4 ms·

The modern rebirth of local currencies was probably the Austrian town of Wörgl which having been hit badly by the Great Depression recovered magnificently after

The modern rebirth of local currencies was probably the Austrian town of Wörgl which having been hit badly by the Great Depression recovered magnificently after creating its own local currency in 1932. The currency was so successful it was later forcibly shut down by Austria's Central Bank. https://en.wikipedia.org/wiki/W%C3%B6rgl https://en.wikipedia.org/wiki/W%C3%B6rgl

m12k 6y ago
It's amazing how well a society can function, if you ensure that the money that circulates in it doesn't leak out of it, fueling further investment and purchases. I think it's worth actually re-examining our view of globalization and global trade with this in mind.
- dkarp 6y ago
  I'm no economist, but wouldn't this lead to greater wealth disparity? When money leaks out, it leaks in to somewhere else. Sort of like connecting bodies of water will lower the water level of one body and raise it in another. One place will lose out and another will gain. Unless differences in local taxation/laws/amenities/other lead to wealth/poverty hotspots. With some areas vacuuming up wealth and others repelling it. Is that what this is really solving? Unable to compete on local taxation/laws/amenities/other, cities have to find another way to prevent their wealth being repelled. Sounds like just another wall though. Which can surely never last
  - maneesh 6y ago
    Like entropy, wouldn’t this lead to greater disparity in the short term but uniformness in the long run?
  - _nalply 6y ago
    To stay in the metaphor, what if a group of people discovered how to create negative pressure? This means they know how to suck money out of a community, probably to enrich themselves.
  - raxxorrax 6y ago
    With the experience of the Euro and the vastly different countries under different legislation, I think this is far too naive. The common currency was a bad decision in my opinion. Sure, now legislation is getting "normalized" (I love the jargon), so that nobody is happy with it anymore. I don't think I would want that for anybody. It is like a marriage that doesn't really work. Complete detachment of capital that was created in one place is not a great idea. That doesn't mean other places cannot grow and it doesn't mean there is no exchange.
    - mschuster91 6y ago
      The Euro was and is not as bad IMO as many people make it to be. I'm half Croat, half German and I remember when visiting Croatia pre-Euro rollout that you had to do three currency exchanges along the trip - from Deutsche Mark to Austrian Schilling to Slovenian Tolar to Croatian Kuna. Today? It's only the Croatian Kuna which is probably going away in 2023-2025. Everywhere else I can pay with a credit card without paying any "currency conversion" fees or exchange rates far away from actual market rates. And especially you don't lose hours upon hours on useless border control any more (with the exception of the SL-HR border and the idiocy at the German border). And it's not just tourism. Euro + SEPA + free movement between countries are what fueled the growth of the European economy pre-rona. That all of this got attacked in the recent years (no matter if Italy/Greece threatening/being threatened with Euro removal or Germany's Seehofer introducing border controls again to "combat immigration" aka get rid of refugees) is saddening. The people who want to dial back European unification are going to cost Europe a lot, especially the ability to compete with the US on the global stage. Do note that this does not mean there are no problems relating to the Euro - especially the economic disparity between the powerhouses Germany/France and the (South) Eastern European countries - but these should be solved by wealth transfers and nation building, not by risking all progress of the last decades!
      - dmurray 6y ago
        Eliminating the costs of currency conversion was the most obvious change for the average European, and very welcome. But economically it was insignificant compared to the effects of establishing a common monetary policy.
  - macawfish 6y ago
    It leaks into crusty oligarch coffins
- deleted 6y ago
  [deleted]
- pjc50 6y ago
  > fueling further investment and purchases Well, yes; this is standard velocity of money stuff. It is detrimental to the economy to hoard money, and even more in a ""hard money"" situation to hoard the hard money, whether that turns out to be gold and silver or just dollars in a collapsing non-dollar country. But if you try to close the economy as a result you end up with mercantilism, and having to forgo all sorts of opportunities for cheaper, better products because you have to buy from the local entrenched elite producers instead. Plus it basically doesn't work in the oil age for most countries because they have to import oil.
- itsoktocry 6y ago
  >if you ensure that the money that circulates in it doesn't leak out of it, fueling further investment and purchases. I think it's worth actually re-examining our view of globalization and global trade with this in mind. Where do you draw the boundaries? Is money leaking outside the globe?
  - unethical_ban 6y ago
    Wow. What they mean, I presume, is that when money earned locally can only be spent locally, it encourages re-investment at the source. This is dangerous and limiting in some ways, but an interesting thought in others. The world doesn't need to be all one or the other, and just like any other currency, a powerful enough local one (NYC Bucks or whatever) would establish an exchange rate against other currencies anyway.
- hyko 6y ago
  What do you mean by the money that circulates in it doesn’t leak out of it? Do you mean having no forex markets? i.e. capital controls?
- trianglem 6y ago
  Until you need TVs, refrigerators and anything that takes a nation to build rather than things a small community is capable of achieving.

