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Second installment of my survey of free-market alternatives to government programs.
The first was Grameen Bank.
Japan's yen, as you may be aware, is not very strong right now. What's more, it doesn't look like Japan's economic situation is going to improve in the near future. But the story of the small town of Yufuin, in Oita prefecture on Kyushu island, shows that this can't be because the Japanese lack anything of creativity or industiousness. While the Japanese government continues to beat the ever-living shit out of the yen, the residents of Yufuin have done what any grassroots constituency should have the legal right to do: they established their own currency.
In 1999, Yufuin liquor store owner Ryuji Urata came up with the idea of a barter club for his town. Instead of being dependent upon the government to manage the yen (which it apparently isn't capable of doing in the first place), the Yufuinjin write certificates for services or goods they will render upon presentation. With one yufu, as these scrips are called, you can get a bottle of sake, a small snack, learn how to wear a kimono, get a haircut, or catch a ride with someone. Although participants in the system generally appraise the scrips at 100¥, or roughly 75¢ American, the purchasing power of the yufu is completely independent of that of the yen or the dollar. In effect, it is money on a service standard.
A yufu basically looks like a slip of paper with the faint outline of the mountains of Oita printed on it. It will have the service value and the provider written on it. There are more than 100 members of the yufu club, providing a wide array of simple services. And because the yufu isn't really considered "money," it doesn't bruise anyone's pride to accept one in return for a favour of the sorts offered. Also, yufu make great gifts; when one restauranteur became ill, club members provided him with enough yufu to pay an employee to replace him. Basically, it's a way for the citizens of this tourism-driven town of 12 000 to get by without relying on the mercuric yen or the subsidy of the government.
In general, governments frown on barter clubs. After all, you can't tax them. Right now, the Japanese government considers the Yufuin club to be relatively innoccuous. On the other hand, with the success of the yufu, barter clubs are cropping up in small towns all over Japan. Still, the government remains confident that people will, on the whole, want "real" money (if that's what they're calling the yen these days), and so are generally leaving the yufu and its brothers to their own devices.
Just another example of why a currency doesn't need to be controlled by the government in order to be stable.
http://www.time.com/time/asia/features/changed_japan/yufu.html