Wednesday, February 6, 2013

Barter currency arrives in Greece

by Clifford F. Thies

BBC is reporting that a local barter currency is becoming popular in the Greek town of Volvos. According to the BBC, there are some 800 users of the barter currency, which is an internet-based system of debits and credits. Transactions are entered into the system, transferring units from one to another account, presumably in consideration of some good or service changing hands. No discussion is provided as to the initial distribution of units, or how the VAT (sales tax) is paid, if it is paid at all. It appears that transactions are mainly confined to trading in second-hand and home-made goods, as at flea markets and yard sales.

At this time in the United States, the Ithaca Dollar is the longest-running local barter currency in continuous use. With this local barter currency, participating merchants offer goods and services for sale either in the local barter currency or in regular government-approved money. Initially, counter-culture type establishments predominated, but the circle is now quite diverse. There is even a credit union for depositing and lending the stuff. With the Ithaca Dollar, redemption can be made in work, at the suggested rate of 10 Ithaca Dollars per hour. As to how Ithaca Dollars are originally created I don't know. Perhaps by purchase with government-approved money, or perhaps by mowing somebody's lawn.

There are at this time maybe four dozen variations on the Ithaca Dollar, only a few of which are well-established.

Going back a ways, the first "Ithaca Dollar" was issued by the American anarchist Josiah Warren (this was a long, long time ago, before anarchists got into bomb throwing). Warren reckoned that the value of everything should be denominated in the time required to produce it. In his "Time Store" in Cincinnati, from 1827-1830, he priced everything in Hours.

At a later date, in 1851, Josiah Warren made his way to Long Island, New York, where he opened a planned community which was to feature common areas, cooperative enterprises and time currency. His currency was redeemable either in money, so many bushels of corn or in so many hours of work.

From the hard times that followed the Panic of 1837 through other bad recessions and depressions to the present, it seems somebody always comes up with one or another form of alternative money. In addition to local barter currency and time money, there have been token coins, stamp money and, our favorite, the Ron Paul Dollar (either in the form of a silver token coin or in the form of a warehouse receipt for silver).

From our standpoint, these experiments in money range from goofy to interesting. Some actually prove to be economic (whereupon the government has moved to shut them down). Accordingly, the fact that the government suffers the continued existence of the Ithaca Dollar and its various spin-offs, but arrested the person who issued the Ron Paul Dollar, tells you something about who really was offering the public a superior product.

As they say, don't take any wooden nickels!

(Yes, there used to be privately-issued wooden nickels.)

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