Las monedas locales complementarias: Modelos de orientación estratégica como política pública

Andreu Honzawa

Abstract

Las Monedas Locales Complementarias (MLC) son redes de intercambios que pueden tener muy diversas tipologías, características y objetivos. Este artículo se propone dar una visión panorámica de su implementación como política pública, utilizando un análisis comparativo de casos históricos y, sobretodo, actuales, a partir del marco analítico, basado en los Modelos de Orientación Estratégica (MOEs) a partir de dos variables clave, la intervención del sector público y de la participación del voluntariado en la gestión de las MLC.

Article Honzawa

Para citar este artículo: Honzawa, A. (2019) ‘Las monedas locales complementarias: modelos de orientación estratégica como política pública’ International Journal of Community Currency Research 23 (Winter) 20-29 <www.ijccr.net> ISSN 1325-9547. http://dx.doi.org/10.15133/j.ijccr.2019.003

Aspectos clave del diseño de una moneda complementaria liderada por la administración pública

Lluís Muns Terrats *

Marta Segura Bonet **

Lluís Torrens Mèlich ***

* Learning by Doing SL; España; lluis.muns@learningbydoing.es

** ESCI-UPF; Learning by Doing, SL; España; marta.segura@esci.upf.edu

*** Ajuntament de Barcelona; España; ltorrens@bcn.cat

Abstract

Mediante este artículo desarrollamos las características esenciales que permiten fundamentar un sistema de pagos complementario promovido y liderado desde una administración pública. En este sentido, hemos centrado este artículo en explicar las posibilidades de desarrollo de un proyecto de moneda local interpretado como una verdadera apuesta de valor para aumentar el impacto económico de los recursos públicos sin necesidad de incrementar el gasto.

La experiencia adquirida en el marco del proyecto europeo Digipay4Growth (2014-2016), el cual ha conseguido vincular diferentes partidas del presupuesto municipal a un sistema de pagos complementario sin la intermediación de entidades financieras y reglamentada por el propio ayuntamiento, justifica y ampara el presente trabajo.

Así, desarrollamos los aspectos que a nuestro criterio aportan argumentos favorables al liderazgo público de un sistema de pagos complementarios local, entendiendo que el tema puede afrontarse desde diferentes perspectivas y que no pretendemos escoger una sola de ellas, sino más bien contribuir a explorar vías y líneas de experimentación.

Son tres las fases en las que se puede dividir el proceso destinado a desarrollar un sistema de moneda complementaria liderado por un ayuntamiento: planificación, implementación y consolidación.

En este artículo analizaremos la fase de planificación, la cual se asienta en cuatro pilares:

  • El contexto y sus posibilidades
  • Los fundamentos legales
  • La determinación del gasto público
  • La base tecnológica

El artículo desarrolla el contenido de cada área y aporta información sólida, argumentada y fiable, además de elementos para el análisis y la reflexión, que permite a los decisores públicos posicionarse respecto a un proyecto de sistema de pago local liderado por una administración pública, tanto en la forma como en el fondo.

Desde la forma, entendiendo el sistema de pago local, no como un fin en sí mismo, sino como un medio de intervención innovador en aspectos tan relevantes como la economía local, el sentimiento de identidad y pertenencia de sus residentes y el posicionamiento de ciudad innovadora.

En cuanto al fondo, el acento se centra en la determinación de las tipologías de gasto público que pueden vehicularse a través de un sistema de pago local y a las diferentes fórmulas que permitan optimizar su impacto transformador de las relaciones socioeconómicas de proximidad. Sea desde el gasto, al vincular la concesión de subvenciones, el pago de salarios o la compra pública, como desde los ingresos, al admitir el cobro de tasas y precios públicos. El principio conceptual se fundamenta más en criterios relacionados con la generación del bien común que en la idea dominante de ganancia económica.

