Ithaca, NY has (had?) a similar system: https://en.wikipedia.org/wiki/Ithaca_Hours
A superior system. 1 hour = 1 hour of work (rather than a USD equivalent). Or at least, that is how it started.
And everyone's hours are treated interchangeably?
BerkShares
31–40 of 92 posts
Re: BerkShares
#32Earlier quoted context omitted.
I grew up in the Berkshires and worked at Crane (making paper for the currency of several countries). Strangely, I've never heard of BerkShares.
Never heard of them either - from north county.
Grew up in Pittsfield. Went to South Berkshire schools. Also never heard of them.
But I still have a Berkshire Bank card in my wallet!
Re: BerkShares
#33While not exactly an economist / finance type I would have thought the federal and state governments would have shut this down as it removes a certain level of currency control no? Can anyone explain the legalities around this?
It is barter, goods for goods. The profit is still taxed. This is not technically money in that it is not backed by a government. It's just bits of paper. Printing your own probably isnt a horrible crime, more a copyright violation or fraud rather than a felony. That people assign value to these bits of paper is no differnt than bitcoin. If a bank wants to sell bitcoin, or buy them, it can. The regulations re whether…
> "This is not technically money in that it is not backed by a government."
Being "backed by a government" is not a necessary condition for something to be money. From wikipedia: "Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context. ... Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money." Even though most contemporary money systems are fiat, that doesn't mean that all money has to be.
Re: BerkShares
#34Virtually all the wealth created in the world is because of unfettered trade. Trying to create an insular economy is just a path to poverty. Are they going to build their own iPhones, Teslas, LCD screens and microprocessors? Obviously not. When a local consumer decides to pass on buying a local good for a substitute made far away, it's because they believe they benefit economically from doing so.
That would be true if currencies couldn't be converted / traded. Nothings stops you from trading Berkshares for USD or vice versa the same way you would Euros / Bitcoins / etc.
Re: BerkShares
#35Earlier quoted context omitted.
If it's a local currency this can be considered a local Consumer Price Index. If you peg the local currency to it, the local currency is always available to buy the food, based on the local CPI of necessary goods, regardless of shortages etc. (if the pegging is daily). I had a similar scheme for local based UBI here: https://qbix.com/blog/index.php/2017/09/the-future-of-money/
Awesome, thanks. It sounds like you're working on some of the ideas I've been mulling over this week. I like the idea of localizing the currency and having immigration restrictions. Localizing helps solve the problem of scaling pseudonym parties. Finding a world-wide, or even nation-wide time where everyone can show up in a group in order to verify their personhood would be tough. I guess the next issue is how do you…
Related to deflation - I believe there are demurage schemes for local currencies where the value of a particular bill lessens over time. It incentivises circulation instead of hoarding.
Re: BerkShares
#36Virtually all the wealth created in the world is because of unfettered trade. Trying to create an insular economy is just a path to poverty. Are they going to build their own iPhones, Teslas, LCD screens and microprocessors? Obviously not. When a local consumer decides to pass on buying a local good for a substitute made far away, it's because they believe they benefit economically from doing so.
This only applies in a market where consumers always make objectively ideal decision.
This applies to smart phones, electric cars, and CPUs. (mostly, see post-script)
But for most goods, there is no such thing. What is the "best" tomato or a jar of honey for a consumer to buy? Is it the cheapest? The brightest? The most delicious? Yes, all those things. But the evaluation of them is subjective for most. A tomato from a local farmer you see on the street every weekend will look brighter and taste better and feel healthier to a lot of people than one coming across the world from Peru. Regardless of the truth or economics of scale.
Also why is it a zero sum game? If some consumers choose to spend more to support local producers, is that not just a form of local subsidy which rebalances the wealth slightly from consumers to local producers?
*Actually iPhones and Tesla are also emotional decisions. For some people an Android or a Chevy Volt are better decisions for factors beyond financial yet for emotional reasons they want the entire package that comes with the top brands.
Re: BerkShares
#37Very similar to Ithaca Hours (https://en.wikipedia.org/wiki/Ithaca_Hours) which were sparsely used in Ithaca at the farmer's market while I attended Cornell
Re: BerkShares
#38Virtually all the wealth created in the world is because of unfettered trade. Trying to create an insular economy is just a path to poverty. Are they going to build their own iPhones, Teslas, LCD screens and microprocessors? Obviously not. When a local consumer decides to pass on buying a local good for a substitute made far away, it's because they believe they benefit economically from doing so.
This only applies in a market where consumers always make objectively ideal decision. This applies to smart phones, electric cars, and CPUs. ( mostly , see post-script) But for most goods, there is no such thing. What is the "best" tomato or a jar of honey for a consumer to buy? Is it the cheapest? The brightest? The most delicious? Yes, all those things. But the evaluation of them is subjective for most. A tomato fr…
Consumers always make objectively ideal decisions. What you think the best good for them to buy is not necessarily what they think, and they are the ones who are right.
Re: BerkShares
#39Grew up in a town that used these (a town in berkshire county, ma); I thought they were a novelty and didn't really buy or use any (or see anyone use them). Just a single datapoint.
Agreed; grew up in the Berkshires and these were just a gimmick. I never saw them.
Re: BerkShares
#40Virtually all the wealth created in the world is because of unfettered trade. Trying to create an insular economy is just a path to poverty. Are they going to build their own iPhones, Teslas, LCD screens and microprocessors? Obviously not. When a local consumer decides to pass on buying a local good for a substitute made far away, it's because they believe they benefit economically from doing so.
I agree with what you said, mostly.
I say mostly because the world is complicated, and economics is something that applies at the it's complicated end. I think we do tend to go a little bit overboard about economic ideas. Local iPhones, Teslas, LCD screens and microprocessors is absolutely a path to poverty. Cultural and economic (I think these closely related) isolation is a path to poverty, of several kinds. Our isolationist instincts are often wrong, and closely bound with our xenophobic instincts. All else equal (including whatever you consider to be important), why buy local? Are faraway people not brothers and sisters? I am very comfortable making the case for openness.
Yet... There is still lots of room for experimentation, and oddities, and places where the rules are bended. There's some food bank collective that hired an economist to invent a fake currency and auction market for them. It needs some part time central banking, but supposedly works well. The market & currency has all sorts of quirks like negative prices to help with their specific needs.
Messing about with 5c on the dollar locally is totally fine. It's more than fine if it has a positive effect, and I wouldn't be surprised if that effect is something we'd see as "cultural."