Fred and Barney walk into a bar...
The weather changed from the expected mid seventies to a relentlessly rainy low fifties. Flint knew we were coming and was thoughtful enough to offer us the Michigan Fall Package.
The first words uttered and the theme of the whole week are how a city that’s on most folks’ radars as a bad case of government incompetence, poisonous water and high crime can at the same time be the poster child of community building, resilience and relentless hustle.
They wouldn’t need to tell us they are more than bad water and shootings. Each stop on the tour showed a community ready to step up when government is unreliable, decided to change the narrative and not be the victim, and working harder than most, because they know the cavalry ain’t coming.
In that process, whether they set out to do it or not, they have created a tremendous amount of value, and they have learned invaluable lessons on generosity, collaborative work, thriftiness, and beauty.
There are murals painted all over town. A two-hour tour gives visitors an idea of how massive the effort to bring joy and beauty to battered streets is. These murals are famous all over the world and people recognize how much Flint has to give.
However, Flint’s economy is not doing so great. Assault and murder are 4 times the national numbers and burglary and theft are well above. 15% have less than high school diploma and the median income of $28,834 is half the state income and less than half the national one.
The gap between the value that neighbors, artists and musicians are creating and the local economy is worth a deeper look. I’m not gonna write about that. I’m sure economists and sociologists ask themselves that question many times a day and there are probably as many different answers as people live in the city.
Where is that value? Where is it stored? Who keeps custody? How can they translate it into wealth? Is it redeemable in some form of Capital that can be put to work to improve their quality of life?
The answer to those questions is in the intersection of Jane Jacobs, Tenino, WA and Blockchain technology.
First, we must reference Jane Jacobs, who in her Economy of Cities and Cities and the Wealth of Nations touched the precedents, context and specific topic of local currencies. Read those volumes deeper to see just how much prescient they seem and be convinced, as I am, that Jane Jacobs would have been head deep studying the implications of financial decentralization for local economies. Economic decisions are best when they are made by agents moving freely in their networks.
Then, there’s the precedent of Tenino, WA, that created a wooden Tenino Dollar to channel funds that the city set aside to help its more vulnerable residents. Local currencies are allowed in the US, under certain conditions.
Finally, let’s go to warmer places. Miami, FL recently raised $4.5M with “Miami Coin”, a digital token based on the Bitcoin network. They were able to leverage those funds by selling the future possibilities of Miami as a Bitcoin hub. They cleverly monetized the value created collectively by the ecosystem.
All three elements above connect to Flint and, in my opinion, to any struggling economy in the Rust Belt and beyond, in that the value that they are creating internally can be leveraged to raise funds to invest in the things the town really needs.
By creating a local “currency” instrument based on the Bitcoin network, and backed by the proof of work that locals do, the shared value can have a price in the market.
Initial investors will see the potential and bet on that value. Others may come later when the funds that the residents have raised are reinvested in the community and primed the city and its legal framework to facilitate further value creation.
Owning these instruments would give people access to art shows, to auctions of local art, to exclusive concerts by local musicians or to knowledge for implementing successful programs that replicate hits from Flint. The opportunities to entice investors based on the value created in the town are endless.
The motivation to invest is not just the perks, however. The organization issuing the instrument, let’s call it a “Decentralized Autonomous Organization” or DAO for short, creates a business plan, that has a quantifiable ROI and measurable indicators, centered around the creation of jobs, the increase in median household income and new business creation. If those move in the right direction, investing in the town’s local currency can make a ton of sense.
I am convinced that new technologies and decentralized ways of capturing and increasing the value that communities are creating around the nation are the exact tools we need to reinvigorate local economies and build prosperity.