HOW, USING COMMUNITY CURRENCY, I SURVIVED THE GREAT DEPRESSION OF 1930, IN A MINING TOWN
By Rev Lindsay King
Born in 1930-the seventh of what later became eight children-on Bell Island, Newfoundland, www.bellisland.net a mining town of about ten thousand people I, as part of a family of miners, experienced the Great Depression, head on. As miners, we lived from paycheck to paycheck. Because of the depression economy, half-time employment was the normal. This meant that the paychecks often did not cover expenses. It also meant that to make up for the loss of pay we-my father and four older brothers (only two had jobs)-had to find other things to do during the days not spent in the mines.
Looking back, I now know that I learned something about the nature and function of money and what it means to earn a living. The time we spent fishing cod, salmon and the like in the water around our island; the time we spent building boats, knitting nets, repairing the house, cutting each others hair, mending shoes, planting and caring for gardens-even making clothes, were our ways of providing the things for which we did not have the cash.
Later, when I became a minister and saw how devastating unemployment was, especially to the lives urban families with mortgages, I decided to do some serious reading about economics.
Economists usually point out that money, generally speaking, has no intrinsic value; that it is basically just a medium of exchange. Eventually, this led me to read Marshall McCluhan's great book, Understanding Media (1964)-extensions of man. Based on what I found in Chapter 14, on the nature of money, I wrote and essay: MONEY, AS PERCEIVED BY MARSHALL MCLUHAN-an essay on his understanding of the political economy-and what he failed to mention. Interestingly, he defined money as: THE POOR MAN'S CREDIT CARD. http://en.wikipedia.org/wiki/M arshall_McLuhan
Makes sense, doesn't it? If you were a merchant and a poor man gave you, a dollar bill, providing it was not counterfeit, you would accept it without question, wouldn't you? However, if he gave you a credit card, you would swipe it to verify he had real credit.
In his book, McCluhan points out that Samuel Butler, in his book about utopia, EREHWON (which backwards spells NOWHERE) refers to money as a type of sacrament-an outward and visible sign of an inward and invisible grace. It is a social medium which you and I can use to extend ourselves to family, to the community, to the nation and even to the world.
Looking back to life on Bell Island in the 1930's, I now understand that this is what we in the King family did among ourselves and, as a family, we also did with other families. It produced things of real value. For me, it even produced the opportunity to get away, at 17, to university in New Brunswick, Mount Allison" http://www.mta.ca
“Money talks.” He writes. "It is a metaphor, a figure of speech, which likens one object to another. It is a bridge from one thing to another. It can even be understood as a form of transportation which carries one thing to another."
It is a storehouse of values such as work. It stores the work of one trade to that of another. It speeds up the exchanges between the trades and, therefore, tightens the bonds of interdependence between one person and/or one community and another. Creating community, it operates in space and time so that both can be looked upon as forms of money.
He says that there are two kinds of money: COMMODITY MONEY AND REPRESENTATIVE MONEY. As I point out below, he failed to see that there is a third kind-fiat money, which is based on debt and a promise to pay in the future.
He defines REPRESENTATIVE MONEY as the paper money that you and I have in our Wallets. It has no obvious or intrinsic value. For example, how many $100.00 bills would it take to make a fire and boil long enough to cook an egg?
However, depending on the number on the piece of paper, it can go far and buy the power needed to get the job done. Coupons issued by stores and backed by products are a form of representative money. This means that any corporation, or even individual, can create this kind of money-backed with goods and/or services.
THE REAL VALUE OF MONEY IS ALWAYS DETERMINED BY WHAT IT WILL BUY NOW
In short, MONEY IS WHAT MONEY DOES. However, even the top economists agree that this is only one definition of money. The full definition of it is a complex matter, indeed.
Interestingly, this kind of money has, in recent times, supplanted gold and silver and most other forms of commodity money. In the light of this, consider this question: When was the last time you saw gold, or even silver, circulating as a form of currency?
WHAT IS COMMODITY MONEY?
Even today, any product that is in demand, or has practical value, can be used as money. For example, animal skins. It can also be tobacco, alcohol, gasoline, you name it. Most certainly, it does not have to be gold, silver or other form of precious metal, exclusively. Commodity money, because it is useful, also has the habit of going out of circulation.
When, for example, the tobacco user gets the tobacco and smokes it, he takes it out of circulation. Gold and silver are no longer in general circulation. Perhaps the copper cent-which I believe will soon be replaced-is the only coin with a real commodity value. In the U.S., attempts have been made to replace the copper coin with ones made out of aluminum.