Artículo Muns

Para citar este artículo: Muns, Ll.; Segura, M. y Torrens, Ll. (2019) ‘Aspectos clave del diseño de una moneda complementaria liderada por la Administración Pública’ International Journal of Community Currency Research 23 (Winter) 30-47 <www.ijccr.net> ISSN 1325-9547. DOI: http://dx.doi.org/10.15133/j.ijccr.2019.004

EDITORIAL: Integration of new narratives and worlds in cc research

Filipe Moreira Alves*

(Guest Editor)

*Researcher at Centre for Environmental and Sustainability Research – FCT-UNL, fmalves@fc.ul.pt

Editorial Alves

Para citar este artículo: Alves, Filipe M. (2019) ‘Integration of new narratives and worlds in CC research’ International Journal of Community Currency Research Volume 24 (Winter) 1-2 <www.ijccr.net> ISSN 1325-9547. DOI: http://dx.doi.org/10.15133/j.ijccr.2019.001

From an idea to a scalable working model: Merging economic benefits with social values in Sardex

The remarkable growth of Sardex as a local currency throughout the island of Sardinia over the past 6 years motivated an in-depth look at its starting assumptions, design and operational principles, and socio-economic context. The paper looks at Sardex as a social innovation start-up, a medium of exchange and unit of account, an online and offline mutual credit system, and a closed economic community or ‘circuit’. The analysis relies on semi-structured in-depth interviews of circuit members and benefits from the reflexive point of view of one of its founders. The main findings are that trust was and continues to be fundamentally important for the creation and operation of mutual credit systems and that Sardex encompasses and mediates both economic and social values. Compared to other mutual credit systems, in addition to its unique design features Sardex is distinguished by its federated model of expansion and its strong commitment to keeping a balance between the economic and social aspects. In Sardex, money’s fungibility is defined by market utility and social values at the same time.

Giuseppe Littera *, Laura Sartori **, Paolo Dini ***, Panayotis Antoniadis ****

* Sardex.net, Sardinia, Italy

** Dipartimento di Scienze Politiche e Sociali, Università di Bologna, Italy

*** Department of Media and Communications, London School of Economics and Political Science, Houghton Street, London, WC2A 2AE, United Kingdom.p.dini@lse.ac.uk

**** ETH Zürich and Nethood, CH

Article Littera et al. pdf

To cite this article: Littera, G., Sartori, L., Dini, P. and Antoniadis, P. (2017) ‘From an Idea to a Scalable Working Model: Merging Economic Benefits with Social Values in Sardex’ International Journal of Community Currency Research 21 (Winter) 6-21 ISSN 1325-9547. DOI http://dx.doi.org/10.15133/j.ijccr.2017.002

Doing it together. Studying the implementation of a new social currency in the Netherlands

In this paper we take Do it Together! (DiT), a social complementary currency (CC) project in two Dutch municipalities, as an interesting example to show how action research with actual projects in the field can add greatly to the development and proliferation of CCs. We argue that action research, collaborative learning and actively sharing the lessons learned from the experiences can help CCs become sustainable and attractive models for use as valuable social (policy) tools in the future. We first describe how the participating organisations and businesses in DiT design and implement a social currency that binds the efforts of their different policies and strategies into a unified framework. Through this co-creative design process, the partners support one another in achieving their own objectives through rewarding desired behaviours of citizens and customers. Secondly, we identify challenges at different levels – micro, meso, and macro – to which the project partners have found several creative solutions. These strategies stem from a broad range of disciplines, bringing psychological, organisational, and institutional theories together in the design process and the resulting currency program. Finally, we assert that reflection on the dynamics and underlying mechanisms of these experiences and processes through action research can enrich a comprehensive understanding and improvement of CCs.

