Complementary Currency

[elitrope]

I’m seeking assistance (3 minutes of your time) in gathering data for a research paper on complementary currency for an Ecological Economics course and I would like to request your participation in a 10 question yes/no survey.

In a nutshell, a complementary currency is another name for a community or local currency that is used as a medium to exchange local goods and services. A government does not back complementary currency, though it can be used parallel to legal tender as a form of mutual credit. Some examples of modern day complementary currency or mutual credit systems are LETS, Ithica Hours, and Friendly Favors.

For more information visit wikipedia: http://en.wikipedia.org/wiki/Local_currency (http://en.wikipedia.org/wiki/Local_currency).

The survey can be found at the following link: http://www.surveymonkey.com/s.aspx?sm=dVoVAOEqgikZtJcSjdyFXg_3d_3d (http://www.surveymonkey.com/s.aspx?sm=dVoVAOEqgikZtJcSjdyFXg_3d_3d)

Thank you for your participation and check back in January 2008 for the posted results!

[Smiling JOe]

Sounds like something that the IRS would not like since it likely wouldn't be taxed when earned.

Interesting avatar. For a minute, I thought it was one I took this summer, but my bug was crawling on the lace curtains in the Bruce Cafe.

[wrobert]

Sounds like something that the IRS would not like since it likely wouldn't be taxed when earned.

Interesting avatar. For a minute, I thought it was one I took this summer, but my bug was crawling on the lace curtains in the Bruce Cafe.

It has actually been used in some towns to try to increase local economic activity. I have been doing some reading about it in hopes of discussing it with some local businesses in the future in DeFuniak Springs.

http://query.nytimes.com/gst/fullpage.html?res=9A00E1DC1338F93BA15756C0A96E9582 60&n=Top/Reference/Times%20Topics/Subjects/C/Currency

[wrobert]

It has actually been used in some towns to try to increase local economic activity. I have been doing some reading about it in hopes of discussing it with some local businesses in the future in DeFuniak Springs.

http://query.nytimes.com/gst/fullpage.html?res=9A00E1DC1338F93BA15756C0A96E9582 60&n=Top/Reference/Times%20Topics/Subjects/C/Currency


I need to correct that. After taking the survey I get the impression that this is a different animal. Oh well.

[Smiling JOe]

Seems like I recall some slot machines popping up in small communities in North GA and SC, and guess what you won -- tokens, aka - complimentary currency, and you would later exchange them for, you guessed it, real money. The Feds didn't go for that and started busting gas stations left and right.

Maybe we need some WalCo coins. Can I have the job of Chief Bill Printer?

[elgordoboy]

Sounds like something that the IRS would not like since it likely wouldn't be taxed when earned.

Interesting avatar. For a minute, I thought it was one I took this summer, but my bug was crawling on the lace curtains in the Bruce Cafe.

:floor: "my bug".

[wrobert]

Seems like I recall some slot machines popping up in small communities in North GA and SC, and guess what you won -- tokens, aka - complimentary currency, and you would later exchange them for, you guessed it, real money. The Feds didn't go for that and started busting gas stations left and right.

Maybe we need some WalCo coins. Can I have the job of Chief Bill Printer?

Berkshares is the one I read about recently.

http://en.wikipedia.org/wiki/BerkShares

Basically you bought their dollars for 90 cents US on the dollar. Then they were honored as dollars and encouraged to be freely exchanged among the merchants for services. The banks would buy them back at any time for the 90 cents US so they never really loss that value. I guess the non-profit that sponsored the program made their money from people collecting them and losing them. The backing would have to stay in the bank but after a bit you would think that interest would be generated that could be used for public projects.

[elgordoboy]

Berkshares is the one I read about recently.

http://en.wikipedia.org/wiki/BerkShares

Basically you bought their dollars for 90 cents US on the dollar. Then they were honored as dollars and encouraged to be freely exchanged among the merchants for services. The banks would buy them back at any time for the 90 cents US so they never really loss that value. I guess the non-profit that sponsored the program made their money from people collecting them and losing them. The backing would have to stay in the bank but after a bit you would think that interest would be generated that could be used for public projects.
I wonder what the point was? Like you say any unredeemed went to the bottom line for the issuer but other than that :idontno:.

