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Fayetteville Speaks: Developing a local currency

What is wealth? What are we willing to do to get it? What do we value? We’ve watched our country lose an economic moral compass, and we wonder what to do to get our economy on track, so that we can earn a living, pay our debts, and save something for the future in investments we can trust. Perhaps we could answer the question “what is wealth” with the following: the ability to meet our needs, be creative, useful, respected and loved, the ability to live with dignity and thrive spiritually, emotionally and physically, and the clarity and means to live within the natural limits imposed by a finite earth.

A subgroup of OMNI Center for Peace, Justice and Ecology in Fayetteville is studying models of complementary community currency, not to replace the current economy, but to augment it, so that unused resources can be used for unmet needs. This currency is local and remains in the community where it originates, can be created either in the process of exchange itself or by a network’s agreement to accept it, either for all or for part of the cost of a good or service. It is a process that builds trust in community, as we meet each other’s needs with our goods and services, often developing creative responses to needs that we found it hard to find time for in our present economy. The system is administered democratically, as people meet in monthly barter potlucks to exchange and monitor how the system is going. It encourages local businesses that accept the currency, and makes more currency available which creates jobs. It can be used to create a fund from which low interest loans are made to encourage local business.

Currently, there are local currencies that are being developed all over the US, in Ithaca, Madison, Portland, Boulder, the Berkshires, which are complementary to the present economy. There are even more local currencies in communities all over the world, Thailand, England, Australia, Africa. They are legal and fit into the tax structure, credits being taxable and debits being deductible. There are various systems that are being tried. The LETS (local exchange and trading system) system records credits and debits of goods and services in the process of exchange. Within the circle of people signed into the system who have agreed to exchange, an exchange is made, and one person receives a credit and one a debit, like an extended barter. E.g., Mr. Jones has apples and wants Ms. Smith’s baked bread, but she doesn’t need apples. So he buys her bread, and she has a credit with which she can buy pears. The one with the credit is expected to spend it and the one with the debit is expected to provide a good or a service. All the transactions are recorded in a computer program. Ithaca has a fiat currency system. They print currency which is less counterfeitable than the Federal Reserve note, and currency is either sold into the system or given out when someone joins the network. Their system is so successful that 2000 people and 300 businesses currently are part of the network, 10% of the value of the currency goes to support non-profits and they are even starting a local health insurance network.

Another sort of system is the Time Bank, in which people agree to exchange labor, hour for hour. There are towns where people who offer to care for their neighbors who may be elderly or ill or need child care are given credits, with which they can “buy” services when they need them. One town has found this system so beneficial that the city government has agreed to cover the credits of those providing such services should no one be available to provide them the services they need within the system. There are many other elements that go into the making of a local currency system. It has to be carefully planned, democratically administered and continually monitored and adjusted.

In our current economic system, the making and hoarding of money has taken precedence over the conservation of our resources, the quality of life of the community and the sharing of goods and services that is essential to a healthy community. Currently, the dollar is created by the action of making a loan. When the loan is paid the money is extinguished. The requirement of the payment of interest on that loan creates a difficult situation. The money to pay the interest has to come from another loan cycle, so that there is never enough money for all the loans to be paid back. We must compete for the scarce funds or more money must be injected into the system to keep from defaulting, which causes inflation. Inflation is a hidden tax, continually eroding the value of our money and requiring continual growth just to stay even, in effect punishing those who try to save.

The process also funnels money systematically toward the wealthy few, 1% of whom now own a third of the wealth, or more. The wealthy steadily earn more interest on investments than they pay out in interest on debts, and it is the opposite for the poor.

These are the waters in which we are swimming. Our current economic system values property over life, and values money over our resources. If we can earn interest on money in the bank, making that our store of value, our security for the future, then we tend not to value the natural capital on which our lives depend, our land and water and clean air and community interdependence. Focused on the making of money, the providing of security for ourselves and our families, we fall under the mind set of scarcity and anxiety. We don’t see any alternative. We may work at jobs that don’t enliven us 8 -12 hours a day, forcing us to neglect our families and even our health, in order to gain money from a system that continually erodes our communities that should be the real source of our well being.

We have to continue using this economy and working to regulate Wall Street and Corporations, but we can also join those who have been developing grassroots initiatives to create an alternative economy based on a new paradigm, the idea that we do not have to bring the money in from outside before making a purchase, the money is created in the process of exchange, and we have many of the goods and services already here that we need. Bernard Lietaer, a former international banker who now devotes his time to local currency, writes that the current economic system is designed to maintain the status quo. Any initiative for a change to benefit the remaining 99% of the people must come from the grass roots. It takes trust in community, networking, planning and designing a system that can be trusted, and then it fosters interdependence and a deepening of community as we learn to see each other as necessary and beneficial for our own quality of life, not as competitors for the money that is controlled by the Federal Reserve.

Given the state of our current national economic system, we think the benefits are worth the effort of assessing what a complementary community currency requires to be successful. A nationwide independent study of local currency systems concluded that in times of economic depression, local currency systems do indeed work, and there are examples of systems that have worked spectacularly well, during the great depression here and in Germany, which you can read about if you google George Monbiot and Schwanenkirchen. Other useful websites are Ithaca Hours, Madison Hours, Small is Beautiful, Reinventing Money, Berkshares, and Transaction.net.

Also, google Bernard Lietaer and local currency.

OMNI center for Peace, Justice and Ecology, the Fayetteville Friends Meeting, and the local currency steering committee are sponsoring the visit of Paul Glover, who founded Ithaca Hours in 1991, to come and assess the possibilities for local currency in Fayetteville.

Dollars control people. Local currency connects people.
-Paul Glover

He will be visiting our city government and local businesses and will also speak at The Unitarian Universalist Fellowship of Fayetteville on May 9th at 7 PM. Please come and help us design a system for our city. It will take all of us working together.

Shelley Buonaiuto
Fayetteville

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