LOCAL CURRENCIES AREN’T
SMALL CHANGE
By Joel Stonington, Utne.com
Article appeared on front page
of the Utne Reader website on June 29, 2004. Joel Stonington
may be contacted at: jstonington[at]orionsociety.org
The essay may be duplicated with advance notice to Joel Stonington.
Most people don’t think much about money beyond the fact
that it seems to leave their wallet quickly. This weekend,
upwards of 300 top economic thinkers gathered to discuss
how to make money into a tool for social justice, community
development, and economic and environmental stability through
the use of local currencies.
The Local Currencies in the 21st Century conference, put
on by the E. F. Schumacher Society, brought together “a
group of extraordinary people who are re-inventing money,”
said conference organizer Chris Lindstrom. The reinvention
is taking place in the field of complimentary or local currencies
that work at local and regional scales to build sustainable
communities.
As keynote speaker Margrit Kennedy—who has written and lectured
extensively on the topic—said, “Money can be made to serve
rather than to rule, to be use—rather than profit-oriented—and
to create abundance, stability, and sustainability.” She
said that while “money is one of the most ingenious inventions
of mankind” it has “the potential to be the most destructive
or most creative.”
As speaker Christopher Bamford, editor in chief of SteinerBooks,
put it, money should “empower people to care for each other
and the earth.”
From Ithaca Hours to the Time Dollar to the Local Exchange
Trading System (LETS) dozens local currency systems are
already being used throughout the world alongside a national
currency. Many attempts have been successful in changing
the value and use of money. Here are examples of some of
the projects already underway:
Ithaca Hours, Ithaca Health Fund, Whole Ithaca Stock Exchange
Paul Glover started Ithaca Hours—denominated in hours of
labor—in 1991, distributing the notes to local businesses
willing to accept them for goods and services. For instance,
local CSA’s accept Hours for produce, some doctors accept
them for care, and some stores accept Hours for goods.
Glover said, “When I started Ithaca Hours I thought it would
be illegal but it wasn’t. It’s too bad, the supposed illegality
was part of the fun.”
The Ithaca Hours program continues to
grow today. It now includes a local credit union that provides
an optional Hours account and a health insurance program—Ithaca
Health Fund—that relies on a simple $100 yearly payment.
The Hours maintain a strong value independent of federal
dollars because they are backed by future productivity in
the community. Over 50 communities throughout North America
have adopted local currency programs using the Hours framework.
Go There » http://www.ithacahours.com/
Time Dollar
The Time Dollar—conceived by Edgar Cahn during a long illness
during which he was dependant upon the services of others—is
used to recognize the caring actions of others. The young,
old, handicapped, and disenfranchised may not be able to
find work but they can certainly contribute to the community
and are therefore worthy of earning Time Dollars. Cahn,
speaking about his reasons for creating the Time Dollar,
said, “We can create a way of valuing those things that
define us as human beings.”
Go There » http://www.timedollar.org/
JAK Bank
One conference attendee, Per Almgren, designed the interest-free
savings and loans system used by the JAK Bank in Sweden
since 1973. Almgren notes, “In the money economy there are
only two types of costs, labor costs and interest costs.”
He believes that the interest costs are part of what makes
growth unsustainable. As Margrit Kennedy said, “The debt
that has accumulated can’t be paid back.” The debt is an
earth debt, an impossible pressure on natural resources.
Eliminating interest would alleviate pressure and put more
wealth into the hands of local economies.
The idea of interest-free loans is, perhaps, one of the
most revolutionary discussed at the conference. The bank
starts with a bulk of capital placed into non-interest earning
savings accounts. Eventually members can withdraw their
money as the bank becomes sustainable. This happens as people
looking for loans build up savings in their account, thereby
earning points—similar to a credit rating. When enough points
are earned the bank issues a loan. Instead of paying interest
to the bank for the loan the borrower puts money into a
savings account that cannot be accessed, building capital
for the bank to issue other loans. When the borrower has
paid back the entire loan they can then access a significant
amount of built-up savings. The bank does not earn interest
but does take a slightly above-average bank fee for the
process.
Go There » http://home.swipnet.se/~w-55704/jakeng.htm
Local Exchange Trading System—LETS
Founded by Michael Linton on Vancouver Island in 1980—by
far the most popular debt-free currency system in the world—LETS
is essentially a self-regulated debit and credit system
coordinated centrally. A consumer can call the central LETS
coordinator to have their account debited and the producer’s
account credited.
Go There » http://www.gmlets.u-net.com/
All of these examples, and there are many more, are as Bamford,
put it, “ways for economic reality to embody our social
and spiritual values.”
David Boyle, jointly responsible for introducing Time Dollars
to Britain, said, “we have to escape from the idea that
money is a semi-divine, golden truth.” He went on, “We are
taking the power to create money back into our own hands.”
Go There » Local Currencies in the 21st
Century: www.localcurrency.org
Related Links:
E. F. Schumacher
Society
Open
Money Manifesto by Michael Linton
"Printing Money, Making Change"
by Robert Swann and Susan Witt
Yes!
Magazine Interview with Bernard Lietaer