Lydwien A. Batterink*, Edgar A.D. Kampers**, Judith C.V. van der Veer***

* Radboud University, Master student and Qoin, The Netherlands (lydwien@gmail.com)

** Qoin, co-founder and director, The Netherlands (edgar.kampers@qoin.org)

*** VU University Amsterdam, PhD, The Netherlands (j.c.v.vander.veer@vu.nl)

Article Batterink-et-al pdf

To cite this article: Batterink, L., Kampers, E. and Van der Veer, J. (2017) ‘Doing it together. Studying the implementation of new social currency in the Netherlands’ International Journal of Community Currency Research 21 (Winter) 22-35 <www.ijccr.net> ISSN 1325-9547. DOI http://dx.doi.org/10.15133/j.ijccr.2017.003

Timebanking, co-production and normative principles: putting normative principles into practice

Timebanking is a parallel currency system structured on Cahn’s normative principles of co-production (2004, 2010; Cahn & Gray, 2013). This article provides a descriptive analysis of the normative principles of co-production in timebanking in order to explore the moral commitment espoused by timebanking economies, especially in regard to reciprocity and the adoption of an asset perspective. A further strand examines the literature on timebanking outcomes for evidence of the influence of normative principles in practice.  Discussion centres on the nature of co-production in timebanking, the practice of reciprocity and time exchange balances. Two distinct issues are identified in the literature that impact the actualization of the normative principles in timebanking practice: a reductionist approach to measurement of exchange, and reciprocation latency. The nature and causes of these invite further research. These issues arise from alternative interpretations of the nature of exchange in co-production in timebanking. The work is important because of the gap in community currency research in regard to how normative values, foundational to this alternative economy, are actualized. The discussion provides a summary of the influences which frame the timebanking exchange and indicates possible areas for further research.

Neville Clement, Allyson Holbrook, Daniella Forster, Johanna Macneil, Max Smith, Kevin Lyons, Elizabeth McDonald

The University of Newcastle, Australia, Email: Neville.Clement@newcastle.edu.au

Article Clement et al. pdf

To cite this article: Clement, N.; Holbrook, A.; Forster, D.; Macneil, J.; Smith, M.; Lyons, K. and McDonald, E. (2017) ‘Timebanking, co-production and normative principles: putting normative principles into practice’ International Journal of Community Currency Research 21 (Winter) 36-52 <www.ijccr.net> ISSN 1325-9547. DOI http://dx.doi.org/10.15133/j.ijccr.2017.004

Psychological factors influencing the use and development of Complementary Currencies

This paper presents a novel socio-psychological analysis of the motivations and experiences of mutual credit members in the United Kingdom and in the United States. Primary data comprised of interviews and participant observation, supplemented with secondary data analysis of organisation documents, and a review of the literature in psychology, sociology and economics. Group members were motivated to secure personal resilience against hardship, and the personal agency that results from this, along with the experiences of community and cultural identity positioning, motivates engagement. Consequently these groups are defined as cultural communities offering personal resilience to members through informal reciprocity. This approach, which prioritises the social aspects of exchange, has implications for the design of complementary currencies, particularly mutual credit initiatives, and demonstrates the value of engaging with the fields of psychology and sociology in developing interdisciplinary understandings of alternative economic practice.

Article Smith pdf

To cite this article: Smith, C.J.  and Lewis, A. (2016) ‘Psychological Factors influencing the Use and Development of Complementary Currencies’ International Journal of Community Currency Research 20 (Summer) 2-23 <www.ijccr.net>  ISSN  1325-9547. DOI http://dx.doi.org/10.15133/j.ijccr.2016.001

Classifying non-bank currency systems using web data

This paper develops a new classification of non-bank currency systems based on a lexical analysis from French-language web data in order to derive an endogenous typology of monetary projects, based on how these currencies are depicted on the internet. The advantage of this method is that it by-passes problematic issues currently found in the literature to uncover a clear classification of non-bank currency systems from exogenous elements. Our textual corpus consists of 320 web pages, corresponding to 1,210 text pages. We first apply a downward hierarchical clustering method to our data, which enables us to endogenously derive five different classes and make distinctions among non-bank currency system and between these and the standard monetary system. Next, we perform a similarity analysis. Our results show that all non-bank currency systems define themselves in relation to the standard monetary system, with the exception of Local Exchange Trading Systems.

