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Money Is Nothing

At each step of the transition from commodity to paper to credit, money became more unreal, and detached from the real goods and services that money can be exchanged for. Money transformed itself from a mechanism for trade into an object in its own right. Modern technology—digital money—further stripped money of corporeality. Money exists as pure information, with no intrinsic value. It is nothing and everything. Making money, lending it, borrowing money, and making money from money is central to human existence and activity. As the Roman poet Horace noted eons ago: “Make money, money by fair means if you can, if not, by any means money.”

Modern money is inherently worthless, but everybody accepts it as real. Paul Seabright, a professor of economics, identified two traits that underpin systems of trust including money: the capacity to weigh up the costs and benefits of trusting others and the instinct to return favors in kind or seek revenge when trust is betrayed. When it is working well, the system enables strangers to deal with each other safely. When the fragile trust fails, people withdraw their money from banks, and they seek the refuge of cash. Ironically, in times of crisis, people seek paper money that has no intrinsic worth, illustrating the power of the monetary illusion.28

The trust that underlies money sometimes works in reverse—alternative paper money. Irving Fisher, a prominent American economist of the early twentieth century, suggested an alternative currency—stamp scrip—which would be periodically taxed with a stamp, forcing holders to spend rather than hoard it. The idea was based on the Wära, an alternative currency used in Schwanenkirchen, a Bavarian coalmining village, in 1931.

Today, Bavaria has the Chiemgauer, introduced in 2003, which can be used alongside the euro in more than 600 shops and firms. In England, in Lewes, Sussex, the Lewes pound circulates alongside the pound sterling. (One Lewes pound can be exchanged for one pound sterling.) The notes feature Thomas Paine, the eighteenth-century activist reformer, not the Queen. In the United States there are at least 12 local currency schemes. The largest is the Berkshares program in the rural region of southern Massachusetts.

These alternative currencies encourage local business and emphasize community values. They are a gesture of defiance against the control of governments, banks, and global money. At their heart is a quaint but powerful notion of ordinary people supporting each other in a complex and often alien world.

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