Creating local alternatives to fiat money

The Common Good Bank is an ambitious project to create a locally owned and operated bank.  Among other things, they plan to create a new currency based on a bundle of stable local goods, and use it as an alternative to fiat money, to avoid having value stolen by the government.  Their proposals seem pretty well thought out and economically solid, much more so than most such "Corporations suck!  Here's my crazy alternative!" systems that I've seen proposed.

I wish them the best of luck.  It would be awesome if local alternative currencies sprung up to replace the fiat dollar.

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Play Money

Of course I'm all in favor of allowing any interaction or other relationship as long as it's voluntary, and that includes alternative currencies. (And I agree with both of the points of David Friedman's article on the subject in The Machinery of Freedom.)

I'm also interested in hearing about amusing crank ideas: where can I find out about the various "Corporations suck! Here's my crazy alternative!" systems you mention?



LETS often rely on stupid marxist idea, such as labor value, or even worse, time value (the time of labor).

Local Currency

Patri, The entire idea is based on misunderstanding. There is nothing wrong with fiat money except the ability of government to make more of it, limited only by embarassment. Money is a good in its own right, serving as a holdable medium of exchange. Money itself needs no backing whatever. It is only money substitutes or money claims which must be backed. The exchange value of money is determined like any other economic good, by the interaction of supply and demand (to hold). Actual exchanges involving money do not create or destroy money and do not change the supply of money. The myth of the localized economy as something desirable is absurd. All it does is institutionalize relative poverty by limiting the extent of the division of labor. Regards, Don


Fiat money is both the best possible money and the worst possible money. It's the best possible money in an ideal world where no one controls  the printing press since no expenses are incurred to produce the underlying goods for purely monetary profits, it's the worst because in the real world, someone controls the printing press.