BBC.com ran an interesting piece on September 18 by Dave Harvey on the recent creation of a new local currency in Bristol, England: the “Bristol Pound.” Notes Harvey:
“The city of Bristol has launched its own currency, which cannot be used in Bath, never mind Berlin or Bombay. More than 350 firms in the city have signed up, making it the UK’s largest alternative to sterling. Unlike previous schemes which have relied on paper, the Bristol Pound can be used online, even by mobile phone.”
The article goes on to note:
“Alternative currencies have certainly done well abroad. A German currency called the Chiemgauer has been operating in Bavaria since 2003. Last year, 550,000 Chiemgauer were in circulation, with a turnover of 6.2 million. With a 1:1 exchange rate with the Euro, that’s serious business.
“In 2006 a rival to the US Dollar was launched in the Berkshire region of Massachusetts, called the BerkShare. Since then, 2.2 million have been issued and 370 local firms are signed up.”
While a local phenomenon in these cities, the article makes clear that at least the Bristol effort is a direct reaction against global currency manipulation and thus, at least in part, a reaction against globalization itself. It’s easy to dismiss the Bristol Pound as a local curiosity but it’s worth considering what this effort says about the feeling in many parts of the developed world about the current global financial system. It’s no secret that many, if not most, people who do not work in finance have lost an understanding of the basic mechanisms of global finance. Cross-border currency flows, scandals about LIBOR and money laundering, and the latest evolutions in High Frequency Trading (HFT) have led many people to give up on understanding how money behaves in 2012. One might be tempted to say this is simply the price of financial evolution but that would be a dangerous position to take.
When ordinary people fail to understand the functioning of the basic mechanisms of society — how money works, how healthcare works, how education works — we enter a period of social frailty, where people who claim to know how it works — and usually it works against you, then tell ordinary people — can take over the conversation and impose their vision of reality on people who long for understanding of the world around them. This is exactly what has happened with politics in the US, where people have stopped trying to understand how laws and policy are made and simply retreated to partisan positions with little desire for informed compromise.
Seen in that light the Bristol Pound is a leading indicator of yet another group of people who have decided the broader (financial) world no longer works for them. That’s a sad state of affairs and one more fall out of the transformation of Wall St over the last 30 years from provider of capital for capitalism to self-referrential money recycler.
Read the full BBC article here: