[wsfii-discuss] Worldchanging article on Complementary currencies

[Mike Ryan]

All

After my flippant comments yesterday, I was asked if I would like to come back
and explain the thinking behind the mails I sent. Therefore, not 
setting out to
offend anyone again, here goes.

First off, I have to say that I disagree with the need for a complimentary
currency. There is no way that cash in it's persent form is going away in my
lifetime - it's just far too convenient, anonymous and robust. Cash is not
severely limited by money-laundering regulations in the environments 
where cash
thrives - on the street and in the purse and pockets of consumers.

I don't pretend that there isn't problems with cash. Forgery is of course an
increasing problem. However, Australia has gone a long way to dealing with the
problem with the introduction of plastic notes. This is of course an ongoing
battle (as it has been since the first money was issued) and poor quality
forgeries of AUD$ notes have already appeared. The lack of similar 
notes in the
UK is wholly due to resistance on the part of the normal person to such a
change and should give you some indication of the enormoity of what you're
proposing.

Why would you want to destroy the idea of people using a single currency? It's
easy, it's portable, it gives people what they want. If people have multiple
currencies with things being valued in different amounts they won't use them.
The idea of a multiple currency environment exists as a de-facto standard in
many parts of the developing world, where the USD (and increasingly the Euro)
existing alongside the local currency. However, given the choice people would
prefer a simple one currency system. Also, you do need to be all things to all
people, just as cash is now. Anything less will not be used.

Cash has not been abolished in the UK in anyway and this is pure 
hyperbole. Govt
organisations are just taking advantage of more convenient avenues of
distributing money. Large parts of this almost certainly end up being 
converted
into cash and then going into the general economy. I don't have the figures to
hand, but I would be surprised if M0 has decreased in the last 20 years,
although I would expect that it would be proportionally smaller than M4, but
this only reflects the increasing wealth of the society we live in.

What is true is that the nature of money is changing, but then this has always
been true. Larger transactions are increasingly done electronically, and
hopefully smaller transactions will be to with the advent of true
micro-payments on the internet. But again, it is a huge leap to read 
the end of
cash in any of this.

I fail to see how the bank raid in NI has any implications for the future of
cash. NI is a small and (relatively) closed economy. This was the biggest bank
raid in UK history, and more disturbingly, these events have potentially
disasterous implications for the future of the democratic process in the
Republic of Ireland. Therefore, the police and govt took extra-ordinary steps
to address the problem that would be impossible in most large, developed
economies. (Interesting, this action would be illegal in the U.S., as I
*believe* that the US has never failed to honour a U.S. banknote, not matter
how old.).

I'm willing to be convinced here, but I think you're designing a 
solution for a
problem that doesn't exist. Nice idea to try out for a day, or to run in a
suitably sympathetic eco-system but for the real world??

Cheers

Mike