Yesterday I discussed an analysis of an attempt to solve the problem of currency management in Somalia and described it as a complement to Tristana Moore's BBC report last month on the Urstromtaler. Today SPIEGEL ONLINE features a more extensive analysis by Nils Klawitter of the pros and cons behind the theory and practice of regional currencies, now that 22 regions in Germany have introduced their own variations on this solution. Unfortunately, Klawitter brings only two voices to the debate. The advocate is Margrit Kennedy, who has written several books on alternative currencies and is basically represented by a single quotation:
Regional money is like a homeopathic cure for the chaos and suffering international financial markets cause in the world.
I think it is a bit regrettable that readers with even the most objective intentions might be biased by the "granola connotations" of this language; and, since I have not read Kennedy's Interest and Inflation Free Money, it is hard for me to tell whether or not this quotation is representative of her rhetoric. (For that matter I am not sure how representative this particular book is, since it was written in 1995; but it is the one English-language title I found in the Library of Congress catalog!)
Klawitter devotes far more attention to the opposing point of view. Here is the lead paragraph for that portion of his analysis:
Gerhard Rösl, a political economist at Regensburg Technical College, is not convinced. "Social romanticism on the part of people who don't think in a structured way" is how he characterizes this way of thinking. Rösl has carried out a study on regional currencies for Germany's central bank. The basic thrust of his study is that regional money may be an entertaining gimmick for tourists, but it's largely nonsense from an economic point of view.
So it may be that Klawitter has "primed the pump" with a quote from Kennedy that prepares the reader for Rösl's accusation of "social romanticism." Klawitter then devotes the rest of his article to examples that Rösl invokes to demonstrate that the system does not really work as it was intended and ends up costing more than it is worth.
When the bias is this strong, you have to wonder whether or not "you have to be there" to draw your own conclusions. Certainly, if regions in Germany are anything like regions in the United States, then it is hard to imagine that they are so uniform in their local administration and politics that they would all run with this particular idea the same way and all enjoy the same benefits from their actions. The most important lesson from Somalia is that, in the words of that old cliché of narrative theory, "context is everything," meaning that the we should be very skeptical on the attempts of both Kennedy and Rösl to generalize on their observations.
For what it is worth, my own bias is in favor of regionalism. I think that one of the key lessons of those harrowing analyses of genocide that I recently discussed is that, whatever Hobbes may have argued about the necessity of government, we all tend to be basically tribal by nature (and, while tribal life may be longer that it used to be, it is still pretty nasty and brutish). Friedman's "flat world" is nothing more than a myth to make the super-rich feel better about exploiting the rest of the world's population; but it does nothing for the majority of that population whose biggest problem often comes down to having a loaf of bread and maybe some milk for the night. There is no reason for people in that sector to expect that their problems will be taken seriously, let alone solved, on any level other than a regional one. Whether or not those regions then decide to open up cross-regional channels of communication is another matter (and which time we would do well to listen to the voices of Isaiah Berlin, Anthony Appiah, and Jürgen Habermas); but my current conviction is that there would be fewer problems on a global scale if regions were more empowered to work out their own problems on their own scale.