A brand new currency for Worcester shoppers?

Some folks in Worcester are planning to introduce a local pound. I would like to offer an opinion during this design phase.

I would like you to consider a different local currency mechanism to the ones being used in Totnes, Lewis, Brixton, and Sussex. But first I would like to ask you some important questions.

1. What are the criteria for success of those schemes and are they being met?
2. What will happen to this local money as the Great British pound deteriorates with inflation?
3. Are you aware of other local currency mechanisms?
4. What is the point of issuing pounds which are still essentially, debt-based money (since they are only exchangeable for debt-based money).
5. Are the designers of your forthcoming scheme aware of the fundamental problems with the money system, and how Transition currencies fail to address them?

I believe that much more experimentation needs to be done with local currencies, and that repeating the mistakes of the Totnes pound would be to squander whatever momentum you are building in Worcester right now. The right local currency mechanism can not only:

• encourage local production and discourage globalised trade of goods, and hence reduce transportation emissions

• make its users more resilient to recession (and collapse)
• build community coherence
• increase the volume of trade and hence build wealth
• reduce the level of personal debt of the users

In my view the problem with the Transition currencies is that they are not ambitious enough. They rely mostly on local people's understanding and concern about environmental and energy issues, and on a major PR offensive. They do not bring sufficient tangible economic benefits to justify their limitations, and consequently border on the gimmicky. So there are two other mechanisms I would like you to consider.

Firstly, a currency backed not by national money, but by a real, perhaps local, commodity, with real, every day value to normal people. Traditionally speaking, you might consider, wool, salt, or even Malvern water to back your currency, rather than apples, pears or plums which are too perishable. You would need to do is obtain a stock of that commodity and issue promissory notes against it. The notes have their value because they be redeemed at any time for the commodity. The tricky part with this currency is acquiring the stock in the first place. Alternatively you could work with the commodity producers so that they issue notes against their stock - there are many possibilities.

Secondly, and requiring no up-front investment, you could facilitate the creation of an exchange network. You need to identify local producers and give them a free line of credit which is the currency. With this design, producers are supported with a free line of credit. Instead of pointlessly issuing notes to be bought by the consumer and redeemed by the high street vendor, these currencies are issued for free and they drive the local economy much harder because they cannot be cashed out. These are not exotic instruments either. Every LETS and business barter system works in this way. Keynes even proposed the global economy should work this way, although the dollar prevailed.

The transition pounds backed by UK pounds are NOT an alternative, but merely a proxy. They are intuitive and easy to cash out precisely because they are the same stuff as what they replace. We desperately need new money, not commercial credit usuriously overissued at issued for profit by government-backed banksters. That way lies inequality, dominance of the rich, and tyranny. Instead we need to get serious about reaching out, and leaning on each other.