Mainstream money, largely because of the way it is issued, rented out and (mis)allocated into first use, is a primary driver of inequality, unfairnesses, poor productivity and environmental damage. Somehow it has come to prioritise all the wrong things. Mainstream money is indeed the root of all evil – but the money system is man-made and can be remade.
This anticipated redesign is arguably already underway. The increased media profile of local currencies, the mainstreaming of the Sovereign Money movement and the rise of crypto currencies all indicate that TAMARA. (An anti-TINA formulation of John Rogers @ValueforPeople that There Are Many Achievable Real Alternatives.)
A number of the previous articles in this series have been concerned with developing the concept of Intentional Currencies (ICs)  – that is currencies that have value-based objectives and target-outcomes over and above the basic function of means of exchange. The Intentional Currencies proposal is that there would be space within an emerging currency ecosystem for value-based currencies; that these currencies would explicitly describe their Preferenced Domain (to which exchanges they wish to give priority), their Deprecated Domain (those exchanges which they wish to exclude or penalise), their Governance (e.g. transparency, decision making, resistance to capture) and so on – the keyword being explicitly. The debate within an IC community should be on how to achieve their objectives and whether those objectives should change over time – not what the objectives really are.
A fundamental objection to the IC concept is the feeling that money should be universally accepted – that as a neutral ‘facilitator of exchange’ it should be as widely accepted as possible so as to lubricate any type of exchange.
This line of thinking carries with it two implied assumptions – that all transactions are equal and that more is always better. I am not going to devote much space to debunking these. Suffice to say that if we have ethical values at all, there will be transactions we want to distance ourselves from; and that unthinking obeisance to growth – the ideology of the cancer cell  – will wipe us out unless checked.
Thus we would argue that intentionally limiting the scope of a currency is a legitimate approach to supporting a given value-set and encouraging desired behaviour change. The issue then becomes how such currencies might fit within a new monetary ecosystem. Currency innovation can become one of the mechanisms for institutional reform.
The development of ideas around bitcoin and the blockchain has been a significant part of TAMARA-realisation. And it is true that some aspects of the development, notably the blockchain itself, have potential for re-engineering or re-imagining exchange relationships. But I believe the main significance here is in terms of platform development – the underlying technology over which emerging currencies will be developed. Thus without wishing to offend any crypto-geeks we will (temporarily at least) consign cryptocurrencies to the ‘how’ basket rather than the ‘what’ basket.
Localism as the definitive intention?
Locality-based currencies are one way of focussing attention on local supply. Without exception they will offer a directory of local participants, and some substitution of local for remote supply can be achieved. But this good work is done against a backdrop of hostile influences. The progressive centralisation of supply chains has often stripped out local economies and some goods and services may have no local supply at all. In this context it is worth noting the success of some Trade Exchanges , where a group of ‘brokers’ are employed to proactively navigate the supply chain of participants and uncover new potential customers and suppliers. In the best of all possible worlds local government should be interested in this activity, and in providing incentives for suppliers of under-represented goods and services to set up shop in the area. At present, however, they seem to be more preoccupied with FDI (Foreign Direct Investment) – subsidising/ bribing national/ international brands to get headline incomers. This, despite the general acknowledgement that these companies are disruptive on the way in and disruptive on the way out of local economies, and that the lifetime value to councils of genuinely locally-grounded businesses is substantial. They also appear to prefer specialisation over diversity in local economies
Other positive aspects of relocalisation are the resulting decrease in carbon costs for locally produced goods, and the potential for re-personalising supply – more face to face exchanges with social benefits.
A major challenge remains the relocalisation of ‘stuff of life’ transactions – food, energy, housing in particular. Perhaps 90% of spend on these items quickly leaves a local economy, and if the classic LETS experience (more aromatherapists than green vegetable suppliers) is to be avoided, proactive measures are needed to prioritise local supply of these categories.
