From IPS

ATLANTA, Georgia, May 30 (IPS/IFEJ) – In the face of an economic system which seems to be premised on environmental harm and profit-driven growth, a handful of communities across the U.S. and the globe have begun experimenting with alternative forms of local currency as a pathway to sustainability.

Local currencies existing today in the U.S. include the Humboldt Community Currency in Eureka, California; Berkshares in the Massachusetts Berkshire region; Bay Bucks in Traverse City, Michigan; Ithaca Hours in Ithaca, New York; Cascadia Hours, Corvalis Hours, and RiverHours in Oregon; Equal Dollars in Philadelphia, Pennsylvania; and Madison Hours in Madison, Wisconsin, according to the E. F. Schumacher Society, which runs Berkshares.

Canadian community currencies are located in Calgary, Alberta; Salt Spring Island, British Columbia; Tamworth, Toronto and the Madawaska Valley, both in Ontario, which is promoting a “usury-free dollar”.

There are also community currencies in Tlaxpana, Mexico; and East Sussex and Devon, England; as well as a regional currency based in Basel, Switzerland, which can also be exchanged in parts of Germany and France.

What these currencies have in common is that they represent an effort to respond to the pressures of globalisation, like the advent of massive chain stores competing with local merchants.

People in Berkshire can go to one of five participating local banks to trade 95 cents for one Berkshare, at a five percent discount to the dollar. Then, they can spend Berkshares at over 400 participating local stores as a direct replacement for dollars, and thus save 5 cents with every Berkshare they spend.

Even though store owners lose the 5 cents whenever they trade Berkshares back for dollars at a bank – which they have to do to buy something that can’t be produced locally – they are still typically happy with the loyal, local customers they keep instead of losing them to chains like Wal-Mart, Starbucks, and Barnes & Noble.

“Local currencies are part of what educate people about the importance of their small, independent businesses. It’s bringing people off the Internet, back to Main Street, for the face-to-face exchanges. Once they’re there, they like it,” Susan Witt, founder of Berkshares, told IPS.

There are many ways having a local currency can help create a more sustainable economy, say leaders in the local currency movement.

First, because using a community currency forces people to buy locally, fewer goods have to be imported.

“By having economic transactions be so focused locally, that’s definitely, for one thing, reducing use of fossil fuel. If it’s a local farmer’s market… food [is] produced 30 miles away instead of 3,000 miles away,” said Steve Burke, executive director of Ithaca Hours, said.

Trade theorists might object that it is less efficient, or less productive, for diverse goods to be produced in many communities than it is for each community to specialise in producing one product for export, even factoring in transportation costs.

“Is it the real cost of transportation?” asked Susan Witt, founder of Berkshares. “Is the real cost and consequences of our dependence on fossil fuels to transport goods really factored into the cost? Is climate deterioration factored in? Is engaging in conflicts for limited supplies of fossil fuels?”

“Nor all the costs of unemployment in our local communities? Nor the hollowness of our life experiences? Nor the human costs in [other countries]… for maybe manufacturing practices that we would not ourselves allow in this country?” she wondered.

A second way in which community currencies support environmental sustainability is that they can lead to reduced consumption, Witt argues. Witt believes that people purchase more and more “stuff”, not because they need it, but to fill a void that community currency can satisfy.

“You know the full story about the goods you purchase. You know how they were produced. You know the carpenter who made the table. You know who her children are. You realise buying the table is supporting that family,” Witt said.

The products bought with local currency “link you to your neighbourhood, your place, the people of your place. They’re not just stuff… they enrich your life the way that stuff would not. So you need less.”

“One hand-knit wool sweater, coming from wool from sheep that graze on the hillside on the way to work, that satisfies you in a way four sweaters from unknown sources fails to do. You care for it in a different way,” Witt said.

A third way in which community currency can lead to sustainable economy is communities can print the currency they need to issue interest-free, or non-profit loans. Allowing credit to be issued interest-free eliminates the need to service growing debts. High-interest debt owed by individuals, businesses, and governments to private banks is one of the main factors pushing economies to constantly grow at an exponential rate. As these entities struggle to service the interest on their debts with a total money supply that was mostly created through issuance of credit, more and more new debt must be created in order for the system to be stable.

Thus, because high-interest debt pushes the economy to constantly grow, it also pushes industrialisation into new markets, new products, and new technologies, which often lead to deforestation, air pollution, and the like.

By communities printing and issuing their own currency, in part through productive non-profit loans, the economy can function without the constant growth that is imperiling the environment.

There are at least two different models for how to organise and operate a local currency that local communities are using. One is used by Berkshares; the other was pioneered by the Ithaca Hour.

