Selecting a Community Currency
Community Projects, Consumerism, Economics, Financial Management, Markets & Outlets, People Systems, Society, Village Development — by Shann Turnbull November 16, 2010
Every time we add our own labour to a product or perform a service we expend energy and increase the overall entropy of the environment. Every time we exchange money for product or service, the legal tender we use represents payment for previous energy that we expended. Money, after all, is nothing more than stored energy credits. – Jeremy Rifkin, Entropy: A New World View, New York: Viking Press, 1980
Money can be anything that people in a community will accept as carrying on its basic functions, which are to provide a unit of value, a medium of exchange, and a store of value. Throughout history many different forms of money have been created with a number of forms being used simultaneously within the same community. Each form has various advantages and disadvantages. These need to be reassessed with modern technology and in the context of the objective of creating for individual communities an autonomous banking and monetary system.
Historically, units of value have been defined in terms of the weight of a given commodity of specified quality. Ideally, the commodity selected as a unit of value should also provide a stable value over time. As scarcity creates value and abundance reduces value, we need to select a commodity, the availability of which remains relatively stable in relation to all the other goods and services traded for money in the community. This requirement is described as the quantity theory of money. Simple stated this theory says that, other things being equal, prices will vary directly in proportion to the quantity of money in circulation.
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