Revisit:
Chapter 1: The Unraveling of Wage Based Value
Chapter 2: Revealing Civic-Labor
Chapter 3: The Structure of a Public-Sector Currency
Chapter 4: Civic Currency in Practice

If you have followed the logic of this series so far, the idea of a public-sector currency starts to feel feasible.

Wage labor is losing its monopoly over the distribution of income and identity.
UBI can stabilize consumption but not purpose.
Civic-labor remains structurally undervalued.

A city-level currency backed by verifiable civic contributions offers a concrete way to recognize the work that markets ignore while creating new channels of belonging.

But, at some point, this concept has to walk through the doors of a city attorney’s office, a budget committee, a union meeting, a state legislator’s staff briefing, and satisfy a skeptical media. It will need to answer the expected questions of, “under what authority, and subject to which laws?”

This chapter is about that confrontation. I wanted to spend some time exploring the politics and regulations that will shape the feasibility of a currency backed by civic-labor within a real city, and identify what laws might need to change, which ones can be worked within as they are, and how to frame the effort so that it’s not derailed by its own complexity and can become a politically defensible extension of existing public practice.

A public-sector currency is inherently a political act. It rearranges who gets to define value, who can authorize new forms of compensation, and how public institutions relate to their residents.

Because of that, we should expect that any legitimate proposal will encounter friction and resistance.  I wrote a little about this in an earlier essay called, Recompising Government Legitimacy, describing the challenges associated with creating change within bureaucracies.

The first political and legal question will be definitional. When we say public-sector currency, what does the law hear?

In the United States, “legal tender” has a specific meaning. Federal law establishes that U.S. coins and currency are legal tender for all debts, public charges, taxes, and dues. That doesn’t mean only the federal government can create units of account or that no other systems of value can exist. It means that U.S. dollars are what courts and tax authorities recognize as the final means of settlement. 

Local currencies, loyalty points, transit tokens, and time banks already exist in the periphery of this system. Cities issue transit passes, parking credits, housing vouchers, food assistance cards, and all sorts of non-cash value instruments without being accused of counterfeiting.

The political risks emerge when a municipal instrument begins to look too much like money in the eyes of regulators or markets. A freely transferable token that trades against the dollar, circulates widely between private parties, and is used to pay for a broad range of goods or settle debts starts to raise questions on whether or not that unit is an unregistered security, or an unauthorized currency. You must also consider that it may be defined as a form of barter income subject to taxation. Once those possibilities surface, the city finds itself in a regulatory grey area.

The concept of a currency backed by civic-labor as proposed here avoids that by design. Credits are non-transferable between individuals, cannot be exchanged for dollars, and won’t be accepted for taxes or fines (yet). They are also not valid in private markets, as they are only redeemable for a specific class of public goods and services, redeemed through accredited institutions, and under administered rules. 

Politically, this distinction matters. If a city considers adopting a civic currency, it won’t need to question whether or not they can create money, but rather, if they can create a structured program of credits redeemable for public services. The latter is much easier to defend. It places the initiative in the family of transit passes, tuition waivers, recreation scholarships, and benefit vouchers…all of which are widely accepted tools of public policy.

The real legal and political friction for this type of currency will come from labor law, public finance restrictions, and welfare/workfare rules.

Labor Laws

Whenever a government entity invites people to perform work and offers something in return, labor law becomes a major focus. In the U.S. context, the Fair Labor Standards Act (FLSA) establishes minimum wage, overtime, and many other protections for employees.

The law draws sharp distinctions between employees, independent contractors, and volunteers. Governments and nonprofits are allowed to use volunteers under certain conditions, but they cannot use “volunteers” as a way to evade wage protections for what is in effect, regular employment.

This has direct implications for a currency backed by civic-labor. If a city invites residents to perform highly structured ongoing tasks that look indistinguishable from paid jobs, and offers credits that function as shadow wages (even if those credits are non-cash) that city risks being accused of wage theft or misclassification. If a school uses civic credits to staff what are essentially teaching roles, or a health department replaces paid outreach workers with “volunteers” compensated in credits, unions will rightly see this as a threat, and the regulators won’t be too far behind.