Founded in 1991, the Ithaca Hour is the oldest local currency to exist in the U.S. since local currencies disappeared in the 1900s. Numerous local currencies have since based their model on the Ithaca Hour.

Businesses become members in Ithaca Hours by purchasing a listing in the Ithaca Hours directory, and they receive two “hours” every year as part of their membership fee. Employees at these businesses then can accept hours instead of dollars for some of their wages. People can accept hours instead of dollars for services, like mowing a lawn, that they provide.

This, in addition to low-cost loans, is the primary way Ithaca Hours enter Ithaca’s economy.

“There’s a pretty fundamental difference between our model and the Berkshares model,” Burke said. “They sell them. With ours, you can’t buy them; you can only earn them.”

They are called hours “to make a statement”, Burke said. The founders “wanted to emphasise the relationship between time and money”.
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From DAVE SMITH
Ukiah

We don’t have to march or protest. We don’t have to write letters to our congresspersons and President. We don’t have to fire all the President’s men.

We have it within our power locally, and only locally, to start dealing with this mess by stepping aside from the economic systems that have created it.

Are your credit/debit card banks relentlessly raising your fees and charging you usury interest? Start using local money instead. It will save you money, and eliminating the bank fees locally-owned businesses have to pay when you use plastic will lower their costs and lower their prices.

Local money cleans up filthy lucre by jilting the banks and investors who have used our money to build pyramid schemes of debt and ponzi schemes of greed. Local money stays home where it belongs instead of lining the bank accounts of billionaires in Arkansas.

Local money, used face-to-face and hand-to-hand, takes back something valuable we have lost: more control over our own local economy.

For locally-owned businesses, creating and exchanging local money is the cheapest and most effective local advertising ever created because it is carried around in our pockets and is passed around the community from neighbor to neighbor, business to business, as a constant reminder to Buy Local.

Local money has its own built-in insurance. It insures the health and wealth of our own communities, and the more it is used, the more community value and sustainability is built.

Local money is backed by the full faith and trust in our community; by the inventory you see through the windows of our merchants; and by the skills in the hands and hearts of our farmers and restaurateurs.
~~

From the Wall Street Journal

SANTI SUK, Thailand — One way to beat the world’s credit crisis: Start printing your own money.

The villagers of Santi Suk began creating their own cash here on the sun-bleached plains of northern Thailand following Asia’s financial crisis a decade ago.

Decorating their money with children’s sketches of water buffaloes and Buddhist temples, the villagers conceived it as a do-it-yourself attempt to protect themselves from the whiplash of vast outflows of speculative money which undermined local currencies and threw Thailand — and much of Asia — into recession in 1997-98.

At the time, some villagers faced questioning before Thailand’s central bank and were accused by local government officials of plotting a secessionist revolt.

Now, with Thailand’s economy slowing sharply, the DIY cash is beginning to flow freely again.

“We need our own money more than ever now,” says Phra Supajarawat, the wiry, orange-robed abbot of the local Buddhist monastery, who doubles as a “governor” of Santi Suk’s tiny, one-room bank. “Things are turning bad in Thailand and people need something they can believe in,” he says.

Homemade currencies, sometimes known as community or complementary currencies, have a habit of popping up during economic crises. Some towns in the U.S., Canada and Germany introduced their own scrip during the Great Depression. Similar schemes have emerged more recently in Japan, Argentina and Britain.

Keep reading at Wall Street Journal→
~~

From Transition Culture
Brixton Pound Promo Video Below

David Boyle’s speech at the launch of the Brixton Pound

One of my first experiences of currencies along the lines of the Brixton pound was in Ithaca in upstate New York, where they have had an amazing printed currency for the last 15 years. You can get loans in it. The biggest loan was for $36,000. Not bad for a local currency. Some of the notes are printed on paper made from Angora rabbit fur, which is an innovative solution to the problem of counterfeiting which has not yet struck the Bank of England. But I met a man there who had been mugged in Manhattan. The mugger searched through his wallet and said, hey what are these?. He brandished a pile of Ithaca notes.

My friend explained that they were a way to keep local economies moving, and the mugger was fascinated. Wow, he said. You’re right about the world: money doesn’t work for people like us, does it. And of course it doesn’t work very well. It works beautifully for a very few, for whom it is endlessly elastic and flexible and forgiving. When Robert Maxwell fell off his yacht, he owed twice as much as Zimbabwe. But he had a yacht.

