Its interesting to see how knowledge from our past experience prepares us for the future. Over a year ago I wrote about a complementary currency system coming together to create greater opportunity between entrepreneurs. I never envisioned at the time of that writing that the economic conditions might just present themselves where such a system could become necessary. I am not fully convinced that the time has come just yet, but it is noteworthy for me to share an update. Although we did not fully launch that previously mentioned system, the insight that I gained about complementary currency systems specifically, and economics in general, has been very valuable.
Complementary currency is, as the name suggest, a monetary system for conducting business between individuals that can live along side a nation backed currency system (e.g. the US Dollar). Complementary currency systems allow individuals to conduct trade / business without having to use money backed by a central government. That is, as an example, I could do business with a graphic artist who in turn does business with an engineer with in turn does business back with me. Instead of just “bartering” between us, the complementary currency system allows me (like when using dollars) to not have to intimately know who I am doing business with, for the currency (whether dollars or complementary currency) tracks the transaction.
It seems, that with the current economic conditions that the US and the world has been facing that there is even greater interest than before in this method of conducting business by a more general crowd than I had previously found when I was looking into complementary currency in 2006/7. This article by Kevin Kelleher on the Gigaom blogging network speaks to how a wider crowd of individuals might be looking to use complementary currency in the coming year(s). Kevin writes:
[Chris Anderson, writer of The Long Tail,] imagined this excess ability expanding as unemployed workers engage in labors of love for free, if only to do something valuable with their time and/or advertise their skills.
I wonder what kind of creativity could be unleashed by workers who, though deprived of a steady paycheck, are freed from such tedious tasks. Some could come up with new ideas that help vault the web to a more advanced stage. Others may make micro-contributions that are equally powerful in aggregate. Such creativity could then foster an entirely new generation of startups, which would eventually lure away some of those who had remained at steady jobs all along.
I believe that complementary currency has the chance of expanding something that ends up being much more resilient than just filling the gap in an under-employed market. I believe that we could see the rise of not just a reputation system that tracks who did what, but a deepening of the currency system in general, where we have an environment that makes it possible for more former employees become entrepreneurs, exploring their capabilities, talents, and passions… ending up not just looking for a job for when the economy recovers, but in establishing themselves in businesses that the traditional monetary cost of capital would have been a barrier to them before.
So, for the Austinites following my blog- what became of this local complementary currency system? Although it did not take off in the direction that we all expected, there is notable work being done here locally… led by one of the guys that taught me about it in the first place- Tom Brown. Tom and Rich Vazquez are writing about these concepts at the Open Source Currency Blog, and have a full blown complementary currency system running at the Austin Time Exchange. In fact, they just had a meeting talking about the “Next Economy”.
Its uncertain about what will be happening with the US and world economies- but it is good to know that there are alternatives that are being explored for entrepreneurs here in Austin. Keep me appraised of what you are seeing out there as well, and I will do the same through this blog.