The political defense here should be to acknowledge the risk, but structure the system in a way that demonstrates the civic-labor being performed is supplementary to core paid functions, and not a substitute.

The roles must be framed as voluntary civic contributions with bounded scope and hours, and not as ongoing employment. The credits must not be convertible into cash, or treated as wages for the purposes of performance evaluation or hiring preference.

Municipal governments already navigate these boundaries in their volunteer programs. The difference here is scale and formalization. Instead of a few hundred volunteers recognized informally, a civic currency system might involve thousands of participants tracked onchain. 

That visibility can be a strength, if it allows the city to prove that volunteers are not being used to undermine union contracts or evade wage laws. Contracts with unions can incorporate explicit provisions for this, establishing that there should be no displacement of bargaining unit work, clear limits on what tasks volunteers can perform, and pathways for volunteers to apply for paid roles when those exist.

Politically, this becomes a negotiation rather than a blindside. If unions are treated as partners in designing the task catalog, they have reason to see the civic currency as a complement rather than a threat. If they are not, they will likely mobilize against it.

Public Finance Laws

Another potential legal constraint comes from public finance rules, particularly in states with strong bans on “gifts of public funds”. At a high level, these provisions prevent governments from giving away public money or assets without clear public purpose and legal authorization. Courts often interpret them to mean that any voucher or preferential treatment must be linked to a legitimate governmental objective and administered under fair and transparent rules.

A civic currency that allows people to earn credits and redeem them for public services might catch the regulators attention.

Why do some residents get discounted or free services when others pay full price?  Is the city giving away public resources without legislative approval?

The answer should be addressed in the design and framing of the currency. Cities already run targeted subsidy programs all the time…things like low-income transit fares, library fee waivers, recreation department scholarships, free school lunches, discounted museum days, etc. These are legally defensible because they are authorized by ordinances or budgets and grounded in policy goals (equity, access, public health).

A civic currency should be positioned similarly. When someone redeems credits for a transit pass they are exchanging one form of public value (their labor) for another (mobility).  It is not a subsidy.

The city council can enact an ordinance or budget line that explicitly authorizes a certain volume of such redemptions, declares the policy objectives (increased civic engagement, stronger public institutions, whatever), and sets out the broad terms under which the program operates.

To make this politically defensible, the city must show that the program advances a legitimate public purpose, that it is reasonably structured to achieve that purpose, and it does so under rules that treat similarly situated people, similarly. 

In practice, that means creating clear eligibility for participation, providing transparent task definitions, and publishing frameworks for redemption. It also means monitoring and evaluation, so that the city can demonstrate that the program is a mechanism for building civic capacity and not just administering a giveaway.

Welfare/Workfare

A third area of political risk lies in the realm of welfare programs. Many social assistance systems already experiment with work requirements, volunteer obligations, or “community engagement” components. They are always deeply contested and always a burden on governments. Critics see them as punitive and stigmatizing, and supporters frame them as a way to encourage self-sufficiency.

If a civic currency is not carefully designed, there is a real danger that policymakers or administrators will try to attach it onto existing welfare programs as a pre-requisite condition. Recipients of housing assistance or food assistance might be told that they must “earn” supplementary benefits by participating in civic-labor. In the worst version of this, failure to participate could be used to justify individual sanctions.

That scenario would fundamentally betray the ethos of what a public-sector currency seeks to accomplish. The point of this type of currency is to create an optional layer of participation and recognition.  It cannot become a new compliance regime for the poor.

Politically, this distinction must be guarded aggressively. The authorizing legislation or executive directive that approves the civic currency should explicitly prohibit tying participation to eligibility for existing programs. Oversight bodies should have a mandate to investigate any attempts to do so.

At the same time, the existence of the currency will inevitably tempt some actors to frame it as a cheaper alternative to expanding cash benefits. The political defense here is to insist on the credits complementary orientation, and should not be framed as substitution.

