Local currencies in European History : an analytical framework

Although today's main organisation principle of monetary spaces is the nation-state's one, everyone can see it is not totally the case because of the existence and the development of local and social currencies and other sorts of parallel currencies. European history gives very useful lessons on this matter. One can distinguish, indeed, three historical periods : firstly, an "old regime" with a great diversity of money, including forms of local currencies ; secondly, the building of nation states and, consequently, what Benjamin Cohen (1998) calls a "westphalian model of geography of money", centred on the principle of one nation, one money, excluding local currencies different from national currencies ; thirdly, the contesting of such a regime of monetary sovereignty. European history gives, then, evidences that the contemporary dynamics of local currencies is not a new one, but that it is undoubtedly the most important of the third period. European history leads however to make significant differences between forms of monetary localisms. Those differences are analyzed within the following framework. First, we have to make a distinction between the nature of issuers : public authorities, groups of citizens, businesses and banks. Monetary localisms before the Westphalian era were mainly organized by public authorities (lords) and religious orders, whereas today's monetary localisms mainly come from citizens and businesses (except from emergency issues and secessions logics). Second, we have to make a distinction between the rationales for monetary localisms : sovereignty, seignoriage and financing needs, protecting spaces, revitalizing spaces, transforming the nature of exchanges and money. Monetary localisms before the Westphalian era were mainly organized in order to capture money and dynamize spaces, whereas one can find the four rationales in today's monetary localisms. The paper, after presenting the analytical framework, concentrates on three sorts of local currencies : local currencies as a result of necessities, local currencies issued by banks and local currencies aiming to change money. It concludes on the differences between local currencies in European history and contemporary local currencies.