7 ms·

Miracle of Wörgl

114 points by rzk 3y ago

skybrian 3y ago
I found a more detailed explanation [1]: > 32,000 schillings were printed (in denominations of 5 and 10 sch.), but only 12,000 schillings were issued by the parish by paying its workers. > The local currency was redeemable, on demand, for official currency, but there was a 2% fee on such redemption. > For each schilling of local currency issued, one schilling of official currency was deposited (at interest) in a bank account to cover demands for redemption. > The depreciation (demurrage) rate was 1% per month. This was called the ‘Relieftax.’ > In order for a note to maintain its full face value, it was necessary to affix a stamp at the end of each month. these stamps could be purchased at the parish office. > The notes expired at the end of the year, but could be exchange, free of charge, for new ones, so long as all the necessary stamps had been affixed. … > Another major ‘gain,’ which von Muralt mentions in passing, is the windfall profit associated with the substantial amount of local currency which was never presented for redemption. He says, ‘However, of the 12,000 schillings worth of relief money issued, only about two-thirds is in circulation. The remainder has disappeared, having been annexed by souvenir hunters and collectors. That such substantial amounts of depreciating money should vanish in this way, contradicts the theoretical intention which aims at accelerating the circulation and not at hoarding. For the parish, however, the disappearance of notes is not unwelcome, since this represents for it a net gain.’ If the stated estimate is correct, this gain would amount to about 4,000 schillings. So this is essentially about paying workers with a bond instead of with cash. It’s not something the workers would normally want to accept, but it’s better than nothing. (Presumably a worker who wanted to save would exchange their money for official currency?) Although the circumstances are different and worse, it seems similar to how some local governments in Argentina were forced to pay their workers in script because they didn’t have the cash. [2] [1] https://reinventingmoney.com/greco-comment_on_worgl/ https://reinventingmoney.com/greco-comment_on_worgl/ [2] https://blog.sbensu.com/posts/pseudo-currencies/ https://blog.sbensu.com/posts/pseudo-currencies/
seltzered_ 3y ago
See also Will Ruddick (Grassroots Economics) on 'demurrage' - Shillings from Heaven / Wörgl's Miracle ( https://grassrootseconomics.org/worgl https://grassrootseconomics.org/worgl ) - (film youtube link: https://www.youtube.com/watch?v=6Uz4PRWr3ns https://www.youtube.com/watch?v=6Uz4PRWr3ns ) The movie references the book Silvio Gesell - The Natural Economic Order - https://en.wikipedia.org/wiki/The_Natural_Economic_Order https://en.wikipedia.org/wiki/The_Natural_Economic_Order
- seu 3y ago
  And a bit more on Gesell, for those who don't know who he is https://www.npr.org/sections/money/2019/08/27/754323652/the-strange-unduly-neglected-prophet https://www.npr.org/sections/money/2019/08/27/754323652/the-...
from-nibly 3y ago
This is the most complicated way to do the same thing that printing more money does.
- atoav 3y ago
  Is it tho? If it is locally valid only it has an entirely different effect as it can only be spent locally.
rgmerk 3y ago
Can anybody explain to me like I'm five why this isn't just Keynesianism working as expected, as it did globally in 2008 (where the world didn't do enough of it in retrospect) and 2020-21 (where the world did a bit too much in retrospect)?
- JackFr 3y ago
  It is exactly Keynesianism. It is Krugman's baby sitting co-op. https://slate.com/business/1998/08/baby-sitting-the-economy.html https://slate.com/business/1998/08/baby-sitting-the-economy....
- imtringued 3y ago
  It is technically proto Keynesianism since Keynes himself said that he took some inspirations from Silvio Gesell. However, it is also different in the sense that it remains very close to classical economics in every aspect other than money.
t312227 3y ago
hello, afaik - i'm a software-developer, not an economist - it was an implementation of the following: the english term * https://en.wikipedia.org/wiki/Demurrage_(currency) https://en.wikipedia.org/wiki/Demurrage_(currency) in german "schwundgeld" * https://de.wikipedia.org/wiki/Umlaufgesichertes_Geld https://de.wikipedia.org/wiki/Umlaufgesichertes_Geld ps. the submission caught my eye, because i live in the region: * https://www.openstreetmap.org/relation/1016862 https://www.openstreetmap.org/relation/1016862 cheersv
yamrzou 3y ago
Related: What if money expired? - https://news.ycombinator.com/item?id=38294275 https://news.ycombinator.com/item?id=38294275 - Nov 2023 (185 comments)
_factor 3y ago
What is money really? If I build you a house for $10, then I pay my friend those $10 for a house, then he goes back to the original friend and paid them to build a house, we end up with $10 passed around and 3x magic value added to the economy (houses). If I go to mars and become the first farmer, then pay 2 barrels of food for a house, then pay 1 barrel for a cobbler to make me shows, I’ve set the market price that a house is now worth 2 pairs of shoes. I start a stock. I offer 1 million shares, I sell 50 shares to my friend for $10 each. The market cap is now 10 million. What even is this fuzzy value thing we call currency? Seems like the only thing ascribing value is some powerful guy with a military behind them saying it has it.