[wrobert]

I wonder what the point was? Like you say any unredeemed went to the bottom line for the issuer but other than that :idontno:.


They say that the 10% discount on the initial purchase helped to keep the dollars circulating in the community. While I never really studied local economic development theories, one that I hear often is you must get dollars circulating as quickly as possible in a community. I guess every time they changed hands the merchant gets a cut.

[Smiling JOe]

I have no idea, but I'm going to go check it out. I can think of similar systems such as a home depot gift card, which makes you spend the money at Home Depot, or the Starbucks card where you pay in advance to stock up your credit on the Starbucks card. You Do want to stand out from the occasional customer. AND, if you are a stockholder, you get a stockholder card, which lets all the employees know that you are a stockholder. Those are legit in regards to the IRS concerns, and they make a ton of money from the float on the advance pays, just like starbucks does, and they start deducting small amounts from the card if you don't use it each month (tons more profit), AND, they make pure profit on any lost or stolen cards, AND, it encourages customers with the gift cards to max out that card, and typically, they will go over the amount and come out of pocket with additional cash, increase sales. Talk about a money maker.

[elitrope]

Thanks for checking out the survey. I've never made one before and I was attempting to keep it quick and simple. So, the questions could probably use some tweaking in the future.

WaltonGOP you are exactly right on what I'm speaking of. Berkshares are another example of complementary currency. Also, SJ a gift card works along the same lines as complementary currency in that you have to use it at a specified retailer.

Complementary currency has its pitfalls like any exchange system, but its intent is to stimulate local economies, support local communities, be more inclusive of youth, elderly and the poor in an exchange system, and lessen the impacts on the planet by decoupling "wealth" from monetary gain. In a mutual credit system, one could use currency or a simple accounting system to keep track of the "exchanges" that happen between 2 parties. Credit never accumulates like a savings account and printing currency as opposed to keeping an accounting system allows different goods to be exchanged immediately.

These systems are completely legal and there is some debate about taxation, but I haven't gotten that far in my research. LETS has been around for 30 years. Toronto Dollars have been around since 1998 with much evolution over the years. Ithica Hours has over 900 participants. http://www.ithacahours.org/ The system becomes more valuable the more businesses or people with goods to offer participate.

My personal interest is to research complementary currency and try to determine if something like this would work in SoWal and would it be beneficial to the community. I see this as an opportunity for people to exchange goods where otherwise there would be no market, as well as divert attention away from a continuous economic growth pattern that is destructive to the planet and our very existence.

For more info. check out, Money: Understanding and Creating Alternatives to Legal Tender by Thomas Greco.

[elgordoboy]

These systems are completely legal and there is some debate about taxation, but
I would imagine the debate is very one sided..the IRS would see nothing to debate about.

[elitrope]

I just wanted to follow up on the survey and taxes on local currency. Thanks to those who took a moment to respond to the survey. I have 32 responses so far with comments I'll be sharing later. I was hoping for 50 respondants, hint hint. It will be accessible for another week or so.

Local currencies are legal, BTW and I'm using the term "local currency" interchangeably with "complementary currency". It's basically an exchange medium that is used locally to facilitate trade between two parties.

As for the taxes, here's some info. I pulled from one site:

Local currencies are lawful and have a long history.
Local currency must appear different from Federal Reserve Notes (US federal currency.)
Local currency is subject to federal anti-counterfeiting laws.
Local currency Hours earned are considered income and are subject to federal income tax. Basically, local currency functions like normal Federal Reserve Notes with regard to taxes with some exceptions. It is taxable based on its "fair market value" in US currency.
Local currency is valued at / Hour. This dollar amount is added to gross income for determining taxes.
Each person is responsible to do their own record keeping and tax reporting.
Taxes must be paid in US federal dollars.
Business expenses in local currency are considered deductible. Sales tax must be paid in Federal Reserve Notes. Workers must be paid at least the equivalent of the minimum wage in Federal Reserve Notes, but may receive local currency as part of their paycheck.

And another:


Say I'm a plumber. I come to your house and fix the plumbing. And you give me a nice cake in payment. I'm supposed to declare the value of that cake and pay taxes on it, because I'm in the plumbing business. Now say I am a professor at a university. I come to your house. I fix your faucet. You give me a $100 bill. I'm not obliged to declare it because I'm not in the plumbing business. As I said: it is not the currency used that determines whether a transaction is taxable or not, but the nature of that transaction.