Ariane Tichit*, Clément Mathonnat*, Diego Landivar**

* Clermont University, Auvergne University, CNRS, UMR 6587, CERDI, F-63009 Clermont Fd. Email: ariane.tichit@udamail.f; Clement.MATHONNAT@udamail.fr; ** ESC Clermont, 63000 Clermont-Fd. Email: diego.landivar@france-bs.com.

Keywords

non-bank money, text mining, web data, downward hierarchical clustering, similarity analysis

Article Tichit pdf

To cite this article: Tichit, A., Mathonnat, C.,  and Landivar, D. (2016) ‘Classifying non-bank currency systems using web data’ International Journal of Community Currency Research 20 (Summer) 24-40  <www.ijccr.net>  ISSN  1325-9547. http://dx.doi.org/10.15133/j.ijccr.2016.002

The “commodity – money – commodity” Mutual Credit Complementary Currency System. Marxian money to promote community trade and market economy

Samo Kavčič

Šercerjeva ul.26, 4240 Radovljica, Slovenia. E-mail: kavcic917@gmail.com

Abstract

The Mutual Credit Currency System, this most radical form of endogenous money, was evaluated and compared with Marx’s Commodity-Money-Commodity requirement.  A simple simulation of a small community closed loop economy was used to illustrate the functioning of two types of mutual credit currency systems. The first, dubbed MCSG, behaved according to the specifications and recommendations of the mutual credit currency system’s founding fathers, Riegel and Greco. The second, dubbed the Komoko Monetary System, or abbreviated to KMS, was a sub-type of the mutual credit currency system with some additional restrictions and one additional liberty. The main restriction introduced in the KMS was that it almost exclusively supported the exchange of only newly produced goods and services. The liberty introduced is forecast-based credit allocation. It was shown that the MCSG has an inconsistency that could potentially lead to instability. The restrictions applied within the KMS can provide a remedy for this potential flaw, while at the same time rendering the KMS compliant with Marx’s requirement. The monetary control measures applicable in KMS were discussed, which guarantee robustness and stability and make KMS a true complement to the official fractional reserve banking.

Keywords

Mutual credit system  , Commodity – money – commodity, Cash flow forecast, Currency circuit,  Monetary control,  Endogenous money

Article kavcic pdf

To cite this article: International Journal of Community Currency Research 20 (Summer) 41-53. <www.ijccr.net>  ISSN  1325-9547. http://dx.doi.org/10.15133/j.ijccr.2016.003

New Issue IJCCR

Dear readers

A new issue of the International Journal of Community Currency Research has been published.

You will find the table of contents here where you can download the individual papers. If you prefer to download the complete issue, you can simply click on this link to access the pdf.

We will be updating our systems this week, so you may be receiving an unusual (and annoying) number of emails. Please receive my sincere apologies for this inconvenience.

Enjoy the reading,

 

Dr. Georgina Gómez

Chief Editor

 

Editorial

Georgina M. Gómez

Chief Editor

International Institute of Social Studies of Erasmus University Rotterdam, gomez@iss.nl

The International Journal of Community Currency Research was founded 23 years ago, when researchers on this topic found a hard time in getting published in other peer reviewed journals. In these two decades the academic publishing industry has exploded and most papers can be published internationally with a minimal peer-review scrutiny, for a fee. Moreover, complementary currency research is not perceived as extravagant as it used to be, so it has now become possible to get published in journals with excellent reputation.

In that context, the IJCCR is still the first point of contact of practitioners and new researchers on this topic. It offers open access, free publication, and it is run on a voluntary basis by established scholars in the field. In any of the last five years, it has received about 25000 views. The figure seems minuscule in comparison with the numbers Internet has got us used to, but it shows the importance of the IJCCR as the key outlet for research on complementary currency systems. IJCCR now counts over 190 articles with research on all continents.

