Sunday, March 9, 2014

Cooperative Currencies

Of course is not the only proponent of multiple currencies. Bernard Lietaer, Belgian civil engineer, economist, author, professor, and former hedge fund manager, has been writing about multiple cooperative currencies for over ten years. See his and Jacqui Dunne's 2013 book Rethinking Money: How New Currencies Turn Scarcity into Prosperity (BK Currents), for example. In it he lists many existing cooperative currencies and tells the stories of a select few. The major use of cooperative currencies seems to be to provide a medium of exchange when it is difficult to obtain ordinary currencies. That is, in economic downturns.

Lietaer's success stories do not surprise us. They are what we would expect since we would advise similar measures as those taken in the stories.

Similar measures, but not the same. In particular, we do not see in his analysis a need to firewall the rich away from the poor using exclusive currencies. The need appears to be present in several of his success stories, however, because several successful cooperative currencies were terminated by legal action to enforce the central bank's monopoly on currencies. There lies one weakness of cooperative currencies. It is relatively easy for the rich to outlaw them. Alternatively, the rich could simply buy them and manipulate them.

Thus for all the effort and thought that Mr Lietaer and his associates are putting into cooperative currencies, we doubt it will have any lasting effect. Exclusivity is also required in our currencies.

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

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