[elitrope]

WTH - part of my post went missing!


Lastly, the government passed theTax Equity and Fiscal Responsibility Act of 1982 (TEFRA), which basically acknowledges "barter" systems and their taxability. Of course, there is more to it than that. Info. here: http://www.irs.gov/taxtopics/tc420.html

[elgordoboy]

I just wanted to follow up on the survey and taxes on local currency. Thanks to those who took a moment to respond to the survey. I have 32 responses so far with comments I'll be sharing later. I was hoping for 50 respondants, hint hint. It will be accessible for another week or so.

Local currencies are legal, BTW and I'm using the term "local currency" interchangeably with "complementary currency". It's basically an exchange medium that is used locally to facilitate trade between two parties.

As for the taxes, here's some info. I pulled from one site:

Local currencies are lawful and have a long history.
Local currency must appear different from Federal Reserve Notes (US federal currency.)
Local currency is subject to federal anti-counterfeiting laws.
Local currency Hours earned are considered income and are subject to federal income tax. Basically, local currency functions like normal Federal Reserve Notes with regard to taxes with some exceptions. It is taxable based on its "fair market value" in US currency.
Local currency is valued at / Hour. This dollar amount is added to gross income for determining taxes.
Each person is responsible to do their own record keeping and tax reporting.
Taxes must be paid in US federal dollars.
Business expenses in local currency are considered deductible. Sales tax must be paid in Federal Reserve Notes. Workers must be paid at least the equivalent of the minimum wage in Federal Reserve Notes, but may receive local currency as part of their paycheck.

And another:


Say I'm a plumber. I come to your house and fix the plumbing. And you give me a nice cake in payment. I'm supposed to declare the value of that cake and pay taxes on it, because I'm in the plumbing business. Now say I am a professor at a university. I come to your house. I fix your faucet. You give me a $100 bill. I'm not obliged to declare it because I'm not in the plumbing business. As I said: it is not the currency used that determines whether a transaction is taxable or not, but the nature of that transaction.
If I give my plumber a $20 cake for unclogging my sink he declares that as income and I reduce my tax basis on my home by $20. $20 less that I will pay taxes on when I sell (if I sell for a gain-posted for Shelly). If you come to my house and I give you $100 for the same you do not have to pay taxes on that and my tax basis is not reduced. Though in a comprehensive audit by the IRS they would inquire as to where that $100 came from. That said there is also the gift limit. It has been a while since I have had to consider this.

[Smiling JOe]

Seems to me that it would be easier to just pay Cash, which you can spend anywhere, and just as fast for transactions as complementary currency. I dislike the idea of gift cards, simply because it limits where I can spend what is essentially, my money. I'm still not seeing any benefits for using this system as opposed to CASH.

[wrobert]

Seems to me that it would be easier to just pay Cash, which you can spend anywhere, and just as fast for transactions as complementary currency. I dislike the idea of gift cards, simply because it limits where I can spend what is essentially, my money. I'm still not seeing any benefits for using this system as opposed to CASH.

Berkshares are bought for ninety cents on the dollar. The benefit being you save 10% if the merchant participates and allows them to be used.

[Smiling JOe]

If it is used to get discounts, why not just have a discount card, allowing you ten percent off at participating merchants?

[wrobert]

If it is used to get discounts, why not just have a discount card, allowing you ten percent off at participating merchants?

The benefit is suppose to be the business owner then uses those dollars with another participant, keeping the money within the local community. A discount card is not necessarily going to have that effect.

[Smiling JOe]

I do understand that part about it keeps the money within that circle. Let's say that we have a local currency, and I make my living by making things, in exchange for the local currency. If I want to buy anything from outside participants, let's say like Publix grocery store, I have to find a "bank" to convert my local currency to US Dollars before making that purchase at Publix. I could only guess that most banks wouldn't exchange the local currency and any "bank" which did, would charge an exchange fee. From what I have read thus far, it just seems like it would be much easier to use cash. Would these participants in the local currency also take cash or credit cards in exchange for their goods? If not, they may turn away many buyers.

