Local Scrip Money

From P2P Foundation
Jump to navigation Jump to search

= a form of Stamp Scrip



John Robb:

"A growing number of communities now use scrip (aka a community currency or loyalty program) as a way to keep business activity local and thereby increase community resilience to economic shocks. Here's how it works. Customers buy scrip that can only be used with local businesses to buy goods and services. This is usually done in response to a community initiative. Businesses that accept scrip can either pay employees with the same (to the extent they accept it), provide it as change to customers (again, limited by acceptance), or exchange this scrip for hard currency (usually at a steep discount). Examples of scrip range from the Ithaca HOURS, Berkshares, to the Totnes Pound. While these attempts at scrip are better than nothing, in almost all cases these efforts have fared about as well as most "green" initiatives." (http://globalguerrillas.typepad.com/globalguerrillas/2008/06/the-resilient-c.html)


"The mechanism which is getting the most press at the moment is the scrip currency. A community prints it's own attractive scrip notes of nominal value equivalent to the official currency. Schemes such as Berkshares and the Totnes pound have generated strong local loyalties. Though tied to the official currency, they are sold at a discount, and then local shops give benefits to customers using that currency. The essential idea here, at least in it's modern incarnation, is to keep the value circulating and enriching the local community. My feeling is that this is a reaction to supermarkets." (http://matslats.net/scrip%20vs%20lets)


The Environmental Argument

Bernard Lietaer:

"The most recent reason for interest in stamp scrip and similar alternative monetary systems in the West or in Japan [Otani 1981; Henderson, 1981; Kennedy, 1988 ; Suhr,1989] results from environmental concerns.

"The higher the money-rate of interest, the higher is the pressure on entrepreneurs to avoid internal costs, that is, to externalize into the environment as much as the cost as is possible. Thus under neutral money, when interest goes to zero, this additional burden on resources will cease" [Suhr, 1988, page 112].

When it pays more to cut a tree, sell the wood and let the proceeds earn interest than simply let the tree grow, it is predictable that "economic pressures" will be felt to cut more trees than is optimal from an ecological viewpoint. Stamp Scrip would reverse that process. It is interesting to notice that this point was also demonstrated in practice: indeed during the experiment with stamp scrip in Austria during the Depression of the 1930's, the incentive for not hoarding was such that people preferred to invest in replanting trees.

As ecological concerns are gradually creeping to the top of political agendas worldwide, this aspect alone justifies the experimentation suggested in this note.

These three objectives: spontaneous creation of employment, inflation control, and ecologically conscious growth are the three results that eonomists can predict from the introduction of stamp scrip.

However, even more persuasive than any theoretical discussion is compelling evidence from case histories: such systems have indeed been used in the past in a variety of cultures, sometimes for centuries, and have always had a significant positive impact." (http://peakenergy.blogspot.com/2008/10/locabucks-are-local-currencies-way-to.html)


How to Accelerate Scrip

John Robb:

"However, despite the spotty record so far, scrip is an extremely powerful means of accelerating local economic activity when nothing else seems possible (in economic extremis).

Past experience with depression era scrip Abschein_vornelike Austria's Worgl indicate that the following will accelerate scrip adoption, velocity, and robustness:

  • Allow community members to use it to pay all or part of their tax liabilities to local governments. This instantly establishes a market for the currency. Also, pay local government employees a portion of their wages in scrip.
  • Deflate the value of the scrip (optimally, one percent per month) to promote immediate use rather than hoarding.
  • To the extent possible, connect scrip to local production rather than retail. Locally produced food (farmer's markets), energy (via local microgrids), products (personal fabs), and labor/services. Further, work with local banks to establish checking accounts for scrip and to enable conversions hard currencies (at a slight discount)."


More Information

For more background read the economist Irving Fisher on depression era scrip at http://userpage.fu-berlin.de/~roehrigw/fisher/