Healthy Money Healthy Planet - library.uniteddiversity.coop

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traditional rice planting and harvesting scenes, and contained a spirit poem written in
the local dialect. The system was designed to replace the Thai baht for local purchases,
and it was planned that the bank would eventually be used for import substitution,
microcredits, and the funding of health and education.
Thus the system was a combination of a mutual credit system with a fiat currency, much
like the Mexican tlaloc or Argentinian créditos.
In abolishing the bia Kud Chum, the Bank of Thailand justified its action by saying
that the currency violated the right of the central bank to issue the country’s currency. It
also claimed that the use of the word ‘bank’ violated a commercial banking act. After
researching the event, Jeff Powell and Menno Salverda wrote:
At such an early and fragile stage in its development, Thailand’s first community currency system
can hardly be deemed a threat to the powers of the State and assorted vested interests. More
production and exchange at a local level means that community members might buy roselle juice
instead of Coke, or produce organic fertiliser instead of buying the 15­15­15 chemical fertiliser of
the Charoen Pokphand Corporation. And maybe, there are some people in Thailand and elsewhere
who don’t like the idea of village people doing just that. 56
There is no doubt in my mind that this the bia Kud Chum was a very successful formula
and, had it succeeded, that many others would have emulated it.
Guernsey Pound
One of the most dramatic illustrations of the use of healthy money is on Guernsey, one of
the Channel Islands off the coast of France. Through a quirk of history, Guernsey had
been accorded the sovereign right to issue its own currency in 1690; it chose to exercise
that right in 1816. 57 Before 1816 the island had used only British pounds issued by British
banks. But during a currency crisis it created its own interest­free money by spending it
into existence. It is now a prosperous island, with low taxes (20 per cent income tax for
individuals and companies), zero unemployment and low inflation.
Soon after the Napoleonic wars of the early 19th century, Guernsey was faced with
a major problem. Its infrastructure was falling apart and, although it had the potential to
attract tourists, the island had no public facilities. It was in a state of extreme poverty,
with the sea encroaching on the land because of the bad state of its dykes. Its roads were
unsealed and there was high unemployment. At the time, Guernsey had £19,000 of
public debt, the annual interest on which came to £2400, to be paid from an income of
just £3000 per year. The £600 left over was insufficient to build any infrastructure. The
island didn’t want to borrow the necessary £10,000 to improve its situation, and there was