Tuesday, December 23, 2008

Money For Answers And An Answer To Money?

Mahalo Answers combines at least two things that have fascinated me for a long time: a Question & Answer system powered by humans and a virtual community currency. I am not part of the scheme and have not tried it (though I would like to), but just reading the page about how Jason Calacanis launched the operation prompted the following brief comment about the currency matter:

Over the last few years, I have written about and made some fledgling steps towards starting a renewable energy-backed currency, but I think an online currency will be easier to get started and maintain. Currency is a complex entity - it is a bit like blood - it's literally vital, but as soon as you remove it from its host body and all the complex organs it's connected to, it coagulates and dies. Money is a bit like that - it has to be flowing inside the system to work and stay alive. Most new community or local currencies never get into the body politic and so remain marginal or shrivel.

Creating a new currency is difficult for many reasons, but I applaud Mahalo for trying and I hope their scheme works for at least two reasons. The more dramatic reason is that if the Chinese ever stop buying billions of treasuries, the US dollar could find itself in real trouble, with the potential to pop the lid off the whole money bubble that has built up and protected America since Bretton Woods. If the US dollar really did head south speedily, other forms of currency might turn out to be very useful.

The more immediate reason is that like many others I am concerned about the state of serious, analytical media and particularly how writers, journalists and their host newspapers, journals, websites are going to stay financially afloat as powerful forces devour many existing business models. Only yesterday I suggested that an online currency would be worth exploring to help struggling media outlets and before that I have called for stronger and properly funded public service broadcasting, especially for the coverage of current affairs.

In the meantime, over the years, everything from Green Shield stamps to airmiles have been popular and had their uses, and many large shopping emporia will grovel to get your customer loyalty and give you in-store points or coupons. In the end, many of these schemes are similar to local or community currencies, so we should not be afraid of them nor dismiss them as unworkable. They can also be a way of direlcty rewarding the kinds of activities you want to see happen (local jobs?) and increasing local economic security. It will be enlightening to see how Mahalo fares.

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