Hi @Michael, I’m not of the belief that their transitory nature is due to the digitisation of money. Indeed, the digitisation of money makes things so much easier to create a local currency. If you look at the proliferation of crypto and digital currencies from the left and right of the political spectrum there is a pretty healthy cambrian period happening in money over the past 10 years.
I think we often don’t see how many “local currency” or purpose specific, company specific, or economic platform specific systems there are out there. They are often so seamlessly integrated into our world view that we think they are even currencies. (Warning: my definition of a currency is any accounting device that creates a unit of account. I don’t believe that currencies must have all the “3 functions of money” to be considered money, nor do I think there are only 3 functions).
There are so many corporate currencies, or in other words loyalty programs, that it is hard to keep up with them. I’m not just talking about frequent flyer miles, but even more orthodox programs like my chase credit card which has a point system where I can spend in an online market that is separate from my chase checking account uses. Sodexo is my favorite corporate currency issuer. Also in the world’s top fifty employers. But the obvious is Amazon and its lending and financing platform. So the model of a ‘local currency’ or a loyalty program, to help consolidate market power and build resilience against external competitors is an obvious tool to manage an internal economy. It is after all why we live in a world of numerous national currencies rather than one world currency.
But your point was more about why when local currencies pop up in local communities, they don’t last, or at least they appear to struggle to last. I think first one should ask if they ever caused harm. If something new comes in, works to some extent, and then disappears, we shouldn’t just give up on it. Local currencies can be temporary, and can achieve outcomes that would have otherwise been hard to achieve. For example, they can be used to plan and organize a town festival where people want to utilize spare capacity in their town as much as possible rather than bring in resources and laborers from outside. Costs and Benefits should be assessed during the period that a currency is in operation. I don’t know enough about the Brixton Pound, but wikipedia seems to think there were some achievements. The critique would be in the costs, and who bore those costs. These is where the design of the local currency needs to forecast what to do when the currency stops. In a game however, I think it might be fun to have winners and losers just to experience how bad that can be, and to think about the design of the game to make everyone a winner even when the game comes to an end.
The transience problem is not just a problem endemic to a local currency, it is a problem with any project that is decentralized and depends on coordination. Democracy is also a big problem. Once it is instituted, i.e. there are institutions to facilitate its continuance, then we think of it as solid, but it can unravel. Plus there are so many countries in the world that are still not considered democratic. It takes time to get there. The tragedy of the commons, or the prisoner’s dilemma are similar problems. They suffer from coordination failure. The solution is often a firm or a government. Grassroots solutions are difficult, and don’t often stick.
By the looks of things, WEAll is a decentralized grassroots system. Maybe more could be achieved if it was more top down, or organized. But then again, if nature is anything to go by, the most viral and organic transitions are often those that are decentralized.
I would rather think of local currencies as a tool for decentralized coordination. Such a tool can be poorly designed, lack coherence, and not gain traction. But I also have faith (by looking at the many examples of them in history) that they can be a powerful tool for coordination. They are just one tool in our tool kit for designing our new economic order. One of many.