I somewhat disagree that the participant discount card wouldn't keep the people frequenting the local businesses. If price is a factor, I think most people would shop at the lesser expensive of two places. I've been a member of some organizations which offer members discounts at particular businesses, and if I have a choice, and all else is equal, I'll support the places participating in my organization and get the discount.

I certainly think it is good to explore changes to our systems, because what we've done for years isn't always the best or most efficient way, so I applaud anyone willing to mix up the status quo.

[elitrope]

It's definitely easier to use cash, without a doubt. Certainly one of the most beneficial claims of using complementary currency is to support local economy, which can be partially accomplished now, by choosing to shop with a local vender.

I'm not necessarily advocating the usage of CC at this time, but I am interested to find out if the ideas behind why a community would want to use local currency are valid and measurable. I'm glad that some of you are voicing your thoughts here because it will help me in researching those concerns.

Some of the reasons noted for using local currency are in one sense altruistic and idealistic and at the same time, in the best interest of the individual. These reasons are:


support local economy
keep money in the community
provide a buffer in the event of economic crisis
empower individuals of lesser monetary means
restore quality of life
lessen our impact on the planet
rebuild communities
build personal relationships based on cooperation not competition
and to put monetary power back in the hands of the people, not the government and banks. In case people are unaware, our money is no longer created by the government, but by the creation of loans by banks, essentially the creation of debt. Currency is still made by the Treasury and issued and regulated by the Federal Reserve, but money is not created until a bank makes a loan.I have been able to find examples of poor and crime ridden communities that have seen positive results from using CC, though I'm interested to see what benefits a community like SoWal could derive from its use. I have a phone meeting w/ the director of Ithaca Hours to see if he can shed some insight into measurable benefits that Ithaca has witnessed from using Ithaca Hours.

In terms of having to trade in your complementary currency to pay a company that doesn't support CC, that's why I use the term complementary. It's not intended to replace the existing currency, but to be used in addition to. In Ithaca, an individual can buy into the system, $10 buys 2 Ithaca Hours, which is equivalent to $20 or $10/ hr. Businesses or individual participants can choose to accept any percentage of the currency they wish or some only accept Ithaca Hours during certain business hours. The US dollars that are collected go into creating the currency and a directory that lists all the producers that accept Ithaca Hours. Other currencies employ things like expirations and easy means to buy in and out of the system and as mentioned earlier, some percentage of the currency is usually used to benefit the community directly.

In principle and theory, this all sounds good, but like I questioned before, would this area be a good candidate for complementary currency and how will those benefits be measured? Oh boy, sounds like I just came up with the main focus for my research paper.

[Smiling JOe]

What medium/form is used for the complimentary currency?

[wrobert]

I like the idea of using interchangable paper money. Whatever system you use, it would have to be very simple. I would think that it would be very beneficial for a non-profit to support this sort of thing in a high tourist location. Just seems you are going to have so many dollars never redeemed as they are collected, lost, and forgotten about.

[elgordoboy]

I am sold. I am volunteering myself as Sowal Bank Chairman and will issue $owals at an initial artificial rate of 1 $owal to 90 cents U.S. I pledge to keep reserves of 20% for redemption purposes and put the other 70% back to work in the form of community loans at 10$owals loaned for 1$owal in reserve against defaults. Just gimme the cash. Google second life and etopia I think it is called. Online mmorpg's with currency that floats against the US $.

[wrobert]

I am sold. I am volunteering myself as Sowal Bank Chairman and will issue $owals at an initial artificial rate of 1 $owal to 90 cents U.S. I pledge to keep reserves of 20% for redemption purposes and put the other 70% back to work in the form of community loans at 10$owals loaned for 1$owal in reserve against defaults. Just gimme the cash. Google second life and etopia I think it is called. Online mmorpg's with currency that floats against the US $.


Community foundations are the coming thing in Florida. So set one up and run the currency program out of it, then hire yourself as the director.

[elgordoboy]

Community foundations are the coming thing in Florida. So set one up and run the currency program out of it, then hire yourself as the director.
Yes great idea- enlightened self interest. Thats where the extra dime is going to go to and the extra 10% from my %20 and %70..well wanna be my CFO?

[elitrope]

What medium/form is used for the complimentary currency?

