FROM "THE HINDU" Online edition of India's National Newspaper
Sunday, September 30, 2001
In the town of Totnes, in South England, you can buy goods and services with Acorns instead of the conventional pounds sterling. The Acorn is a local currency that does not take the form of either coins or bank notes. Acorns change hands when a cheque is written out by a member of the Totnes LETSystem.
For example, Marcea Colley is a local resident who has earned Acorns by selling baskets, teaching basket-making and running a bed and breakfast facility. In turn she has used those Acorns to pay for plumbing repairs, pruning of trees in her garden, baby sitting and buying things like yoghurt and bread.
In the South of France there is a network of community currency groups called Grain of Salt. Every fortnight this network has a big party. People gather to trade things and services. Someone may be selling cheese or fruits and buying hours of plumbing, haircuts or sailing. These exchanges take place not in the conventional French Francs but in the local currency created and operated by groups in the network.
This is just one of thousands of community currency networks now operating in countries across North and South America, Europe, Australia and New Zealand. These networks tend to flourish during times of recession when many people find themselves either under-employed or without a job. Local currencies are also a way of trying to recreate the sense of community that is otherwise lacking in many industrialised countries.
A local currency cannot leave the community it serves, so it ensures connections between people exchanging skills, goods and services, writes Michael Linton, a Canadian who designed the first Local Exchange Trading System (LETS) back in the early 1980s. LETS is one of several forms in which local currencies have emerged.
Interestingly, the origin of the word community is in the Latin words for gift and coming together or among each other. Thus community, literally, means to give among each other. The word community initially referred to the material organisation of a self-contained economic entity like a monastery.
In the age of globalisation, a self-contained community-based local economy may be impossible. But local currencies are one way in which people are able to partially protect themselves from the vagaries of economic trends determined by distant and amorphous forces. Local currencies are also a response to an anomaly which afflicts many free market societies and is most starkly manifest in the U.S.A.
The last ten years have generally been a boom period for the American economy. Yet there is reportedly not enough money for basic facilities like education, health care and pensions for the elderly. Thus one of the leading books on local currencies is called Time Dollars: the new currency that enables Americans to turn their hidden resource - time - into personal security and community renewal.
Ralph Nader, the leader of the American consumer movement, calls the Time Dollars an organised, inflation-proof currency that can provide as constant, as powerful, as reliable a reward for decency as the market does for selfishness.
This is how Time Dollars work. A person earns credits by providing a service to others who are part of the network, like a car-ride to the market or doing minor home repairs or baby- sitting. This credit, or Time Dollars, are then used by that person in exchange for a service or product he or she may need.
In the words of Edgar Cahn and Jonathan Rowe, authors of Time Dollars, this is a money that is almost anti-money. It provides a practical way to restore and validate trust; and it makes community institutions, rather than corporations and government, the nexus of this trust. Now that we have trusted gold and governments and plastic and computer blips, is it really so outlandish that we try to trust our neighbours?
Community currencies, also called Local Currency, come into being when a community finds that conventional money is in short supply. By inventing their own local money, or token of exchange, the community is able to ensure that skills, services and goods keep going around thus creating livelihoods for more and more people. There's no limit to the different ways in which these currencies can work and several models are now in operation.
One of the most famous such models operates in the town of Ithaca, on the east coast of the U.S., and was described in an earlier article in this column. The Ithaca Hour is a printed paper currency which has become a valid token of exchange for much of the town's population. It is now accepted by 300 local businesses and has the backing of the local chamber of commerce. One local bank even pays its staff's salaries partly in Ithaca hours. Paul Glover, the founder of the Ithaca Hour, calls such currencies the community magic act.
Local currencies have been common throughout history, emerging whenever a community needs to protect its internal economy from outside disturbances such as war or depression. Several systems sprang up in the U.S. and in Europe during the economic slump of the 1930s.
For example, in 1930, the owner of a small bankrupt coal mine in Bavaria started paying his workers in coal instead of the German Mark. Since it would be cumbersome to cart coal all over town for every purchase, the mine owner issued a local currency which was redeemable in coal. This system was reportedly so successful that by 1931 this Freiwirtschaff, or free economy movement, had spread through out Germany and included about 2000 corporations. But soon the German Central Bank asserted its monopoly on currency creation and prohibited the experiment.
However, in 1932 the Austrian town of Worgl repeated a similar experiment to achieve full employment. Again the success was copied by hundreds of communities but later stopped by the Austrian central bank. It is estimated that during the 1930s about 400 cities and thousands of communities in the U.S. launched some form of local currency. But eventually these were all prohibited in favour of a centralised currency creation and banking system.
Even today the mainstream media and economists tend to refer to these community currencies as funny money implying that it is not as real as the conventional dollars, pounds or pesos. John Turmel, a Canadian politician and local currency activist, suggests that if a community's local currency is called funny, then it would be more appropriate that the conventional currency is called sad money. For both moneys are based on the same collateral and the only difference is that the funny money doesn't inflate since its backed up one-to-one with collateral while the tearful money does lose its value over time because of its 'usury' which is truly not funny.
The success of such phenomenon is not easy to judge using conventional standards of growth. For example, the Totnes LETSystem is the earliest one in Britain but still remains very small. In early 2001 it had approximately 400 members. But one reason for this, as Marcea Colley points out, is that once people are linked to each other they often trade without formally recording the transaction in the LETS register.
So while formally they appear to have dropped out, the concept is still working for them. Community currencies open up many promising possibilities for the future. First, for the people who benefit from them it is a happy, and not funny, money. Second, all these experiments feed into the complex challenge of working towards economic systems that are humane and non-exploitative.
David Korten, the author of a book called The Post-Corporate World: Life after Capitalism, suggests that we live at a time when our very survival depends on rapid innovation toward the creation of living economies and societies. Such innovation depends on vigorous community level experimentation supported by the creative energies of individuals everywhere.
Note: Those seeking how to details of such systems can access many different versions by doing a search for local currencies or community currencies on any search-engine on the Internet.
Readers are also invited to spend some time reviewing the information posted at The Barter/LETS Cyberclassroom: www.cyberclass.net/bartable.htm
John C. "The Banking Systems Engineer" Turmel, has been actively promoting the 'usury-free' LETS software as the optimal solution to create peace, abundance, and prosperity for every person on planet earth. John is the author of the UNILETS usury-free time-based currency United Nations C6 recommendation to Governments in the www.un.org/millennium/declaration.htm John C. "The Banking Systems Engineer" Turmel's website is located at this URL: www.cyberclass.net/turmel Tel: 613.632.2334