The situation in Ireland due to the financial crisis is worsening. Local councils are forced to cut back expenses, and might be pushed to more cuts in the next months.

Out of these conditions, local authorities develop an interest in being able to still pay wages to their employees. Scenarios, in which they pay them wages partly in Euro and partly in alternative currencies, are being discussed.

The meeting with the local government of Kilkenny has been very fruitful. They are very interested in supporting the adoption of the quid in their area. For this to happen, approval from the Minister of the Environment needs to be sought first. This will be our next step. If we get approval, the introduction of the quid alternative currency comes much closer to realisation.

There have been also voices for the issuing of paper notes of quids. Initially, this was not included in our draft, but as it has been requested, we don’t see any major problems in running the mainly electronic quid system alongside a limited amount of paper bills.

On a public meeting, Kilkenny citizens have expressed interest and acceptance to an alternative currency, and individuals offering collaboration and leadership have already emerged.

Both the local government as well as the public are very supportive of the quid system. This offers for The Liquidity Network an ideal situation: support as well from bottom-up as from top-down. There could be no better fertile ground for the system.

A next meeting is scheduled for September; until then, we want to get green light from the Ministry, a crucial step. That meeting will flesh out in more details how the quid (or however Kilkenny wants to name its local currency) introduction could work, and possibly be able to demonstrate as much as possible.

So this spurs the developer team on making progress for the simulation. A vertical integration of software components using the simulation environment SimPy took place; for now it is only a very simple simulation of people getting quids into accounts. In subsequent sprints, we are going to refine the simulation, continuously adding functionality.

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This article by Louis Even was published in the January-February, 2004 issue of “Michael”.

It is illustrative of how a local community could create “sufficient” and non-inflationary money streams to revive the economy.

Louis Even:

“Guernsey is a small island located in the English Channel. An Anglo-Norman population. This island is located closer to the French coast than to the English one.

At the close of the Napoleonic wars, the island, like several countries, was in pitiful condition, both pydically and financially.

No money

Sea walls, roads, markets were needed.There was no manpower shortage. but there was no money to pay for these works.

The money used by the people on the island was the money from England, the pound sterling. But, like after any war, the financiers were calling back the money advanced to finance the slaughter, and the pounds sterling were very scarce everywhere.

The island had an autonomous government, “the States of Guernsey.” So it had the rights inherent in all sovereign government, among other rights, that of regulating the volume of money incirculation in the country. But, no more ethan any other country, the States of Guernsey had thought of exercising this sovereign prerogative.

An intelligent governor

The island was especially in need of a new market house, and a committee was set up to take care of it. The committee went to see the governor to explain the situation to him:

“We need a new market, but we have no money to build it.”

“With what material are you going to build a market?” asked the governor.

“With stone and wood.”

“Do you have it in the island?”

“Certainly, and in plenty.”

“Do you have workers?”

“Yes again. But it is money that is lacking.”

“Could not your parliament issue money?” asked the governor.

A new idea!

This idea had never occurred to the committeemen, who had never analysed the money question. They knew where to get money when there was some: but they never wondered where money begins or can begin.

The method of taxing when there was money was quite familiar. But the method of injecting the money that is lacking, and of taxing only after, was something new to our administrators.

Issues of national currency

An estimate of the cost was prepared and the States printed the money required, which was paid to those who either worked on the project or furnished materials for it.

As the new currency was paid out into circulation among the people, exchanges were being expedited. The wage-earners went to the shopkeepers, the shopkeepers went to the producers, the producers bought enough to increase their production.

The currency was accepted everywhere. The government took measures against inflation by decreeing that money would be withdrawn by taxes, so it does not accumulate. And, in fact, the money was retired on schedule by taxes. But, as the increasing activity required a corresponding volume of money, other issues were brought out by the government for other works.

On October 12, 1822, the new Market house was completed and opened. Not a penny of public debt on this public enterprise.

The bankers intervene

At the time of the original issue, there was no bank upon the island. This explain, without doubt, why there was no opposition to the issue of State money.

But ten years after the first issue, the island had become so prosperous, thanks to the activity allowed by a sufficient volume of money, that the banks of England had en eye on this island.

English bankers set up branches in the island and brought the population around to orthodox rules. “It was unsound,“ they said, “to let the government finance its enterprises without getting into debt.”

The bankers did everything to stop further issues to introduce the system of interest-bearing loans to the government and to withdraw from the island the State money that had been paid out into circulation.

There was some resistance, but the bankers won their point, with their usual methods, and on October 9, 1836, the States of Guernsey had abdicated their sovereign prerogative over the control of the volume of money. From then on, the amount of the national currency decreased gradually, and was replaced by money issued by private bankers in the form of loans getting the island into debt.

Nevertheless, there is still about 40,000 pounds sterling ($200,000) of national currency outstanding at this date in the island. (According to Gertrude M. Coogan in Money Creators, published in 1935.)”

We need to balance the need for a quick implementation due to circumstances with a sound standing concept and a stable architecture.

We invite you to scrutinize our ideas. In Rationale
we explain why we think there is a need for the “Quid”, as we dubbed the new currency. The  Outline pages give an introduction to how we envision the system to work. Have a look at Implementation to get some more details of how we think it could work.

The issues are complex. We welcome any comment and invite you to participate in our conversations to make it happen: Participate

The current crisis is man-made and is built in into the current monetary system. We hope to be able to alleviate the shortcomings these difficult times bring and to help our families, friends and fellow citizens in introducing an alternative.