[Peace-discuss] (APN/ IPS) Local Currencies Really Can Buy Happiness

[Robert Naiman]

(IPS) Local Currencies Really Can Buy Happiness

By Matthew Cardinale, News Editor, The Atlanta Progressive News; North
American Correspondent, Inter-Press Service (May 30, 2009)

http://atlantaprogressivenews.com/news/0465.html

Also, comment at our blog: http://www.atlantaprogressiveblog.com

http://www.ipsnews.net/news.asp?idnews=47042

ATLANTA, Georgia, May 30 (IPS/IFEJ) - 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).

Matthew Cardinale is the News Editor for The Atlanta Progressive News
and is reachable at matthew at atlantaprogressivenews.com.