No one can earn a million dollars honestly.
William Jennings Bryan, 1860 – 1925,
an American lawyer, statesman, and politician, three times the Democratic Party nominee for President of the United States.

The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn't deliver the goods.
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Capitalism is the astounding belief that the most wickedest [sic] of men will do the most wickedest of things for the greatest good of everyone.
John Maynard Keynes, 1883 – 1946,
a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and political theory, as well as on many governments’ fiscal policies.  

We have noted many deficiencies in the capitalism which we practice.  The purpose behind such a look has been to encourage thought and action about how to make capitalism work better.  We are now looking at possible solutions.  

In the three previous essay parts, we looked at ESOPs, a local currency, and a specialized chamber of commerce as possible solutions to the deficiencies of present-day American capitalism.  We spend a little time here looking at a local currency.  

A local currency is money printed and used in a community, without the need for approval from the U.S. Treasury, but in line with public law so that the local currency not be deemed counterfeit by the government.  If we click on www.ithacahours.org, we visit the Web site of what is called by some the “granddaddy of modern-day local currencies.”  

But we should realize that local currencies have been around for a long time.  

In economics, a local currency, in its common usage, is a currency not backed by a national government and not necessarily legal tender, and intended to trade only in a small area. These currencies are also referred to as community currency.  

… In the modern era, the most recognizable local currencies were company scrip issued in certain industries to pay workers, and tokens issued by some businesses to encourage consumer loyalty. In the nineteenth and early twentieth century, the failures of national banks during crises often created acute demands for cash, which were met by businesses creating emergency currencies. These scrips were usually issued with the intention of redemption in national currency at some later date. ...  

... The Wörgl experiment dramatically illustrates some of the common characteristics and major benefits of local currencies.  

Local currencies tend to circulate much more rapidly than national currencies. The same amount of currency in circulation is employed more times and results in far greater overall economic activity. It produces greater benefit per unit. The higher velocity of money is a result of the negative interest rate which encourages people to spend the money more quickly. 

Local currencies enable the community to more fully utilize its existing productive resources, especially unemployed labor, which has a catalytic effect on the rest of the local economy. They are based on the premise that the community is not fully utilizing its productive capacities, because of a lack of local purchasing power. ...  

... Since local currencies are only accepted within the community, their usage encourages the purchase of locally-produced and locally-available goods and services. Thus, for any given level of economic activity, more of the benefit accrues to the local community and less drains out to other parts of the country or the world. ...  

A common difficulty [is] ... hyperinflation. This is particularly likely when the local currency is not exchangeable for the coin of the realm and there are only a few vendors of basic necessities, such as food or housing, accepting the local currency for full, or nearly full, payment. ... http://en.wikipedia.org/wiki/Local_currency  

Worth trying in Montebello ?  

April 17, 2008