- hgomersall 3y ago
  Nothing fuzzy: money is debt. Ultimately modern money originates from a ledger entry which denotes an asset and a liability (a deposit and a loan; which is the asset and which is the liability depends on your perspective). State issued currency is exactly the same. The liability from the perspective of the state is that central bank issued money can be used to satisfy a tax liability.
  - yamrzou 3y ago
    Fuzzy in the sense that the value of things is not well defined, it is just arbitrary, based on supply and demand.
    - smallnamespace 3y ago
      The relative value of things change even in the absence of money (e.g. in a barter economy, or for one person stuck alone on an island). Therefore the fuzziness cannot be attributed all to money.
- deleted 3y ago
  [deleted]
- JackFr 3y ago
  Money is anything which: is a store of value; is a medium of exchange; is a unit of account; is a standard for future payment. It needs to be durable, transportable, divisible and difficult to counterfeit. Famous example - cigarettes in a POW camp: https://courses.cit.cornell.edu/econ4260/out/radford_pow.pdf https://courses.cit.cornell.edu/econ4260/out/radford_pow.pdf
carlosjobim 3y ago
The greatest evil that has ever been conceived is debt currency. Nothing has damaged humanity more, nothing has been the reason for more wars, suffering and serfdom. Human productivity would easily double or triple without the need for any new technological invention, if we were freed from the shackles of the debt based currency system. But for that to happen, a radical change in how we as humans perceive the world and our own lives is needed. As long as the money masters have a tight grip on the souls of the majority, they can strike down any threats with ease.
- greenie_beans 3y ago
  this is a big opinion without convincing me, is there anything i can read to understand your argument?
mgaunard 3y ago
I fail to understand how one could invest in anything without the concept of interest. Without the notion of investment, then you're limited to short-term superficial things that you can do or build.
- sigilis 3y ago
  In the context of the system where the currency was used, financial investments were not safe. It was the Great Depression, the inflationary nature of currency at the time made the only long term non superficial things structures, land, and goods. In the end, the things people do and build are what money is for. It’s a medium of exchange and a store of value. If it fails at these things, the making grain to feed people or housing them still has intrinsic value. You just need a working medium of exchange to avoid having to use barter for everything. If people trusted the town’s scrip more than the national currency, then they would use that. Investment in such a system would be in real objects and the means to produce them. Assuming people still cooperate and will accept your weird scheduled devaluation currency, then industrial society could continue to function and may even thrive, given people are incentivized to spend money which is the definition of economic activity. Also, other financial instruments might not be affected. Shares of stock, for example, would be worth what people would pay for them. It’s just big piles of literal dollars that you should get rid of expeditiously.
- lo_zamoyski 3y ago
  If you’re talking about usury, then you have confused investment with lending. Lending money is not investment. When a bank gives you a loan, they aren’t investing in your house. They’re supposed to be helping you buy a house. Interest on a loan is theft as no value is being provided by the bank in return for that interest (as opposed to service fees for the labor of issuing a loan, for example). Some call capitalism state-sponsored usury. I’m not sure I’d go that far. But money is sterile, “barren metal”, as “The Merchant of Venice” calls it. It cannot multiply. Only labor multiplies value. Wrt the article, while the author does seem naive and no systematic thinking is demonstrated, you could store away valuable commodities, like gold. But it won’t breed for free. For more gold, you must work, or steal.
wesleyd 3y ago
The US did something similar during Covid - many people not working, government printed money and handed it out, saving it earned no interest, and the money depreciated ~10% a year (“inflation”). It worked surprisingly well. And, like Wörgl, it was killed by Serious People.
- freen 3y ago
  Inflation was largely driven by companies utilizing price increases created by short term supply shocks, and making them permanent. Pepsi controls 90% of the potato chip market. 6 companies provide ~80% of all products on the interior aisle shelves of your grocery store. There is no universe where the quantity of money in pandemic stimulus even remotely approximates the total net price increase (inflation). Rather, the corporate net profit increase accounts for the vast majority of all inflationary pressures.
lo_zamoyski 3y ago
“Now, money as we know it, was invented to accumulate in value.” It was invented as a medium of exchange of value. “For those of a religious bent, that is reflected in usury – the practice of lending money at unreasonably high rates of interest, so the money you give out comes back as more.” Usury is any interest on a loan. “That’s what caused Jesus to lose his cool at the Temple on the Mount.” https://catholicexchange.com/what-did-jesus-drive-out-the-moneychangers/ https://catholicexchange.com/what-did-jesus-drive-out-the-mo...
