November 21, 2012

Local currency getting a boost


Annie Gowen, Washington Post - Local or alternative currencies are almost as old as trade itself, but the movement has found new life amid the global financial crisis, as parallel economies outside the traditional monetary system have emerged in countries such as Spain, Mexico and Brazil. These systems are flourishing because the unemployed can either trade skills for local currency or swap their time for other services.

Supporters of local currency in the United States say they are founding these systems here because they believe in the “buy local” movement and want to strengthen their neighborhoods and reduce reliance on large corporate banks.

“Obviously the idea of local currency has been around for a long time and historically they do pop up in times of economic uncertainty,” said Julie Gouldener, 40, program coordinator of the Baltimore Green Currency Association. “We view the complementary currency as a win-win. It’s not meant to replace the U.S. dollar. It’s meant to exist alongside it and build more local wealth.”

Gouldener’s group launched a currency called the BNote in April 2011. Locals can trade real dollars for BNotes at eight “cambios” around the city, including Zeke’s Coffee in Northeast Baltimore, and use them at 175 businesses. So far, there are about 28,000 BNotes in circulation.

“It’s going great. We’ve had steady growth since the launch,” Gouldener said.

Ed Collom, an associate professor of sociology at the University of Southern Maine, said local currencies had their first heyday during the Great Depression, when users traded notes called scrip — essentially IOUs made of paper, wood or even clamshells — that replaced scarce federal dollars.

There are now about a dozen local currency systems around the country, including Ithaca Hours, one of the largest that was founded in New York in 1991. The idea seems to appeal to people from a wide political spectrum — from Green Party progressives campaigning against globalization to libertarians suspicious of big government.

Collom said that currency systems are more likely to falter because organizers find it difficult to sustain momentum. Even the Ithaca Hours has seen a decline in usage, with the number of participating businesses falling from about 500 at its height to about 200 now. Its new board president, Paul Strebel, a financial adviser, said he hopes to reinvigorate the system and is exploring using virtual bills on smartphones.


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1 comment:

Anonymous said...

To be fully effective and supported, local currency has to be matched with local self-sufficiency.

When goods must be imported from outside the local area, or profits are exported, local currency can't be used as currency because those who'd have to accept it don't live in the area and thus would have no use for it.

Jane Jacobs explained it all: local self-sufficiency is the sine-qua-non of local economic health and the worth of local currency.

It was a bad day for us all when the Federalists suckered people into accepting their crypto-monarchy.