The idea is simple: to encourage consumers to spend more of their money in the local independent shops that accept the one, five, 10 and 20 pound notes and stop money leaking out of the area to faceless multinationals, unknown shareholders or the discredited banking system.Oh, I see, it's the large companies that they don't want any truck with.
The Bristol Pound website has the gen on the intentions and people behind this idea. I see that the dreaded nef make a showing, which already makes me think this enterprise is doomed to a messy end. Director Ciaran Mundy lets us know where he's coming from:
I love the spirit of the people in Bristol and crucially, the independent traders, retailers, artists, street traders, crafts people, restaurants etc. Bristol is often called counter cultural, and for me it's that which makes it feel so exciting a place to live and work.Ah yes, the wonderful Bristol counter-culture He clearly doesn't care whether this works, as long as he feels he's sticking it to the capitalists.
Another of the team caught my eye:
Mark BurtonTake note, Bristol Pound participants, you're part of a geography student's Ph.D. studies, which is likely to be good material for his thesis and papers but I suspect you're going to get a teensy weensy bit screwed over in the process. You should at least ask him for co-author credit. And the School of Geographic Studies? Nothing to do with economics. I think we can see what he's going to regard as a successful scheme.
Research and Strategy. A doctoral student at the University of Bristol, Mark is using his research to instigate practical change towards a sustainable and just financial system. He teaches on the nature of the financial system and possible alternatives.
So, those questions that the Bristol Pound FAQ skirts around:
- How are Bristol Pounds going to get into the hands of Bristolians?
- I'd imagine that Lloyds, RBS, HSBC etc. are in no rush to put Bristol Pound notes in their ATMs. Most companies pay their workers using direct deposit. So someone, somewhere, has to seed each Bristol Pound note into the local economy. I see this being a bit problematic at scale. The most likely source listed on the Bristol Pound site is Bristol Credit Union, and I can't see many people with cashflow problems being particularly keen on cash with which you can't pay the trademan, mechanic, Tesco or Aldi.
- Why would anyone choose a Bristol Pound over a Pound Sterling?
- The only tangible benefit quoted in the article was from shops giving a few percent discount to Bristol Pound. Bearing in mind the shop's increased costs in managing and accounting for their dual currencies, I can't see them offering much here long-term.
- What happens when the experiment peters out?
- Bristol Credit Union currently promise to exchange money back to pounds for the small, small fee of 3%. Of course, I'd want to see evidence of the escrow account into which they pay £1 for each 1BP. I do like their comment: "This arrangement will strengthen Bristol Credit Union which has a clear social purpose to be a community anchor for the city, providing fair financial services for all the people of Bristol, and offering competitive, viable alternative financial provision for member benefit and not for private profit." Oh, Lordy. BCU is not strengthened in any way that I can see. They can't do anything with this backing money, it's essentially pledged as collateral for the BPs.
- So how do electronic balances in BPs work?
- Say I take a 100BP loan from BCU in BPs. Presumably they're going to be more keen to lend to people willing to accept BPs (hey, anyone looking for a loan without too many questions being asked? This may be a good place to start). BCU open an account for me containing 100BP, move £100 into their escrow account and I'm good to go. I can presumably withdraw BP notes from any BCU branch, and transfer BPs between my account and other BP account holders. But no major business (Tesco, Aldi, M+S, Next) is going to open a BP account - I can only pay other people. No bank is going to accept BP transfers. If I run short of £s, I have to exchange my existing BPs and pay 3%. Nice.
- Where will the BPs end up?
- Money normally circulates in the economy - from bank to person to store to person to bank, or some variant thereof. But there are going to be so few BPs relative to the population of Bristol, and so few participants, that after a few steps in the circulation the BP holder is going to be hard-pressed to circulate it to someone else without paying them for the privilege. I anticipate any moderately successful shop offering a substantial discount for the BP being an effective sink for BPs. Good luck trying to shed them at anything under a 3% cost.