Bitcoins and the Brixton Pound
The whole money power story really is a mindbender, and we will try and come back to it with more understanding. This is an informative site about money creation as we live with today:
At the Federal Reserve’s website, the reader will find a completely different representation to the notions that have been explored in this note; or the Bank of England website:
Promoting the good of the people of the United Kingdom by maintaining monetary and financial stability
But whatever the truth in all of this, there would seem to be something in it; central banking, fractional reserve banking, like the whole neoclassical, neoliberal rest of it, has become unquestioned orthodoxy for a long time. And unquestioned orthodoxies show every indication of taking the world to utter disaster, so they surely need to be questioned and challenged.
In the area of money, there’s interesting innovations with currencies that lie beyond central bank or state creation of money. In the wake of the World Wide Web and the explosion in digital technology, digital currencies are emerging. These are Web based mediums of exchange that, like the Internet, know no borders. The most widely accepted of these is Bitcoin, and it’s all a very interesting idea. Such currencies are called decentralised digital currencies, there is no central control. The Bitcoin site says:
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.
There are several variants on the Bitcoin model and the idea is developing.
Throughout history there have been experiments in currency which have bypassed both bank and state creation of money, just local initiatives doing their own thing.
In 1932, amidst the world recession caused by the Federal Reserve’s activities, the Mayor of a struggling town called Worgl in Austria, full of idle labour and urgent repairs to make, (much like Guernsey in 1815) decided he’d had enough of the national currency and started printing his own Certified Compensation Bills. The Mayor was a reader of Silvio Gesell (an anarchist who had been influenced by Henry George) and his theory about Freigeld and free-flowing money.
These Worgl bills depreciated in value by 1% a month, a negative interest rate, promoting rapid circulation. A few weeks on, there was full employment, roads repaired, and the neighbouring villages were copying them.
But, in 1933, the central bank’s monopoly over the issue of currency was legally upheld, the local initiative cancelled. Only a few weeks after unemployment had returned to the 30% it was before Worgl’s experiment.
In recent years, local currencies are breaking out all over Spain and other countries, there’s three in Seville alone. They’re in France, Italy, Austria. There’s the Totnes Pound and the Brixton Pound (B£) in the UK.
The use of local currencies is actually part of the policies of the Green Party in the UK. Local currencies circulate quicker, keep money in the area and produce increased economic activity locally.
It is argued by local currency advocates that entire countries, let alone continents, are not necessarily an optimum currency area, which some defenders of the Euro wouldn’t want to hear. Then again, there has been some mention of gradually reissuing national currencies in the Eurozone, (but we can’t remember where and are really not trying to spread rumours.) There are some that suggest that perhaps the USA is not an optimum currency area. It’s an interesting question. There are, in fact, 2,500 local currencies in the world.
Anthony Migchels has a lot to say about debt-free, interest-free currency, and he is behind the Gelre, the first regional currency in the Netherlands. He writes some very interesting pieces here where he talks about:
Supporting People and the Commonwealth and resisting the Money Power by defeating Usury.
The Gelre is first interest-free credit unit convertible to the Euro.
Migchels is excited by the possibilities, and says of the Gelre:
Think of it in this way: we are building a printing press that will provide interest free credit that will buy Euro or Dollar and thus everything else. It will be made available to initiatives worldwide at (close to) zero cost and these regional (but also international Internet based) currencies will allow the people to buy back the world interest free.
We wish him well. And all the people who are thinking about all these things, trying to understand these things and bring knowledge and power back to the people.
Henry George said:
Let no man imagine that he has no influence. Whoever he may be, and wherever he may be placed, the man who thinks becomes a light and a power.