m12k 6y ago

It's amazing how well a society can function, if you ensure that the money that circulates in it doesn't leak out of it, fueling further investment and purchases. I think it's worth actually re-examining our view of globalization and global trade with this in mind.

dkarp 6y ago
I'm no economist, but wouldn't this lead to greater wealth disparity? When money leaks out, it leaks in to somewhere else. Sort of like connecting bodies of water will lower the water level of one body and raise it in another. One place will lose out and another will gain. Unless differences in local taxation/laws/amenities/other lead to wealth/poverty hotspots. With some areas vacuuming up wealth and others repelling it. Is that what this is really solving? Unable to compete on local taxation/laws/amenities/other, cities have to find another way to prevent their wealth being repelled. Sounds like just another wall though. Which can surely never last
- maneesh 6y ago
  Like entropy, wouldn’t this lead to greater disparity in the short term but uniformness in the long run?
- _nalply 6y ago
  To stay in the metaphor, what if a group of people discovered how to create negative pressure? This means they know how to suck money out of a community, probably to enrich themselves.
- raxxorrax 6y ago
  With the experience of the Euro and the vastly different countries under different legislation, I think this is far too naive. The common currency was a bad decision in my opinion. Sure, now legislation is getting "normalized" (I love the jargon), so that nobody is happy with it anymore. I don't think I would want that for anybody. It is like a marriage that doesn't really work. Complete detachment of capital that was created in one place is not a great idea. That doesn't mean other places cannot grow and it doesn't mean there is no exchange.
  - mschuster91 6y ago
    The Euro was and is not as bad IMO as many people make it to be. I'm half Croat, half German and I remember when visiting Croatia pre-Euro rollout that you had to do three currency exchanges along the trip - from Deutsche Mark to Austrian Schilling to Slovenian Tolar to Croatian Kuna. Today? It's only the Croatian Kuna which is probably going away in 2023-2025. Everywhere else I can pay with a credit card without paying any "currency conversion" fees or exchange rates far away from actual market rates. And especially you don't lose hours upon hours on useless border control any more (with the exception of the SL-HR border and the idiocy at the German border). And it's not just tourism. Euro + SEPA + free movement between countries are what fueled the growth of the European economy pre-rona. That all of this got attacked in the recent years (no matter if Italy/Greece threatening/being threatened with Euro removal or Germany's Seehofer introducing border controls again to "combat immigration" aka get rid of refugees) is saddening. The people who want to dial back European unification are going to cost Europe a lot, especially the ability to compete with the US on the global stage. Do note that this does not mean there are no problems relating to the Euro - especially the economic disparity between the powerhouses Germany/France and the (South) Eastern European countries - but these should be solved by wealth transfers and nation building, not by risking all progress of the last decades!
    - dmurray 6y ago
      Eliminating the costs of currency conversion was the most obvious change for the average European, and very welcome. But economically it was insignificant compared to the effects of establishing a common monetary policy.
- macawfish 6y ago
  It leaks into crusty oligarch coffins
deleted 6y ago
[deleted]
pjc50 6y ago
> fueling further investment and purchases Well, yes; this is standard velocity of money stuff. It is detrimental to the economy to hoard money, and even more in a ""hard money"" situation to hoard the hard money, whether that turns out to be gold and silver or just dollars in a collapsing non-dollar country. But if you try to close the economy as a result you end up with mercantilism, and having to forgo all sorts of opportunities for cheaper, better products because you have to buy from the local entrenched elite producers instead. Plus it basically doesn't work in the oil age for most countries because they have to import oil.
itsoktocry 6y ago
>if you ensure that the money that circulates in it doesn't leak out of it, fueling further investment and purchases. I think it's worth actually re-examining our view of globalization and global trade with this in mind. Where do you draw the boundaries? Is money leaking outside the globe?
- unethical_ban 6y ago
  Wow. What they mean, I presume, is that when money earned locally can only be spent locally, it encourages re-investment at the source. This is dangerous and limiting in some ways, but an interesting thought in others. The world doesn't need to be all one or the other, and just like any other currency, a powerful enough local one (NYC Bucks or whatever) would establish an exchange rate against other currencies anyway.
hyko 6y ago
What do you mean by the money that circulates in it doesn’t leak out of it? Do you mean having no forex markets? i.e. capital controls?
trianglem 6y ago
Until you need TVs, refrigerators and anything that takes a nation to build rather than things a small community is capable of achieving.