The Ithaca Hour is a paper currency based on one hour of work and the value has been determined by an average hourly wage of $10.

I can hear some of you jeering already, WHA, $10 an hour!!!

I've attached a pic. of a 2 hour note.

[Smiling JOe]

The US paper currency has many safeguards to try and prevent counter-fitting. There are great printers on the market today. How would you control the security of the paper currency and who would print the money for the participants?

$10 dollars an hour? I'm just wondering who would pay $60 dollars for a knitted hat, when they could go to Not-So-SuperWalmart and get a knitted hat for $.96.

[wrobert]

The Ithaca Hour is a paper currency based on one hour of work and the value has been determined by an average hourly wage of $10.

I can hear some of you jeering already, WHA, $10 an hour!!!

I've attached a pic. of a 2 hour note.


I want my money in relative dollars. Not time. I can not grasp this concept of time. Time seems to go quickly in the morning, slowly at the end of the day. Faster when I have a deadline, slower when I am awaiting payment. If only time were constant.

[elitrope]

The US paper currency has many safeguards to try and prevent counter-fitting. There are great printers on the market today. How would you control the security of the paper currency and who would print the money for the participants?

$10 dollars an hour? I'm just wondering who would pay $60 dollars for a knitted hat, when they could go to Not-So-SuperWalmart and get a knitted hat for $.96.

I would ask similarly, who would pay $60 US dollars for a locally crafted, hand knitted hat, when one could go to the Not-So-SuperWalmart and get a knitted hat for $.96 US cents? I think you and I both know who, the person that doesn't understand the true cost of the .96 hat to society, the planet, etc.

For the counterfeitting, you are quite right about this being a problem because of today's printing capabilities. I asked Stephen Burke, the Director of Ithaca Hours if they have had problems with the Ithaca Hour. He said he did not know of any instance of counterfeitting. The Hours are printed by a printing service they trust and they use serial numbers and faint images to limit someone's ability to counterfeit. Also, what would be someone's objective to counterfeit money? To become more wealthy, right. So, if someone all of a sudden started unloading a bunch of Ithaca Hours, the community is small enough this activity would be quickly detected. Counterfeitting local currency also carries the same illegal repercussions as counterfeitting US currency.

The hour of measure is more symbolic than a hard and fast rule. The businesses or individuals set the amount of Ithaca Hours they charge or accept for their services. It's no different than how the free market operates with US currency. One can choose to use the services of a house painter that charges x dollars per sq. ft., or a rate of x dollars per hour and another house painter may charge twice as much as the first.

I keep referring to Ithaca Hours because it has been well studied, but there are thousands of currency systems in place, each uniquely designed for the locale it serves. This would be the beauty of developing our own currency here. I also asked Stephen how they would measure the claimed benefits to the environment of using a local currency. One of the researchers found that the Ithaca Hour on average was used 30 times before it left the community, compared to US currency that was used on average 3 times. The reasoning is that by individuals keeping their purchases local, they have effectively reduced their ecological footprints. Since I'm working on this for an Ecological Economics course, this is the part that interests me most, determining the ecological value or cost benefit of such a system.

[30A Skunkape]

One thing I am curious about is not spending, which everyone seems to be focusing on, but what about saving? It would be hard to retire on a currency that has no potential for compounding interest. In saving for the future you would have to hoard your Ithica bucks at home (a risky prospect considering fire, theft, etc) or pay a bank to store them for you securely, which is a money losing endeavor.

[wrobert]

I would ask similarly, who would pay $60 US dollars for a locally crafted, hand knitted hat, when one could go to the Not-So-SuperWalmart and get a knitted hat for $.96 US cents? I think you and I both know who, the person that doesn't understand the true cost of the .96 hat to society, the planet, etc.


Which is just about everybody. And if you want to get people to reduce their ecological footprint, why don't you get people in south Walton to turn off some lights. That has got to be the most lit up place I have ever seen. I went out to Driftwood last night and even saw where some guy had put lights in the top of 40' pine trees. I really thought conservation had taken place in that area of the county, but I was wrong, again.

[elitrope]

One thing I am curious about is not spending, which everyone seems to be focusing on, but what about saving? It would be hard to retire on a currency that has no potential for compounding interest. In saving for the future you would have to hoard your Ithica bucks at home (a risky prospect considering fire, theft, etc) or pay a bank to store them for you securely, which is a money losing endeavor.

