From child care to piano lessons to cooking a meal, to website design and gardening, there's no limit to the ways to trade in a community currency. I help you, and you help another—and someone else helps me. The recipients of help become, in turn, the providers of help. What goes around comes around. The currency you earn by helping others can be used to receive services or help from someone else and buy goods on offer. When you spend your community currency, someone else earns it.
Visit http://www.localcurrency.ca to learn more
The Slow Money Revolution
by Cliona O Conaill. New Consumer magazine.
localMoney is so inextricably woven into the fabric of our lives that it has become fundamental to our survival in the West. It affects almost everything we do, and yet we actually know very little about it. However, understanding of the nature of money will empower us as consumers. Money is not an actual thing. It is only an agreement between businesses, banks, governments, communities and nations to treat something as though it has value. It is “like a marriage, like a political party, like a business deal”, says Bernard Lietaer, author of nine books on money and finances and an economist for over 25 years who was involved in designing the Euro.
THE HISTORY & POLITICS OF GLOBAL FINANCE
How this “agreement” has assumed a mythical power, that dominates us and, as money expert Marjana Kos says, makes us “dance for money,” is the recent history of money. At the beginning of the First World War Britain stopped using the gold standard it had adopted in 1816. Then at the Bretton Woods conference in 1944, Western leaders met to design a post-war financial structure to allow global free trade. They established The World Bank, the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT). Jointly these organisations designed the conditions for millions more Western-style consumers and unlimited access to the resources of the Third World. Transnational corporations were nurtured to the detriment of local economies as globalisation took off and many of today’s problems are a result of this legacy
After this conference, the US dollar, became the ‘reserve currency’ for world trade so other countries pegged their currencies to it, and the dollar took on the role that gold had previously played, which explains how the US began to become a superpower. When US President Nixon “closed the gold window” in 1971, money stopped being backed by gold and became a free-floating entity backed only by our “agreement” to treat it as though it had value. “This is the first time in the history of the world that every major country has a currency that is not based on gold or silver or some commodity,” says Lietaer.
Money became an abstraction, a numerical figure on a computer screen, existing in a fantasy land where the amount being traded on the foreign exchanges is 150 times larger than the total of all international trade put together, and is 100 times larger than the quantity trading on the global stock markets, according to Kos.
Six decades after Bretton Woods, global financial, social, political, economic and ecological problems are rife. There is a widening gap between the rich and the poor, family and community breakdown, a politicized food-distribution system, skill loss as more and more people move off the land and into cities, causing competition for jobs, high unemployment, housing shortages and over one trillion pounds of consumer debt - while leaving the worlds’ eco-systems in the hands of the multinational corporations.
The politics of poverty become clear when you realize that in the last 25 years, 87 countries have suffered currency crises due to the financial policies of the IMF. “If the United States had to live by the rules that are imposed on, say, Brazil, it would become a developing country in one generation,” says Lietaer.
The modern banking system adds to the problem by perpetuating a debt-based economy, which makes us prey to debt repayment and fluctuating interest rates, disenfranchises people with limited access to money, and increases the drain on the earth’s resources. (See www.moneyasdebt.net and New Consumer Nov/Dec 05).
LOCAL CURRENCIES - THE WAY OUT
But there is a way to short-circuiting mainstream banking and get more oomph out of our wallets. Using local, or complementary currencies is a way of promoting local businesses, rebuilding community, and promoting relocalisation. You may already be using complementary currencies without realising it in the form of airmiles and supermarket loyalty points. But there is much more to them.
These currencies have been gaining momentum over the last 15 to 20 years: from Bali, where they have had a dual currency for centuries; to Curitiba, in Brazil, where pre-sorted rubbish earns you bus tokens. There is even an electronic currency in Japan called ‘Love’ accrued through doing social welfare activities. Over 4,000 communities worldwide use them according to Lietaer. Local currencies are part of the Slow Money Movement because they are physical money and require face-to-face contact to use, which slows down the speed that the money circulates. They complement rather than compete with national currencies and could not replace them.
