The Growth of Local Currencies
A worldwide spending movement takes hold locally and abroad
With colorful names like the Eco-Pesa, Brooklyn Torch, Detroit Cheers,
and Palmas, local currencies are springing up all over the world. In fact,
there are an estimated 2,500 such systems now functioning or proposed these
days. In this country, Berkshares in nearby Western Massachusetts is one of the
most well known and successful of these; our own Hudson Valley Current is still
in the planning stages. Internationally, local currencies are very popular in Great
Britain and in the British Commonwealth countries such as New Zealand, Canada,
and Australia. Western Europe, Africa, and Asia all have numerous examples as
well.
Local currencies are part of several broad trends in economics. The
first of these is called "fiscal localism." The “buy local” movement,
which is well developed and supported here in the Hudson Valley, is an example
of fiscal localism. A local currency, circulating as it does within a
particular region, is a potent force for a local economy. It builds community,
and it is also a psychological motivator, raising consciousness about monetary
and economic issues. It brings up questions that are very useful to ask
ourselves, like “Just what is money, anyway?”
Local currencies fall into the broader trend of “alternative
currencies.” This term refers to just about any system of exchange that is not
a national currency. Aside from printed currencies, there are time-based
exchange systems such as the successful Woodstock Time Bank here in Ulster County,
and Ithaca Hours. In Wales alone there are 116 such systems; there are about
100 in the US. Then there are mutual credit systems that also do not use
currency in the usual sense of the word. A well known type of this system is
LETS (Local Employment Trading System). There are over 240 LETS systems
operating in Australia alone. All these types of systems and projects have
their strengths and weaknesses. Many fail after a time. Thomas Greco, a leading
writer on the subject, believes that mutual credit systems can actually replace
money in the future if they are properly designed.
Alternative currencies need not be local. The Hub Culture community is
an international social network that has drop-in work and social spaces for
members in big cities worldwide, similar to BEAHIVE in Kingston and Beacon. Hub
Culture also has its own currency, the Ven. Airline miles are another example
of a non-local monetary system.
Another term you will hear in discussions of this topic is
“complementary currency,” which refers to a monetary system that works
alongside a national one. Not all complementary currencies can be exchanged for
national ones, but they are all intended to complement, not replace, national
currencies. The Toronto Dollar, Berkshares, and the proposed Hudson Valley
Current are complementary currencies whose value is set in relation to the
national currency, and they can be exchanged for that currency at banks.
One last important trend reflected in local currencies is what I call
“Civil Economics.” The inspiration and leadership for these projects comes from
civil society rather than governments or for-profit entities. They are
community based, part of the “blessed unrest” that Paul Hawkin wrote about in
his book with the same name. The worldwide flowering of
civil society organizations is a real bright spot in human society these days.
People are joining together to make a difference, whether it is in relation to
environmental causes, serving human needs, or bringing creative thinking to the
human predicament. Certainly in economic matters there is a profound need for
new ways of thinking and relating to each other. There is a great deal of
potential for civil society leadership to help shift entrenched patterns of
economic influence and power by triangulating the often-unhealthy relationship
between the governmental and business sectors.
Still, community based action is not necessarily easy. Lack of financial
clout and political authority always creates obstacles, but lack of general
public awareness is probably the biggest problem. In matters of money, we are
deeply habit bound. Organizers of local currencies often feel the “little red
hen” effect, which is the feeling that people are enthusiastic about something
in theory, but the hard work and support may be lacking. They may be willing to
use a system that’s already in place, but making it happen is a different
story. Luckily a local currency is not a hugely complicated project. Here in
the Hudson Valley, though there is a lot of economic distress, there is not the
kind of starvation and total powerlessness found in other parts of the world.
That may contribute to the low level of participation in economic activism in
these parts.
In Kenya, by contrast, there is now a local currency called the Eco-Pesa
(Ecological Money), which is a
community business voucher to benefit the environment and economy of Kongowea,
a slum district of Mombasa. There, the average business takes in about $5US per
day, an amount that supports perhaps five or more people. The voucher acts as a
currency that can be exchanged for local goods and services and redeemed for
Kenyan Shillings. As Eco-Pesa can only be spent in local businesses within
Kongowea, its use creates a direct incentive for residents to take an active
role in their community while also helping the local economy and environment.
By generating better circulation of money within a specific area, this currency
does exactly what local currencies are designed to do in more developed
economies: they support local businesses, empower community development, and
build a sense of local kinship at a social level.
As we look at the process locally, we can take inspiration that we are
not reinventing the wheel. Communities and regions around the world are doing
it, and they’ve been doing it for quite some time. We can learn a lot from
their efforts. The cool thing is this: as we design and build our local
currency, we are building community from the start.
This work is the stage on which deeper aspirations are being worked out...aspirations
for a more vibrant and creative society, for greater security and fairness, and
ultimately for greater prosperity—the prosperity that comes from a truly
healthy economy.
Resources:
The Eco-Pesa: ecoethics-kenya.org/projects/eco-pesa.html
Brooklyn Torch: brooklyntorch.org
Detroit Cheers: metromodemedia.com/features/DetroitCurrency0115.aspx
Palmas: en.wikipedia.org/wiki/Banco_Palmas
Berkshares: berkshares.org
Hudson Valley Current: hudsonvalleycurrent.org
Woodstock Time Bank: woodstocktimebank.org
Ithaca Hours: ithacahours.com
Hub Culture: hubculture.com
BEAHIVE (Kingston): beahivekingston.com
Excellent general site on local currency: mainstreetcash.org
Books:
Thomas Greco, The End of Money and
the Future of Civilization (Chelsea Green Publications)
Paul Hawkin, Blessed Unrest
(Viking Press) blessedunrest.com
—David McCarthy
http://trickle-in.blogspot.com
tongdrol@gmail.com
Posted by Chris Hewitt
on 2:52 PM.
Filed under
buy local,
Culture Features,
Hudson Valley Current,
Local Economy
.
You can follow any responses to this entry through the RSS 2.0