This is a great point to bring up. Complementary currency is meant to be a medium of exchange, not a means of savings. The idea is that complementary currency is used to complement the existing currency and help free up some of those US dollars, so they can be used for savings and investing.

[elitrope]

Which is just about everybody. And if you want to get people to reduce their ecological footprint, why don't you get people in south Walton to turn off some lights. That has got to be the most lit up place I have ever seen. I went out to Driftwood last night and even saw where some guy had put lights in the top of 40' pine trees. I really thought conservation had taken place in that area of the county, but I was wrong, again.

Thanks for responding Walton GOP. I'd like to hear more on your thoughts about bringing an alternative currency to DeFuniak that you mentioned earlier.

I'd love for people in SoWal to reduce their ecological footprints by turning off some lights, though that's not the only thing we need to do.

Please speak for yourself if you'd prefer to shop at Wal-Mart or with the lowest bidder. I choose not to and I know I'm not alone. That's not to say that I don't shop at any big box stores, I do., but I try (the best I can in SoWal) to make conscious purchasing decisions that are more favorable to local and or hand crafted goods and services. I also on occassion choose to go without. This is my personal choice, but I believe strongly in voting with my dollar. Some choices are out of our control right now and I'm certainly not saying that my choices are better than someone elses, but I think we as consumers can learn to consume in a way that restores the social, cultural, economical and environmental integrity of natural and human communities.

[elgordoboy]

Familiar with Buckminster Fuller?

[elitrope]

Familiar with Buckminster Fuller?

Sure. Great architect, love those geodesic domes, and a great visionary. The Buckminster Fuller institute is devoted to building a sustainable future.

[elgordoboy]

Sure. Great architect, love those geodesic domes, and a great visionary. The Buckminster Fuller institute is devoted to building a sustainable future.
"Critical Path" a good tough read. I think it was in that book, as well as other places, where he presented the idea of inexpensive housing for the future using the geodesic domes you mentioned (reminds me of the opening of the tv show "Buck Rogers in the 25th Century" showing New Chicago). Anyway my point- His idea, or what I recall, was to carpet bomb the forests in Brazil to then drop premanufactured houses down for the natives into the fresh clearings. It was written 50 or so years ago? and read by me 10 or so ago. I remember being amused and horrified. I bring him up because this thread reminds me of the solar energy ideas presented by Fuller. Essentially closed systems and open systems - taking in and keeping more than you send out thus building wealth/quality of life.

[elitrope]

Hmmm...I haven't read Critical Path, though it sounds like something I'd like to add to my long reading list. From your comments and I'm admittedly not familiar with Fuller's solar energy ideas you speak of, it's unclear to me if you find this thread to be amusing and horrifying or potentially a way to build wealth and quality of life. Maybe you could explain more or connect the dots for me.

[Smiling JOe]

I really don't know much about Ithaca, but with SoWal being mostly a tourist destination, I wonder how many times the complimentary currency would be spent locally, in comparison to Ithaca. Along those same lines, Counter-fitting the complimentary currency would not simply be used as a means to grow wealth. It could be a way to live for almost free. The Ithaca system may not know of counter-fit local currency, but I wonder who is testing it to know? The Banks or Feds check US $. If you have ever seen how the Feds print $$$ you know how complex the paper making and printing can be, and the security has to be very tight. Hiring out a local trustworthy printer might sound good in theory, but it takes only one employee to steal the digital image. It would also be very easy to scan the money and print your own. Even with our US currency, it would be fairly easy to scan and print the money, and pass it off.

I cannot think a way around this counter-fitting possibility, other than using some sort of debit/credit (that's +/-), where you could buy into the local currency, and have your Local Card credited, much like a gift card. The kink with that is how do you add the credit for producing hours of labor (like making a hat)? I guess you could have a few places for exchange such as that, but then it is still up to a system of honesty, which may work in most cases, especially in a place like SoWal. Maybe it would help grow even more trust into our already, fairly safe area.

I still think the IRS is going to want to be able to track income and sales tax, and this local currency seems almost invisible to the Feds and State. Since WalCo also charges a Local Option Sales Tax of 1%, they too would want a piece of the pie. If I had to guess, the governments would want some sort of tracking method.

