Introduction Part 3: Open Money - or how I learned to stop worrying and understand the Tom

After returning from a conference in California, a friend of mine Tom, introduced me to the idea of community economics and alternative currencies. He was quite excited about these ideas and he kept going on about creating currency and sandwiches and Powell's books. I was apprehensive and unenthusiastic to say the least. While he was explaining a lot this was all I heard:

Step one: Create currency
Step two: Tutor
Step three: Claim sandwich

We moved on to other topics and I went about working on other things. The next week I was cruising twitter and saw that Tom was going to be a guest on a streaming podcast with the guy who introduced him to these sort of Open Money concepts. I don't know what was said that made it happen (even re-listening to it now) but it all made sense like an explosion of understanding in my head.

I remembered Argentina.

You may be familiar with the tremendous economic collapse/crisis Argentina went through around 1999 2000. I remembered seeing a documentary not long ago on the subject called The Empty ATM (part of PBS' Wide Angle series). The segment that pertains to the discussion here is about the barter clubs. With the economy left in utter ruin, the banks having to ration out how much paper money they could give you (hence the documentary's title), and unemployment rates hovering around 25%, the people had to do something. Some of them did.

The Argentinian social credit or credito is a currency used in barter clubs run in Argentina. With dentists and farmers and pilots and everyone out of work a fundamental problem arose when there was no paper money to be had: People had stuff to sell. People had services to preform. Unfortunately, no one could afford to buy stuff or services hence barter clubs came into being. They provided a place where one could, say, bring a goat and get dental service or an airline ticket or what ever service one desired and vice versa. With a sort of economic apocalypse on their hands the people of Argentina created economic stimulus outside of the economy at large.

This isn't crazy. This is how people operate before there is an industrialized, currency driven economy. Some people have stuff, others do stuff. People do stuff for stuff and people give stuff to people for the stuff that they do. When money gets introduced into the mix, it acts as a liaison between vendor and specialist. Some people have stuff, and some people do stuff, people sell their stuff for a price people perform services for a price.

Community economics is a way of determining your price, in such a way that it directly benefits your community. I have found that many people have decided to think locally and not nationally when it comes to economic stimulus.

The theory is easy to resist, but after some very minimal research I have become fascinated by the practice. Posts here on Open Money will be an exploration of the practice of community economics wherever such a thing is being practiced. How has it worked? How is it working? Consider me an amateur community economist.

More to come,