For the rest of us, it is very concrete. We have to pay what little we borrow back according to the rules. Because otherwise, well its moral jeopardy, isn’t it. We might learn bad habits. We might get perverted somehow from the straight and narrow. Then there wouldn’t be enough to bail out Citibank again! But then Americans, it seems to me, understand these things better than we do. Their new kinds of money caused the War of Independence in the first place. Benjamin Franklin with his printing machine. They had 5,000 depression currencies in the 1930s which luterally kept people alive through the Great Depression. Some of them were made of wood, which is a bit bizarre.[!!]

We have Captain Mainwraing. Or we did. In fact, that whole tradition of dull, careful bank managers has been swept away in this country. When American investigators began looking into the subprime mortgages which cause the great bank crash of 2008, they looked down the list of borrowers and – on the very first page – they found one paid to someone called M. Mouse.

Other cartoon characters followed. When you start shelling out mortgages willy nilly to anyone, whether they can afford it or not, because they are considered risk free to the bankers – that’s what happens. That’s the opposite of the kind of money we need, and the opposite of the imaginative self-help money we are launching today.

Worse than that. It is a kind of lie. A kind of theft. There used to be 144 breweries in New York a hundred years ago. Now there are six. There used to be ten thousand local papers in this country then. Now there are about a few hundred. We are experiencing a money system that is driving out this diversity because it is monocultural. It makes everywhere the same. One kind of measuring stick. One kind of business. Monoculture money systems drive out other cultures, other species, other languages, other opinions, other forms of wealth. We can see this everywhere.

The great harbours and rivers that have bustled for a thousand years. Empty. The farming communities and fields of the world covered with weeds. Even the great corporations – whatever else we may think of them – shedding all the real work until they are just shells that just do financial services. There’s a great silence descending on the world. It’s a kind of death. The very opposite of life creating, and that’s why I am so excited about the Brixton pound.

There’s a kind of thrill about it, it seems to me. You hold those notes and you say, Can you do this? Can we just print it then? It seems too simple. Aren’t there laws against it? The answer is you have to make sure you’re not claiming it is a bank of England pound, a promise to pay the bearer on demand pound. In fact, the organiser of the Liberty Dollar in the States, who mints sterling silver coins he calls dollars, has just been arrested. Ten years, the Isle of Wight County Council were prosecuted for minting their own coins. But they would have been fine if they hadn’t called them euros.

So no, it IS legal to print your own. You can use what you like as money after all, if someone will accept it. We still have that freedom at least. But there’s still a moment of breathlessness when you hold these things in your hand. As if you were somehow touching the stuff of life. And in a way you are. Because money is like blood. It circulates around us, and when it disappears somewhere – because of some squall on Wall Street – our lives seize up a little.

And let’s stay with the idea of lifeblood for a moment. Before William Harvey announced his theory about how blood works in 1616, most people thought it was made in the liver and the heart and swallowed up by the other organs. Harvey showed that it was the circulation of the blood that really mattered. If nothing circulates, the patient dies. It’s the same with economics, and local economies. If the money goes round, or any medium of exchange, the place lives. If it doesn’t, it dies. It doesn’t matter really how much money there is in total.

But economics hasn’t reached William Harvey yet. It still adds up the bottom line, and if doesn’t work,  they get the scalpel out and bleed the patient. So money is life, and we can make our own. That’s why I say those Brixton pound notes are alive. It is a small liberation to use one. A bit like the moment Gandhi made salt for the first time: a symbolic moment of revolt, using the stuff of life. So every time we use one of these notes, it seems to me – and we are going to have to use them if this is going to work – it is a moment of liberation.

To run our own lives. To set us free just a little bit from dependence on the government or Tesco. Or are they the same thing these days? To make Brixton a place, knitted together, with its own money and its own life, not just a tube station with housing attached. I don’t pretend it’s going to be easy. I don’t pretend there are no great issues to face, and decisions to make. I don’t pretend we can possibly get there in one leap. There are going to be disappointments and frustrations along the way.

But every time we invest in this money and take it out of our pockets, to exchange it for something – looking the shopkeeper in the eye as we do so – we are shaping our futures. We are clawing back just a little control over that great global money system that swirls above us like the gods. It may be a bit of paper now. But it is a small lever with which we can move the world. Good luck to it.

From Rob Hopkins
Transition Culture

This weekend saw the launch of the Stroud Pound. Four denominations have been published, and over at Josef Coates-Davis’s blog, he tells the story of the design of the notes.

“The notes, designed by local artist Ronan Schoemaker and produced by local currency collector Steve Charlwood, are like miniature histories of the economic and cultural life of the Five Valleys. The most prominent local celebrity to feature is Laurie Lee, author of Cider with Rosie, who was born in Stroud and is buried in the Slad Valley. Local wildlife is represented by the rare Adonis Blue butterfly found on Minchinhampton Common. Stroud’s economic heritage is commemorated by the teazle itself, while the lawnmower, invented in Stroud, the green felt cloth that is still made in the town and Thomas the Tank Engine also feature”.

