Case Study

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Mackerel Economics in Federal Prisons In 2004, the government banned access to cigarettes among inmates at federal prisons (although some tobacco is still smuggled in). This change was not driven by health issues alone. Prior to the ban, in addition to smoking them, inmates used cigarettes as currency to acquire goods and services from other prisoners, including contraband items like drugs. In response, in some prisons around the country, inmates turned to plastic-and-foil pouches of mackerel fillets as the new currency. Called “macks,” they became the new coin of the realm. The Hassle of Small Change Money is an extraordinary invention. It enables exchange and cooperation between people on a vast scale, as long as trust can be maintained. Because our planet is now practically full with the impacts of human activity, debt based money, with its compulsion for growth, is now a problem. Other forms of currency that don't have this problem are described here. The difference between a demurrage charge and an interest charge is that interest is a demand for money in addition to the principal, while demurrage is a charge subtracted from the currency itself. While both are fees for having money, the difference in the impact the fees cause is immense. Demurrage changes the nature of the monetary system in a number of significant and beneficial ways. Primarily, that currency would no longer be suitable for storing value. In long-term storage, the “parking fee” would reduce your holding to nothing. To receive the full value from one’s income, it would have to be spent within a short while. When it is spent, the people receiving it would also want to spend or invest it as soon as they could. Over and over, the currency would be spent at the first practical opportunity, employing people at each step along the way.

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