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Lietaer's book contains some economic nonsense, but for the most part it's a very compelling argument. The examples drawn from history are especially powerful.

Lietaer's book contains some economic nonsense, but for the most part it's a very compelling argument. The examples drawn from history are especially powerful. But perhaps the best argument against the usefulness of alternative currencies is that they exist, but no one uses them. There are some modest successes, such as Ithaca Hours (http://www.ithacahours.org/ http://www.ithacahours.org/) and there are probably some LETS systems that work, but that's about it. In an extreme liquidity crisis, such as the Great Depression was, they were great success, but I doubt we'll ever see that kind of crisis again. We have far more tools for preventing extreme liquidity droughts now than we did then.

cchooper 18y ago
Incidentally, Lietaer's website is http://www.transaction.net/ http://www.transaction.net/
dantheman 18y ago
I'm pretty sure that alternative currencies are illegal in the united states -- wasn't their a big fiasco with the FBI raiding the people making liberty dollars? I think this makes it illegal: http://www.law.cornell.edu/uscode/18/514.html http://www.law.cornell.edu/uscode/18/514.html Also, there may be tax issues. If you have an alternative currency and the us dollar is inflated do you have to pay capital gains taxes on the growth in value of the alternative currency? There are also probably issues with money laundering -- in other words I don't think we can say that they exist, without a caveat about the legal limbo in which they exist.
- cchooper 18y ago
  They're definitely not illegal, although certain forms are illegal. That law only covers attempts to create currencies that could be mistaken for US dollars. Other systems are illegal because they amount to an unregulated form of banking, or because they are used for laundering. For tax: it depends on the currency in question. Barter systems that use a currency to settle barter accounts are taxed as normal income. Systems such as Time Dollars are considered tax free because they are used for non-commercial activities (http://www.timebanks.org/faqs.htm#taxexempt http://www.timebanks.org/faqs.htm#taxexempt). In China, there exists at least one system that is considered tax-exempt, except when the currency is exchanged for real currency, in which case it is subject to tax.

cchooper 18y ago

Incidentally, Lietaer's website is http://www.transaction.net/ http://www.transaction.net/

dantheman 18y ago

I'm pretty sure that alternative currencies are illegal in the united states -- wasn't their a big fiasco with the FBI raiding the people making liberty dollars? I think this makes it illegal: http://www.law.cornell.edu/uscode/18/514.html http://www.law.cornell.edu/uscode/18/514.html Also, there may be tax issues. If you have an alternative currency and the us dollar is inflated do you have to pay capital gains taxes on the growth in value of the alternative currency? There are also probably issues with money laundering -- in other words I don't think we can say that they exist, without a caveat about the legal limbo in which they exist.

cchooper 18y ago
They're definitely not illegal, although certain forms are illegal. That law only covers attempts to create currencies that could be mistaken for US dollars. Other systems are illegal because they amount to an unregulated form of banking, or because they are used for laundering. For tax: it depends on the currency in question. Barter systems that use a currency to settle barter accounts are taxed as normal income. Systems such as Time Dollars are considered tax free because they are used for non-commercial activities (http://www.timebanks.org/faqs.htm#taxexempt http://www.timebanks.org/faqs.htm#taxexempt). In China, there exists at least one system that is considered tax-exempt, except when the currency is exchanged for real currency, in which case it is subject to tax.