Currently there's Onion River Exchange in Montpelier, which is a
time bank instead of a local currency. Members donate their time
to other members in return for services in return. A bit of a
socialist slant in that an hour of garden weeding is valued the
same as an hour of computer consulting, but you've got to define
some medium of exchange to get the ball rolling.
Money is just a medium of exchange backed by the government. It
eases the difficulties of the barter system by removing the
requirement that both parties have something that the other
desires. i.e. you want my car but I don't want your motorcycle,
but I'll take your cash which I can use to buy that boat I want.
Money also solves problems of sliding scales. If the going
exchange rate is three cows for two horses, how do you buy
only one horse without being overcharged (paying two cows)
or getting into a bloody mess (half a cow).
There is also the problem of liquidity. If I amass a pile
of Brinkerhoff Bucks, how do I know I can actually use them
to get something in the future? It takes a while to build
a stable reputation so that folks will actually hold onto
a local currency.
If my aging memory is working right, there was a time in the
1840's where the US government allowed businesses to print
their own currency. Generally it was just used as a novelty
for in-store specials because nobody else would honor that
currency, but a couple of stores in San Francisco did Ok
at it for a decade or so.
Anyhow, while many merchants would love to reduce or eliminate
their credit card processing fees, the infrastructure required
is considerable. Someone needs to buy the credit card machines
before they can be programmed and then leased out to the merchants.
If it's a separate system, then does the merchant need a second
phone line to work the local system on top of their existing CC
system? Integration with cash registers and existing card swiping
software is another problem. The current credit/debit card system
has a huge amount of inertia behind it. Cash flow is another
concern, how quickly is the merchant paid after they submit a
receipt? CC's often pay in 2 business days, barring returns
and merchants count on getting the funds that quickly so they
can pay their own bills.
Anyhow, just my $0.02 on the subject.
Rene
Stanley Brinkerhoff wrote:
VAGUIANS,
There is an idea of a 'local' currency. Burlington has tried it.
Montpelier has tried it.
I am sure its been done many times -- and it seems to fail (as far as I
have causally noticed). Has anyone developed; or has any area
implemented; a local "debit card" system for a town/geographical area?
Something simple where individuals could put cash onto cards (online, or
even at a local business) and spend locally with little to no processing
fees? Right now a local vendor subsodizes the creditcard at 1-5% --
such a system could charge an equal overhead while guaranteeing local
businesses they are "paying" for local business, rather than sending
1-5% to a creditcard processor. Such a system could even be piggybacked
to process a vendors normal creditcard transactions such that they could
process local cards, and as a failback, it would push the transaction
out to their merchant.
Enlighten me to where this has happened -- or why it wouldn't work.
Stan
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