Civic credits can empower citizens and open doors to new opportunities, but it should not be a source they rely on to pay rent or cover medical bills. It serves as an additional option available to all residents, whether or not they are on public assistance.

Bottom line is that if you require people to labor for basic survival, you have created a two-tiered citizenship where some people’s time is priced at zero. That is exactly the condition a post-wage civic economy is meant to correct, not reproduce. 

The Importance of Framing

For those who care about civic engagement and democratic resilience, a civic currency offers a way to structurally support the kinds of participation that normally depend on altruistic exploitation and volunteer burnout. It acknowledges that showing up for your community is work, and that work deserves some tangible recognition. After all, it helps sustain the institutions that form the civic infrastructure of a city.

For those who prioritize fiscal prudence, the program can be framed as an efficiency and resilience measure. Civic-labor fills gaps that would otherwise require much more expensive interventions down the line. The currency does not conjure resources out of nowhere, but it helps mobilize underutilized human capacity in a more systematic way.

For those focused on labor rights, the program, if done right, offers a way to separate survival from employment without diminishing the value of work. Instead of insisting that every socially necessary task be squeezed into a wage labor model (or alternatively, completely ignored), it creates a parallel track where citizens can contribute on flexible terms without being preyed upon by employers. It also provides pathways for people to build experience, skills, relationships, and networks that might lead back into paid roles if and when those exist.

For those committed to equity, the civic currency can be defended as a way to redistribute access to public goods in a manner that is tied to agency. It does more than our current system does, which seems to just drop benefits on people at random.  

For institutions, the program is politically defensible because it does not require them to surrender their core mandates. Transit agencies retain control over their schedules and safety policies. Libraries retain authority over their collections and programs. Museums retain curatorial independence. The currency overlays a new layer of value recognition without compelling institutions to become something they’re not.

The alternative is politically worse. If cities do nothing, they drift into a future where automation undermines wage based identity and meaning, and all they have to offer in return is the hope of an eventual UBI program or the expansion of punitive welfare regimes. A civic currency is not the entire answer, but it is, politically, a far stronger posture than passivity.

The State and Federal Lens

Although most of the action is local, state and federal politics shouldn't be ignored. States determine the scope of municipal powers, and in many cases, they control crucial policy levers. The federal government shapes tax policy, benefits eligibility, and regulatory frameworks for currency, securities, and financial services.

A civic currency that is clearly bounded within the domain of municipal services, non-transferable, and non-monetary is unlikely to trigger federal regulatory interventions. It does not create parallel money, does not touch interstate commerce in any substantial way, and does not compete with federal legal tender. 

However, its interactions with federal tax and benefits systems may need careful consideration. For example, if the IRS were to view civic credits as barter-like compensation, there might be concerns about taxability. One political strategy is to design the credits explicitly as non-cash, non-convertible, and limited to in-kind benefits (analogous to existing loyalty programs that typically fall under informal thresholds of concern).

At the state level, the main issues involve preemption and benefit coordination. Some states tightly circumscribe the powers of cities while others provide broad “home rule” authority. A city considering a civic currency should seek a state-level affirmation that such a program falls within its authority to manage local welfare, education, transportation, and cultural services. In some cases, state legislatures might even be interested in authorizing pilot programs, especially if they align with state goals around civic engagement.

The more the civic currency is framed as a contained experimental program, the easier it becomes to defend at the higher levels. The more it is integrated with existing state and federal objectives (for example, by using civic credits to support disaster preparedness, public health initiatives, etc.), the more allies it can attract.

A Practical Path to Control Political Framing

Political defensibility is about process. How would a real city go from notion to implementation? We need to have a process that establishes a pathway for projects like this to control the political framing and increase the probability of success.

It usually starts with a champion.

That might be a mayor interested in civic innovation, a council member focused on democratic participation, or a senior administrator worried about the long-term sustainability of public institutions in an era of automation.

