Local Currencies Flourishing Around The US
by Paul Van Slambrouck
Christian Science Monitor News Service
May 13, 1999
     SAN FRANCISCO - If globalism has got you down, take heart. A 
flourishing movement that seeks to supplement the almighty dollar with 
an all-local currency is providing refuge around the country, and 
world, for those who feel that mega-economic forces are stripping 
individuals and communities of control over their own affairs. 
     "There is tremendous interest and energy" in the movement to 
establish local or community-based currencies, says Susan Witt, 
director of the <http://www.schumachersociety.org/ E.F. Schumacher 
Society of Great Barrington, Mass. The Schumacher Society is a firm 
supporter of the concept, and Witt says there is "revival" under way 
right now.
     The concept is simple: Establishing a local currency within a 
town or region lets residents exchange goods or services in a way that 
guarantees the currency will stay local and not seep out into the 
great sea of global commerce.
     In communities with local currencies, the U.S. dollar continues 
to circulate and remains the backbone of the local economy. But as 
seen by advocates, local money provides a powerful tool for community 
cohesiveness and rejuvenation. The north coast hamlet of Mendocino, 
Calif., plans to launch a local currency called Seed in the next few 
days. Further down the coast, a Time Dollar system that allows 
community service organizations to trade services is about to begin in 
Santa Cruz. And last year, local currencies became available in places 
as diverse as Toronto and Berea, Ky.
     All this activity follows already well-established programs like 
the Ithaca Hours in New York and the Local Economic Trading System 
(LETS) pioneered in Canada and now operating in Great Britain, 
Australia, New Zealand, and in several European countries. There are 
about 2,000 local currency systems in operation around the world, 
according to Bernard Lietaer, a former Belgium central banker who is 
now setting up a clearinghouse for community currencies from his base 
as a research fellow at the University of California at Berkeley.
     Local currencies flourished in the United States following the 
Great Depression, when jobs and money were scarce. Over the years, 
stressed communities have often created local currencies or scrip as a 
means to allow people to trade skills and goods, even when they're 
unemployed and have no traditional dollars to spend. But today, the 
motivation behind local currencies stems more from a view that 
communities are losing their sense of interconnectedness among 
residents, who don't know each other and who buy goods that are 
imported with dollars that are often earned from a distant 
     "It's a counterpoint to globalization," says Lewis Solomon, a law 
professor at George Washington Law School and author of "Rethinking 
Our Centralized Monetary System: The Case for a System of Local 
Currencies." Local currencies have proven themselves viable, says 
Solomon, but their prevalence depends, ultimately, on "how much 
antipathy builds to the global economy." The movement itself is 
diverse, blending primarily environmentalists and community activists, 
but with a sprinkling of Libertarians, millennium bug alarmists, and 
even survivalists who fear a major financial meltdown is inevitable.
     But at its core is a yearning for more control, less seeming 
vulnerability, and greater interaction among people of the same 
geography. "Community is becoming a vacant term. We're not really even 
trading with each other any more," says Michael Linton, one of the 
founders of LETS in Canada. 
     While local currencies may appeal to some as a return to simpler 
times, it's quite modern in terms of taking advantage of technology. 
Linton has been working on a smart card that would allow people to 
make purchases with local and even regional currencies, automatically. 
And software needed to begin a LETS system can already be downloaded 
from the Internet.
     Local currency systems are usually set up and run by volunteers. 
The BREAD program, begun in Berkeley in 1997, is typical. Members 
apply to join, must be able to provide a good or service to the 
community, and must agree to honor the local currency. Once admitted, 
members are listed in a local directory, which now includes about 350 
listings, including gardeners, restaurateurs, artists and auto 
     Each member is initially issued paper currency worth four Bread 
hours, valued at $12 per hour. There is about $15,000 worth of Bread 
currency in circulation right now. "We have quite a cross-section of 
members," says Miyoko Sakashita, Bread co-founder. "Most are middle to 
low-income, and from all age groups."
     As one sign of the movement's current vigor, advocates from all 
over the country and world began meeting this week in the Santa Cruz 
mountains at a church-owned retreat site. Called simply "The 
Gathering," the aim is to "connect the local currency movement, and 
create the infrastructure for a new, more just economy," says 
organizer Carol Brouillet.
     While some critics question the logic of a system that encourages 
buying local goods, even when better or cheaper goods may be available 
elsewhere, advocates say that kind of math is simplistic. "Things may 
be cheaper over the hill," says Margaret Howe, one of the organizers 
of the new Seed program in Mendocino, Calif., "but there is a cost to 
the community in buying over there, instead of here."

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