David Birch at kashklash has been thinking about alternative currencies. He’s decided that local currencies, while their hearts are in the right place, are not the solution their advocates claim them to be:
They’re wrong because their notions of locality are too backward-looking. So while I buy the idea that some form of localisation of money it might be part of an overall trend, a reaction against globalisation and so on, I think that localisation in the coming online world means something different from the slightly romantic, slightly unworldly, geographic notion of locality that is at the heart of many current schemes.
So what might we use as alternative currencies instead of localised money?
People don’t seem to have a problem holding World of Warcraft money, or iTunes’ money, in addition to money in their bank accounts. Given a free (or, at least, vanishingly small marginal cost) choice, what would they prefer? We’ve already touched on gold in the earlier discussion about alternative currencies and the price of oil. But I’m curious about other non-commodity suggestions: telecommunications bandwidth, mobile minutes…
As a commenter points out, bandwidth and mobile minutes are commodities to most of us… and the more I think about it, the harder I find it to think of anything that would make a practical currency that isn’t a commodity. Calories; water; kilowatt/hours… can you think of any more? [image by bradipo]
5 thoughts on “Funny money – what might we use as alternative currencies?”
..oh and Second Life has failed, because it is oncool, because it as become associated with uncoolness, and as such Second Life money is not to be mentioned and shunned in articles.
But is that really the case?
I think that digital money and local script or notes are apples and oranges. The driving force behind local community money is to keep the dollars that are spent in the local area. If you have no where outside the area to spend them, you will shop locally and the dollars are recirculated. With Berkshares, Susan Witt recently said that on average, each note is spent 4 times locally before it makes the trip back to the exchange bank. On the contrary, about $.90 cents out of each dollar spent at a Wal-Mart, immediately leaves the area and possible country never to be used again at any local establishment. You can’t really measure or attempt to use a financial product in this manner over the Net. The Net made everyone around the world your close neighbor you can spend a dollar in China, Russia or San Diego just as easily so the concept of recirculating money ‘locally’ is lost over the Internet. I would have to disagree that local money is a backwards thing because of the Net, they are mutually exclusive and you can’t compare such items.
What about real estate? I’m reminded of Ken MacLeod’s quip about the government giving everyone a land grant on the Moon to stimulate the economy.
I guess any currency is based on faith: in the case of the dollar or the euro it is faith in the continuing existence, power, and influence of a nation state.
Would it be possible to create a monetary economy (i.e. non-barter economy) without the Westphalian-style nation state concept to back up the currency?
Dunno – is state power a commodity? As it (theoretically) guards us while we sleep I suppose it has value…
In Elf Sternberg’s “Pendor” universe, after the first few hundred years or so, the economy seems to have steadied on several sorts of currencies, all of which are directly convertable to the things that are needed by people for survival. LIU is the most common – Light Industrial Unit – used for the manufacture of common, mostly personal goods. HIU – Heavy Industrial Unit – are a currency to pay for larger goods – homes, manufacturing facilities, and so on. There are also: Environmental, Agricultural, Computational, and Territorial units, and all of it is really just electronic bookkeeping.
I would submit that the Watt or Joule might be a useful currency of the future. If everything comes back to the manipulation of energy – why not come right out and state that? It might also make it easier to measure the true cost of producing an object.
Thanks, Anthony – may have to look those Sternberg titles up!
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