Bartering has existed since before so called ‘fiat’ money (money created ‘out of nothing’ , normally by a nation state, printing it or giving banks quotas to create loans against) was widespread and doesn’t need anyone to go into debt to get things done. But bartering per se relies on an exchange of goods or services between two.
Barter networks take this a step further by keeping tabs on the exchange of goods and services within a network using some sort of barter ‘unit’. But typically these networks seize up after a time with some enthusiasts building up lots of credit and others ‘owing’ but having no real incentive to earn.
Many other innovative ‘social credit’ projects have been created to address the systemic problems of barter networks and have thrived to a greater or lesser extent, especially during recessions. They all work with pseudo-currency ‘units’ (FEASTA’s is called the Quid) or notional ‘hours-worth’ of labour.
The FEASTA plan is novel in a number of ways (as will be described later), but these innovations might be only of academic interest were it not for the planned scale of the Network.
Networks of this sort always face a critical mass problem. Typically they would grow slowly and organically outwards from a core group usually based in one locality. While there are few participants there are only a few alternative ways to spend your ‘units’ and a smaller market to earn them from, so growth can be slow.
FEASTA believe the seriousness of the current Irish crisis is such that there is no time for the Liquidity Network to grow organically in this way if it is to have the impact desired. The reasons for this assessment are not repeated here (but see e.g. http://www.irishtimes.com/newspaper/opinion/2009/0203/1232923383096.html ).