Local Currencies Really Can Buy Happiness

Published on
by
Inter Press Service

Local Currencies Really Can Buy Happiness

by
Matthew Cardinale

ATLANTA, Georgia - In the face of
an economic system which seems to be premised on environmental harm and
profit-driven growth, a handful of communities across the U.S. and the
globe have begun experimenting with alternative forms of local currency
as a pathway to sustainability.

Local currencies
existing today in the U.S. include the Humboldt Community Currency in
Eureka, California; Berkshares in the Massachusetts Berkshire region;
Bay Bucks in Traverse City, Michigan; Ithaca Hours in Ithaca, New York;
Cascadia Hours, Corvalis Hours, and RiverHours in Oregon; Equal Dollars
in Philadelphia, Pennsylvania; and Madison Hours in Madison, Wisconsin,
according to the E. F. Schumacher Society, which runs Berkshares.

Canadian
community currencies are located in Calgary, Alberta; Salt Spring
Island, British Columbia; Tamworth, Toronto and the Madawaska Valley,
both in Ontario, which is promoting a "usury-free dollar".

There
are also community currencies in Tlaxpana, Mexico; and East Sussex and
Devon, England; as well as a regional currency based in Basel,
Switzerland, which can also be exchanged in parts of Germany and France.

What
these currencies have in common is that they represent an effort to
respond to the pressures of globalisation, like the advent of massive
chain stores competing with local merchants.

People in Berkshire
can go to one of five participating local banks to trade 95 cents for
one Berkshare, at a five percent discount to the dollar. Then, they can
spend Berkshares at over 400 participating local stores as a direct
replacement for dollars, and thus save 5 cents with every Berkshare
they spend.

Even though store owners lose the 5 cents whenever
they trade Berkshares back for dollars at a bank - which they have to
do to buy something that can't be produced locally - they are still
typically happy with the loyal, local customers they keep instead of
losing them to chains like Wal-Mart, Starbucks, and Barnes & Noble.

"Local
currencies are part of what educate people about the importance of
their small, independent businesses. It's bringing people off the
Internet, back to Main Street, for the face-to-face exchanges. Once
they're there, they like it," Susan Witt, founder of Berkshares, told
IPS.

There are many ways having a local currency can help create
a more sustainable economy, say leaders in the local currency movement.

First, because using a community currency forces people to buy locally, fewer goods have to be imported.

"By
having economic transactions be so focused locally, that's definitely,
for one thing, reducing use of fossil fuel. If it's a local farmer's
market... food [is] produced 30 miles away instead of 3,000 miles
away," said Steve Burke, executive director of Ithaca Hours, said.

Trade
theorists might object that it is less efficient, or less productive,
for diverse goods to be produced in many communities than it is for
each community to specialise in producing one product for export, even
factoring in transportation costs.

"Is it the real cost of
transportation?" asked Susan Witt, founder of Berkshares. "Is the real
cost and consequences of our dependence on fossil fuels to transport
goods really factored into the cost? Is climate deterioration factored
in? Is engaging in conflicts for limited supplies of fossil fuels?"

"Nor
all the costs of unemployment in our local communities? Nor the
hollowness of our life experiences? Nor the human costs in [other
countries]... for maybe manufacturing practices that we would not
ourselves allow in this country?" she wondered.

A second way in
which community currencies support environmental sustainability is that
they can lead to reduced consumption, Witt argues. Witt believes that
people purchase more and more "stuff", not because they need it, but to
fill a void that community currency can satisfy.

"You know the
full story about the goods you purchase. You know how they were
produced. You know the carpenter who made the table. You know who her
children are. You realise buying the table is supporting that family,"
Witt said.

The products bought with local currency "link you to
your neighbourhood, your place, the people of your place. They're not
just stuff... they enrich your life the way that stuff would not. So
you need less."

"One hand-knit wool sweater, coming from wool
from sheep that graze on the hillside on the way to work, that
satisfies you in a way four sweaters from unknown sources fails to do.
You care for it in a different way," Witt said.

A third way in
which community currency can lead to sustainable economy is communities
can print the currency they need to issue interest-free, or non-profit
loans. Allowing credit to be issued interest-free eliminates the need
to service growing debts. High-interest debt owed by individuals,
businesses, and governments to private banks is one of the main factors
pushing economies to constantly grow at an exponential rate. As these
entities struggle to service the interest on their debts with a total
money supply that was mostly created through issuance of credit, more
and more new debt must be created in order for the system to be stable.

Thus,
because high-interest debt pushes the economy to constantly grow, it
also pushes industrialisation into new markets, new products, and new
technologies, which often lead to deforestation, air pollution, and the
like.

By communities printing and issuing their own currency, in
part through productive non-profit loans, the economy can function
without the constant growth that is imperiling the environment.

There
are at least two different models for how to organise and operate a
local currency that local communities are using. One is used by
Berkshares; the other was pioneered by the Ithaca Hour.

Founded
in 1991, the Ithaca Hour is the oldest local currency to exist in the
U.S. since local currencies disappeared in the 1900s. Numerous local
currencies have since based their model on the Ithaca Hour.

Businesses
become members in Ithaca Hours by purchasing a listing in the Ithaca
Hours directory, and they receive two "hours" every year as part of
their membership fee. Employees at these businesses then can accept
hours instead of dollars for some of their wages. People can accept
hours instead of dollars for services, like mowing a lawn, that they
provide.

This, in addition to low-cost loans, is the primary way Ithaca Hours enter Ithaca's economy.

"There's
a pretty fundamental difference between our model and the Berkshares
model," Burke said. "They sell them. With ours, you can't buy them; you
can only earn them."

They are called hours "to make a
statement", Burke said. The founders "wanted to emphasise the
relationship between time and money".

*This story is part of a
series of features on sustainable development by IPS and IFEJ -
International Federation of Environmental Journalists -­ for
Communicators for Sustainable Development (www.complusalliance.org)

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