It's been more than 10 years since the economics department at UMKC (University of Missouri at Kansas City) introduced its own currency. It's called the buckaroo, named in sync with the school mascot, the kangaroo.
It all began when the department indicated a desire to have students contribute their time to community service. I suggested they do it by introducing a new currency, which would both, for the most part, accomplish the intended purpose and give the students and up close and personal knowledge of currency dynamics.
It works something like this (with variations by specific class):
- All students are required to submit 20 buckaroos by the end of the semester to get their grades. Buckaroos can be earned by doing designated community service jobs.
- There is no limit to how many buckaroos a student may earn.
- Buckaroos are freely transferable.
First, a bit of history. In the late 1990's, when the program began, it was reported that students had exchanged buckaroo with each other at a price of $5 each. More recently, buckaroos have been reportedly exchanged for $15 each. Therefore, by that measure, the buckaroo has probably been the strongest 'paper currency' in the world, outperforming the S & P and most other investments.
There has always been 'full employment' in that any student can work for and be paid buckaroo at the designated community organizations without limit. There has been a zero interest rate policy since inception, in that the UMKC does not offer interest bearing buckaroo deposits.
The UMKC has run a continuous fiscal buckaroo deficit in that, from inception, it has always spent more buckaroos than it has collected. The value of the buckaroo has been 'internally stable' from inception, in that one buckaroo has always been able to purchase one hour of student labor.
The buckaroo has been operating continuously in a small, open economy, with multiple other currencies trading around it simultaneously. There has been continuous full employment with no capital controls, no trade restrictions, and no banking arrangements.
Furthermore, it has been obvious to the students that:
- The buckaroo is a (simple) case of a public monopoly;
- The UMCK's buckaroo fiscal deficit is exactly equal to the buckaroos saved by the students and their associates;
- The value of the buckaroo is a function of what the students have to do to earn a buckaroo from the UMKC work doing one hour of community service;
- The buckaroo functions first to move student labor from private to public domain and
- The buckaroo has operated and sustained its public purpose independently of foreign central bank policies.
Additionally, the students have recognized how variations in outcomes from the utilization of other currencies can be traced directly to variations in the policies of the issuers of the various currencies. For example, it's obvious to the students that if the UMKC attempted to run a fiscal surplus -- spend fewer than the 20 buckaroo per student it requires as payment to get one's grades -- the results would be highly problematic and counter to public purpose.
It's also obvious to the students that if, for example, the UMKC started paying 2 buckaroo per hour rather than 1, the buckaroos would probably exchange for $7.50 each rather than the current $15.00 each. They also recognize how problematic it would be if UMKC limited its total buckaroo spending to anything less than what the students wanted to earn to be able to both pay the required tax of 20 buckaroos and save buckaroos as they may desire.
The students also recognize that if the UMKC decided to buy other goods and service with buckaroos from willing sellers, they could do that, but that said purchases would tend to reduce the student labor that the community service providers would attract. The UMKC, as well as the students, have failed to identify any public purposes that may be served by having the UMKC pay interest on buckaroo savings, so the zero interest rate policy remains in place.
The students fully recognize that if the UMKC ends the 20 buckaroo tax, the buckaroo will have no further value. The students have gained an awareness of how, for example, wealthy students can opt out of community service by purchasing buckaroo from more needy students. They have recognized how the issues of theft and corruption influence the currency and people's lives.
In general, the buckaroo has been a fully functioning currency that has directed student labor to community service, and at the same time, provided an invaluable educational experience to the students. It's also has made it obvious that the world's leaders and their economists are necessarily subversive and/or ignorant.