On 2003-10-31, Fred Foldvary uttered: >> At least in some cases we can analyse local currencies as instances of >> tax evasion. > >So why not just use federal paper dollars for that?
Because if you get caught, you'll pay for it. In case of local currency, the tax authorities do not bother as easily because of the cost and the trouble with drawing the line between mutual help and legally taxable transactions. (From the econ standpoint, there's no such line. If we were to be perfectly logical about it, tending to your children is a service to your spouse with a taxable value.) >> From this perspective local currencies can also be a means to >> circumvent labor market rigidities. > >Again, why not just use federal cash? Because it isn't always available if the relevant markets are rigid. Local cash on the other hand can be created on demand, and even neglecting that, is somewhat decoupled from the ordinary cash economy. >What is more neighbourly is the local organization and the relationships >it fosters. So why not just use federal paper dollars for that? -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
