THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

described in the previous chapter - the argument is a bit more
complex. In that case the currency is issued in proportion to the spare
capacity of the businesses participating in the system. The existing
precedent is the well-know corporate scrip issued by airlines, the socalled
frequent-flyer miles.
Does issuing frequent-flyer miles increase the number of times
passenger will Ay? The answer is, of course, yes. Does it create
inflationary pressure on the airline air fares? The surprising answer is
no. Not because the marginal cost for an additional passenger is
virtually nil (which is why they give these free tickets in the first
place), but because any airline manager worth his or her salt will
ensure that anybody using the free frequent-flyer ticket is sitting in a
seat that would otherwise be empty. That is why there are restrictions
such as 'no frequent flyers at Christmas or holiday season or on this
route at weekends', etc.
This is exactly what happens with the Minneapolis C$D issued. For
instance, a restaurant might accept 50-50 national currencycomplementary
currency before 7 p.m. So there is no inflationary
pressure on the restaurant's prices, because it just uses space that
would otherwise remain idle. In a competitive market, a restaurant
would theoretically be able to afford to increase prices only when
operating above capacity. This feature of enabling the businesses
themselves to better manage the problem of the excess capacity -
from a theoretical inflation control viewpoint - is one of the intriguing
aspects of the complementary currency approach. Within singlecurrency
environment there is no easy way for businesses to
differentiate among customers to improve the use of their spare
capacity in order to increase their productivity. For instance, what
tends to happen with discount offers is that they end up
cannibalising the income from norm national currency customers.