wunderlab 3y ago
The same impact on the velocity of circulation can (and is) accomplished by steady inflation - hence the targeting inflation rates. Demurage (Worgl case) works like inflation… or am I missing something.
zokier 3y ago
The experiment ran for only 13 months. > Wörgl was the site of the "Miracle of Wörgl", beginning on 31 July, 1932 during the Great Depression. > the "experiment" was ended by Austria's central bank Oesterreichische Nationalbank on 1 September 1933 So all the fancy demurrage stuff could not have had much effect at all. Sounds like they could have issued pretty much any kind of currency with the same end result. With that time period being economically tumultuous in general, drawing any sort of conclusions is pretty much impossible. Maybe the biggest learning here is that rallying local community around some stunt like this can provide genuine, if temporary, boost to the local economy; the exact details of the thing matter less if you just get community to buy into it.
- DFHippie 3y ago
  It seems to me the fancy demurrage stuff would have had the intended effect provided they didn't know it was going to end in 13 months.
kleiba 3y ago
I don't get the part about the expiration date. Say, you got your free money from the town with an expiration date Dec 31. Awesome, you better spend it quickly, because it's already Dec 30 (say). But then, who is going to accept your money? If you're the local baker, why would you take my money for the bread you made, knowing perfectly well that you're probably never going to get the chance to spend it? Doing business on Dec 30 or even Dec 31 is the extreme case, but even before that it's an issue: the closer you get to the expiration date of the money, the higher the risk you're taking that you might not be able to spend it in time.
- EGreg 3y ago
  I think demurrage works when money loses value gradually, everyone who accepts it should spend it before it loses value and it increases money velocity. It is also why people don’t understand why mild inflation can be good
  - incrudible 3y ago
    Neither inflation nor demurrage can stop people from saving. They can simply exchange their constantly shrinking money to some good of lasting value. If the problem is lack of liquidity, helicopter money will do, everything else is a needless complication.
    - imtringued 3y ago
      "Good of lasting value" doesn't exist in reality. If you use gold then it doesn't change the fact that you are using it as a token representation for human labor. It's just a fancy way of representing a balance sheet. If gold was a store of value, then it would allow you to travel backwards in time, since the gold used to buy and sell a car today, could be used to buy and sell a car during the time of the Roman empire. In fact the entire concept of time simply wouldn't exist. All "store of value"s therefore are either the result of fair negotiations in which case their supply would be bounded or they are the result of artificial interventions which will collapse over the long term. After all, feudalism didn't last forever, so using land as a store of value doesn't work either.
EGreg 3y ago
We are actually building it for everyone: https://community.intercoin.app/t/local-community-currencies/1067 https://community.intercoin.app/t/local-community-currencies...
rvba 3y ago
So what happens if you arethe poor guy who keeps the banknote at the end of the year? You lose 10%? So stop selling in December? Damn in November even? Or increase prices? The miracle was that this money did not have hyperinflation.
- imtringued 3y ago
  You can bring the money to the bank and lend it out and not pay the fee? Since money is now available for borrowing in a closed circuit you don't have to keep issuing an endless amount of money to keep the Ponzi scheme going.
EdSharkey 3y ago
Sounds like a stimulus sugar rush to get them out of a funk. When national currencies collapse, local communities that issue scrip to facilitate ongoing commerce fare well. https://en.wikipedia.org/wiki/Scrip https://en.wikipedia.org/wiki/Scrip
- imtringued 3y ago
  It's not a stimulus or sugar rush at all. The effectiveness depends on how much the government is artificially constraining liquidity. If the government is massively intervening with austerity policies, then the effect will be large. You should think of it more using the transaction cost based approach. Government money is artificially scarce, therefore it has high transaction costs, therefore it hinders trade instead of facilitating it. The purpose of the scrip is to issue a money that isn't artificially scarce so it's transaction costs are low. In this way you don't get a stimulus, rather you are getting rid of dead weight loss. A guy pulling a rickshaw is naturally going to fall behind someone who can walk without baggage. The point isn't to make the runner faster or stimulate his performance via some sort of doping.
  - EdSharkey 3y ago
    > Government money is artificially scarce Wot? Not sure how to respond to something so silly. I hope you mistyped. From whence does one derive their "money supply"? Scrip is a placeholder for value like any other printed currency. It works well in place of debased government fiat, at least in times of trouble, because the web of trust at the local level is strong enough to back individual transactions.

