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July 7, 2005

Money is frozen desire


Calvin Woodward wrote about the thriving barter system in Floyd, Virginia, deep in the Appalachian mountains.

Yesterday's Associated Press story told how the counterculture met the mountain culture there and brought back to the age–old system of "I'll give you this if you'll give me that."

Of interest is that in 2002, Floyd created its own labor–based currency, called Floydian Scrip, also known as Floyd Hours.

Two denominations were printed on recycled denim: a note that valued one hour of labor at $10 and one that valued 15 minutes at $2.50.

In theory, wrote Woodward, "A customer could pay for groceries with a $10 Floyd note. The store could use that note to pay for an hour's worth of service from an electrician. The electrician could then take the note to the local masseuse for a rubdown. And so on."

But the system didn't work.

Stores found themselves with lots of blue notes they couldn't pass on.

And then Woodward closed his story with this blockbuster sentence: "Without universal acceptance, a local currency breaks down at its weakest link."

Stop right there.

The whole idea of money is one of a collective illusion that we choose to believe in.

Because why should a piece of paper entitle me to anything just because of what's written on it?

James Buchan, in his superb book, "Frozen Desire: An Inquiry Into The Meaning of Money," explored this mystery with great insight.

And it is indeed a mystery.

Take, for example, the gift card.

Here is an invention which takes a universal currency — money — and transmutes it into a much more limited version that can only be used in one place.

Yet people buy in big–time, more so every year.

How is that possible?

The retail industry has succeeded in a mass brainwashing that has resulted in the widespread belief that giving someone money is tacky, crass and thoughtless as opposed to giving that same money in the form of a plastic card that in many cases, unlike money, begins to lose value from the instant it's purchased.

And unlike money can't be used anywhere the recipient wishes but only at one merchant.

Here's Woodward's story.

    Forget The Wallet And Barter Instead

    They came to Floyd to get back to the land, to be alone, to find community or to make music.

    They fit here because they didn’t quite fit in anywhere else.

    Here the counterculture met the mountain culture and something unique was born.

    The two lifestyles had something in common: a lack of money.

    The locals wanted it but didn’t have it.

    The newcomers with tie-dyed shirts didn’t care much about the dollar but, like everyone else, they had to pay bills.

    So together they took something ancient and made it new.

    It worked, and still does, like this: I’ll do this for you, if you give that to me.

    The practice is bartering, defined as trading goods or services with no money involved.

    Today the barter system courses through Floyd, an Appalachian town that still attracts people who are off the beaten path in life.

    At Dr. Susan Osborne’s Barter Clinic, people have brought in firewood, meat and soap to trade for her medical services.

    In Floyd, goods tend to be bought the usual way, with cash.

    But trade has its place.

    A man dropped by the Harvest Moon natural foods and exotic gifts store, worked for 15 minutes on the grounds, and claimed a few croissants as payment the next day.

    "He’ll show up for our smoothie test run," said Tom Ryan, who runs the two-story, cedar-planked store with its founder, his wife, Margie.

    Out in the country, Dawn Shiner and her family spend a day helping a farmer cut or bale hay, in return for taking all the hay they need back home to their garden and work at a market for the five pounds of almonds she wants for baking.

    And when Erika Johnson and her husband wanted to open a restaurant and music place downtown, they got the space by offering the seller $2,000 worth of food and drink at the place, Oddfellas.

    Payment in full.

    Many oddfellas inhabit these hills.

    Scores of artists have been drawn to a town where many people can’t afford what they create.

    Noses are pierced, a new generation of Earth Shoes is sold.

    On the other side, the old-time corner hardware store sells Red Flyer wagons and a country store hosts a Friday night bluegrass jamboree.

    Economists think informal commerce – including bartering, baby-sitting, lawn mowing and unreported moonlighting – make up at least 6 percent and even as much as 20 percent of the national economy, according to an analysis done for the Federal Reserve Bank of Richmond.

    And that doesn’t count criminal transactions.

    In Floyd, as anywhere else, money still drives the bulk of commerce.

    But in 2002, Floyd took the leap and created its own labor–based currency, the Floydian Scrip, also known as Floyd Hours, inspired by a pioneering effort in Ithaca, N.Y.

    Two denominations were printed on recycled denim — a note that valued one hour of labor at $10, and one that valued 15 minutes of labor for $2.50.

    In theory, a customer could pay for groceries with a $10 Floyd note.

    The store could use that note to pay for an hour's worth of service from an electrician.

    The electrician could then take the note to the local masseuse for a rubdown.

    And so on.

    In practice, it didn't turn out that way.

    Stores found their registers stuffed with blue notes they couldn't pass on.

    Margie Ryan took up $500 worth of scrip but was hard–pressed to use it.

    "Once my building's built, I don't need carpentry anymore," she said.

    Without universal acceptance, a local currency breaks down at the weakest link.

This article has given me cause for reflection and I have decided to undertake an experiment that, if nothing else, will provide much amusement for me as well as material for an occasional bookofjoe post.

What I'm going to do is order a bunch of business cards in bookofjoe green with "bookofjoe" printed in white just like atop this page.

I will sign and date each on the back, as well as place my thumbprint on it.

Then I am going to offer this new currency, as yet unnamed, for a price yet to be determined.

Like Edwin Starr in his great 1970 song, "War," you may ask, "What is it good for?"


And like Edwin Starr I will reply, "Absolutely nothing."

July 7, 2005 at 02:01 PM | Permalink


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Tracked on Aug 14, 2006 10:28:00 PM


Interesting. I had heard of Ithica notes.
Have you ever thought a state issuing currency in the form of its paychecks.
Community benefit labor is not truely an expense. Someones labor is only an expense to you if they are not also owners.

Visualize abundant labor for teachers, police, firemen, DMV workers...
We could still have free enterprise (fair enterprise).

what do you think?

Posted by: Matthew Martin | Mar 2, 2009 10:13:39 PM

excelente. gran erudiccion que me encanta, quiero saber si esta traducido al castellano para regalarlo a nuestro ministro de finanzas.

Posted by: frozen desire | Mar 25, 2006 4:24:30 PM

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