The IJCCR is currently under scrutiny to be listed in Scopus, so we need to keep this effort going. We invite researchers to disseminate their work through this journal and welcome articles of scientific quality that present a well-argued proposition, an explicit dialogue with theories, and the work of other scholars in the field.

The IJCCR is the main academic publication of the Research Network on Monetary Innovation and Complementary and Community Currencies (Ramics.org), which is still working on establishing itself as the referent organisation in the field. We hope you enjoy this new summer issue.

Read as pdf Editorial

Social representations of money: contrast between citizens and local complementary currency members

Ariane Tichit

CERDI, University of Clermont Auvergne; France; Ariane.Tichit@uca.fr

Abstract

This article analyses the social representations of money from survey data. More specifically, it tests how organizers of a complementary currency system have a distinct perception of money compared to other citizens. The main results confirm the existence of significant differences between the two groups. The structure of their representations shows that for the local currency members money is less tied to official institutions, to the symbol of the sovereign State, to labour and to wages than for the representative population segment. This confirms a number of theoretical studies that see these social innovations as forms of protest against the standard system, questioning the sovereign State currency and close to the concept of unconditional income. Local currencies, through the different social representations of money they contain, could well be drivers of societal change.

Keywords

Social representations of money, Survey data, Abric method.

Article Tichit, A.

To cite this article: Tichit, A. (2019) ‘Social representations of money: contrast between citizens and local complementary currency members’ International Journal of Community Currency Research 23 Issue 2 (Summer 2019) 45-62; http://www.ijccr.net; ISSN 1325-9547; DOI http://dx.doi.org/10.15133/j.ijccr.2019.013

Key Factors for the Durability of Community Currencies: An NPO Management Perspective

Jeremy September

Tohoku University Graduate School of Economics and Management in Sendai, Japan; jeremyseptember@gmail.com

Abstract

This paper investigates key factors for the durability of community currencies (CCs) by conducting a comparative dual case study on two long lived CCs in Japan. CCs both in Japan and abroad have exhibited effectiveness in developing social capital however the literature reveals a lack of academic research on the management or operation of CCs. Therefore this paper aims to identify key factors for the durability of CCs that could contribute to the development of a best practices model for social entrepreneurs. A secondary purpose is to add to the English body of knowledge on Japanese CC systems. Two contrasting Japanese CC organizations that have operated for more than a decade are investigated in depth. This entailed gathering both qualitative and quantitative data from both organizations and analyzing the data within a Nonprofit Organization (NPO) management framework. The results reveal five key durability factors: creating value and utility for stakeholders, appealing to the local solidarity of businesses, the receptiveness of businesses towards CCs, partnering with a corporation or larger institution and solid organizational structure. The main implication of these factors is that successfully engaging external stakeholders is crucial to sustaining the operations of a CC organization.

Keywords

Community currency, durability factors, stakeholders, best practices framework.

Article September

To cite this article: September, J. (2019) ‘Key factors for the durability of community currencies: an NPO management perspective’ International Journal of Community Currency Research 23 Issue 2 (Summer 2019) 17-34; http://www.ijccr.net; ISSN 1325-9547; DOI http://dx.doi.org/10.15133/j.ijccr.2019.011

Sidechain and volatility of cryptocurrencies based on the blockchain technology

Olivier Hueber

Université Côte d’Azur, CNRS-GREDEG; France; olivier.hueber@univ-cotedazur.fr

Abstract

A cryptocurrency market based on the blockchain technology is characterized by the coexistence of a steady-state supply and a volatile e-money’s demand. In this study a cointegration test establishes a long-run relationship between the internal demand of Bitcoins and prices. From this result, we propose to restrain the intrinsic volatility of any cryptocurrency based on the Blockchain technology by introducing a sidechain pegged to the parent chain.

