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Re: <nettime> In Gold We Trust, part 1
Doug Henwood on Sun, 20 Jan 2002 01:05:13 +0100 (CET)


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Re: <nettime> In Gold We Trust, part 1


Keith Hart wrote:

>It should be clear from several recent postings that open money or LETS is
>not just about community currencies, but the many forms of exchange circuit
>that might be built using them. It has hitherto been understood that they
>normally function as small-scale local networks, but this is an
>unnecessarily restrictive form and we are now exploring others. This is a
>broad church and experimental project that is open to learning from or
>combining with  any contemporary money system, whether state money, Paypal,
>hawala, commercial barter or social credit. Our emphasis is on the people
>who make the money they use for exchange. Community cirrencies are issued
>by all members whenever any of them goes into a negative balance. The
>promise to pay is made by each of them, unlike a single issuer currency
>(whether state or private). We believe that these forms are inherently more
>robust becaiuse they are democratic and multiple. The default of some
>members does not limit the ability of the others to trade. LETS systems
>cannot suffer from a run on the bank, although they may experience
>difficulty in recruiting individuals willing to trade.
>
>In the course of our work, we often run up against money experts who insist
>that state money is the only feasible kind and who have a potted history of
>money in their heads that justifies this assumption. They are usually, but
>not always, academics. I ask nettimers to judge which is the greater fetish
>-- to worship one of two eternal verities, gold or the state, or to try to
>develop forms of money issued by the people themselves?

I'm not an academic, though my head is sometimes potted.

I'm still at a loss to understand how these "community currencies" 
would be used to pay for products outside the community. Or will 
every community have its own steel mill and chip plant? It's a big 
leap from using scrip to exchange products at a roughly similar level 
of technical complexity and capital intensity - meals for haircuts, 
housecleaning for dogwalking. But what about things that require 
machinery, financing, specialized labor, and entities that extend 
across time and space to produce them? How would a New Yorker like me 
get a computer or an orange? Once you get beyond exchanging simple 
goods and services in a small geographical area, you have to have a 
state-guaraneteed token (or gold), or you can't have commerce. Or are 
you really proposing that production be undertaken strictly on a 
local scale? Do you even think about the relations between money and 
production beyond the level of sentiment and wish?

Doug

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