Two comments I would like to make. While localized currency systems do exist in real life, they are pretty limited (frequent flyer miles). The federal government doesn’t appreciate when people mess with their revenue stream, see the raid on Liberty Dollar for an example: http://www.gata.org/node/5738

Finally, there has been and always will be a truly competitive currency that is both localized and international, is a fantastic store of wealth and is not able to be inflated by any government. Gold has been a true reserve currency since the beginning of time and will continue to be superior to any fiat currency produced by any government.

And while I won’t delve into a nuanced critique of this brand of quasi-Marxism, I have to take issue with “Capitalism (in addition to being a lot of other things) is the way people get rich simply for being rich.” This is nonsense. Interest accrues to capital for the same reason that wages accrue to labor; it is a productive factor which is scarce, and must be rationed.

Somebody who supplies capital to the market is being compensated for, amongst other things, the risk they are taking, the opportunity costs of foregone consumption (which is all that savings is), and the transactions costs of moving that capital around. Do you have a savings account? By this fallacious and shallow definition of “capitalist,” then, you are one too.

Lots of modern thinkers are criticising capitalism and economics in interesting, insightful ways. Can we move past Marx please?

http://www.krksbscr.cm/

“I don’t pay interest on my salary. Tax, yes. What are you talking about?”

What he’s talking about is that unless you already held enough money to buy everything outright on day one, if you set up a new business you will pay interest on the loan you need to go buy the new equipment, renting office or factory space, and paying the staff between them starting work and making the first sales.

If it’s really expensive to borrow money, (or if money isn’t ever lent) then companies have to pay the full set-up costs at the beginning of a new venture, which potentially stifles things, because saving the full cost beforehand will delay the start.

I think that even the hardest of us european lefties will admit that marxism is not a way forward. Heck, even decent social-democrats seem to have problems.
The current western system is not a good solution because of things you mention but also, I believe, because it is based on expansion.
Any slowing of expansion is likely to crash parts of the system, which is not good for anyone (well, mostly not).

So figuring out a way to run society without NEEDING fast expansion is probably a way forward.

How to do that?
No idea.

Whoa there brother– don’t think for a second that all the blame is on the borrowers. The banks (i.e. “professionals”) should have also known that loans based on some magical imaginary future value of the house was essentially gambling; both Newton and Adam smith could tell you “what goes up must come down.” They convinced a lot of borrowers to take those mortgages with the convincing argument that it wouldn’t matter that their loan payments were going up, as the value of the house was going up, and they could just resell the house and make a profit. Plus there were bonuses involved in selling as many of these sub-prime mortgages as possible. Everybody was looking the other way because of the money signs in their eyes. Several pundits have pointed out that nobody is without blame here, and I tend to agree (and I would fault the so-called professionals at the bank more than the delinquent homeowners– you know what you are getting into with a loan shark, but banks are supposed to be trustworthy legal institutions).

However this is only tenuously related to the post at hand, which is about the idea of “printing ones own money”, so don’t change the subject.

For example, take, “Where does that money [to pay back a loan] come from? Someone else who borrowed.” Although that’s possible, that’s not usually the case. Suppose I lend you three bags of seed corn in the spring, in exchange for four bags in the fall. Do you get those bags for me by borrowing? No, you grew it. You created value. And that’s what should happen with any business loan: you use the capital to increase your power to create value, and then give part of the value to the person who helped you out with the dough.

I’m all for changing the system we’ve got, but to do that effectively, you must first understand the system we’ve got, and show how your plan is an improvement.

http://econlog.econlib.org/archives/2005/03/the_myth_of_tim.html

and there’s a good recent post on brad delong’s blog on the difference between ‘consumer’ time preference and the operation of the markets.

http://delong.typepad.com/sdj/2008/09/moral-philosoph.html

Some of this probably comes back to the old “the problem is overpopulation”. We’re “successful” as a species in a way only bacteria and insects seem to match, and it’s gonna be tricky to keep that. (And yeah, juxtaposed w/ the declining birthrates of rich nations, you wonder what the balance will be)

I’m surprised no one has mentioned Sharia law or Torah rules against usury.

I suspect scholars of these respected religions noticed fairly similar conclusions to Rushkoff’s back in their respective eras, and included scriptural clauses in the Qur’an and Torah which forbade the charging of interest. Since these texts survive more or less unchanged today, these doctrines are still enforced on the handling of money among orthodox members of both religions.

Interestingly, one of the big side-effects of recent war and money-based international incidents in the West has been the rise of Islamic bank accounts in dozens of banks and lenders worldwide. Examples include banks in Indonesia, Thailand, Australia, the Middle East (of course), France, and the UK. Basically, everywhere but the USA.

website, http://www.kashklash.com,

a lively platform about future scenarios in an alternative economy, and also try out our questionnaire.

http://www.surveymonkey.com/s.aspx?sm=f_2ffyDCPS_2b4auKyX9D8ggxA_3d_3d

I think part of the problem is that people don’t have much experience with creating systems of arbitrary units. When they count, they count concrete things, and it freaks them out to trade concrete things for a virtual thing with imaginary units. Ignoring that it works for, as far as I know, every country on the planet.