114 points by rzk 3y ago

I found a more detailed explanation [1]: > 32,000 schillings were printed (in denominations of 5 and 10 sch.), but only 12,000 schillings were issued by the parish by paying its workers. > The local currency was redeemable, on demand, for official currency, but there was a 2% fee on such redemption. > For each schilling of local currency issued, one schilling of official currency was deposited (at interest) in a bank account to cover demands for redemption. > The depreciation (demurrage) rate was 1% per month. This was called the ‘Relieftax.’ > In order for a note to maintain its full face value, it was necessary to affix a stamp at the end of each month. these stamps could be purchased at the parish office. > The notes expired at the end of the year, but could be exchange, free of charge, for new ones, so long as all the necessary stamps had been affixed. … > Another major ‘gain,’ which von Muralt mentions in passing, is the windfall profit associated with the substantial amount of local currency which was never presented for redemption. He says, ‘However, of the 12,000 schillings worth of relief money issued, only about two-thirds is in circulation. The remainder has disappeared, having been annexed by souvenir hunters and collectors. That such substantial amounts of depreciating money should vanish in this way, contradicts the theoretical intention which aims at accelerating the circulation and not at hoarding. For the parish, however, the disappearance of notes is not unwelcome, since this represents for it a net gain.’ If the stated estimate is correct, this gain would amount to about 4,000 schillings. So this is essentially about paying workers with a bond instead of with cash. It’s not something the workers would normally want to accept, but it’s better than nothing. (Presumably a worker who wanted to save would exchange their money for official currency?) Although the circumstances are different and worse, it seems similar to how some local governments in Argentina were forced to pay their workers in script because they didn’t have the cash. [2] [1] https://reinventingmoney.com/greco-comment_on_worgl/ https://reinventingmoney.com/greco-comment_on_worgl/ [2] https://blog.sbensu.com/posts/pseudo-currencies/ https://blog.sbensu.com/posts/pseudo-currencies/