They start conversations with allies; the library director who understands the latent demand for learning, the parks director who sees the limits of current staffing, the head of a major nonprofit who is tired of operating in scarcity.  We need to believe alternative systems can work for us, and those systems need to be championed by individuals who have the authority to utilize them as a solution.

Once we have a champion or two, the next step would be to establish an exploratory working group. It should include representatives from key agencies, the city attorney’s office, budget and finance staff, unions, and at least some members of the communities likely to benefit or be harmed. The group’s job should be to surface the legal questions, political obstacles, social impact, and practical opportunities that exist. 

They should try to identify where in the municipal code, an authority might already exist, for example, who has broad powers to create programs that advance public welfare, or specific authority to set pricing and discount schemes for services. They can also identify where explicit legislative authorization will be needed.

The city attorney’s role here is also extremely important. They will be able to flag potential conflicts with labor law, public finance restrictions, state preemption doctrines, and federal regulations. They will ask hard questions about how credits are defined, whether they constitute compensation, how they intersect with taxation, and whether they could be construed as creating liabilities on the city’s books. They won't be able to eliminate all risk, but they should be able to ensure that the risk is understood and bounded.

Once the working group has a rough model that appears legally viable, the political legwork can begin. Briefings are held with union leaders, who are given a clear explanation that civic tasks will be carefully scoped to avoid undermining bargaining unit work. State legislators or relevant state agencies may be consulted to ensure that the program does not inadvertently jeopardize eligibility for state-administered benefits. Local advocacy organizations are brought in to stress-test the design for equity and accessibility.

Once this is done, a pilot ordinance or resolution can be drafted. This is important because it does several things at once. A draft declares the city’s recognition of civic-labor as a vital component of its public life. It can authorize the creation of a civic currency pilot program under defined conditions, and establish or ratify the governance committees described in the prior chapter. 

It would also delineate the core principles such as non-coercion, non-substitution for existing wages, privacy protections, equity goals, etc. It would authorize a finite volume of redemptions for specified services and allocate budgetary resources to cover any associated costs, such as administrative staffing and backstops for essential services like transit.

The ordinance will also bake in monitoring and reporting requirements.

After, say, two years, the administration can report back to the council and the public on participation levels, demographic distribution, impacts on public institutions, and any unintended consequences. This provides a built-in accountability mechanism and allows skeptics to feel that the experiment has guardrails.

Implementation can then proceed as described earlier where committees are created, issuers accredited, tasks defined, rates set, redemption agreements signed, and so on.

Throughout, the political components keep communicating and explaining the program, sharing stories from participants, highlighting benefits to institutions, and being candid about challenges.

If and when the pilot shows signs of success, the city can move to institutionalize the program through permanent code changes, expand the redemption universe, and negotiate regional interoperability.

If it fails, the city has a clear off-ramp where it can sunset the pilot, analyze what went wrong, and perhaps salvage components that proved valuable.

The key is that at every step, the civic currency is presented as a disciplined experiment in extending the tools cities already use into a more coherent civic economy.

Embedding Politics in Design

The politics of a public-sector currency are part of the design space. Law defines what is possible, but politics defines what is sustainable. A system that ignores these constraints might get launched once, under an unusually aligned administration, only to be dismantled by the next one. A system that grows inside the legal and political bubble of institutions has a chance to outlive its founders.

The point here is not to water down the "civic currency idea” until it becomes indistinguishable from existing voucher programs. The point is to recognize that in a deeply path-dependent system like municipal governance, anything genuinely new must be threaded through existing forms. 

The practical path might involve starting with a narrow focus and then gradually expanding as trust and understanding grows.

A public-sector currency is politically defensible when it is honest about what it is and what it is not, modest in its claims, disciplined in its governance, and transparent in its impacts.

It will not solve every distributional problem in the post-work era. But it gives cities a way to say, with some integrity, that even as the wage system unravels, they can still recognize and reward the work people do for each other.




