I find myself with lots of naive questions about economics. The debt crisis in Greece has led to 25% unemployment (European Commission Unemployment Statistics accessed 23 February 2015). How can that make any sense? How can people not working help anyone? Surely it just means that money is not doing its job?
But there are alternatives that do work.
Greece already has some local currencies, that have kept money circulating several towns and cities, as it cannot be siphoned away. (There are similar systems in Britain, such as the Bristol and Totnes Pounds). But strangely they do not make use of the thrilling, transformative system that almost saved Europe from fascism; the currency developed by the economist Silvio Gesell called stamp scrip. It is explained in Bernard Lietaer’s magnificent book The Future of Money.I think this comes under the heading of 'Information and Values'. Is there anyone out there who could come to DTMD 2015 and talk about it?
In its original form, stamp scrip was a piece of paper on which a number of boxes were printed. The note would lose its validity unless a stamp costing 1% of its value was stuck in one of the boxes every month. In other words, the currency lost value over time, so there was no incentive to hoard it. Stamp scrip projects took off across Germany and Austria after national currencies collapsed in the early 1930s. In 1932, for example, the Austrian town of Wörgl was almost broke, unable to finance public works or to support its destitute population, until the mayor heard of Gesell’s proposal.
He put up the town’s tiny remaining fund as collateral against the same value of stamp scrip, and used it to pay for a building project. The workers then passed on the currency as quickly as they could. Like the magic pudding, this little pot of money kept circulating, enabling Wörgl to repave the streets, rebuild the water system, construct new houses, a bridge and even a ski jump. In the 13 months of the experiment, the 5,500 scrip schillings in circulation were spent 416 times, creating between 12 and 14 times as much employment as the standard currency would have done(9). Unemployment vanished, and the stamp fees paid for a soup kitchen feeding 220 families.