What we call coins today are really tokens rather than true coining of precious metal. these always seemed to me to be ADDING a step to transactions rather than making them easier. What step does it add to exchange in terms of gold ounces rather than dollars? It is a step to translate from dollars to gold, but if you reckon in terms of gold ounces, then the extra step is to translate to dollars. and the argument that e-gold solves the fiat money problem is, to me, false because you're stuck with gold's value being determined by a market that's priced in ... dollars. The fiat problem is the arbitrary inflating of the amount of currency, which does not take place with gold. Gold's value is relative to everything else, not just dollars. Those who had their money as gold during the past couple of years are not crying. Fred Foldvary = [EMAIL PROTECTED]
Re: Why is local currency good or bad or neither?
People also often suffer from a confusion between income and money. They tend to think of the two as synonymous, that anything not received in money isn't income and therefore isn't taxable. Precisely. If we drop the distinction, we can for instance easily see that all sex is actually prostitution of one kind or another. Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 No, prostitution is sex in exchange for money or goods, when there is no emotional or relational benefit from it. If one obtains psychic income from sex, one has not really prostituted oneself. Fred Foldvary = [EMAIL PROTECTED]
Why is local currency good or bad or neither?
It seems that there are a number of schemes to create currencies, on top of extant national currencies, that will be accepted only locally. Under such a program, a unit of currency, let's call it a Local, will be created by a group in the community. The currency may have a more-or-less arbitrary value associated to it--one group I've read about sets their equal in value to ten dollars as well as one hour worth of effort. Presumably, then, if someone rakes your lawn for one hour, you pay that person one Local, and that person can exchange the Local for $10 worth of goods or services from participating merchants or individuals. I am not sure how universal the dollar-pegging aspect is. For all I know, some schemes may the dollar-Local exchange rate may be free to fluctuate. I am very uncomfortable with such programs, although I haven't been able to find any scholarly research on them. Apart from obvious complaints, such as arbitrarily setting the wage rate too high causes unemployment, or those who wish to keep their transactions local could just do so anyway without this extra layer of complication, why are such schemes a bad thing? Alternatively, why are they good? Or, why are they neither? __ Do you Yahoo!? Exclusive Video Premiere - Britney Spears http://launch.yahoo.com/promos/britneyspears/
Re: Why is local currency good or bad or neither?
here's a good introduction to local currency systems. http://www.transaction.net/money/ etb -Original Message- From: ArmChair List [mailto:[EMAIL PROTECTED] Behalf Of Susan Hogarth Sent: quinta-feira, 30 de Outubro de 2003 20:41 To: [EMAIL PROTECTED] Subject: Re: Why is local currency good or bad or neither? Quoting john hull [EMAIL PROTECTED]: It seems that there are a number of schemes to create currencies, on top of extant national currencies, that will be accepted only locally. Under such a program, a unit of currency, let's call it a Local, will be created by a group in the community. The currency may have a more-or-less arbitrary value associated to it--one group I've read about sets their equal in value to ten dollars as well as one hour worth of effort. Presumably, then, if someone rakes your lawn for one hour, you pay that person one Local, and that person can exchange the Local for $10 worth of goods or services from participating merchants or individuals. ... Can you provide an exampe (or two?) please? Thanks. -- Susan Hogarth
Re: Why is local currency good or bad or neither?
Quoting john hull [EMAIL PROTECTED]: It seems that there are a number of schemes to create currencies, on top of extant national currencies, that will be accepted only locally. Under such a program, a unit of currency, let's call it a Local, will be created by a group in the community. The currency may have a more-or-less arbitrary value associated to it--one group I've read about sets their equal in value to ten dollars as well as one hour worth of effort. Presumably, then, if someone rakes your lawn for one hour, you pay that person one Local, and that person can exchange the Local for $10 worth of goods or services from participating merchants or individuals. ... Can you provide an exampe (or two?) please? Thanks. -- Susan Hogarth The only example I know about is Ithaca Hours used in Ithaca, NY. See these links: http://csf.colorado.edu/forums/essa/may97/0081.html http://www.ithacahours.com/ Quoting from one: One Hour is worth $10. That's roughly the average wage in Tompkins County, NY. The idea is that one person's time is as valuable as anyone else's There is nothing to prevent professionals from charging several Hours per hour, of course, and a babysitter might accept a quarter-Hour per hour. But Hours are a leveling force, raising the minimum wage, allowing peole to buy things they couldn't afford before, and stimulating everyone's business. The system's founder, Paul Glover, explains that we printed our own money because we watched federal dollars come to town, shake a few hands, then leave to buy rainforest lumber and fight wars Hours help us hire each other to get what we need. I'd guess there is a substantial correlation between support for this sort of currency and listening to NPR. ;-) I should point out that in theory income taken in these Hours should be taxable like any other income at the given exchange rate. --Robert