There is no doubt that supporting people’s need for a ‘sense of place’ – a feeling of belonging to a locality and of its specialness – will positively impact on the wellbeing metrics that must eventually replace GDP as a measure of progress. And unearthing the richness of supply in a locality can only help that process.
However, no local economy is an island. And notwithstanding the doomers prescription that localities should develop ‘lifeboat’ economies – a sort of networked extension to the backwoods survivalist approach – some mechanisms for trading with the economy next door ought to be envisaged.
Networking localised ICs
Most locally focussed currencies have only one real preference – that participants should be locally-grounded. This might perhaps mean businesses with a registered office in the locality, and individuals who live there. So the Deprecated Domain might include major high street brands and citizens of other localities.
The latter, in practice, tends not to be much deprecated. Tourists or casual visitors often take away Totnes or Brixton Pounds as souvenirs, creating small amounts of seignorage for the currencies. And the spend of individuals who, say, work in Bristol but live outside, is considered just as valuable as that of residents.
The former, though, has created some interesting introspections. Mostly serious national brands have maintained an indulgent but aloof attitude to ‘funny money’, but there have been occasions when a branch of a major supermarket has wanted to participate but been refused entry. There has been a recent spate of apparently pro-local positioning in supermarkets, some genuine, some ‘localwash’.
The key point though is that other than this fairly gentle preferencing of the local, the currencies have no strong underlying value-set. This is important because the major problem with interlinking (exchanging and/ or cross-promoting) value-led currencies is likely to be where there are value conflicts. The lack of such conflicts makes it easier to design cross-working.
So the only possible barrier to consider is what might be called local-chauvinism. If such narrow minded thinking is evident then the co-operation does not need to encompass cross-promotion. A simple exchange function is all that is needed – funded presumably by a spread on the exchange rate. The operator of the exchange would need to be accepted as a bona fide business participant of both currencies. For the proxy-pounds (and similar) this would mean they can cash their spread-commissions back into fiat. For non-convertible currencies though, the lack of a fiat escape route may affect the perceived attractiveness of setting up exchanges.
Apart from proxy-pounds and the like, another locality-based model is the Trade Exchange  – a mutual credit based operation. The pro-local mindset tends to be very similar, and the potential for cross-working via a currency exchange similarly unconstrained.
It may well be that the most promising growth path for locality-based currencies is for them to replicate and network. But choosing to grow is not the only option and size/ scope should be an explicit strategic choice.
If a future monetary ecosystem were to consist largely of a network (or networks) of interlinked locality-based currencies, how might restricted-scope value-based currencies fit into the picture?
One problem with trying to envision this developing ecology is that there are few examples of value-based currencies out there. (No-one has designed a vegetarian currency yet though it might be an interesting thought experiment.) Perhaps the most widely documented example would be the Fureai Kippu elder care currencies of Japan which have been in existence for 40 years plus.  Mayumi Hayashi’s 2012 attempted evaluation  gives an excellent flavour of the challenges that can be expected in any restricted-scope currency. Two are particularly relevant – the relationship between the currency and fiat ; and the temptation to extend scope beyond the core mission in order to scale up.
There would appear to be two strategic approaches to the positioning of value-led currencies in our new ecology. Either they sit as independent standalone currencies, fighting it out in a Darwinian competitive world as anticipated by Hayek ; or they find some sort of symbiotic space with more general-purpose currencies – perhaps with our networked model of locality-based projects.
The former can be characterised as a sort of value-fundamentalism. We know that competing with fiat is a tough call anyway – largely because it will remain the currency of choice for the establishment for the forseeable future, that status being reflected in the demand to pay taxes in fiat. Backers of this strategy are making the further choice that their own value-set is of such fundamental importance that no co-operation with those of alternative views is supported. Thus they would choose to be not just fiat-averse  but other-values-averse.
