by David J. WestonProsperity, May 2000

Money is a marvellous invention, enabling people to exchange their labour and energy with others. When used with wisdom, it can enhance a community; used foolishly, it can destroy a community.

Currencies reflect exchanges at different levels of society, and depending on how the currency is designed and used, can enhance or destroy value. Some are centralised; others decentralised.

What effect do centralised and decentralised currencies have on economies?A great deal; for currencies act as feedback loops to the area they serve, monitoring where energy is needed. Centralised currencies extract value out of hinterland communities into centralised banking systems in the metropolitan cities. Allow a pound to be extracted out of your community, and that is one less pound that someone in your community could have spent in your community. It could be called the ‘divider effect’. Centralised currencies usually benefit elites in elite places. Decentralised currencies give direct feedback, generating and regenerating local economic activity. A decentralised or local currency will stay in a community creating the ‘multiplier effect’ whereby the local currency circulates and recirculates value. A local currency benefits local people.

What lessons are to be learned from that analysis in terms of the situation in Britain today? The English (rather than British) pound holds sway on these islands, with the exception of Eire, which has its own Irish pound, the ‘punt’, which floats against the pound (but not the Euro). What would happen if a community or series of communities, say within Wales, were to create a Cymru punt for tourists to buy at a discount with their English pounds? From the writings of Jane Jacobs we learn that the lower value of the regional/local currency would encourage exports, and because imports would be more expensive, would increase import replacement, leading to generation and regeneration of local industries, and of Lexports exports of locally created products and services. The Cymru punt would activate the ‘multiplier effect’ leading to a revitalised Welsh economy.

Can such a currency be created by a municipality?

Yes, any community in Wales, or even better a consortium of municipalities, could resolve to create legal tokens to sell to tourists to enable those tourists to buy punt funded, locally produced, goods and services.

Depending on the commodity, some businesses might even sell goods imported into Wales from the pound economy. The implications are significant, and exciting. Such a model could inspire more.

But the fear of those who control the centralised money system is financial insubordination and independence, and they will attempt to undermine our creative instincts. But that should not inhibit us, for the history of mankind is the history of the struggle between centralist and decentralist forces. Paradoxically the centralised state put up the research money which created the decentralised Internet by which we can disseminate decentralised ideas. If we can implement these ideas we will all gain. It will truly be a ‘win-win’ game.

CURRENCY DETERMINES SOVEREIGNTY

Throughout history, whomever has controlled currency has determined sovereignty, where ‘sovereignty’ simply means the ability of a community to make decisions at the appropriate level, in the interest of its citizens.

Where the currency that circulates within a community is an external one, there is an inevitable leakage of value and energy. Thus the pound sterling, controlled by the Bank of England, currently determines the economic fate of the countries of the UK. In Scotland, the distinctive notes issued by the Scottish private banks are tied to the pound sterling. When the Bank of England sneezes, Scotland gets a cold….

Where the currency that circulates within a community is an internal one, there is a retention of value and energy, and a constant renewal of that economy.

So, how do we create and retain local and community self-reliance? And how do we stop the haemorrhaging of wealth from our community?

It is important to first analyse the way the leakage has been, and is, happening, and thereby devise means of stopping it. Understanding the role and flow of money is key, as ‘money’ is the energy symbol which represents the three factors of production of labour, capital and natural resources and what happens to them.

Essential to regaining control of the local and regional economy is control of both its cheque book and its currency. In Worgl, Austria, during the height of the last acknowledged Depression in the late 1920s, early 1930s, the town solved its unemployment within six months, and became a prosperous community within one year. It did so by creating its own community currency and spending it into existence.

With the Worgl schillings, workers were able to buy food, local farmers able to sell their crops, materials were bought and all were able to pay their local rates and taxes in Worgl schillings. The experiment caught the imagination of 200 Austrian mayors who wished to emulate it, and regenerate their own local economies. But the experiment also caught the attention of the Austrian National Bank which felt threatened by this example of financial insubordination and independence, and through the Austrian Supreme Court had the enterprise closed down.

This should not discourage us from creating a similar enterprise. Jane Jacobs, in herCities and the Wealth of Nations (especially Chapter 11) highlights the effectiveness and efficiency of city currencies.

A ‘WIN-WIN’ PROPOSAL

Is there a way that everyone can benefit: both local producers and inhabitants, and those from outside a community? Yes! Here is a proposal to stop the escape of locally created energy value, of which money is a key expression, and to enable the revival of local and regional economies by way of Lexports through the creation of a local/regional enterprise currency.

We propose that since tourism is an export, it should be used as the initial basis of creating the local/regional currency which will eventually become self-reliant. In order to have a distinctive unit of account, and to be able to distinguish between the English ‘pound’ and the local/regional currency, we propose to use ‘punt’, the Welsh word for ‘pound’, preceded by the name of the region concerned ie. Cymru/Welsh Tourist Punt.

Exporting via tourism, especially if it is ecologically appropriate, would seem to be a sensible activity. It has the advantage that the ‘products’ the scenery, the local culture, history, friendly people etc, and the services are all renewable and sustainable.

So, how to encourage ecological tourism using a local/regional tourist currency?