It’s like crossing a bridge that you can see through. It works just as well, and can have significant engineering advantages. But for people who are nervous to begin with and keep looking down, they work themselves into quite a lather.

Chiefly:

1. Many of us have neither a patch of fertile soil nor an appropriate skill or trade that would be of much use to us in a local economy, especially considering…

2. The vast contraction of capital required in such an economic transition. I doubt many people would be willing to pay me to edit videos when they were busy trading homegrown gourds for dental care.

3. Due to my now scare resources, what follows is an abridged list of products and/or services I would never again purchase/use/donate to: music, movies, dry cleaning, books, expensive sandwiches, funny t-shirts, iPhone applications, African charities, McSweeney’s publications, international travel, and those breakfast biscuits at Starbucks (probably a good idea anyways)

4. Our new lifestyle, while impressively communal and exceedingly sustainable, would be marked by a drastic reduction in standard of living, perhaps so drastic as to outweigh all of the net gains such a local commerce utopia might entail.

…Yet another reason we shouldn’t mollycoddle those with short attention spans. More essays, please!

That’s not to say I’m not interested in the occasional long post, but there are other places where I get my fill of that. And many of them are thoughtful enough to summarize it in a paragraph and then link to the full article, so that I can quickly decide whether or not to read it.

The single best resource for the WHOLE story is a book called ‘The Creature From Jekyll Island: A Second Look At The Federal Reserve’ by G. Edward Griffin. I promise you that reading this book will change the way you see your world. It’s no boring economics book either, it’s a real page turner.

Find it here:
http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986395/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1222379835&sr=8-1

To his post:

What I take form DR is that the universe is actually made out of clay which we can shape as we wish so long as we are able and willing to discard our mind-forged shackles. It really amounts to deep optimism.

Once you put yourself in the mindset of possibility, you quickly come to realize that the world could be a much better place than it currently is. The greatest crimes ever committed are crimes against our own imaginations.

The “Left” (as much as I hate to invoke the bogus left-right political spectrum) always seems enamored with LETS. However, it doesn’t really solve anything… at least none that a credit union doesn’t already, and it still has many of the same problems as our existing financial system — such as book-entry settlement (i.e. centralization). In short, it doesn’t address the fundamental analysis of a monetary system, and why money has emerged spontaneously, historically.

Instead, I’ll offer two points to consider:

1.) Denationalisation of Money: The Argument Refined (An Analysis of the Theory and Practice of Concurrent Currencies Series by Friedrich A. Hayek

2a.) Tim May’s e-money cypherpunk / crypto-anarchism argument
2b.) David Chaum’s DigiCash strong cryptography digital currency minting algorithms
2c.) Robert A. Hettinga’s digital bearer settlement argument (that book-entry incurs significant transaction costs)

Ok, as a bonus, The PayPal Wars goes into how high-minded ideals were compromised in a “if you can’t beat ‘em, join ‘em” plotline.

Analysis of Linden Lab’s virtual economy in Second Life, with their Linden Dollars, is an exercise left to the readers.

The gold standard isn’t the answer. I would love to see the kind of anarchist solution that Mr. Rushkoff proposes succeed, but last time I checked the revolution had been indefinitely postponed. In reality using the power of democracy to end the state-sanctioned wealth-grab and counter the parasitic power of corporate capital is probably the best hope we have.

As Brecht famously almost wrote: ‘What is the crime of robbing a bank, compared to the crime of founding one?’

I don’t see how they make money from printing it. Also, what would be the incentive for me to loan you money unless I had some sort of financial motive or guarantee? Interest on loans makes perfect sense to me…

And watch out for bad legislation, the stock market may have created Black Tuesday, but it took an act of congress to create the Great Depression. To see the effects of an attempted legislation of a local economy, look at the magical success of Smoot-Hawley.

The “Left” (as much as I hate to invoke the bogus left-right political spectrum) always seems enamored with LETS.

NoneMoreBlack said it better:

It appears that you’re placing the onus for an enormous variety of (perceived) ills on central banks. So your entire thesis boils down to advocating free banking, but with a Klein-esque anti “corporate” vitriol rather than the analytically rigorous Austrian approach?

And while I won’t delve into a nuanced critique of this brand of quasi-Marxism, I have to take issue with “Capitalism (in addition to being a lot of other things) is the way people get rich simply for being rich.” This is nonsense. Interest accrues to capital for the same reason that wages accrue to labor; it is a productive factor which is scarce, and must be rationed.

For anyone not already familiar, c.f. time preference / time value of money

I agree. A localized economy is almost inherently obsolete in a globalized society.

By neccesity it requires people to tailor their professions to ones that are worth trading goods for to their immediate community, which essentially ends research/development jobs.

Am I going to trade a portion of my corn crop to someone for the prospect of him curing a disease?

Localized connotes immediate return on investment; here is your widget, now give me my widget.

There is a reason we have evolved from this.

Again, interesting read anyway.