>From: "Doug Henwood" <dhenwood at panix.com>
>
>
>
>>>How so? It certainly wouldn't work as a substitute for widely-used
>>>currencies, that's obvious. But as for developing a smaller, more
>>>contained economy to keep trade in the neighborhood, it doesn't
>>>strike me as a bad or nostalgic idea. (Hard to see "nostalgia" in
>>>the scheme, since I can't recall any time when local currencies
>>>actually existed.) What's the argument against it?
>>>
>>>
>
>Question: When you start your local currency system, do you plan to have
>MRI's in your local hospital? GE accepts payment in US$, not local paper. Do
>you plan to have ambulences for emergency ER care? Ford Motor accepts US$.
>How about computers, construction equipment, cancer drugs, etc.? You have to
>have dollars to pay for all that stuff. Of course, you could borrow the
>dollars from Citicorp, but pretty soon you'll have yourself a nasty little
>external debt problem. Then you'll have to bring in the IMF. This idea has
>little to recommend it.
>
I'd like to suggest you re-read what I'd said. I stated that local
currencies would obviously _not_ work for many things, such as (in
Doug's suggested counterexample) steel, and it would not be a substitute
for the prevailing currencies in all situations. Again, I'd be
interested in knowing the actual workability of local-currency schemes,
and how well they've worked when they've been implemented.
But I am surprised at your argument which is, basically, "Nobody does this now, so it can't possibly work." You might argue, with equal content and force, that because GE doesn't like labor unions, and Ford isn't going to divest its investments in governments that commit human-rights abuses, it's silly and pointless to suggest that they consider going along with these things.