Local Currencies Aren't Small Change

News from the Local Currencies in the 21st Century conference
Joel Stonington Utne.com
June 2004


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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 used -- 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 of 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 Community Supported Agriculture (CSA) farms 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>>Ithaca HOURs Online

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>>Time Dollar USA

JAK Bank

One conference attendee, Per Almgren, designed the interest-free savings and loan 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>>JAK Medlemsbank

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>>LETSystems

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

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