Chapter 6: Co_Existing with Markets (final)

Revisit:
Chapter 1: The Unraveling of Wage Based Value
Chapter 2: Revealing Civic-Labor
Chapter 3: The Structure of a Public-Sector Currency
Chapter 4: Civic Currency in Practice

If you have followed the logic of this series so far, the idea of a public-sector currency starts to feel feasible.

Wage labor is losing its monopoly over the distribution of income and identity.
UBI can stabilize consumption but not purpose.
Civic-labor remains structurally undervalued.

A city-level currency backed by verifiable civic contributions offers a concrete way to recognize the work that markets ignore while creating new channels of belonging.

But, at some point, this concept has to walk through the doors of a city attorney’s office, a budget committee, a union meeting, a state legislator’s staff briefing, and satisfy a skeptical media. It will need to answer the expected questions of, “under what authority, and subject to which laws?”

This chapter is about that confrontation. I wanted to spend some time exploring the politics and regulations that will shape the feasibility of a currency backed by civic-labor within a real city, and identify what laws might need to change, which ones can be worked within as they are, and how to frame the effort so that it’s not derailed by its own complexity and can become a politically defensible extension of existing public practice.

A public-sector currency is inherently a political act. It rearranges who gets to define value, who can authorize new forms of compensation, and how public institutions relate to their residents.

Because of that, we should expect that any legitimate proposal will encounter friction and resistance.  I wrote a little about this in an earlier essay called, Recompising Government Legitimacy, describing the challenges associated with creating change within bureaucracies.

The first political and legal question will be definitional. When we say public-sector currency, what does the law hear?

In the United States, “legal tender” has a specific meaning. Federal law establishes that U.S. coins and currency are legal tender for all debts, public charges, taxes, and dues. That doesn’t mean only the federal government can create units of account or that no other systems of value can exist. It means that U.S. dollars are what courts and tax authorities recognize as the final means of settlement. 

Local currencies, loyalty points, transit tokens, and time banks already exist in the periphery of this system. Cities issue transit passes, parking credits, housing vouchers, food assistance cards, and all sorts of non-cash value instruments without being accused of counterfeiting.

The political risks emerge when a municipal instrument begins to look too much like money in the eyes of regulators or markets. A freely transferable token that trades against the dollar, circulates widely between private parties, and is used to pay for a broad range of goods or settle debts starts to raise questions on whether or not that unit is an unregistered security, or an unauthorized currency. You must also consider that it may be defined as a form of barter income subject to taxation. Once those possibilities surface, the city finds itself in a regulatory grey area.

The concept of a currency backed by civic-labor as proposed here avoids that by design. Credits are non-transferable between individuals, cannot be exchanged for dollars, and won’t be accepted for taxes or fines (yet). They are also not valid in private markets, as they are only redeemable for a specific class of public goods and services, redeemed through accredited institutions, and under administered rules. 

Politically, this distinction matters. If a city considers adopting a civic currency, it won’t need to question whether or not they can create money, but rather, if they can create a structured program of credits redeemable for public services. The latter is much easier to defend. It places the initiative in the family of transit passes, tuition waivers, recreation scholarships, and benefit vouchers…all of which are widely accepted tools of public policy.

The real legal and political friction for this type of currency will come from labor law, public finance restrictions, and welfare/workfare rules.

Labor Laws

Whenever a government entity invites people to perform work and offers something in return, labor law becomes a major focus. In the U.S. context, the Fair Labor Standards Act (FLSA) establishes minimum wage, overtime, and many other protections for employees.

The law draws sharp distinctions between employees, independent contractors, and volunteers. Governments and nonprofits are allowed to use volunteers under certain conditions, but they cannot use “volunteers” as a way to evade wage protections for what is in effect, regular employment.

This has direct implications for a currency backed by civic-labor. If a city invites residents to perform highly structured ongoing tasks that look indistinguishable from paid jobs, and offers credits that function as shadow wages (even if those credits are non-cash) that city risks being accused of wage theft or misclassification. If a school uses civic credits to staff what are essentially teaching roles, or a health department replaces paid outreach workers with “volunteers” compensated in credits, unions will rightly see this as a threat, and the regulators won’t be too far behind.

