Response to ‘Market Street’

3

Joshua Msika, coordinator of Transition St Andrews and third year student (BSc Hons Sustainable Development), replies to Elliott Miskin’s latest ‘Market Street’ column.

I’ll take the flippant questions first: I’m personally in favour of 100 SINNERS constituting 1 SAINT. However, this takes us into shaky theological territory and that is definitely not my area of expertise.

Serious questions next: no, you can’t pay tuition fees or rent or bills in SAINTS. Nor – incidentally – can you trade alcohol. That’s illegal. But these questions miss the point of this alternative currency which, as you astutely point out, is one among many.

What is being offered in SAINTS at the moment are food items, small services and craftwork. I have so far purchased a walnut-garlic spread (delicious) as well as a half-dozen eggs. A more ambitious friend of mine is saving up to commission a coffee table for her living room. “Sure,” I hear you say, “I could get all that with pound sterling.”

That’s not true. SAINTS are bringing goods and services into a trading economy which would otherwise go untraded and unvalued. The eggs I have bought, laid by a woman’s three hens which she looks after herself, were not available in any shop in St Andrews until the Saint Exchange was set up. “Sure,” you’re still saying, “now that you’ve found her, why not buy her eggs in GBP?”

I could. Of course, there’s a de facto exchange rate between GBP and SAINTS (just as there is an exchange rate for Bitcoins) as people spend some money to make the products with which they earn SAINTS. The chickens were probably fed with commercial feed bought from somewhere, their bedding and cage did not come free.

However, the highly localised and personal nature of SAINTS make trading in them more attractive to me than trading in pounds. And here’s my explanation.

The Saint Exchange, soon to go online and embracing new technology, provides its members with perfect certainty over where their SAINTS are going. I personally believe that the goods and services listed in the members’ directory deserve to be traded.

Since hoarding is useless – you don’t receive interest on SAINTS – I know that the SAINTS I have spent on my half-dozen eggs will soon be spent on another service listed in the directory, valuing the skills of someone else in the network.

By contrast, when I spend pounds, I can be pretty sure that they will soon end up in the bank accounts of the 1%. By using SAINTS, I am promoting creative self-employment – entrepreneurship if you’d rather use modern econspeak – as well as receiving goods and services money can’t buy.

So no: SAINTS can’t replace pound sterling (nor will Bitcoins, for all their virtues) but they provide a way of valuing St Andreans’ time and skills again and again as they circulate through the system. They promote mindful and creative production where so much of our time is spent in passive and homogenised consumption.

In a time when the future is uncertain and everyone is saving their pounds despite the government’s best efforts to restart the engine of the economy, a currency that is actually circulating is not to be lightly dismissed.

3 COMMENTS

  1. Since Elliott’s criticisms were somewhat unfair and mostly vacuous, I’ll give you some to chew on:

    this new currency is an interesting prospect, but how can you possibly attempt to standardize the time/effort/products equivalent to 1 SAINT? It in an indirect barter system at its core, but since the trades are being conducted through an intermediary, someone will have to decide “ok, well 1 hour of childcare is equivalent to a SAINT” but how can you value walnut tables in units of babysitting? You can’t really, that’s why we have the convenient intermediary of Pound Sterling. The thing is, you will have to spell out the SAINT value of every product and service in the local economy, which will inevitably lead to arbitrariness and dissatisfaction. In the (real) economy, the value of most products and services is not fixed–it responds to changes in price and demand. How will you accommodate for this? Will you constantly revise the equivalencies? Or just fix the value of services? Inevitably, people will discover flaws within the system, that is human nature, and they will try to exploit them. SAINTS will fail, I predict, because St Andrews is not large enough to accommodate enough market diversity that there will be demand for products deemed SAINTS-worthy, and so when people don’t spend (because they don’t find anything that really appeals to them) you will be thus forced to a) issue new currency, devaluing it or b) stubbornly keep the quantity of SAINTS fixed, and then weep as liquidity dries up, causing a cycle of hoarding/speculation and busts. which, incidentally, is why bitcoins will never catch on.

    • Good point. You expose me as a dabbler in economics 😉 We have indeed recommended that 1 hour’s is work equivalent to 6 SAINTS. But this is a guideline rather than a fixed rule and you are right in that the members will face the interesting exercise of trying to determine how many SAINTS the things they are offering or acquiring are worth. It seems to be working: over 180 SAINTS worth of trade have occurred so far with little fuss.

      The system is not self-regulating. That is a myth (see the excellent but slightly psychedelic documentary by Adam Curtis “All Watched Over by Machines of Loving Grace” – episode 2, no longer available on youtube but maybe bobnational). Individual members can either end up with large amounts of credit or debit or force inflation/deflation on the system. However, this is a local trading scheme and the members are not anonymous, exploitation is traceable.

      As opposed to the GBP economy where individualist action is king, this scheme has a steering group open to all members which is responsible for the smooth running of the trades. This is the exact opposite of Bitcoins as far as I can tell. The Saint Exchange works on the assumption that not all humans are pathologically self-interested and that social norms do have an influence on economic behaviour. Is that such an unreasonable assumption to make?

      If you are interested in trying your hand at some novel macroeconomic theory not based upon homo oeconomicus but upon homo sapiens, join the Saint Exchange steering group. It’s probably substantially more exciting than any economics lecture. standexchange@gmail.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.