Are invented or local currencies money?

WHAT IS MONEY
Are invented or local currencies money? Why or why not?

What is money
One of the most significant systems of a social system is money. Apart from the
nationally recognised currencies, there are certain local or the invented currencies as
well that are prevalent in a region or a social system. The following work is aimed at
presenting the argument that the invented and the local currency is regarded as money
as the same fulfils the various characters of the money. The work would be facilitated
by the various literary works that would support the above stated argument.
One of the chief functions of money is to establish a medium of exchange (Anon). A
local currency is referred to as a currency that is for the use within a region or a country
only. Thus, a local currency is the currency in which most of the transactions are settled
within a region or a country. Some of the examples of the local currency that were
created over time were the German WARA, the Swiss WIR Franc, the American
Ithaca’s Hours, the Austrian Worgl and others. From the initial use of the barter system
as a medium of exchanging to the invention of the coins, paper bills and now the digital
currency, the human race has come a long way in terms of the development of medium
of exchange on the lines of sustainable and economic development of a country or
region. It is vital to note that the local currency implementation can be facilitated with
different value systems and motivations that would aid in addressing the various issues
in the society such as the divisions of labour, imbalances in terms of wages and others,
and thus can aid in the sustainable development. Hence, as per the first characteristics
the local currency can be regarded as money.

What is money
Apart from the above discussed, the yet another function and the characteristics of
money is that it was introduced with an aim to eliminate the need of the double
coincidence of wants as existed in the case of the barter system. This leads to one more
vital characteristics of the money that is facilitating the trade of the commodities. The
yet another key characteristics of money is that the nature of money in itself is such that
it is independent of any transactions in which the same is used and has an identity of its
own irrespective of the nature of the transactions (Thomas 3). It is significant to note
that the introduction of the local currency is not done with an aim to replace the
conventional money or present a challenge to it, rather the introduction is done with an
aim to complement the same.
The need of the currency in the refugee camp had led to the development of a
commodity currency namely the POW Cigarettes, which had begun to be circulated as
money in order to ensure the even distribution of the goods within the camp and
eliminate the double coincidence of wants (Bradford 189). One of the major
characteristics of money that is incidental to the conduct of the business sis also the
settlement of the accounts and the payment of the taxes. The transactions conducted in
terms of the commodities like that of the cigarettes are inconvenient in terms of taxing
the value addition achieved in the trade. Hence, it would be right to state that the POW
Cigarettes in the form of a local currency did qualify certain characteristics of money,
but not all of them. However, the same are not as convenient as the actual paper bills
because not everyone consumes cigarettes. Hence, it would be right to conclude that

What is money
money is something that is of utility of everyone and can be used by the people at large
for the settlement of accounts and trade.
It is very important to note that money is a significant component of a social system and
its efficiency can be achieved only when a proper institution is established for the
management of its circulation and other functions. An institution is defined as a
framework within which the activities of a repetitive nature are carried on in an
organised and a regulated manner to ensure the consistency and the avoidance of the
conflicts of the interests. The institutions works on the basis of the set rules that govern
the efficiency and consistency. The review of the functions of the monetary institution
would aid in the understanding of the significance of the institutions.
The key functions of the monetary institutions are that of the facilitating the savings,
provision of a platform for conversion for savings into cash, and the aid of the interest
for providing the money to the institution in the form of savings. Hence, there are listed
a complex set of functions that are governed by a disciplined set of rules or the code of
conduct for the monetary institutions. Analysis of the local currency of the Boggs Bill
in conjunction of the features of the money is elaborated as follows. The Boggs Bill
denote the currencies drawn by the artist J. S. G. Boggs which were when circulated
raised the questions as to whether the exchange conducted by such bills was an
exchange of an art or a money in disguised form. This highlights one of the significant
features of money, that money is something that holds such value that it does not really
have a replacement in real. The Boggs objects went onto become both as a art objects

What is money
and a medium of performance of an act (Lawrence 16). It is also vital to note that the art
was so distinct that on consistent rotation of the single value, its value rose to two to
three times and thus the notes were exchanged for higher values later on. However in
contrast to this, the value of the monetary bills remain constant and this forms a key
feature. Hence, it can be stated that Boggs Bill were not at all money, as the same did
not follow any of the characteristics of money that are the provision of medium of
exchange, and a common standard value for the conduct of the transactions.
The discussions conducted in the previous parts aid to conclude that money is one of the
most vital component of the functioning of a society and an economy with multifaceted
characteristics. The work was in the form of a study of the various characteristics of the
money that are the providing a platform for trade and exchange to be the most basic, to
being an independent medium for carrying out transactions and institutional functions
of saving and exchange. The work further analysed the above mentioned characteristics
in light of the features and functions of the invented currencies that are confined to a
region only. While the POW Cigarettes possessed certain characteristics of money, the
Boggs Bill did not possessed the same. With the aid of the study, it can be concluded
that the local currency or the invented currency are comprised of certain characteristics
of the government regulated money.

What is money
Works Cited
Anon. “Money.” The Encyclopaedia Britannica. 11th Edition. Volume 18. New York:
Cambridge UP, 1911. Pages 694-696.
Bradford, Robert A. "The economic organisation of a POW camp." Economica 12.48
(1945): 189-201.
Crump, Thomas. The Phenomenon of Money (Routledge Revivals). Routledge, 2011.
Weschler, Lawrence. “Laughing All the Way to the Bank.” Boggs, A Comedy of Values.
University of Chicago Press. Extract published in The Guardian. London (UK)
08 May 1999.