The political defense here should be to acknowledge the risk, but structure the system in a way that demonstrates the civic-labor being performed is supplementary to core paid functions, and not a substitute.

The roles must be framed as voluntary civic contributions with bounded scope and hours, and not as ongoing employment. The credits must not be convertible into cash, or treated as wages for the purposes of performance evaluation or hiring preference.

Municipal governments already navigate these boundaries in their volunteer programs. The difference here is scale and formalization. Instead of a few hundred volunteers recognized informally, a civic currency system might involve thousands of participants tracked onchain. 

That visibility can be a strength, if it allows the city to prove that volunteers are not being used to undermine union contracts or evade wage laws. Contracts with unions can incorporate explicit provisions for this, establishing that there should be no displacement of bargaining unit work, clear limits on what tasks volunteers can perform, and pathways for volunteers to apply for paid roles when those exist.

Politically, this becomes a negotiation rather than a blindside. If unions are treated as partners in designing the task catalog, they have reason to see the civic currency as a complement rather than a threat. If they are not, they will likely mobilize against it.

Public Finance Laws

Another potential legal constraint comes from public finance rules, particularly in states with strong bans on “gifts of public funds”. At a high level, these provisions prevent governments from giving away public money or assets without clear public purpose and legal authorization. Courts often interpret them to mean that any voucher or preferential treatment must be linked to a legitimate governmental objective and administered under fair and transparent rules.

A civic currency that allows people to earn credits and redeem them for public services might catch the regulators attention.

Why do some residents get discounted or free services when others pay full price?  Is the city giving away public resources without legislative approval?

The answer should be addressed in the design and framing of the currency. Cities already run targeted subsidy programs all the time…things like low-income transit fares, library fee waivers, recreation department scholarships, free school lunches, discounted museum days, etc. These are legally defensible because they are authorized by ordinances or budgets and grounded in policy goals (equity, access, public health).

A civic currency should be positioned similarly. When someone redeems credits for a transit pass they are exchanging one form of public value (their labor) for another (mobility).  It is not a subsidy.

The city council can enact an ordinance or budget line that explicitly authorizes a certain volume of such redemptions, declares the policy objectives (increased civic engagement, stronger public institutions, whatever), and sets out the broad terms under which the program operates.

To make this politically defensible, the city must show that the program advances a legitimate public purpose, that it is reasonably structured to achieve that purpose, and it does so under rules that treat similarly situated people, similarly. 

In practice, that means creating clear eligibility for participation, providing transparent task definitions, and publishing frameworks for redemption. It also means monitoring and evaluation, so that the city can demonstrate that the program is a mechanism for building civic capacity and not just administering a giveaway.

Welfare/Workfare

A third area of political risk lies in the realm of welfare programs. Many social assistance systems already experiment with work requirements, volunteer obligations, or “community engagement” components. They are always deeply contested and always a burden on governments. Critics see them as punitive and stigmatizing, and supporters frame them as a way to encourage self-sufficiency.

If a civic currency is not carefully designed, there is a real danger that policymakers or administrators will try to attach it onto existing welfare programs as a pre-requisite condition. Recipients of housing assistance or food assistance might be told that they must “earn” supplementary benefits by participating in civic-labor. In the worst version of this, failure to participate could be used to justify individual sanctions.

That scenario would fundamentally betray the ethos of what a public-sector currency seeks to accomplish. The point of this type of currency is to create an optional layer of participation and recognition.  It cannot become a new compliance regime for the poor.

Politically, this distinction must be guarded aggressively. The authorizing legislation or executive directive that approves the civic currency should explicitly prohibit tying participation to eligibility for existing programs. Oversight bodies should have a mandate to investigate any attempts to do so.

At the same time, the existence of the currency will inevitably tempt some actors to frame it as a cheaper alternative to expanding cash benefits. The political defense here is to insist on the credits complementary orientation, and should not be framed as substitution.