The latter approach would seem to give a better chance of bootstrapping a currency into sustainable existence in a hostile fiat-dominated world; but defining what an acceptable symbiosis might look like is not easy. Firstly it will call for judgement – ideally peer-reviewed judgement; secondly it will likely change over time and governance arrangements need to reflect that. Various symbiosis scenarios can be envisaged.
Two scenarios are worth anticipating at this stage – co-operative networking via exchanges and cross-promotion; and shared platform developments. Both will involve an agreement from the involved currencies’ users that they are not part of each others Deprecated Domain. Thus we may see an intermediate Partner Domain which sets out a mutual recognition and a co-operation plan, this greatly facilitated by the fact that both currencies (if properly Intentional) are explicit about their own preferences and values. The first scenario might allow a more gentle exploration of shared interest, but it is likely that pressure on costs (especially fiat costs) will encourage experiments with the latter.
[A possible example of shared platform development might be the choice of two or more currencies to share a blockchain. This direction appears to be facilitated by the ‘colored coins’ development of Bitcoin.]
Monetary Ecosystem Aspirations
This sort of currency ecosystem may well progressively develop over time, energised by a fundamental belief that currencies should be controlled by their users and not enclosed by elites.
The hostility of the environment in which the ecosystem develops will stem from two main sources: a) the likelihood of states continuing to preference fiat currencies via their tax status, and b) the antipathy of the corporate world to a new raft of innovative, collaborative institutions
It is already clear that new currencies will populate a spectrum of attitude towards taxation, from the hardline (total privacy, libertarian) to the compliant (transparent and complete fulfillment of tax obligation in fiat). The availability of tech options for the former makes the latter more ‘praiseworthy’ and may mitigate against the heavy handed attitude to currency innovation experienced in the 1930s. We may see a move away from taxing exchange to taxing assets, for pragmatic reasons.
The corporate world has tended to be dismissive about alternative governance structures, especially the co-operative movement. It is caricatured as woolly, naive, and legally and commercially fragile. Their core fear here is of motivation that is not entirely profit-based, and therefore difficult to predict and control. This hostile element is likely to be a severe problem to a new ecosystem, primarily because preferential corporate access to cheap finance facilitates both legal and commercial attack. Developing currencies may need to fight extended battles in court, predatory finance/pricing and sustained efforts at capture.
But they may not. It may become clearer that trustful arrangements are socially and operationally superior to the trustless scenarios beloved of Reagan and Thatcher’s children; that once you expect the best of people they behave better; that currency users have both the right and the capability to manage their own means of exchange; that TAMARA.
: see for example: http://openhere.data.ie/?portfolio_page=graham-barnes-intentional-currencies-and-money-as-a-commons and http://www.resilience.org/tag-search-results/180425-intentional%20currencies/79236
: Edward Abbey, who said a good number of memorable things. https://en.wikiquote.org/wiki/Edward_Abbey
: http://beyondmoney.net/2015/08/20/sardex-an-emerging-model-for-credit-clearing-exchanges/ and http://goo.gl/fx9AhU
: The Denationalization of Money: https://en.wikipedia.org/wiki/The_Denationalization_of_Money
: https://www.feasta.org/2015/07/29/new-currencies-and-their-relationship-with-fiat-currency/ fiat-friendly, fiat-cautious and fiat-averse currencies
Featured image: a literal basket of currencies. Source: https://commons.wikimedia.org/wiki/File:Basket_of_money.jpg
Note: Feasta is a forum for exchanging ideas. By posting on its site Feasta agrees that the ideas expressed by authors are worthy of consideration. However, there is no one ‘Feasta line’. The views of the article do not necessarily represent the views of all Feasta members.
Graham Barnes is a Currency Innovation Strategist. He is a Director of Feasta and co-organiser of the Feasta Currency Group. He holds a PhD in Computer Science and worked at a senior level in IT and online marketing in a previous life. His current projects include the design and delivery of currencies to be sponsored by a local authority; by a social entrepreneur to complement and enhance a well established sustainability methodology; and by a restaurant chain.