The launch has generated a fair bit of coverage. The Telegraph focused on the fact that Laurie Lee (author of ‘Cider with Rosie’) features on one of the notes, and here is a piece from the local paper. Local councillor, Philip Booth, on his excellent site Ruscombe Green, discusses Why We Need the Stroud Pound. The Stroud Pound is the work of the Stroud Pound Co-op Ltd which in turn, grew out of Transition Stroud. You can read their take on it here. They state that the reasons for the currency are;

• Retain more locally created economic values within the locality and prevent leakage into the global economy, as happens with sterling exchanges;
• Increase and sustain local economic activity and help insulate Stroud’s economy from the worst effects of Recession;
• Increase trade and support the creation of more jobs
• Help consumers identify which businesses support the local economy.
• (Reduce the length of supply chains for local consumers;)
• Stimulate greater local production

Keep reading at Transition Culture→

Mendo Food Futures Credits→

Posted in Blog Posts ]]> http://mendomoola.wordpress.com/2009/03/04/food-backed-local-money/feed/ 0 Dave http://mendomoola.wordpress.com/2008/12/10/create-your-own-currency/ http://mendomoola.wordpress.com/2008/12/10/create-your-own-currency/#comments Wed, 10 Dec 2008 17:50:32 +0000 Dave Smith http://mendomoola.wordpress.com/?p=78 ]]>

“Money,” wrote Jamais Cascio, “is the tangible manifestation of an agreement between you and other people that the oddly-colored piece of paper in your hands has value.”

But what’s truly valuable is not those units of currency, so much as the units of time they represent to those who earn and spend them. Two women from Ashland, Ore., who follow this philosophy have created a way to turn units of time into currency that can be directly traded and tracked through their online system OurNexChange. This “community currency” allows local residents to buy goods and services without exchanging any money.

Continue reading Create Your Own Currency
~~

Article here

Excerpt:

On July 5th 1932, in the middle of the Great Depression, the Austrian town of Wörgl made economic history by introducing a remarkable complimentary currency. Wörgl was in trouble, and was prepared to try anything. Of its population of 4,500, a total of 1,500 people were without a job, and 200 families were penniless.

The mayor, Michael Unterguggenberger, had a long list of projects he wanted to accomplish, but there was hardly any money with which to carry them out. These included repaving the roads, streetlighting, extending water distribution across the whole town, and planting trees along the streets.

Rather than spending the 40,000 Austrian schillings in the town’s coffers to start these projects off, he deposited them in a local savings bank as a guarantee to back the issue of a type of complimentary currency known as ’stamp scrip’. This requires a monthly stamp to be stuck on all the circulating notes for them to remain valid, and in Wörgl, the stamp amounted 1% of the each note’s value. The money raised was used to run a soup kitchen that fed 220 families.

Because nobody wanted to pay what was effectively a hoarding fee [technically known as 'demurrage' and often referred to as "negative interest"], everyone receiving the notes would spend them as fast as possible. The 40,000 schilling deposit allowed anyone to exchange scrip for 98 per cent of its value in schillings. This offer was rarely taken up though.

Of all the business in town, only the railway station and the post office refused to accept the local money. When people ran out of spending ideas, they would pay their taxes early using scrip, resulting in a huge increase in town revenues. Over the 13-month period the project ran, the council not only carried out all the intended works projects, but also built new houses, a reservoir, a ski jump, and a bridge. The people also used scrip to replant forests, in anticipation of the future cashflow they would receive from the trees.

The key to its success was the fast circulation of scrip within the local economy, 14 times higher than the schilling. This in turn increased trade, creating extra employment. At the time of the project, Wörgl was the only Austrian town to achieve full employment.

Six neighbouring villages copied the system successfully. The French Prime Minister, Eduoard Dalladier, made a special visit to see the ‘miracle of Wörgl’. In January 1933, the project was replicated in the neighbouring city of Kirchbuhl, and in June 1933, Unterguggenburger addressed a meeting with representatives from 170 different towns and villages. Two hundred Austrian townships were interested in adopting the idea.

Unterguggenberger was opposed to both communism and fascism, championing instead what he referred to as ‘economic freedom’. Therefore, it was deeply ironic that the Wörgl experiment was first branded ‘craziness’ by the monetary authorities, then a Communist idea, and some years later as a fascist one.
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http://globalguerrillas.typepad.com/globalguerrillas/2008/06/the-resilient-c.html

Dave