Civic credits can empower citizens and open doors to new opportunities, but it should not be a source they rely on to pay rent or cover medical bills. It serves as an additional option available to all residents, whether or not they are on public assistance.

Bottom line is that if you require people to labor for basic survival, you have created a two-tiered citizenship where some people’s time is priced at zero. That is exactly the condition a post-wage civic economy is meant to correct, not reproduce. 

The Importance of Framing

For those who care about civic engagement and democratic resilience, a civic currency offers a way to structurally support the kinds of participation that normally depend on altruistic exploitation and volunteer burnout. It acknowledges that showing up for your community is work, and that work deserves some tangible recognition. After all, it helps sustain the institutions that form the civic infrastructure of a city.

For those who prioritize fiscal prudence, the program can be framed as an efficiency and resilience measure. Civic-labor fills gaps that would otherwise require much more expensive interventions down the line. The currency does not conjure resources out of nowhere, but it helps mobilize underutilized human capacity in a more systematic way.

For those focused on labor rights, the program, if done right, offers a way to separate survival from employment without diminishing the value of work. Instead of insisting that every socially necessary task be squeezed into a wage labor model (or alternatively, completely ignored), it creates a parallel track where citizens can contribute on flexible terms without being preyed upon by employers. It also provides pathways for people to build experience, skills, relationships, and networks that might lead back into paid roles if and when those exist.

For those committed to equity, the civic currency can be defended as a way to redistribute access to public goods in a manner that is tied to agency. It does more than our current system does, which seems to just drop benefits on people at random.  

For institutions, the program is politically defensible because it does not require them to surrender their core mandates. Transit agencies retain control over their schedules and safety policies. Libraries retain authority over their collections and programs. Museums retain curatorial independence. The currency overlays a new layer of value recognition without compelling institutions to become something they’re not.

The alternative is politically worse. If cities do nothing, they drift into a future where automation undermines wage based identity and meaning, and all they have to offer in return is the hope of an eventual UBI program or the expansion of punitive welfare regimes. A civic currency is not the entire answer, but it is, politically, a far stronger posture than passivity.

The State and Federal Lens

Although most of the action is local, state and federal politics shouldn't be ignored. States determine the scope of municipal powers, and in many cases, they control crucial policy levers. The federal government shapes tax policy, benefits eligibility, and regulatory frameworks for currency, securities, and financial services.

A civic currency that is clearly bounded within the domain of municipal services, non-transferable, and non-monetary is unlikely to trigger federal regulatory interventions. It does not create parallel money, does not touch interstate commerce in any substantial way, and does not compete with federal legal tender. 

However, its interactions with federal tax and benefits systems may need careful consideration. For example, if the IRS were to view civic credits as barter-like compensation, there might be concerns about taxability. One political strategy is to design the credits explicitly as non-cash, non-convertible, and limited to in-kind benefits (analogous to existing loyalty programs that typically fall under informal thresholds of concern).

At the state level, the main issues involve preemption and benefit coordination. Some states tightly circumscribe the powers of cities while others provide broad “home rule” authority. A city considering a civic currency should seek a state-level affirmation that such a program falls within its authority to manage local welfare, education, transportation, and cultural services. In some cases, state legislatures might even be interested in authorizing pilot programs, especially if they align with state goals around civic engagement.

The more the civic currency is framed as a contained experimental program, the easier it becomes to defend at the higher levels. The more it is integrated with existing state and federal objectives (for example, by using civic credits to support disaster preparedness, public health initiatives, etc.), the more allies it can attract.

A Practical Path to Control Political Framing

Political defensibility is about process. How would a real city go from notion to implementation? We need to have a process that establishes a pathway for projects like this to control the political framing and increase the probability of success.

It usually starts with a champion.

That might be a mayor interested in civic innovation, a council member focused on democratic participation, or a senior administrator worried about the long-term sustainability of public institutions in an era of automation.

