“The essence of the contemporary monetary system is creation of money, out of nothing, by private banks often foolish lending.” — Martin Wolf
The day before Christmas Eve it was a freezing cold day in Lincoln, the County town of Lincolnshire. It must have been cold as the River Witham was frozen, something I had never seen before. OK covered in ice. I have seen the Brayford solid with ice, but never ice on the river.
I was cold, chilled to the bone. I decided to walk up The Strait and Steep Hill to Lincoln Cathedral for no other reason than to keep warm. Though having said that it is a worthwhile walk, away from the ghastly Clone Town of the city centre to interesting shops and an attractive environment.
On my climb up, with a stop at Readers Rest where I picked up a copy of New Covent Garden Soup Company’s Book of Soups, I noticed many of the shops on my climb up and in Bailgate when I got to the top had notices in the window saying they accepted Bailgate vouchers. What were these I thought, has Bailgate set up a local currency, or are they as it says merely vouchers something like Book Tokens?
On my way down I looked in the Jews House Restaurant and had a chat with a very helpful and friendly Samantha. She explained no it was a voucher not a local currency. She had no information and suggested I visited the Tourist Information Centre as they should have some information. But as that was at the top of the hill, I did not fancy climbing back up again, but said I would look in another day.
The difference between a voucher and a local currency is that a voucher is spent once, whereas a local currency, ie a genuine Bailgate Pound, circulates within a local economy, it stops money leaking out of the local economy.
You spend it in the butcher, he spends it the baker and so forth.
I suggested that they take the next step and establish a local currency. I suggested she looked at the Totnes Pound which has been a huge success since its launch by Transition Town Totnes. It is one of many local currencies which have been introduced.
If you spend one pound sterling in a High Street store or a superstore, that pound goes straight out of the local economy, its buying power lost to the local economy. A local pound may only be spent within the local economy, and thus has a multiplier effect, which benefits the local economy.
For example. I spend ten Bailgate Pounds in the local butcher. He pops across the road to the florist and spends it on some flowers. They walk along to the deli and spend it on some cheese. They go down to the butcher and spend it again. The ten Bailgate Pounds I originally spent have not only benefited the butcher, but several other retailers too by circulating within the local economy.
The Bailgate Pound was a local initiative by Bailgate traders, Lincoln Business Improvement Group, The Bailgate Guild and the Lincolnshire Echo following the collapse of the Lincoln Christmas Market due to adverse weather conditions. Having seen its success let us hope they now go that one step further and introduce a genuine local currency.
The support is there, critical mass has been reached, awareness raised, the Bailgate Pound should be turned into a fully fledged local currency. It is important this is done as soon as possible not to lose momentum.
An attractively designed Bailgate Pound would become a much sought after collectors items for visitors.
Local currencies have been a success in Totnes, Lewes, Brixton, they retain money within the local economy, essential when the economy is deflating, so why not Bailgate?
The Bank of England injects money into the economy through Quantitative Easing. In reality they are creating money, but if not backed by real resources, real growth, they are creating debt. The underlying problem beside the debt, is the money goes to the banks, they use it for speculation, commodity prices go up. Creation of money not backed by real resources causes inflation. Rising prices, inflation, transfers money from the poor to the rich.
We need money injected into local economies by local councils. Not easy at a times of cuts, but all the more important when the economy is deflating. But the money injected into the local economy has to be retained within the local economy. One way to do so is by the local council acting as a Central Banker to the local economy through backing a local currency.
Stop Press: Top story in The Currency Daily on New Year’s Eve (Friday 31 December 2010)!
Stop Press: Front page news on Lincolnshire Echo on New Year’s Day (Saturday 1 January 2011), with full page coverage inside on page 3. And top news story on their website for New Year’s Day! It looks like the Bailgate Pound may go ahead as a fully fledged local currency. My own talks with local retailers shows a great deal of enthusiasm and support. [see Bailgate currency could be here to stay following success of Christmas initiative]