Keywords

Sidechain, Community currencies, Blockchain, Bitcoin, Demurrage, cryptocurrencies

Article Hueber

To cite this article: Hueber, O. (2019) ‘Sidechain and volatility of cryptocurrencies based on the blockchain technology’ International Journal of Community Currency Research 23 Issue 2 (Summer 2019) 35-44; http://www.ijccr.net; ISSN 1325-9547; DOI http://dx.doi.org/10.15133/j.ijccr.2019.012

Transforming or reproducing an unequal economy? Solidarity and inequality in a community currency

Ester Barinaga

Lund University, Sten K. Johnson Centre for Entrepreneurship at the Dept. of Business Administration, School of Economics and Management; Sweden; ester.barinaga@fek.lu.se

Abstract

Building on empirical material from 6 months ethnographically inspired fieldwork in Málaga Común, a mutual credit community currency in Southern Spain, the paper uses Ostrom’s (1991) theoretical framework on common-pool resources to look deeper into the provision and appropriation dynamics in the currency scheme. Particular attention is put into the sources of inequality in members’ provision and appropriation capacities. Findings suggest that, embedded as community currencies are in the conventional economy, the sources of inequality from the conventional economy are also brought into the community currency. More particularly, private ownership and specialised complex skills lie behind members’ unequal capacity to earn community currency in relation to their spending needs. The paper ends by outlining some elements that would need attention when designing the governance institutions of community currency schemes that aim to overcome the inequality brought in by these currencies’ embeddedness in the conventional economy.

Keywords

Mutual credit currency, inequality, Ostrom, resource system vs. flow of resource units; provision/appropriation ratio, common-pool resource.

Article Barinaga

To cite this article: Barinaga, E (2019) ‘Transforming or reproducing an unequal economy? Solidarity and inequality in a community currency’ International Journal of Community Currency Research 23 Issue 2 (Summer 2019) 2-16; http://www.ijccr.net; ISSN 1325-9547; DOI http://dx.doi.org/10.15133/j.ijccr.2019.010

New Issue IJCCR

Dear readers

The Winter edition of the IJCCR No. 23 is now online!

This is the first issue to be published completely in Spanish and Portuguese (except for the Editorial by guest editor, Filipe Alvez). It collects papers presented at the 4th International Conference on Social and Complementary Currencies “Money, Awareness and Values for Social Change” held between 10th and 14th May 2017. The Conference was organised by Dr. August Corrons at the Universitat Oberta de Catalunya (UOC) in Barcelona, Spain.

Enjoy the reading!

Dr. Georgina M. Gómez, Chief Editor

New Issue now online

Dear CCS community

We have now published our 2018/2 Issue based on the IVth International Conference on Social and Complementary Currencies organised by the Universitat Oberta de Catalunya in Barcelona in 2017. Filipe Alves is the guest editor of this issue, which you can find here: https://ijccr.net/current-issue/

A second output of that conference will be our next issue 2019/1 and exceptionally it will be published entirely in Spanish.

Enjoy the reading and keep on submitting your research to IJCCR!

Dr. Georgina M. Gómez

Chief Editor

 

The Complete Economy

by Pierre Gancel

Promoting a digital Community Currency (CC) platform can boost local trade for the 700m Africans to be connected by 2020. This figure is based on the GSMA estimated 54% penetration rate of unique internet subscribers combined with Wolfram 1,29 billion population estimation in Africa the same year.

This post demonstrates that CC can improve standards of living through the case of Bengla-Pesa in Kenya, then suggests two ways to adapt CC with the constraints of mobile to scale up. It suggests modernizing front-office by integrating with messaging platforms, then demonstrates how using a Blockchain-based database can enhance back-office security.

Bangla-Pesa is a CC used by 200 small businesses since May 2013 in Mombasa to trade goods and services. Based on a ‘mutual credit’ model similar to the Wir Franc, this system provides local business with a means to exchange their excess capacity. Allotment of vouchers is based on a survey to assess the productive capacity of a participant, backed by four other members in case of default. One week after launching the currency, 83% of respondents reported sales increases with 22% of daily trades done with Bangla-Pesa. For 89% of the network, Bangla-Pesa exchanges did not replace trades in Kenyan shillings but represented separate additional transactions. The presence of Bangla-Pesa in the community may also reduce volatility as people have access to a means of exchange even in times of market instability. Indeed sales can range from 3-15 euros per day! Two more programs have been launched since then in Kenya. Estimates are that each CC increases local trade by USD100,000 each year fueling growth that does not rely on large donors, banks or governments.

There are thousands of CC worldwide, most now use software rather than physical bookkeeping. Free open solutions provided by groups such as Community Forge are aiding their uptake. Yet they are burdened with complex user experience and outdated design. To provide a viable alternative to cash, users need a seamless experience when exchanging CC via mobile. The best interface being no interface, such platforms should almost be invisible. Sending value through a messaging platforms is increasingly popular. In November 2015, WeChat reached 200M users on its payments service, while two weeks ago Facebook Messenger started accepting native payments without sending users to an external website. There is as a result a huge opportunity to plug CC front-end into a conversational BOT to boost user engagement.

According to Richard Logie, 90% of digital CC systems fail to scale due to lack of transparency and governance risk in the process of allocating vouchers. Using Blockain-based solutions would prevent such flaws. Indeed private Blockchains produce a transparent record of account balances that does not rely on a central authority. These programmable trust-less ledgers create an independently verifiable record of user identities and transactions thus solving the accountability issue. Bryan Young designed an innovative CC use case through SlackCoin. Combining Slack messaging platform and Monax open-source Blockchain i.e. eris:db.

Since usage determines the core leverage of today’s economy, developing active digital CC networks is bound to yield great value. Backing up the promises of these disruptive tools Colu raised $9.6m in June 2016 to promote their Blockchain-based solutions for creating local currencies.

Vol. 20 (Summer) pp. 41-53

The “commodity – money – commodity” Mutual Credit Complementary Currency System. Marxian money to promote community trade and market economy

Samo Kavčič

Šercerjeva ul.26, 4240 Radovljica, Slovenia. E-mail: kavcic917@gmail.com

Abstract

The Mutual Credit Currency System, this most radical form of endogenous money, was evaluated and compared with Marx’s Commodity-Money-Commodity requirement.  A simple simulation of a small community closed loop economy was used to illustrate the functioning of two types of mutual credit currency systems. The first, dubbed MCSG, behaved according to the specifications and recommendations of the mutual credit currency system’s founding fathers, Riegel and Greco. The second, dubbed the Komoko Monetary System, or abbreviated to KMS, was a sub-type of the mutual credit currency system with some additional restrictions and one additional liberty. The main restriction introduced in the KMS was that it almost exclusively supported the exchange of only newly produced goods and services. The liberty introduced is forecast-based credit allocation. It was shown that the MCSG has an inconsistency that could potentially lead to instability. The restrictions applied within the KMS can provide a remedy for this potential flaw, while at the same time rendering the KMS compliant with Marx’s requirement. The monetary control measures applicable in KMS were discussed, which guarantee robustness and stability and make KMS a true complement to the official fractional reserve banking.

Keywords

Mutual credit system , Commodity – money – commodity, Cash flow forecast, Currency circuit,  Monetary control,  Endogenous money

Article kavcic pdf

To cite this article: Kavčič, S. (2016) ‘The “commodity – money – commodity” Mutual Credit Complementary Currency System. Marxian money to promote community trade and market economy’ International Journal of Community Currency Research 20 (Summer) 41-53 <www.ijccr.net> ISSN 1325-9547  http://dx.doi.org/10.15133/j.ijccr.2016.003