seltzered_ 3y ago

See also Will Ruddick (Grassroots Economics) on 'demurrage' - Shillings from Heaven / Wörgl's Miracle ( https://grassrootseconomics.org/worgl https://grassrootseconomics.org/worgl ) - (film youtube link: https://www.youtube.com/watch?v=6Uz4PRWr3ns https://www.youtube.com/watch?v=6Uz4PRWr3ns ) The movie references the book Silvio Gesell - The Natural Economic Order - https://en.wikipedia.org/wiki/The_Natural_Economic_Order https://en.wikipedia.org/wiki/The_Natural_Economic_Order

seu 3y ago
And a bit more on Gesell, for those who don't know who he is https://www.npr.org/sections/money/2019/08/27/754323652/the-strange-unduly-neglected-prophet https://www.npr.org/sections/money/2019/08/27/754323652/the-...

from-nibly 3y ago

This is the most complicated way to do the same thing that printing more money does.

atoav 3y ago
Is it tho? If it is locally valid only it has an entirely different effect as it can only be spent locally.

rgmerk 3y ago

Can anybody explain to me like I'm five why this isn't just Keynesianism working as expected, as it did globally in 2008 (where the world didn't do enough of it in retrospect) and 2020-21 (where the world did a bit too much in retrospect)?

JackFr 3y ago
It is exactly Keynesianism. It is Krugman's baby sitting co-op. https://slate.com/business/1998/08/baby-sitting-the-economy.html https://slate.com/business/1998/08/baby-sitting-the-economy....
imtringued 3y ago
It is technically proto Keynesianism since Keynes himself said that he took some inspirations from Silvio Gesell. However, it is also different in the sense that it remains very close to classical economics in every aspect other than money.

t312227 3y ago

hello, afaik - i'm a software-developer, not an economist - it was an implementation of the following: the english term * https://en.wikipedia.org/wiki/Demurrage_(currency) https://en.wikipedia.org/wiki/Demurrage_(currency) in german "schwundgeld" * https://de.wikipedia.org/wiki/Umlaufgesichertes_Geld https://de.wikipedia.org/wiki/Umlaufgesichertes_Geld ps. the submission caught my eye, because i live in the region: * https://www.openstreetmap.org/relation/1016862 https://www.openstreetmap.org/relation/1016862 cheersv

yamrzou 3y ago

Related: What if money expired? - https://news.ycombinator.com/item?id=38294275 https://news.ycombinator.com/item?id=38294275 - Nov 2023 (185 comments)

_factor 3y ago

What is money really? If I build you a house for $10, then I pay my friend those $10 for a house, then he goes back to the original friend and paid them to build a house, we end up with $10 passed around and 3x magic value added to the economy (houses). If I go to mars and become the first farmer, then pay 2 barrels of food for a house, then pay 1 barrel for a cobbler to make me shows, I’ve set the market price that a house is now worth 2 pairs of shoes. I start a stock. I offer 1 million shares, I sell 50 shares to my friend for $10 each. The market cap is now 10 million. What even is this fuzzy value thing we call currency? Seems like the only thing ascribing value is some powerful guy with a military behind them saying it has it.

hgomersall 3y ago
Nothing fuzzy: money is debt. Ultimately modern money originates from a ledger entry which denotes an asset and a liability (a deposit and a loan; which is the asset and which is the liability depends on your perspective). State issued currency is exactly the same. The liability from the perspective of the state is that central bank issued money can be used to satisfy a tax liability.
- yamrzou 3y ago
  Fuzzy in the sense that the value of things is not well defined, it is just arbitrary, based on supply and demand.
  - smallnamespace 3y ago
    The relative value of things change even in the absence of money (e.g. in a barter economy, or for one person stuck alone on an island). Therefore the fuzziness cannot be attributed all to money.
deleted 3y ago
[deleted]
JackFr 3y ago
Money is anything which: is a store of value; is a medium of exchange; is a unit of account; is a standard for future payment. It needs to be durable, transportable, divisible and difficult to counterfeit. Famous example - cigarettes in a POW camp: https://courses.cit.cornell.edu/econ4260/out/radford_pow.pdf https://courses.cit.cornell.edu/econ4260/out/radford_pow.pdf

