I was standing at the counter in the chemists’ over the road this afternoon when my eye was drawn to a shiny leaflet displayed there. For a moment, I daydreamed, admiring the design and the pretty colours, the words ‘Brixton Pound’ turning my thoughts to a possible new club or home for rescue dogs.
Then, with an actual, physical start of surprise, I noticed what it was really advertising. The Brixton Pound.
Once I’d paid for my goods, I snatched up a copy of the leaflet and went out to the pavement to read it. Here is what it says:
The B£ is a local currency launching in autumn 2009. It’s a practical way for Brixton residents to support local traders and boost Brixton’s economy.
The B£ will work alongside pounds sterling – but can only be spent with independent local businesses within Brixton. Brixton will be the first urban centre in the UK to have its own currency.
Your money goes further:
- Rewards and special offers for using the B£
- The B£ keeps circulating within Brixton – local people benefit each time you spend one
Good for the local economy, community and environment:
- Supports independent shops and local jobs under threat from the recession and larger chain stores
- Maintains the diversity and character of Brixton
- Localising trade helps cut carbon from transport
The B£ is secure:
- Printed on watermarked secure paper
- Backed by sterling held by Lambeth Savings and Credit Union
The B£ is being launched by a group of local volunteers in partnership with:
- Transition Town Brixton (Community-led vision and action on Climate Change)
- Lambeth Savings & Credit Union (Lambeth’s financial cooperative)
- nef (economics as if people and the planet mattered – Lambeth-based economic think-and-do tank)
Please show your support by joining the B£ 1000 club. Membership is free and you will be one of the first 1000 people to use the B£ when they are launched. Visit www.brixtonpound.org to sign up.
Several questions leap to mind.
First, what is the exchange rate between B£ and £ to be?
Second, how exactly is that going to be determined?
Third, most traders in Brixton purchase their goods from outside of Brixton (I would guess). If the B£ is worth less than or as much as the £, how is it going to help them?
Fourth, most residents in Brixton earn their money in £. If the B£ is worth more than the £, how is it going to help them?
Fifth, if the B£ can only be spent within Brixton, the ‘diversity and character’ of what Brixton residents buy is going to shrink. You can’t buy a drink at a pub in Streatham with your B£. You can’t take a bus to Stockwell with your B£. What, in fact, will your B£ buy you? Locally-sourced goods from local traders. Which, in Brixton, is basically drugs. Hello, black market!
I’m not suggesting that alternative currencies are a bad idea in and of themselves; in many circumstances, I would argue, they’re necessary, especially when hyperinflation for example has devalued the official currency. They probably do this in Zimbabwe. But an alternative currency in a location like Brixton, that produces few truly ‘local’ goods and where most of the residents are earning their money outside of Brixton in pounds sterling, is at best pointless, and at worst, damaging to local traders.
I haven’t actually worked through it all in my head yet, however, so I’m willing to be told differently. I just thought it might be interesting for other libertarians to hear about this. Especially Tim Worstall.