The following article was written by Professor Doctor
Tobias Studer, an economist at the
This WirPlus magazine article reviews a research paper by myself, Jim Stodder (no relation to Prof. Dr. Studer, the author of the following piece!) My research paper, entitled "Reciprocal
Exchange Networks: Implications for Macroeconomic Stability,” http://www.rh.edu/~stoddj/Stodder_WIR3.htm is a statistical
analysis of the bank’s post-war history.
This paper shows that WIR’s centralized
“barter” arrangements -- based on reciprocal credit arrangements rather than on
Swiss currency -- play a stabilizing role in the national economy. This has encouraging long-run implications
for the evolving internet economy.
E-commerce shows tendencies toward a system of reciprocal credit and
exchange, rather than traditional monetary transfers.
The
following is my translation of the French article, “Le Système
WIR dans l’Optique d’un Scientifique Américain,” or:
by
Professer Tobias Studer
Center of Economic Studies
American research
findings show that WIR contributes to the stabilization of the Swiss national
economy. In periods of economic boom
WIR activity shows less-than-average growth, while in periods of recession it
shows greater-than-average growth. Over
the course of 52 years, there has been another correlation – that between the
WIR system and unemployment: while the number of unemployed grows, the activity
of the WIR system also grows, playing the role of a stabilizer.
At the
international conference of the Engineering Management Society, held
Equally,
however, are these results of interest to the WIR bank itself. For the first time, an independent American
researcher has arrived at a surprising conclusion: far from representing a
factor of disturbance for national monetary policy, the credits created by WIR
constitute a support of the National Bank (Swiss Central Bank) in pursuit of
its monetary policy objectives.
Exchange without monetary payment,
such as practiced by the WIR system and numerous other “barter” exchanges, has
enjoyed a veritable renaissance with the advent of the internet. One of the principal barriers opposing barter
up until now – the difficulty in finding suitable partners for any exchange –
has disappeared with the internet, since this medium can resolve, in an optimal
manner, the problem of identifying potential trade partners. Using the internet, each supplier can present
his or her offers to the entire world with minimal difficulty, at any hour of
the day or night. Furthermore, it will
be quite easy to update this offering as necessary. The trading exchange assumes diverse
functions, including standardization of information on the presentation of
clients, products, and services.
In principle, it would be
possible to make all non-reciprocal purchases on the internet using a
conventional payment script or voucher, before receiving the goods. But if the seller and buyer are both in
electronic contact, it is more practical, quicker, and less risky to finalize
sale and the payment in the same transaction.
Nowadays, payment with credit or debit cards has become quite
widespread. Nevertheless, this method of
payment entails needlessly high transaction costs. Methods of payment are evolving in more
advantageous directions, as for example direct withdrawals from bank accounts,
or payment via “e-cash” or virtual money.
The ordinary money printed by
Central Banks [e.g., the Federal Reserve, or the National Bank of
Rensselaer
Polytechnic Institute in
James Stodder is one of 400
professors at
Professor Stodder is a
“polyvalent” economic theoretician, one who has become known in numerous
publications in well-known specialist journals. Over the last few years, among
other things, he has specialized on economic activity that takes place without
direct monetary exchange, in particular, on forms of barter. As precursors of “money-less” e-commerce,
traditional barter exchanges represent excellent subjects for analysis,
especially since one finds them accompanied by a substantial amount of
statistical data. Furthermore, given the
similarities between both forms of commerce, it may be possible to draw
conclusions on the future of e-commerce by analyzing the economic effects of
barter exchanges.
Searching the world over for
adequate statistical data, Stodder came across the WIR system and integrated
this into his research. By reason of the
extraordinary continuity of available data (Annual
Turnover, Number of Clients, and Volume of Credits Advanced from 1948 to
1999 – a period of 52 years) the WIR system would become for Professor Stodder
one of the principal objects of his analysis.
One can say, in summary, that
in the course of the last 50 years, the WIR system has given proof of its
profoundly anti-cyclical character. In
periods of economic boom, it has tended to grow more slowly than the economic
average, while in periods of recession, it has tended
to grow more quickly than average. Thus it contributes to the stability of the
Swiss economy. Such stability, of course, is the primary objective of the
monetary policy of the Swiss National Bank.
The system of WIR is thus, whether intentionally or not, a useful
partner to the National Bank --and certainly not a force to disturb its
monetary policy.
It is particularly important
to emphasize the contribution the WIR system makes to stabilizing rates of economic
activity, particularly in the fight against unemployment. It is especially in this realm that Professor
Stodder has identified a very pronounced statistical correlation. Each time that the level of unemployment has
risen over the past 52 years, the activity of WIR has also risen, as a
compensating factor.
Professor Stodder has
measured WIR activity by means of the number of clients, and the relation
between the Volume of Credits and the Annual Turnover. The activity of the WIR system is equally
anti-cyclical in relation to Gross National Product: faster growth in the GNP
is always accompanied by slower growth in WIR activity. Finally, there exists a positive link between
merchandise inventories and WIR activity: in cases when there is a fall in
sales and a parallel growth in inventories, the WIR system facilitates the
reduction of inventories and thus, indirectly, contributes to overall economic
stabilization. In checking his findings,
Professor Stodder has worked with alternative parameterizations, which permit
him to verify the same conclusions.
Stodder’s findings for the Swiss economy are extended by his
study of the effects of US “barter” exchanges – an analysis leading to similar
results. In the
The results of the research
of Professor Stodder are interesting for two reasons:
·
First of all, it
is reassuring to know that the revolution now underway in e-commerce is not
tending toward a destabilization of the world economy, but rather is
contributing to stabilization. Other
studies up to this point have arrived at similar conclusions, noting the
stabilizing effect of greater transparency in internet transactions.
·
Secondly, it is
good news for friends and clients of the WIR system of payments, who are
sometimes reproached about the “destabilizing” influence the WIR system might have on national monetary policy. It is good to know that, not only are these
criticisms without foundation, but that, contrary to those assertions, the WIR
system has a positive influence on the national economy.
That these conclusions come
by way of a disinterested and neutral researcher only serves to increase their
value.