A pilot scheme for the "Hawick Pound" is being launched this month to try to encourage more people to shop locally.I'm all in favour of towns like Hawick having strong economies. And I'm also in favour of private monetary systems. But I don't think that the good folk of Hawick have thought this through properly.
There has been concern from traders because of the competition they face from larger retailers outside the town.
But the idea is that the local currency could only be spent in Hawick, so money would stay in the community.
Listen to this broadcast:
Basically we are going to print up some notes and sell them into circulation.Just like that.
When the BBC reporter asked, "How would inflation work in Hawick?" the answer was, "I don't know." Not good enough. And if the currency is just going to be "printed up", we can guess the answer on that one.
As Mises explained, a sound currency can only come into existence by winning the hearts and minds of people in the marketplace. Why would a resident of Hawick prefer a currency that was only usable in his home town, especially a currency that can be "printed up"? There's absolutely nothing to stop Hawick folk from patronising local businesses as things stand right now. By all means let that include a bank - but one founded on sound principles.