Historically, scrip has often appeared when cash is scarce, but rarely has it been as successful as the grassroots local currency projects that are springing up today. The first such system, Ithaca HOURS, was developed by community economist Paul Glover in Ithaca, New York in 1991. To date, Ithaca HOURS have generated more than $2.5 million worth of business in the community.
The bartering process is simple, but the results can be profound. By focusing on people's capacity rather than their needs, a local currency recognizes the value of what each person has to offer. Bartering encourages individuals to help each other by using their skills to improve their lives and their communities. Bartering is empowering: it provides people with dignity and the ability to feel like a valuable and contributing member of society, even if they don't have a penny in the bank.
Local currencies help people differentiate between wealth and money. As a society, we've forgotten that we invented money as a unit of measurement to make commerce more convenient. Money is not wealth, it is a token that gives its holder a claim on wealth. The true wealth of the community-its productivity-need never be limited by lack of money: it would be like a carpenter running out of inches!
Local currencies also help make the distinction between jobs and work. In today's economy, we never have a shortage of work to do or people wanting to do it. We just have a shortage of money to pay for it all! With the local currency system, employment is available to anyone who wants to work and has a skill or service that is required by someone in their community.
Local currencies particularly help to increase the purchasing power and self-worth of socially and economically marginalized groups such as youth, seniors, people with disabilities and the un- or under-employed. These people all have skills that are useful to the community, but they often have no mechanism for making a contribution. The informal economy built around a local currency is more flexible than a traditional job, and it values less marketable skills, such as the ability to drive an elderly person to the grocery store or teach someone how to skate.
Exclusively dedicated to regional commerce, local currencies are only valuable within the community and thus encourage people to spend their money close to home.
They provide an advantage to sustainable businesses by favoring the locally-produced, the low-tech and the recycled. A big strawberry plantation in the central valley has no use for a local currency here, but a local organic grower who accepts them at a farmer's market can easily use them to hire an extra set of hands at weeding time. Re-use becomes more convenient and, instead of migrating towards the landfill, used goods increase in relative value and become more desirable than new ones.
The intangible, more personal aspect of local currencies challenges the "jobs versus environment" dualism that is so well cultivated by mainstream media and politicians. Profit is often used as justification to destroy a community or ruin the environment; when money is not so powerful, values can become the bottom line.
Local currency projects bring us back to the real definition of community: munus means gift, and cum means together, or among each other, so community literally means "to give among each other." Nurturing these sharing, supportive relationships is a key focus of the system. The emphasis is on local. Bartering is about face-to-face economics and the accountability and control that comes with locally-made economic decisions.
A local currency directory can help people access and organize childcare co-ops, car pools, neighborhood tool sharing groups, food buying clubs or maternity/kids' clothing exchanges. Local currency projects do not depend on banks or granting agencies for success, so lack of money is not a limitation to community self improvement.
Local currencies are sensitive to community realities. Because each bioregion has its own unique productive capacity, it needs a currency that accurately represents local resources and is adaptable to the seasonal and yearly fluctuations of production. A local currency can help us to live more bioregionally, decreasing our dependence on the exploitation of people and environments here and in other places.
The establishment of a viable economic system is critical to the long-term social and environmental sustainability of a community. Just as increasing centralization of political power has left individuals and communities without a voice in their own affairs, so the growing centralization of financial power has isolated and disenfranchised the vast majority of Americans. As Francis Bacon said, "Money is like muck, not good except it be spread." Producing a local currency is a simple, community-initiated method to encourage the development of a diversified, stable, bioregional economy. It builds community trust and solidarity and helps keep regional wealth in the region-where it belongs.
Copyright Mendocino Environmental Center 2000
Permission granted to excerpt or use this article if source is cited