Unemployment, Barter, and Local Currencies

Over at Marginal Revolution Alex Tabarrok has an interesting post on barter, local currency, and unemployment.

There was a huge increase in barter and exchange associations during the Great Depression with hundreds of spontaneously formed groups across the country such as California’s Unemployed Exchange Association (U.X.A.). These barter groups covered perhaps as many as a million workers at their peak.

In addition, I include with barter the growth of alternative currencies or local currencies such as Ithaca Hours or LETS systems. The monetization of non-traditional assets can alleviate demand shocks which is one reason why it’s good to have flexibility in the definition of and free entry into the field of money …

During the Great Depression there was a marked increase in alternative currencies or scrip, now called depression scrip.

This doesn’t seem to be happening now. Have we forgotten, lost resilience?

Tags: local currency