Federalism and cooperation for community currencies: Some ideas on the need for intercommunity clearing systems

Abstract

This paper reflects on the necessity of financially connecting community currencies (CCs) outside the standard monetary system by devising a way to clear transactions between them. Knowing that attempts of social reorganization through local currencies have been constrained by ideas and the rules of the game in the “normal” economic world, the creation of federal clearing systems between communities could help circumvent those constraints. Connecting communities multilaterally could alleviate issues linked to access to resources, liquidity and also push back debt accumulation for both independent CCs and CCs linked to national currencies.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

Notes

1 As exemplified by Graeber (2012) with cigarettes in POW Camps. Being accustomed to using a currency in a context where there is none, individuals have no choice but to turn to another medium to exchange as if they were money, which is the opposite thesis that of Radford (1945).

2 The Accorderie in the St-Roch district of Quebec City (Canada) was an example of how LETS could improve people's social lives by lifting them out of their isolation. On the other hand, material contribution does exist (Fare, 2016), yet it is not strong enough to have a truly significant impact, especially if we think on a larger scale.

3 Similarly, further consideration should be given to the question of intercommunity fiscality, as proposed by Martignoni (2015), under which the implementation of an operating system checking for trade and debt imbalances between communities, as proposed here, is a step towards this more complex rearticulation of socioeconomic activity according to the federative and local perspective. In addition, as far as equity and environmental issues are concerned, it would be interesting to consider a “natural-resource rent tax” (Hudson, 2019) to address the inequality issues generated by the control of natural resources.

4 Although the economic objective of bringing communities together to facilitate trade and increase the participants standard of living, neighbouring regional trade is strongly favoured to avoid reproducing the polluting trends of international trade (e.g. Angus, 2016).

5 Mehrling (2016) proposes to go 'Beyond Bancor' since the post-World War II context was not only marked by large debts and imbalances in favour of the United States, but also, because according to him, the Keynes-White debate was not aimed at creating a new international monetary system, but was rather meant to stabilize imbalances with a pro bias. That is why Mehrling encourages us to look at Indian Currency and Finance (1913) and the Tract on Monetary Reform (1923), which had a context that was more similar to ours, and maybe for the future of CC federalism.