The [Greek] crisis could present new opportunities. From Bitcoin to barter, the impending loss of the euro has Greeks looking for unorthodox solutions that operate largely outside the banking system.
Leander Bindewald, a senior researcher at the New Economics Foundation, draws inspiration from the industrial Greek city of Volos, which in 2011 established a barter-like system of local alternative units – known as TEMs in Greek. With euros in short supply, residents traded their skills – electrical work, plumbing, teaching – for TEMs, which could be traded for, say, food from a local grocer. Similar systems have sprung up throughout Greece in recent years.
"These are a lifeboat for people in their daily lives," says Bindewald, who manages the international group Community Currencies in Action, which consults communities on setting up local monetary networks.
To Bindewald, the economic inefficiencies that might arise from a patchwork of local currencies and barter systems are worth it, considering the cataclysmic dangers that monetary systems like the eurozone present. "If you have only one currency and it fails, people are hungry and starving on the street because there is no backup." – International Business Times, July 7, 2015
Greece is ahead of the economic curve. While the rest of the world is stuck with various state-sponsored paper currencies, Greece has a chance to start fresh. Unpayable debt will drive it from the Eurozone at some point.
No paper currency can last forever, not even the euro and the U.S. dollar. They will all collapse at some point; the only question is when. Greece is a chance to see what will happen to all of us eventually.
Given its recent performance, the Syriza government is not likely to lead a smooth transition. This, too, may be all right. The Greek public has non-government alternatives that didn't exist even a few years ago.
News reports in recent weeks showed Greeks stocking up on all kinds of tangible goods, from cars to wine and toilet paper. Better, they reason, to hold something with intrinsic value than euros that might disappear from their bank accounts. They are on the right track but eventually will need to "spend" their savings. How will that happen?
Economics 101 tells us the flaws of barter. You have to find somebody who has what you want while also wanting what you have. This is inefficient, but doesn't have to be so. On one level it is simply an information management problem. Technology can connect people faster than they can meet in the village square.
Nonetheless, at some point an economy needs a widely accepted medium of exchange with intrinsic value, portability, fungibility and scarcity. Gold and silver historically filled this role and may soon do so again in Greece. Bitcoin is another possibility. So are the local alternative currencies mentioned in the above news story.
News stories will keep focusing on Greece's negotiations with creditors and political scheming. They won't cover the far more important story: Can a modern economy function without state-issued currency? If so, how?
The answer may give us a peek at everyone's economic future.