New money stories: the eleven dollar bill

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Posted Mar 21 2021 by Dave Darby of

I’m writing a book – published by Chelsea Green next January – about the possibility of building a new economy around a moneyless, mutual credit core, at a time when money is going to be scarce. I’m often told that the best way to get new ideas across is with a story. So I’m trying to think of stories that can help beginners to understand the concept of mutual credit, and to get the penny to drop that we can take control of money away from banks – we don’t have to have a money system that drains our communities, grows tax havens and prevents real democracy.

What do you think of this one? It’s about an eleven dollar bill (or an eleven pound note – I’m just blatantly trying to grab the attention of a larger audience here).

Here goes. One day, a baker was on his way to buy some flour from his local grocery store. As he walked along the street, he saw a piece of paper on the floor, picked it up and saw that it was an eleven dollar bill. He thought to himself ‘Wow – I didn’t know such a thing as an eleven dollar bill existed; you learn something new every day’. Inside the shop, the grocer put the bag of flour on the counter and said ‘That’s eleven dollars please’. ‘Aha’ thought the baker, ‘I can use the eleven dollar bill I just found. That’s handy’. He put the eleven dollar bill on the counter, and the grocer said ‘I think that might be a fake. I don’t think eleven dollar bills exist’. ‘Oh’, said the baker, ‘You might be right, but I’ll tell you what – if it turns out to be fake, I’ll bring you over eleven dollars’ worth of bread – or maybe I’ll bake you a big cake.’ ‘OK’ said the grocer, and put the eleven dollar bill in the till.

The grocer popped next door at lunchtime to buy some fish and chips (do they have fish and chip shops in the US? Never mind), which came to eleven dollars (obviously). She slapped the eleven dollar bill on the counter and the chip shop owner said ‘Hmmm. Not sure that’s legal tender.’ The grocer said ‘I think it is. But if not, you can get eleven dollars’ worth of stuff from my shop. OK?’ ‘OK’, said the chip shop owner.

The chip shop owner needed a sign painted for outside the shop, which cost (you’ve guessed it) eleven dollars. Again, the eleven dollar bill was handed over, and again, the recipient, the signwriter, said ‘I don’t like the look of that’ and the chip shop owner said ‘Look, if it turns out to be fake, you can have eleven dollars’ worth of fish and chips.’ ‘OK’ said the signwriter.

This went on for 100 transactions, when a shoe-mender came into the bakery and asked how much it would cost for the baker to bake a nice birthday cake. ‘Eleven dollars’ said the baker. The shoe-mender gave him the eleven dollar bill. ‘That’s the second one of those I’ve seen today’, said the baker. ‘I hope they’re real.’ ‘Well if not, you can get your shoes fixed any time, said the shoe-mender. ‘Sure’, said the baker.

The next day, the baker was walking past the bank, and decided to go in and deposit the eleven dollar bill into his account. ‘What’s this?’ the bank cashier asked. ‘It’s an eleven dollar bill. I think they’re printing them now.’ ‘Don’t be ridiculous’, said the cashier, and tore it up before his eyes. ‘You’re lucky I don’t call the police’, she said. ‘But you obviously thought it was real, or a bank would be the last place you’d bring it.’

‘Ah well’, thought the baker. ‘Easy come, easy go’. But that little note had enabled $1100 worth of trade to happen in the town. Everyone was better off, even though it wasn’t ‘real’ money.

Now, times were hard in that little town, and the next day, the baker didn’t have any money to buy the flour he needed to bake his bread. ‘Actually’, he thought to himself, ‘I bought some flour and sold a cake yesterday, for something that wasn’t really money. Maybe I can do the same again today.’ So he took a piece of paper and wrote on it ‘I owe the bearer eleven dollars.’ Then he went to the grocery store and told the grocer what had happened to the eleven dollars that he’d given her yesterday. ‘Oh dear, I gave it to the chip shop, and I guess they must have spent it too, and I don’t know how many other people used it before it got back to you. I hope we don’t get into trouble.’ ‘No’, said the baker. ‘The bank let me off. But it got me thinking. Could we do the same thing today, but with something that won’t get us into trouble? Can I give you this note – an IOU? You can always give it back to me when you want bread, or you can spend it with local businesses, and promise to give them goods from your shop. Or you can tell them they can get bread from me with it. You’d be doing me a great favour, as I don’t have any money at the moment.’

‘Sure’ said the grocer, who asked the chip shop owner if she could do the same thing, promising goods from her shop, or bread from the baker. The chip shop owner agreed, then decided they needed another sign. The signwriter agreed to take it, having been promised eleven dollars’ worth of fish and chips for it, or goods from the grocer, or bread from the baker. And so on – until, you’ve guessed it, the note came back to the baker, who accepted it from the shoe-mender for bread. Now, what do you do when someone returns an IOU to you and you’ve paid up / cleared the debt? Well, you can tear up the IOU. But in this case, the baker had an idea. In fact he had several ideas.

  1. What if I don’t tear up the IOU? What if I spend it again tomorrow? All the local businesses seem to accept it. They know I’ll provide bread for it.
  2. The grocer could write her own IOU too. Everyone knows she’s good for produce from her shop.
  3. Actually, I could write different IOUs for anything I buy from local businesses. They all could. Wow – we could all trade with each other without needing any money. Then if there’s a recession, and there’s not much money around, it really doesn’t matter. We can all keep producing stuff and trading with each other.
  4. Those big chains won’t accept our IOUs, because they need to send money out of the community to pay their shareholders, and they certainly don’t want little IOUs from people they don’t know. But I guess that’s a good thing, because then we’ll trade with each other more, and not so much with those big chains whose business model is sucking money out of our town.

And then, the big one:

  1. But those notes aren’t ideal. They can be so easily forged, or stolen, or lost. This is the 21st century. Surely someone can build a little software package so that we can keep track of who’s in credit and who’s in debit? We can all have an account with how much we owe, or how much we’re owed, exactly like little IOU notes, but not requiring any money, or bits of paper – just numbers in an account. Wouldn’t it be great if we could all access this on our phones, so that we can pay anyone in our little network, any time?

So, to get to the main point: this, of course, is possible, and it’s what my book is about – building a new kind of community-based economy around a ‘mutual credit’ core, that helps prevent money from being siphoned out of our communities. There are many, many excellent people building such schemes all over the world. There’s one on the island of Sardinia for example, that’s doing 50 million euros’ worth of trade annually – but without money.

There are schemes on every continent, and the really exciting thing is that all these schemes, even if they operate slightly differently, can be joined together in a new, global trading system. It’s happening, and the point of my book is to describe these schemes and the kinds of sustainable, local businesses they can spawn, and persuade you to join in.

More soon.

Image: Lawmandave

Dave DarbyAbout the author: Dave Darby lived at Redfield community from 1996 to 2009. Working on development projects in Romania, he realised they saw Western countries as role models, so decided to try to bring about change in the UK instead. He founded in 2001, spent 3 years on the board of the Ecological Land Co-op and was a founder of and the Open Credit Network.