In my possession I have an aluminum French franc which I found on a visit to Paris in 1972. It was minted in 1944 and was obviously issued by the Vichy government set up under German occupation. It has no value as a commodity. It was obviously not a commodity coin at all, but just like paper.
Regardless of its value it worked. Why? Because it was issued, by fiat of the Nazi-controlled government in power, was accepted by the people as a transfer of value. It didn't have to have any real or intrinsic value of itself. It was the community that gave it its value. When the nature of the French community and those in authority changed following the war, a whole new system had to be put in place.
MONEY AND COMMUNITY GO TOGETHER
All of this goes to show the powerful and important role of community in the creation and use of money. It also shows the important role that is played by those who govern (locally and/or nationally) the community. As McLuhan points out, all forms of money are powerful expediters and transmitters of goods and services. As such it is one of the main tools of modern civilization. It is also one of the main tools of THE GLOBAL VILLAGE as well the LOCAL VILLAGE, OR COMMUNITY.
The story of Robinson Crusoe illustrates what the lack of community does to money.
As McLuhan points out (p.125), when Crusoe found himself alone on what he thought was a deserted island he discovered something about money he hadn't thought of before. On visiting his wrecked ship he found some coins-copper, gold and silver, I presume. It suddenly occurred to him that he had no use for them; that a knife he found was far more valuable.
However, he failed to discover-I should say that Jonathan Swift failed to write about it-what we all need to discover: There is a real difference between commodities-copper, silver and gold- used as money, and commodities-iron, steel, animals, skins, cotton, wool and the like-of intrinsic and real value.
MORE ABOUT REPRESENTATIVE MONEY One of the functions of commodity money-such as copper, gold and silver, real estate, whatever-the so-called financial experts tell us is that it can store value. As prices go up, if you have your money in the form of such a commodity, it is supposed to go up.
For example, in the 1970s we were told this about the already-mentioned real estate. It did go up. But it soon became a dangerous bubble. Then it burst. In the late 80's and early 90's, bang, it happened again.
THE CRISIS OF 2008-is not just about real estate.
IT IS CRUCIAL FOR US TO UNDERSTAND THE FOLLOWING, IF WE ARE TO DEAL WITH THE CURRENT FINANCIAL CRISIS OF OCTOBER 2008 (Dec. 2008)
Now, in 2008, that we all know what false booms are, and how the very real and inevitable busts, can do to all of us, at any time, it's time we took a look, a close look, at the money game and got some understanding as to who set it up and how it is played.
As McLuhan pointed out: "Representative money acts more like a language, as a translator and transmitter of current valuables. As a agent of exchange or translator of values, it can move with greater and greater speed and ever greater volume." It is important, therefore, not to confuse the two kinds of money.
THE THIRD KIND OF MONEY
Also, in my opinion we need to understand that there is a third kind of money. It is a debt-based fiat money, which, with the cooperation of our federal government, the central banks (money wholesalers)-In Canada it is the Bank of Canada-create, virtually out of nothing but the debtors ability to pay. This fiat-money is retailed to the debtor by the chartered banks, which makes money on what is called "the spread"-the interest it charges above what they pay the Bank of Canada. Check the rate now-it was 0-and you will see what is happening.
As indicated, Marshall McLuhan never mentioned the nature and function of our central banks and the role of the Bank of Canada in the creation of a debt-based fiat-money. The banks give loans that put people into debt and call it credit.
FALSE BOOMS, THE MAIN CAUSE OF DEVASTATING AND VERY REAL BUSTS.
Over the last number of decades, which I have witnessed, here, in my sincere opinion, is what I feel has been the three main failures which has promoted all false booms and caused all devastating busts.
1. The failure of our government regulators to prevent thieves from getting into high-paid positions of high authority in the financial industry.
2. The failure of governments and central banks to work together to create a transparent, balanced and democratic money-system, one designed to serve the total needs of the all the people, not just the privileged few. But this is another story.
3. The failure to see the value of a well-regulated commodity-based barter system, using monetized barter, in cooperation with all governments, tax systems, and all registered charities, including the churches.
Now for the really good news: Go back to what happened to the King family on Bell Island in the 1930's. By the way, recently, I spent two wonderful weeks in the area.
In the light of all this, the good news is: We survived simply because, despite the deep depression-the Great one-we agreed to work and to earn all the cash-the federal kind of money-we could working in the iron-ore mines. However, when there were layoffs, we also agreed to work for one another. As long as there was food, clothing and shelter practically available, no one starved, or froze, or went without clothes. We simply lived by the Golden Rule.
Without knowing what we were doing, we created a very valuable community currency. Any community can do the same. Do it!
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