They start conversations with allies; the library director who understands the latent demand for learning, the parks director who sees the limits of current staffing, the head of a major nonprofit who is tired of operating in scarcity.  We need to believe alternative systems can work for us, and those systems need to be championed by individuals who have the authority to utilize them as a solution.

Once we have a champion or two, the next step would be to establish an exploratory working group. It should include representatives from key agencies, the city attorney’s office, budget and finance staff, unions, and at least some members of the communities likely to benefit or be harmed. The group’s job should be to surface the legal questions, political obstacles, social impact, and practical opportunities that exist. 

They should try to identify where in the municipal code, an authority might already exist, for example, who has broad powers to create programs that advance public welfare, or specific authority to set pricing and discount schemes for services. They can also identify where explicit legislative authorization will be needed.

The city attorney’s role here is also extremely important. They will be able to flag potential conflicts with labor law, public finance restrictions, state preemption doctrines, and federal regulations. They will ask hard questions about how credits are defined, whether they constitute compensation, how they intersect with taxation, and whether they could be construed as creating liabilities on the city’s books. They won't be able to eliminate all risk, but they should be able to ensure that the risk is understood and bounded.

Once the working group has a rough model that appears legally viable, the political legwork can begin. Briefings are held with union leaders, who are given a clear explanation that civic tasks will be carefully scoped to avoid undermining bargaining unit work. State legislators or relevant state agencies may be consulted to ensure that the program does not inadvertently jeopardize eligibility for state-administered benefits. Local advocacy organizations are brought in to stress-test the design for equity and accessibility.

Once this is done, a pilot ordinance or resolution can be drafted. This is important because it does several things at once. A draft declares the city’s recognition of civic-labor as a vital component of its public life. It can authorize the creation of a civic currency pilot program under defined conditions, and establish or ratify the governance committees described in the prior chapter. 

It would also delineate the core principles such as non-coercion, non-substitution for existing wages, privacy protections, equity goals, etc. It would authorize a finite volume of redemptions for specified services and allocate budgetary resources to cover any associated costs, such as administrative staffing and backstops for essential services like transit.

The ordinance will also bake in monitoring and reporting requirements.

After, say, two years, the administration can report back to the council and the public on participation levels, demographic distribution, impacts on public institutions, and any unintended consequences. This provides a built-in accountability mechanism and allows skeptics to feel that the experiment has guardrails.

Implementation can then proceed as described earlier where committees are created, issuers accredited, tasks defined, rates set, redemption agreements signed, and so on.

Throughout, the political components keep communicating and explaining the program, sharing stories from participants, highlighting benefits to institutions, and being candid about challenges.

If and when the pilot shows signs of success, the city can move to institutionalize the program through permanent code changes, expand the redemption universe, and negotiate regional interoperability.

If it fails, the city has a clear off-ramp where it can sunset the pilot, analyze what went wrong, and perhaps salvage components that proved valuable.

The key is that at every step, the civic currency is presented as a disciplined experiment in extending the tools cities already use into a more coherent civic economy.

Embedding Politics in Design

The politics of a public-sector currency are part of the design space. Law defines what is possible, but politics defines what is sustainable. A system that ignores these constraints might get launched once, under an unusually aligned administration, only to be dismantled by the next one. A system that grows inside the legal and political bubble of institutions has a chance to outlive its founders.

The point here is not to water down the "civic currency idea” until it becomes indistinguishable from existing voucher programs. The point is to recognize that in a deeply path-dependent system like municipal governance, anything genuinely new must be threaded through existing forms. 

The practical path might involve starting with a narrow focus and then gradually expanding as trust and understanding grows.

A public-sector currency is politically defensible when it is honest about what it is and what it is not, modest in its claims, disciplined in its governance, and transparent in its impacts.

It will not solve every distributional problem in the post-work era. But it gives cities a way to say, with some integrity, that even as the wage system unravels, they can still recognize and reward the work people do for each other.




Chapter 6: Co_Existing with Markets (final)