every city should have its own currency (= my remix of Jane Jacobs in the eta of crypto & digital currency)
14 tweets · July 2023 · 5 likes · 0 retweets · read on Twitter
every city should have its own currency (= my remix of Jane Jacobs in the eta of crypto & digital currency)
For the Jane Jacobs half, read this article about how economics can do a kind of natural balancing on the scale of cities that it doesn't on a nation scale. Large nations are kind of aberrant. astralcodexten.substack.com/p/your-book-re…
This effect is mediated through currency—exchange rates reflect the power of a cities exports and make incentives for cities to become more prosperous. But in this era we might be able to solve this without cities seceding. Just need their own currency! Enter crypto?
You wouldn't need crypto to do this. In some sense it already happens via modern credit cards when you buy software or clothes from another country! Auto conversion! Ppl would probably resent the absurd 3% conversion fee... but if it felt like @transferwise card…!?
I've read a bit about how a city or town in Germany became very prosperous in the Great Depression using a local démurrage (depreciating, encourages spending now) scrip note pegged to the franc but with a 5% loss on conversion. It's a rough proof-of-concept for parts of this.
Pegging the value *might* be okay to start with but it'd totally defeat the Jane Jacobs point here as it wouldn't allow the magic that happens when the city has a feedback-creating exchange rate that reflects the supply/demand flows of resources across the system boundary.
So to achieve this effect, it would have to be the case that the local companies are straight exporting in this currency 🤔 Like if SF did it, you'd have to pay for Twitter Blue in SF dollars (which would be politically weird even if logistics were easy haha)
This would then get into some pretty confusing issues where internet subscriptions from other cities would fluctuate a lot in value, which is disorienting and hard to keep track of. A major downside. Not sure what to do here. They should tho! Fixed is fake.
Moreover they'd fluctuate based on both the economy of the city you're buying from AND the economy of the city you're living in (thus getting your purchasing power from) Which feels like a lot. But I'm still excited by this idea.
Oh snap maybe this could naturally be combined with a land value tax and UBI that are both denominated in city currency! That would definitely create supply & demand. Citizens get UBI in CityBucks, & somehow all businesses (exporting and local) need to get CityBucks to pay LVT.
Any city trying to do this would encounter the fact that all locals still need to do a lot of dealings with the federal government currency, for taxes and buying things from out-of-city. But again, we're already kinda used to foreign exchange on international purchases.
I bet one vital component for any city wanting to do this would be to make kickass banking accounts, cards, & software that would make it beautifully easy to manage these conversions, and track federal taxes based on local income etc.
That would make the citizens much more excited by the change. I could even imagine systems that encourage locals to be proud of their exchange rate. By contributing to the local economy, you make everyone in the city more able to afford imports! Help people see wealth.
So! This idea feels pretty nonviable atm just because it's so weird and would require cooperation from so many entities. But maybe still a good seed. Probably best to start it somewhere like Detroit, that has had its economy collapse due to the absence of the key feedback loop.