Analysis Trust in money: hard, soft and idealistic factors in Euro, gold and German community currencies Erhard Theophil Wonneberger 1 * and Harald A. Mieg 2 1 Humboldt-Universität zu Berlin, Institut für Psychologie, Rudower Chaussee 18, 12489 Berlin, Germany 2 Humboldt-Universität zu Berlin, Geographisches Institut, Rudower Chaussee 16, 12489 Berlin, Germany In this article, we want to prepare the grounds for a psychology of trust in money, trust being key to sustainable money systems. On the basis of an analysis of functional money characteristics, we constructed 12 scales for trust-related money aspects: liquidity, fungibility, stability, backing, credibility of the issuers, system security, image, manageability and idealistic aspects. In an online study (N = 394) comprising a sub-sample of 97 users of community currencies in Germany, we tested the scales for three curren- cies: Euro, gold and community currencies. We could confirm the hypothesis of a divide between a hard, economic factor and a soft factor of trust in money. In addition, we found a third, idealistic factor in community currencies. The three currencies significantly differed with regard to the 12 trust-related functional aspects and specific uses: Euro is preferred for purchase and investing and gold for storage and community currencies for donations. The discussion centres on the concept of trust applied to money. Keywords: community currencies; Euro; money; money perception; trust 1. Introduction Trust in money is a necessity for the functioning of any capitalistic economic system. Trust is needed in almost any economic exchange as well as in credit relations. Market participants need to rely on the willingness of all other market participants to produce and to sell – and to pay. A cascade of distrust leads to the stagnation of the entire credit system, as evidenced in the recent global financial crisis. In his ‘General Theory’, Keynes (1997) pointed out that a trust crisis in investors may be so severe that even the most radical cuts in interest rates would not lead to any relief. As trust is a psychological phenomenon, trust in money is also a psychological phenomenon. However, Furnham and Argyle (1998) stated that money is one of the most neglected topics in the whole discipline of psychology (p.2). If psychologists are interested in money, they look at attitudes towards money, why and how people behave as they do towards and with money, as well as the effect of money on human relations (p.6). But if you look for the relationship between trust and money in the psychological literature, you will discover a relative void. PsycInfo (December 2010), for example, reveals 1,154 entries for ‘money’ and 3,350 for ‘trust’, but only three entries for ‘money’ and ‘trust’ together. In this article, we want to prepare the grounds for a psychology of trust in money. Our point of departure will be an analysis of the functions and characteristics of money, such as liquidity or credibility of the issuer, that may be to some extent relevant to trust in a currency. One particular goal is the ability to distinguish different currencies with regard to their trust-related character- istics. To this end, we compare the Euro with gold and community currencies that are in use in Germany. Com- munity currencies are types of regional money that seem heavily dependent on trust within a regional network. Some scholars consider community currencies as a role model for sustainable money systems (e.g. Lietaer, 2009). 2. Community currencies The idea of community currencies as an alternative to money was developed by the German–Argentine sales- man Silvio Gesell (1862–1930). Gesell postulated a mal- distribution of money, since in a money-driven economy there is always a tendency to use money not only as a medium of exchange but also to store value. Gesell (1958) contrasted money to wares, he wrote: ‘The pos- sessor of wares is commanded by them, under threat of *Corresponding author: E-mail: mail@theophil.de Journal of Sustainable Finance and Investment 1 | 2011 | 230–240 http://dx.doi.org/10.1080/20430795.2012.655891 © 2011 Taylor & Francis ISSN: 2043-0795 (print), 2043-0809 (online) www.tandfonline.com/tsfi Downloaded by [ETH Zurich] at 06:36 09 May 2012