A friend of mine recently linked to a story about stamp scrip currencies in a discussion about Initiative Q¹. Stamp scrip currencies are an interesting monetary technology. They’re bank notes that require weekly or monthly stamps in order to be valid. These stamps cost money (normally a few percent of the face value of the note), which imposes a cost on holding the currency. This is supposed to encourage spending and spur economic activity.

This isn’t just theory. It actually happened. In the Austrian town of Wörgl, a scrip currency was used to great effect for several months during the Great Depression, leading to a sudden increase in employment, money for necessary public works, and a general reversal of fortunes that had, until that point, been quite dismal. Several other towns copied the experiment and saw similar gains, until the central bank stepped...

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