Regarding the "fair exchange," I hear what you are saying about using the $/hour system as a guide or example. I would love to make Gordie Hinds a hat in exchange for a painting which takes him six hours to create. It seems very interesting. Think about this scenario, you have a plumber and a doctor. The plumber's kid has a nasty cough and needs to see a doctor for a diagnosis and medicine. The Doctor's house has a toilet which is leaking onto the floor and going to mess up the entire 1st floor of his home if it is not repaired. The plumber's kid will eventually recover from the cough, but that leak in the toilet at the Doctor's home, isn't going to stop on its own. The Plumber's work may actually be worth more than the doctor's, in this particular case. Treating a compound fracture on the plumber's kid, may be a different case. Anywho, this local currency somewhat levels everyone's wages depending only the hours involved, but not noting that the doctor had many years of expensive school and training.

Exchange is interesting though. I can remember being in the second grade question my teacher why diamonds were more expensive than water. She could only answer that it was supply and demand. There was a lot of water and not many diamonds. That never answered my question because (close your ears, BeachBummet) 99.99+% of people have no real value of use for diamonds, but 100% of people will die within a few weeks of not drinking water.

[elitrope]

SJ, I have similar questions, which may or may not be satisfactorily answered within the scope of my course work. I venture to guess there is much more to this than the brief answers I've provided and would entail more extensive research to actually put something like this into place. You mention debit cards being another option and this falls more in line with the LETS system which has been around for about 30 years. It doesn't use currency, but instead an accounting system. The point of having a circulating currency is to alleviate some of the confusion and necessary education with an accounting system. Everyone knows how to use cash. The credit does have to start somewhere and it does require trust. This is the part that is suppose to be community building. The obligation to the IRS is the burden of each user of complementary currency, just like I'm suppose to tell the IRS if I receive part of payment for my business in the form of knitted hats. If I don't, then I'm the one at fault and guilty of tax evasion. Who's checking? Who knows. Someone, I'm sure.

I really liked your anology of the water and diamonds, BTW.

Exactly, how currency came into being in the first place, so people could trade goods that weren't necessarily of value to them personally. If you have hats and Gordie has paintings, but he can't use your hats, the only way you two can trade is if you trade something else of value that other people can use. Otherwise, Gordie would have to take your hat in the hopes that someone else will want to trade the hat for something of value to Gordie. In a LETS system, no currency would trade hands in this exchange, just a credit or debit would be recorded for each transaction.

Anyhow, enough about that, back to leveling the playing field. I think one of the goals of complementary currency is to create more equality and value for services and goods that are currently undervalued, like the making of the $.96 hat from Wal-Mart.

Lastly, in response to tourism, this would be a unique situation for our area and somehow would have to be cleverly incorporated into the whole system.

[wrobert]

Well first of all, you need to get over the evils of Walmart. While I certainly am not there biggest fan, you have to admit, they have kept prices low which has led to a higher standard of living for people, especially the working class.

You are never going to get people to buy a significant number of any product at $15 when they can get the same basic thing at $1. As much trouble as we have educating people in things like math, how are you going to make a dent in the general feelings of their own economic well being?

When I looked at Berkshares, the idea was to introduce something like that into the culrural side of business in DeFuniak Springs. Thinking was it would be easier to explain to the more educated persons. From there we would start trying to bring in businesses that wished to participate. I think it would be a great way to tie nowal and sowal together in a more symbiotic relationship. All those sunburned tourist need something else to do after the first day of roasting, at least until they recover a bit.

[elitrope]

I'm not proclaiming any evils of Wal-mart, simply saying I choose not to shop there. Yes, I'd say they have given people access to more goods at deeply discounted prices, there by raising some aspects of their standard of living. But at what cost to the environment, other people in other countries, and the local culture? Maybe in the short term this is a positive cost benefit, though couldn't we move beyond Wal-mart and possibly come up with some other creative means to raise peoples standard of living, which BTW is different from quality of life. Improved standards of living may improve quality of life, though quality of life transcends monetary gain or increased standards of living once our necessities have been adaquately met. Education and increase in wages raise peoples standard of living.