THE POLICY DECISION

First, a local municipality needs to make the policy decision to create a locally validated, and locally valid, currency. This is not difficult, for creating symbols of value, other than the pound, is common practice air miles, supermarket tokens, green stamps, petrol stamps, barter cards, time pounds, local authority repair chits, and others, like the Swiss Wir. Many of these are created in addition to pounds, whereas the regional and local ‘Cymru tourist punts’ (CTPs) because they are exchanged for pounds, would be ‘instead of’, and therefore more valid and legitimate than those above. The exception is the local authority repair chit whereby some council tenants receive two kinds of chits. One for the materials; the other for the labour by which the tenants can either do the work themselves, or give to a neighbour to do. These chits represent a tradable local legal currency and highlight that councils can decide politically to create tradeable chits even now.

Although this decision can be taken by a municipality, it may be better taken by a consortium of municipalities. If it can be taken in conjunction with, in this case, the Welsh Assembly, so much the better, but its not essential. While we envisage denominations of 1, 2, 5, 10, and perhaps 20 punts, we might also consider local/regional ‘smart cards’ or even ‘tally sticks’ for transactions larger than 20 punts.

CULTURAL CURRENCY

Secondly, because currency can reflect the culture, particularly for the tourists, consideration should be given to creating truly beautiful local/regional notes as well as coins all designed by local crafts people. Each interested municipality could hold a competition for a local currency design which reflects that locality. Also, a design is needed which reflects the larger region eg. Cymru/Wales. For example, the local side of the currency could have the picture of a famous local person, or local scenery. The other side could have a map of Cymru/Wales, a dragon, a flag, and any other symbols reflecting the country’s attributes including its language. This may encourage tourists to take them away as souvenirs an export.

DISTRIBUTION METHOD

Thirdly, it is proposed that the Cymru tourist punt be sold to tourists at a discount determined by the local council and/or the Welsh Assembly; perhaps an experimental 5% to begin. A tourist would receive 1.05 punts for one pound sterling. The figure could be higher but should be determined only by elected, and therefore accountable, officials, and not by ‘the market’ which is unaccountable.

It is recommended that the currency be sold through public outlets such as Tourist Information Centres, local Post Offices and local council offices. Consideration should also be given to the establishment of other public outlets, like the Treasury Branch outlets set up in the 1930s in Alberta, Canada, which exist efficiently and effectively to this day. Further and this is also essential the Cymru punt should never be allowed to be speculated on, in any money market. If it did, it would be sucked dry of its value, and all the effort of many years could evaporate within days.

ACTUAL TRADING

Fourthly, local businesses would be urged to accept these ‘Cymru tourist punts’. Those businesses that agree to sell goods imported and paid for with pounds sterling will effectively be giving tourists a 5% (or whatever is the rate) discount. But it also means that they will get that tourist business. The tourists would be able to buy goods in shops and businesses for a literal 5% discount, by simply using their Cymru tourist punts. Businesses would indicate for which items and services they would accept CTPs.

At the end of a day any traders, should they wish, could trade in their punts for pounds at a discount of a couple of per cents higher than the discounted figure, as a handling fee. But this may be unnecessary, as shown in the following….

BEYOND TOURISM

Fifthly and this is key as this currency begins to circulate, it will increase the possibility of businesses being able to pay their staff partial wages in Cymru punts. That may at first sound like a cut of 5% in wages. However, as the momentum gathers and the circulation increases then local producers like farmers, horticulturalists, bakers, cheese makers, beer and cider makers, apiarists, wood craftsmen, potters, glass blowers, and other local manufacturers will likely, as in Worgl, begin to trade between each other in CTPs. Therefore, workers will be able to buy those local and regional products at the same price as before, because they are using punts. Within Wales, therefore, it would be a level playing field. Further, locals may decide to exchange sterling pounds for Welsh punts and be able to gain from the discount. Businesses which do accept the ‘Cymru tourist punts’ are giving a 5% discount to the tourists, but that is for those products which are ‘imported’ with sterling pounds; but for goods and services produced within Wales in punts, traders will not be giving any discount at all. The tourists will still be getting a good deal. Everybody wins!

So, commodities produced within the region such as beer, bread, meat, could be traded in the local currency for local consumption. It also means that these commodities are now beginning to be produced at 5% cheaper than using the sterling pound. That means that Lexports of these local products will increase, bringing more prosperity to Wales.

IN CONCLUSION

Currency determines sovereignty, where ‘sovereignty’ simply means the right of citizens to make their own decisions about the rules which daily affect us all.

This is why, if the Canadian Parliament as they are being urged to do by the American government accepts the US dollar as its currency and the privately-owned Federal Reserve Bank as its central bank, Canadians will immediately lose their sovereignty. Likewise, if the British parliament accepts the Euro as its currency, Britons will lose their sovereignty to a non-democratic, non-accountable central bank.

Likewise, if the countries in Britain continue to accept the English pound sterling as their currency, they will be denied the ability to make decisions at the appropriate level. A community losing its sovereignty is like signing all its blank cheques and then giving them away! As individuals we wouldn’t do that, nor should we as a community.

Let cities, regions and countries create their own currency which reflect their own culture and their own economic destiny, based on the principle that decisions made and actions taken should be at the most local level possible, with decisions made and actions taken at more centralised levels only as appropriate.

Let Wales invite tourists to exchange their sterling for the Cymru tourist punt at a discount which will be mutually beneficial. They will be able to buy goods within Wales cheaper than using sterling. Through the ownership and control of their money the Welsh, in turn, will be encouraged to make and buy local products. This will boost their economy, and their exports, and provide local employment for local workers. This really is a ‘win-win’ situation.

Copyright © David J. Weston, May 2000

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