Cultural Credit Circuit – Cultos
C3 concept for the cultural sector
In the cultural industry, a Cultural Institution behaves like a business company in the commercial sector: both belong tothe respectve industrial sectors. The difference between the two is that the former may not be designed to pursue profit whilst the latter is explicitly designed to compete for profit. In the cultural sector, a Cultural Institution (museums, libraries, etc.) deals with other cultural institutions in order to organize events and for collaborations of all sorts. Moreover, it has often to pay its employees who are (often) themselves producers and users of cultural products.
In times of shortage of conventional money, i.e. economic recessions and eventual tightness of credit as a consequence of the contraction of the money supply, Cultural Insitutions could trade between themselves and their employees with a complementary currency while continuing to trade with other non-cultural parties with conventional money. They could then circulate such complementary currency in a network formed by all the different economic agents dealing with the cultural sector at a regional or national level.
The pre-requisite is a good deal of persuasion of the cultural sector itself – both public and private – and the public opinion. This would be crucial in view of involving the principal actor, namely the Ministry of Culture, which should accept also Cultos in payment of taxes from both Cultural Institutions and cognitive/creative workers. This would be the primary incentive for using the currency in a large scale scenario.
At a conceptual level, if a Cultural Institution needs money for the value of – e.g.- 10,000 Euros, but the national Ministry of Culture is willing or, better nowadays (2010), able to finance only 7,500 Euros overnight while the other 2,500 Euros will be credited in – say – 120 days, then the Cultural Institution may open an account on the clearing-network managing the complementary currency with a value of 2,500 Cultos ( 1 Culto = 1 Euro and Cultos are merely digital). Indeed, the problem is a lack of conventional credit and not the risk of fund erasing. Therefore, such 2,500 Cultos are thought of as a Value Claim, which must be insured. Thereby, if the cultural institution goes bankrupt the risk of exposure for all the actors dealing with the it will be secured. Cultos are therefore a pretty safe negotiable instrument.
Among the actors trading with the cultural institution there will be those who will be paid in Cultos. At this point who gets paid in Cultos has three choices:
- Go to the bank and cash Cultos by paying a high bank fee to cover both interest and opportunity costs that the bank will incur in, if it does not wait that the Cultos reaches maturity after those hypothetical 120 days.
- Keep the Cultos until maturity and cash them with no banking fee.
- Make them circulate into the cultural credit network without loss of value and, in turn, increasing the volume of trade in the cultural sector taken as a whole.
The system is thus very flexible, and even individual producers of commons could participate: they could create the money by valuing their work in complementary currency, then use Cultos for boosting their artistic activity inside the cultural industry or spend them in mixed payments with Euros for participating to cultural events, i.e. conferences as well as for leisure. Naturally, in case of need they can cash them (with a loss of value due to the bank fee as for point 1).