carlosjobim 3y ago

The greatest evil that has ever been conceived is debt currency. Nothing has damaged humanity more, nothing has been the reason for more wars, suffering and serfdom. Human productivity would easily double or triple without the need for any new technological invention, if we were freed from the shackles of the debt based currency system. But for that to happen, a radical change in how we as humans perceive the world and our own lives is needed. As long as the money masters have a tight grip on the souls of the majority, they can strike down any threats with ease.

greenie_beans 3y ago
this is a big opinion without convincing me, is there anything i can read to understand your argument?

mgaunard 3y ago

I fail to understand how one could invest in anything without the concept of interest. Without the notion of investment, then you're limited to short-term superficial things that you can do or build.

sigilis 3y ago
In the context of the system where the currency was used, financial investments were not safe. It was the Great Depression, the inflationary nature of currency at the time made the only long term non superficial things structures, land, and goods. In the end, the things people do and build are what money is for. It’s a medium of exchange and a store of value. If it fails at these things, the making grain to feed people or housing them still has intrinsic value. You just need a working medium of exchange to avoid having to use barter for everything. If people trusted the town’s scrip more than the national currency, then they would use that. Investment in such a system would be in real objects and the means to produce them. Assuming people still cooperate and will accept your weird scheduled devaluation currency, then industrial society could continue to function and may even thrive, given people are incentivized to spend money which is the definition of economic activity. Also, other financial instruments might not be affected. Shares of stock, for example, would be worth what people would pay for them. It’s just big piles of literal dollars that you should get rid of expeditiously.
lo_zamoyski 3y ago
If you’re talking about usury, then you have confused investment with lending. Lending money is not investment. When a bank gives you a loan, they aren’t investing in your house. They’re supposed to be helping you buy a house. Interest on a loan is theft as no value is being provided by the bank in return for that interest (as opposed to service fees for the labor of issuing a loan, for example). Some call capitalism state-sponsored usury. I’m not sure I’d go that far. But money is sterile, “barren metal”, as “The Merchant of Venice” calls it. It cannot multiply. Only labor multiplies value. Wrt the article, while the author does seem naive and no systematic thinking is demonstrated, you could store away valuable commodities, like gold. But it won’t breed for free. For more gold, you must work, or steal.

wesleyd 3y ago

The US did something similar during Covid - many people not working, government printed money and handed it out, saving it earned no interest, and the money depreciated ~10% a year (“inflation”). It worked surprisingly well. And, like Wörgl, it was killed by Serious People.

freen 3y ago
Inflation was largely driven by companies utilizing price increases created by short term supply shocks, and making them permanent. Pepsi controls 90% of the potato chip market. 6 companies provide ~80% of all products on the interior aisle shelves of your grocery store. There is no universe where the quantity of money in pandemic stimulus even remotely approximates the total net price increase (inflation). Rather, the corporate net profit increase accounts for the vast majority of all inflationary pressures.

lo_zamoyski 3y ago

“Now, money as we know it, was invented to accumulate in value.” It was invented as a medium of exchange of value. “For those of a religious bent, that is reflected in usury – the practice of lending money at unreasonably high rates of interest, so the money you give out comes back as more.” Usury is any interest on a loan. “That’s what caused Jesus to lose his cool at the Temple on the Mount.” https://catholicexchange.com/what-did-jesus-drive-out-the-moneychangers/ https://catholicexchange.com/what-did-jesus-drive-out-the-mo...

wunderlab 3y ago

The same impact on the velocity of circulation can (and is) accomplished by steady inflation - hence the targeting inflation rates. Demurage (Worgl case) works like inflation… or am I missing something.

zokier 3y ago

The experiment ran for only 13 months. > Wörgl was the site of the "Miracle of Wörgl", beginning on 31 July, 1932 during the Great Depression. > the "experiment" was ended by Austria's central bank Oesterreichische Nationalbank on 1 September 1933 So all the fancy demurrage stuff could not have had much effect at all. Sounds like they could have issued pretty much any kind of currency with the same end result. With that time period being economically tumultuous in general, drawing any sort of conclusions is pretty much impossible. Maybe the biggest learning here is that rallying local community around some stunt like this can provide genuine, if temporary, boost to the local economy; the exact details of the thing matter less if you just get community to buy into it.

