Civilizing the Economy A New Economics of Provision

It’s Time to Make Some Money

Posted Jun 2, 2012 by Marvin Brown in Uncategorized, 2 Comments

Consider this case:  A local school district is facing a 20% decrease in state funding, so it is looking for ways to make up for the shortfall.  The school board is considering various options from shortening the hours of instruction to decreasing the length of the school year.  These options would mean about a 10% decrease in teachers’ and staffs’ salary.  Well, there is another option:  They could make some money themselves and use it to replace the 10% loss in salaries.

How is this possible?  Let’s say that a teacher’s salary is about $60,000.00, or about $3,500.00 a month after deductions.  10% would be $350.00.  So each month teachers get $350.00 in local currency.  They could use this currency as a means of exchange (a primary function of money) with businesses and services that had joined the community supporting such a local currency (LC).

Let’s imagine how an individual might use that much LC in one month:

Two dinners at locally owned restaurantsFour lunches at locally owned restaurants

Car rental

Gifts for friends at local gift store

Laundry

Haircut

Bike repair

Local Book store

Yoga (or workout at local gym)

Donation to charity

Total

60.0060.00

30.00

30.00

20.00

30.00

30.00

40.00

30.00

20.00

350.00

You might add other ways to use a local currency, but it doesn’t seem like it would be that difficult to get enough local businesses to join in so that the currency could be used for the benefit of all.  A basic requirement of local currencies is that they circulate, which means that whoever accepts them has a way of using them.

Here’s the point.  If public agencies don’t have enough money for public services, they should make some.  Money, of course, has multiple functions, but one is to function as a means of exchange.  Every community has lots of things that could be exchanged for everyone’s benefit.  If the lack of money prevents such exchanges, then simply increase the supply.

For more reflections on local currencies, check out Charles Eisenstein’s recent post: “Design and Strategy Principles for Local Currency.”

Teachers, like most of us, exchange talents, time, and care for the things needed to make a living.  It should be a fair exchange, so we get a good day’s pay for a good day’s work.  We don’t work for money.  We work for a good life.  Local currencies could certainly help in realizing this for all of us.

2 Responses to “It’s Time to Make Some Money”

  1. Kingofthe Paupers says:

    June 4, 2012 at 3:09 pm

    Jct: Same idea for municipal workers and the Argentine Solution. If all government workers took 10% of salary in government bonds they can spend for Hydro, Taxes, Medical, Licenses, it would free up that cash to hire another worker! The more they can spend, the more they can accept, the more new jobs can be created. Of course, the government has to recoup the bonds in taxes! But no interest to the middlmen.
  2. KingofthePaupers says:

    September 12, 2012 at 2:25 am

    Jct: You forgot that the local currency obtains its value from its ability to pay taxes for the payment of the teachers. The record most successful case was in the British Isle, Where "Tallies," sticks of money, left King Henry I with smile. Accountants in the Treasury would split the stick in two, One half would be the money and the other half its due. A tally worth a pound of gold to pay the King's expense, The other half amounted to taxation that made sense. The only question left is how the tax should be assessed, For goods and services? A simple formula to test. For services, he'd levy tax at end of every year. For assets, tax to pay depreciation. It was clear. The tax collectors through the land all had an easy way, Since people had their tallies and enough the tax to pay. The tallies funded projects and could pay for everything, With tallies matching tax, a hero, Henry I, their King. For over 700 years, the tallies were in use, But having lost control of money now is Crown's excuse.

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Marvin T. Brown, Ph.D teaches business and organizational ethics at the University of San Francisco and Saybrook University in San Francisco.

This book is the culmination of 30 years of teaching and writing on business and society from a communicative perspective. Visit workingethics.com for more information.

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