I have no particular objection to the author's suggestion except that it may be far more difficult to implement than he suggests. By the time government advisors have advised, a counterfeit-proof design devised, the administrative details hammered out, this natural money is issued and shop keepers finally "get" the idea to the point where they accept the notes, the economy may well have moved on. Then everyone will have gone back to real dollars. That solution was devised for a recession which went on for years, and in which around a third of the workforce was out of work (and even then they didn't do it). The current five per cent or so unemployment isn't going to make the authorities adopt a fairly desperate expedient.

Alternate forms of money have circulated in Australia, incidentally. These have been various forms of barter dollars - that is, a more systematic way of battering work between businesses which circulate in districts. I have not heard of barter dollars for some time so they may have faded away, but reviving those systems may be a better, sort-term fsoloution to lack of liquidity..

I agree with Curmudgeon that any government initiative to issue natural money could be too slow for mitigating the current recession. However, the objective of my article was on “remaking the economy” after the current crisis to reduce future problems.

But there could well be sufficient time for the government to issue natural money to avoid going into debt and/or increases taxes to fund their $43 billion “Nation Building and Job Plan. Refer to my letter “Wasteful Treasury mortgages future” published in the Australian Financial Review on February 12th.

History does not support the view of Curmudgeon that the private sector would be slow in introducing natural money “and shop keepers finally ‘get’ the idea to the point where they accept the notes”. Hundreds of US communities issued and accepted natural money very quickly in 1933 as documented by Professor Irving Fisher in his 1933 book Stamp Script that can be downloaded from http://userpage.fu-berlin.de/~roehrigw/fisher/ . Fisher quickly wrote the book that year to provide details to the many communities on how to introduce natural money described as “Stamp Scrip”.

Another point of disagreement with Curmudgeon is where he refers to the current form of legal tender as “real” money. It is only real in the legal sense not in any material sense as money today cannot be defined or redeemed into anything real. It makes no sense to create markets to allocate real resources by synthetic money not connected to the real economy and so impervious to any feedback from the real economy

Good article Shann.

People are slow to catch on to non-mainstream ideas, as I'm sure you know.

Curmudgeon, this is a whole different approach. You have to go away and think about it and perhaps educate yourself. Kneejerk knocking is not useful, it's the reason dysfunctional ideas last well beyond their use-by date. Ask the Mayans.

Geoff,
You are right in saying that knee jerk negative reactions extend the life of concepts that have outlived their usefulness. However, Curmudgeon’s views would be reflected by countless every day curmudgeons simply because they find radical change hard to deal with. i.e. The idea that the climate is changing and it’s their responsibility too.

Shann,
You're right in my opinion that we need a new Paradigm in the way we address the economy. Boom and bust due to speculation and chicanery might be acceptable for inanimate creations like companies but my concern is for those who are devastated buy the currently inevitable down turns.

The idea has merit but it was conceived for/at a time and available technological context. As it stands it needs more work.

PS pity you can’t deregister some of those Upper echelon of business who have shown that in spite of qualification greed and stupidity are still rife