In the US there are several hundred “time dollar” systems including 31 states where people are being paid to set them up according to Lietaer. The most well known of these is Ithaca Hours, in New York, which can even be used to pay a proportion of your rent. In Japan there are 300 to 400 private currency systems called “fureai kippu” (caring relationship tickets) enabling people to pay for care for the elderly by ‘banking’ hours that they do the same for others.
This is similar to how LETS - Local Exchange Trading Schemes, one of the most established complementary currencies in the UK, works. At its peak around 1996 there were approximately 40,000 people active in 450 schemes, exchanging childcare, transport, food, home repairs or equipment. James Khan, a holistic therapist in London who used LETS for five years says, “LETS takes away the limitation from a lack of money. The community creates wealth from the services and products that it provides rather than being dependent on money issued by the banks”. This sums up the value of local currencies not linked to the national currency like the ones above.
Some local currencies are directly linked to the national currency including Berkshares in the Berkshire region of Massachusetts and Totnes Pounds in Devon. Susan Witt of Berkshares quotes Bob Swann*, “‘When a region begins assuming the power to support their own business needs by issuing their own currencies, then we will have taken great strides toward regional self-reliance, greater security, full employment, and an economy of permanence’. There is great excitement in watching BerkShares begin living up to these visionary statements,” she says.
Totnes Pounds have been around since March this year and by the end of 2007 there will be £10,000 circulating in the town of 8,500 people. They are accepted in over 60 shops and businesses and I even pay ten per cent of my rent with them. My landlady uses them to pay for her dance classes or her shopping in a health food shop and I get to feel that I am doing my bit to promote the local economy, say “No” to globalisation and feel mildly subversive once a week.
Noel Longhurst one of the developers of the Totnes Pound with a background in local economic development says, “Local currencies are a great way of opening up discussion about the money system, which is often treated within both politics and economics as something that is just ‘there’ rather than something is created and shaped by people.” The success of these local currencies depends on a critical mass of people using them. So eco-villages like Damanhur in Italy who use the Credito and Findhorn in Scotland where the 450 residents use the Ekos are the most successful. Findhorn even has its own ethical banking system.
If there is no local currency scheme near you there are other things you can do to promote your financial resilience and that of your community. For example, learn to live within your means, consume less and use cash for all your transactions. Longhurst advises, “Try and avoid getting into debt. And use institutions and banks, which support positive causes, for example, the Co-operative Bank and its internet arm Smile, Triodos and the Ecological Building Society or credit unions”.
If you are already in debt, Steve Meakin, Money advice coordinator for Devon and Cornwall, and a Member of the board of trustees of the Institute of Money Advisors, says, “Budget – itemise everything you buy; distinguish between wants and needs; deal with priority debts first - debts that threaten your home or mean you risk imprisonment; and take FREE impartial advice from an agency like National Debtline or the Consumer Credit Counselling Service or Payplan.
We need to vote with our wallets and invest and spend our money ethically. We need to arm ourselves with education, to see beyond the label to the living conditions of the fair trade farmers, and the Third World producers growing food for Europe at the expense of food for themselves. Money is one of the most powerful political tools available to us today. Our consumer choices can shape the destiny of nations and they can create a world that is fair, equitable and sustainable.
Dancing for Money - a dissertation for Schumacher College in 2006, by Marjana Kos, who was part of the team who launched the Totnes Pound and has a background in economics. * The Role of Local Currency in Regional Economic Development, essay by Bob Swann, 1984. Nexus – Colorado’s Holistic Journal, Complementary Currencies for Social Change, an Interview with Bernard Lietaer, By Ravi Dykema, July/August 2003. www.nexuspub.com/articles/2003/july2003/interview.htm Consumer Credit Counselling Service: www.cccs.co.uk or 0800 138 1111 Payplan 0800 917 4298 www.payplan.com The National Debt Line: www.national-uk-debtline.co.uk or 0808 808 4000 Totnes Pound: http://transitiontowns.org/Totnes/Main/TotnesPound Transition Town Totnes: www.transitiontowns.org/Totnes/ Berkshares: www.berkshares.org Ithaca Hours: www.ithacahours.com/ Findhorn Ekos: www.ekopia.findhorn.com/ LETS: www.letslinkuk.net/