Just maybe, there is another option besides Wal-Mart that can give people what they need and strengthen our communities. Plus, I don't think you give people of lesser economic means enough credit. Having been there myself (having to choose between going to Wal-Mart because it was what I could afford or choosing to shop with a local vender, which I could not) I would have welcomed something like an alternative currency that I could participate in and give me some sense of pride and connection to my local community.

Anyhow, I appreciate and would encourage your idea of bringing NoWal and Sowal together in a more symbiotic relationship. You mention introducing local currency into the cultural side of business in DFS. It would follow that you see something amiss or lacking with this culture that you feel moved to do something about. Maybe you'd be interested in collaborating in the future?

[wrobert]

I'm not proclaiming any evils of Wal-mart, simply saying I choose not to shop there. Yes, I'd say they have given people access to more goods at deeply discounted prices, there by raising some aspects of their standard of living. But at what cost to the environment, other people in other countries, and the local culture? Maybe in the short term this is a positive cost benefit, though couldn't we move beyond Wal-mart and possibly come up with some other creative means to raise peoples standard of living, which BTW is different from quality of life. Improved standards of living may improve quality of life, though quality of life transcends monetary gain or increased standards of living once our necessities have been adaquately met. Education and increase in wages raise peoples standard of living.

Just maybe, there is another option besides Wal-Mart that can give people what they need and strengthen our communities. Plus, I don't think you give people of lesser economic means enough credit. Having been there myself (having to choose between going to Wal-Mart because it was what I could afford or choosing to shop with a local vender, which I could not) I would have welcomed something like an alternative currency that I could participate in and give me some sense of pride and connection to my local community.

Anyhow, I appreciate and would encourage your idea of bringing NoWal and Sowal together in a more symbiotic relationship. You mention introducing local currency into the cultural side of business in DFS. It would follow that you see something amiss or lacking with this culture that you feel moved to do something about. Maybe you'd be interested in collaborating in the future?


The difference is you seem educated. We have a serious problem in this country, and in this county. We are not putting enough emphasis on education. Educated people tend to see the bigger picture and not just their little part of the world. Educated people understand that we are here today because of our own actions.

Yes I would love to talk about this further. I am still trying to figure out just how something like this would be implemented up here, but I have already met with some of the more culturally involved people and discussed the idea. They are also very interested.

[SHELLY]

Although I haven't read through the entire thread, I'd like to offer up an eye-witness experience of a process similar in nature to that being discussed.

Several years ago (before Hurricane Ivan), I visited a small zoo out near Pensacola. Someone in front of me in line paid for their admission with some sort of "Trade Dollars." Being the economic wonk that I am, I asked the clerk about this program...this is how I remember it:

There was a cooperative of local owners of service/retail operations (shops, doctors, dentists, car repair, etc). They "bought in" to the bartering program with a lump sum (let's say $500) and were given either paper "currency" or a "charge card" that they could use in any of the members' operations. The "dollars" were exchanged at face value with no change given, so for an admission charge of $12.50 the buyer could either hand over $13.00 in "trade dollars" or $12.00 in "trade dollars" and 50-cents in US currency; any tax due, however, would have to be paid in US currency. The sale is rung up on the register, and at the retail operation (in this case the Zoo) the tax and trade dollars are put in a separate envelope to be turned into the accounting department. The actual "trade dollars" are, I assume, turned over to the boss who will decide how they want to spend them.

All-in-all, it appeared to me be a very tedious process (the clerk said it was a "pain in the azz" as it took some time to do the additional work to record and separate the sale documents and tax currency), and I assume there was some fee paid to the "Trade Dollar Overlord" who took care of handling the membership documents/manuals; lists of members; printing/distributing the trade dollars; and recording information from the "credit cards."

IMO on a small scale, I agree with the clerk--on a very large scale (with the public involved), it is a disaster in the making.

This may have been the program they used: http://www.floridabarter.com/barter_benefits.html

.

[elitrope]

In response to WaltonGOP, I'll just add that giving people hope for a better future, as well as desire to achieve a better future are equally important. Ok, that's it and possibly the research I'm currently doing could be of some use in your future project. Ta ta, and I think it's easy enough to figure out who I am if you want to brainstorm in the future. Have a happy holiday!