DFHippie 3y ago
It seems to me the fancy demurrage stuff would have had the intended effect provided they didn't know it was going to end in 13 months.

kleiba 3y ago

I don't get the part about the expiration date. Say, you got your free money from the town with an expiration date Dec 31. Awesome, you better spend it quickly, because it's already Dec 30 (say). But then, who is going to accept your money? If you're the local baker, why would you take my money for the bread you made, knowing perfectly well that you're probably never going to get the chance to spend it? Doing business on Dec 30 or even Dec 31 is the extreme case, but even before that it's an issue: the closer you get to the expiration date of the money, the higher the risk you're taking that you might not be able to spend it in time.

EGreg 3y ago
I think demurrage works when money loses value gradually, everyone who accepts it should spend it before it loses value and it increases money velocity. It is also why people don’t understand why mild inflation can be good
- incrudible 3y ago
  Neither inflation nor demurrage can stop people from saving. They can simply exchange their constantly shrinking money to some good of lasting value. If the problem is lack of liquidity, helicopter money will do, everything else is a needless complication.
  - imtringued 3y ago
    "Good of lasting value" doesn't exist in reality. If you use gold then it doesn't change the fact that you are using it as a token representation for human labor. It's just a fancy way of representing a balance sheet. If gold was a store of value, then it would allow you to travel backwards in time, since the gold used to buy and sell a car today, could be used to buy and sell a car during the time of the Roman empire. In fact the entire concept of time simply wouldn't exist. All "store of value"s therefore are either the result of fair negotiations in which case their supply would be bounded or they are the result of artificial interventions which will collapse over the long term. After all, feudalism didn't last forever, so using land as a store of value doesn't work either.

EGreg 3y ago

We are actually building it for everyone: https://community.intercoin.app/t/local-community-currencies/1067 https://community.intercoin.app/t/local-community-currencies...

rvba 3y ago

So what happens if you arethe poor guy who keeps the banknote at the end of the year? You lose 10%? So stop selling in December? Damn in November even? Or increase prices? The miracle was that this money did not have hyperinflation.

imtringued 3y ago
You can bring the money to the bank and lend it out and not pay the fee? Since money is now available for borrowing in a closed circuit you don't have to keep issuing an endless amount of money to keep the Ponzi scheme going.

EdSharkey 3y ago

Sounds like a stimulus sugar rush to get them out of a funk. When national currencies collapse, local communities that issue scrip to facilitate ongoing commerce fare well. https://en.wikipedia.org/wiki/Scrip https://en.wikipedia.org/wiki/Scrip

imtringued 3y ago
It's not a stimulus or sugar rush at all. The effectiveness depends on how much the government is artificially constraining liquidity. If the government is massively intervening with austerity policies, then the effect will be large. You should think of it more using the transaction cost based approach. Government money is artificially scarce, therefore it has high transaction costs, therefore it hinders trade instead of facilitating it. The purpose of the scrip is to issue a money that isn't artificially scarce so it's transaction costs are low. In this way you don't get a stimulus, rather you are getting rid of dead weight loss. A guy pulling a rickshaw is naturally going to fall behind someone who can walk without baggage. The point isn't to make the runner faster or stimulate his performance via some sort of doping.
- EdSharkey 3y ago
  > Government money is artificially scarce Wot? Not sure how to respond to something so silly. I hope you mistyped. From whence does one derive their "money supply"? Scrip is a placeholder for value like any other printed currency. It works well in place of debased government fiat, at least in times of trouble, because the web of trust at the local level is strong enough to back individual transactions.