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03 MAR 2009

New currencies

All new currencies have to be created by us, bottom up. We can't wait for money to start flowing again from the top. That may never happen. We can't waste our time fighting over what's left. Instead we're going to create new wealth with new money we make ourselves. This is the future, and a fundamental mind-shift in how we think of money.

What kind of money can we create? Everyone knows about barter, which is the ancestor of modern money, and that proves we can do it. We can write out a note worth one haircut or one chicken or one chicken dinner. We can improve on this with local currencies based on what we have to offer. Not a bad idea. It has worked in Ithaca, New York. It failed in Prescott in the 1990s. Business barter clubs have had more widespread success and are definitely an option today.

All these are substitutes for traditional money, and follow the same credit/debit or win/lose accounting of the past. That accounting system was based on material scarcity and now that we've entered an age of abundance it's blown up. All it can do is return us to material scarcity.

So I'm only interested in win-win currencies, which more accurately deal with abundance. I've been studying these for about 30 years. Back then the dollar was falling fast, double-digit inflation, worth less than half what it was ten years before. I didn't care. I was having too much fun with free love just before the age of AIDS, and my partners were enjoying it equally. That's when I devised my first win-win currency, an enduring inflation-proof standard: one good roll in the hay.

Ten years later Edgar Cahn was developing time dollars, equal to one volunteer hour. The dollar had dropped again over a third, now only 30 cents remaining from 20 years before, but an hour never changes.

There was some confusion over time dollars. Some people thought it was a barter currency which needed to be paid back. In fact it was elder care or community service. I saw it as a win-win currency, crediting both the volunteers and the agency that employed them.

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