1970. The Beatles announced their break up; Venera 7 landed on Venus; the Boeing 747 made its debut commercial flight from New York to London; a new house cost, on average, $23,400.00; and the Irish banks went on strike — for six long months.
Chaos ensued. At the beginning, all was grand. Goods and services could still be purchased by anyone, since cash was still available to the typical Irish house hold. But a couple of weeks in, and it was clear things were not going to end well. Money was getting locked in businesses vaults, not flowing back into the economy. People started trimming down their expenses — first leisure, then unneeded belongings, and at last food, water, and shelter. As expected, uncertainty for the future, and mostly hunger, began getting the best of everyone. Small scale protests, followed up by large proportion riots, swept the island from end to end, leaving nothing but a trail of destruction.
It looked like Hell on Earth!
— said no one during that time
What, you might say? Yes, that’s right! That never happened. Life went on, and the imminent collapse of the Irish economy never saw day light, as economists might have conceived.
What emerged from this situation is an amazing tale of trust inside small, localised, communities. Even though cheques were still in circulation and used everyday — although no one could verify whether or not they were valid, Irish started trading with their own, personalised, currencies. Due to the lack of access to fiat currency, your every day scrap of paper served to sign a trade agreement. No need for a bank, or an insurer, or a broker… People started trusting each other.
Before we go into the why I find this so interesting, let’s first take a quick look into some of the reasons why this happened.
Pubs. Yes, pubs. This might be an oversimplification of what happened back then, but it’s probably the best way to describe it. Back then — and even today, pubs were the de facto place to network. If you had been going to the same place for years, every night, to enjoy that post-work pint of Guinness, you’d most likely have a pretty clear understanding of who was who. You would know who you could and could not trust. But even better than that would be you local publican! When tending for a pub, you get to know your customers — sometimes even better than their own families, one could argue. Armed with that knowledge they could serve as brokers in case Bob and Alice, unsure of how much they trusted each other, wished to transact between themselves, using a box of cigarette as a “legal” agreement.
Irish had, unknowingly, been building very close relationships for years, unaware that these would serve them well at a very specific moment in their lives. And when that time came, borrowers and lenders had no problem doing business outside the “normal” financial system, since they already knew each other. Bob trusted Alice, and Alice trusted Bob.
The unorthodox and amazing story of the 1970 Irish banking strike sheds some exceptional light into how humans manage to adapt and overcome unexpected situations. And that organised, robust communities share one thing in common: trust.
The story presented here effectively resulted in the creation of a localised, decentralised, peer-to-peer financial system based in nothing else but the fact that people within the same community knew each other.
And this is what I find so interesting about this story. Even though there was no formal agreement between anyone, people still pulled through and created a solution for the problem at hand. No one was captaining the boat, deciding on who should do what, or how it should be done. It grew from a societal need, organically, simply, out of thin air almost.
Why do I find this interesting though? Well, when we are young we are taught not to talk to strangers, because that’s dangerous; as teenagers, people tell us to always believe in what our teachers teach us, because they know better; you start working, and then comes the conversation around “keeping your friends close, but your enemies closer”. From the moment we are born, we are coached in this very peculiar manner, where we are either told not to trust ourselves, because we are too young, or not to trust other people, because everyone always has hidden agendas.
This last point by itself would be enough to write another article by itself — which I won’t do, because funny enough I hate writing. My point being that people have shown time and time again that trust can arise even in the most adverse conditions, and maybe, just maybe, we should all learn to trust each other just a tiny bit more — that’s one of the traits that makes us human after all, no?
In an age where banks are “too big to fail”, access to credit is based on a “problematic” scoring system, and the gap between rich and poor keeps on rising, it might be important to reassess what is the true meaning of value. And, on a similar note, how should value be exchanged. In my honest, very humble opinion, there is a very deep, intrinsic component to the later: trust.
Do you want to know the funny thing about the events that took place in 1970? The Irish economy didn’t slow down, and it was actually completely fine, contrary to what would have been expected. Maybe something to reflect upon, after reading this.
Disclaimer: the views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in this article are not reflective of the position of any entity other than the author — and, since we are critically-thinking human beings, these views are always subject to change, revision, and rethinking at any time. Please do not hole me to them in perpetuity.