High-tech parallel monetary systems for the underdogs?

Steve Keen stays pretty much on message but this post shows that he has noted the potential of non-bank money as devised by his research colleagues Trond Andresen

3 October 2011


Advances in information technology now make it possible for non-government entities, or governments themselves, to establish and run a national parallel paperless monetary system at very low cost and launch it on very short notice. The workings of such a system is described and discussed. Such systems may ameliorate the dire state of affairs in the hardest hit eurozone countries, and increase the political pressure on EU and national elites for debt forgiveness, full employment and reduction of cutbacks. It may also be applied in near-bankrupt U.S. States.  Link to full post.

This proposal is very similar to C3 devised by STRO except that units are issued without any security and the Richard Douthwaite’s Liquidity Network idea except it is not just aimed at businesses.  Andresen is most persuasive (as was Douthwaite’s proposal) when he argues that the parallel electronic money could provide an emergency currency in the Eurozone.

An intermediate solution

A government could however, implement an a less drastic measure: use a variant of the VP system described above, as a parallel “emergency currency” (“EC”). As already mentioned, a government-issued EC has intrinsic value as opposed to the VP, since it may be used for tax payments. An EC will therefore easily be accepted as a means of payment by any agent ? individual or firm ? that is obliged to pay taxes.

An advantage of implementing this system electronically using the mobile phone network, is that it may be up and running very quickly after a government have decided to do it, so that its positive effects may have been demonstrated before the EU system could marshal forces to stop it. It will then be very difficult to kill, due to gained popular support.

A further advantage of an electronic EC is that tax avoidance is impossible, since any transaction occurs via accounts in licensed banks, and is logged there.

This scheme could also be useful for non-EU-countries, or such national regions that have authority to collect region-based taxes, like the near-bankrupt U.S. state of California. There EC’s could be implemented by the state government, with immediate positive results.

Great minds think alike, obviously.

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