Monetary democracy – reconstructing the core idea of the local currency movement

In the last decade, local currencies have been initiated by social movements all over the world in response to the climate crisis, economic volatility as well as the difficulties of the representative democratic institutions of addressing these problems. The currencies, which can be used within a delimited area and to buy certain goods, are intended to promote local and sustainable production and economic stability. At the same time, the aim is democratic. The influential Mouvement Sol in France aims to construct a “monetary democracy”, providing new participatory spaces and allowing citizens to consciously take part in economic decision-making. However, the idea of monetary democracy is controversial. Can you bring together the idea of money – often understood as a medium for the preference maximization of the individual – and the idea of democracy – the proposition that the people can rule itself? And while local currencies have received significant attention in the fields of green and alternative economy, the idea of monetary democracy that underpins it remain understudied in the field of political and democratic theory. This paper seeks to fill this gap. By bringing economic scholarship on monetary pluralism in dialogue with the deliberative democratic theory on which the local currency movement draws, it examines the idea of democracy that is actualized when money becomes democratic and democracy becomes ‘monetary’. First, the paper shows that from a deliberative democratic perspective, the logic of public deliberation falls into conceptual tension with the logic of money. From this point of view, the notion of “monetary democracy” appears as a contradiction in term that, ultimately, risks corrupting the very meaning of democracy. Second, it demonstrates that the notion of monetary plurality challenges the deliberative democratic conception of money in such a way that it, in some cases, resolves the tension between money and deliberation. While agreeing with deliberative democrats that money shapes the norms and practices of the social relations that it mediates, the research on monetary pluralism suggests that this relation goes both ways. A key finding here is that the meaning of money will depend on the cultural context in which it circulates, and that, consequently, it can take on a plurality of forms. Some of these forms, such as special-purpose money, are particularly sensitive to collective community control. Some forms of money, I argue may be open for deliberation and collective appropriation. By reading deliberative democratic theory alongside the literature on monetary plurality, the paper suggests a path forward for further expanding deliberative democracy into the social and economic sphere. At the same time, it sheds light on the pitfalls of democratic corruption that the process of collectively appropriating and democratizing money, emphasized by the local currency movement, may entail.