The unit of electrical power output, the Kilowatt Hour (Kwhr) has much appeal as a universal unit of value for an autonomous community banking and monetary system.
Similarly, the commercial bank would issue its own notes which the holders could convert or cash-in to the primary notes or reserve currency, and which could be used to pay their power bills at the time specified. The secondary notes could be denominated in Kwhrs but without any specified redemption time. They could thus be used as hand-to-hand money in the community.
Some of the more important issues to be considered in comparing the suitability of Kwhrs or gold as a basis for a monetary system are set out in the table below:
Evaluation criteria Kwhr $ Gold $
Unit of value Kwhr Ounces/grams Quality testing Not required Density
Intrinsic consumerable value 100% 10%
Subjective value Nil 90%
Changes in consumption Related to total Little related to economic activity to economic
activity
Global availability Universal Haphazard Changes in production Related to Little related consumption to consumption Rate of change Relatively stable Less stable
Cost of production Relatively stable Fluctuates with by region and in region and in time time
Cost of storage Not required 1% of value p.a. Cost of insurance Not required 1% of value p.a. Cost of distribution Increases with Changes little distance with distance
Shann Turnbull, GPO Box 4359, Sydney, NSW 2001, Australia (tel 612 233 5340). The full pamphlet, Selecting a Local Currency, is available from Centre 2000, 2 O'Connell Street, Sydney, 2000, Australia, for Aus $1.50.