When it comes to creating those new kinds of money there is no one perfect currency that can right all the wrongs of the past and every flaw in the conventional money we use. There are currencies fit for the job in hand, and which have specific challenges as a result.

If you want to encourage mutual support around a doctor’s surgery, you might use time credits. If you want to encourage people to recycle by using spare capacity on the buses, that’s going to require something different — something more akin to Air Miles. If you want to provide a backing of commodities for the money we use, or you want to revive the local economy by making it easier to use local assets and skills, rather than distant ones — in each of those circumstances, you will choose something different.

Each of these will have a design that works best. That is why I am all for a live and let live approach: a multiplicity of currencies — and as simple as possible. In my experience, the new kinds of money that succeed have a simplicity about them which means that people can use them in the ways they think best.

I first got excited about local currencies in New Zealand in 1991. Green dollars were then setting up in most cities, backed by the welfare authorities. In fact, if you lost your job you got a leaflet encouraging you to join your local green dollar scheme. Since then, I’ve had a fascinating time — when I’ve been involved. I have interviewed Edgar Cahn and Michael Linton, Paul Glover and Bob Swann. I have met Heloise Primavera and Sergio Lub. I have cheered when the multicurrency Europe seemed to be emerging. And when it wasn’t — I’ve gone off and done something else.

But the conversation that brought me up short was right back in New Zealand in 1991. I was on the green dollar island of Waiheke, just outside Auckland harbour, and I got a lift from a Maori back to the ferry.

“What do you think of these green dollars?” I asked. With all the innocent excitement of the true believer.

“I think it’s terrible,” he said.

“In the old days, we used to give each other fish or help out or build each other’s homes. What we never did was measure it all exactly.”

Now, I think this is important. If you try starting a time bank in a neighbourhood where everyone already helps each other as much as they can. Or start a national smartcard or internet scheme which gives points to people for acting green — when they are already practised at exactly that.

We have research which suggests what will happen. You undermine the altruistic impulses.

So you have to be careful. But there is also no problem about finding the need and the demand. If you live in Greece, and in some ways we clearly all do, the next generation is going to be about vacuuming money out of their economy.

A huge sucking sound is going on all over Europe and will continue. Of course people will want to find other ways of meeting their needs, especially as there are resources and time all around them. The Greek government has passed an emergency law encouraging new forms of exchange. The Volos networks are growing there too.

I find this pretty extraordinary. Here are these powerful models of parallel currencies emerging in Latin America. The C3 model in Uruguay which takes bills owed to small businesses and then factors them in return for local currency. The community banking model in Brazil, providing low cost or no cost loans to the poorest neighbourhoods, to individuals and businesses.

All of them are learning the lessons from two decades of development in Latin America, and both models have support from the European Commission. Yet here we are, on the Commission’s own doorstep, and the Greeks have to laboriously reinvent the tools of exchange, just like the beleaguered and indebted people of Argentina ten years ago.


It is time to draw some of these strands together. All this means we are dealing with the source of life in some ways. We have to be careful. Do the wrong thing and we can end up far worse. Do nothing and things definitely end up worse.

First, we need to make a coherent case for new kinds of money in the mainstream. The reason for their emergence all over the world is that they are all responses to the same set of problems. Because currencies have become international, ordinary money sometimes carries too complex messages for simple local exchanges to take place using money. Then some vital things are not valued by conventional currencies and market exchanges — human skills, local skills, local food and waste and so on. All these reasons seem likely to continue, so the basic motivation for new kinds of money are going to continue as well.

What makes the difference compared to the position in 1991 is that there are now successful and mainstream models running, mainly in Latin America.

But there is another reason why it seems likely that new kinds of exchange will become increasingly mainstream in the decade ahead. It is because internet and mobile phone technology makes these ideas much more practical and simpler to manage for individuals. There is also huge innovative energy about exchanges on the internet, from eBay to Bitcoin.

It also seems likely that the private sector will catch up with what is happening within the next decade. Mobile phone banking is now mainstream in Africa. It is hard to avoid the conclusion that most of us will be used to the idea of multiple counting systems, probably on our phones, within a few years.

Two of the sectors that have been lagging behind have been the mainstream banks and government. But there are exceptions. I know that the National Health Service is involved with time banks all over the country, and so is the Prison Service. Local authorities have been involved, for example in the development of the Brixton pound, now an electronic currency on mobile phones too. There has been more involvement by the police and youth services in bigger reward projects like Karrots, Connexions and Young Scot.

But we are right up against it now, all of us. At the heart of a financial storm, and we can begin to imagine the future.

I can imagine a community bank and barter system in every region, offering very low cost loans to small businesses.

I can imagine a time bank in every public service outpost, every surgery, every school, every housing estate. To rebuild the social networks.

I can imagine new kinds of health insurance packages which people part pay by helping other members.

I can imagine time debt owed by students before graduation, which they have to pay off by involvement in local community.

I can imagine credits based on the value of waste. Or on local renewable energy.

I can imagine cities issuing their own money via their own banks, and providing loans in it at very low interest.

I can imagine these being bundled together in new kinds of institution, maybe paid for by the big banks…

Combining local currency, microcredit, business coaching, business mentoring and finance by local business angels.

We are still in the dark about some economic questions. Will too much nudging create a reaction against manipulation? Is there a danger that parallel currencies will create inflation if they are linked to national currencies? How can they be kept circulating among poor people, in defiance of every economic law which suggests that the rich will begin to garner anything that is lucrative and successful? We don’t know.

What we do know is that we are feeling our way towards more natural kinds of money — ones that connect more automatically between what we need and the means to provide it. That is a huge step forward for money and for humanity.

This is part two of a two part series from the New Economic Foundation’s David Boyle on money and other ways of monetising our wealth. Read part one here.

David Boyle is the author of a range of books about history, social change, politics and the future including Money Matters: Putting the Eco Back Into Economics and Funny Money: In Search of Alternative Cash. He has been editor of a number of publications including Town & Country Planning, Community Network, New Economics, Liberal Democrat News and Radical Economics. He is a fellow of the New Economics Foundation.