Resources to accompany 10 Practical Tools for a Resilient Local Economy
Practical Tool #5: Multiple Currencies
SIMPLE SHARING ARRANGEMENTS
· small-scale, easy-to-set-up, neighborhood-level sharing ideas.
· Sharing arrangements might include carpooling networks or informal childcare co-op arrangements, pet care co-ops, elder care co-ops, etc. They may include garden sharing (you can piggyback on the established friend-finding network GrowFriend), tool sharing (example: Portland), neighborhood libraries (example: Los Angeles), book swaps, seed swaps (how to).
· Group purchasing: You can buy in bulk, save money, and access better stuff. Small food co-ops (how to: Los Angeles EcoVillage). Group purchasing software BuyingClubSoftware.com
· Simple sharing arrangements are a great entrance point into alternative finances, because they’re very easy to set up. They get community members accustomed to dealing with each other in a new way (outside of US dollar transactions), which can open the door for other financial vehicles. They can be fun and delightful in themselves, and grow the spirit of the community.
A gift circle is an open circle where people come to help each other, and share their needs and services. People share their services and help as a gift, without expectation of anything in return. The purpose of a gift circle is to allow people to help each other and to create a sense of community, and to further the gift economy. (See Eisenstein, page 45)
How to start a gift circle http://trustcurrency.blogspot.com/2010/10/how-to-start-gift-circle.html
In a discussion circle here in Los Angeles, the issue was raised of problems inherent in gift circles – someone giving too much and feeling taken advantage of, etc. The observation was made that these human-dynamics issues were really part of all human exchanges and interdependencies, but that in many ways the conventional money system with its built-in disconnection has allowed us to ignore these uncomfortable issues. That shifting to any of the more “alternative” models we have been discussing means facing these human-dynamics issues again.
LOCAL BARTERING ARRANGEMENTS
· Basic barter is a basic cash-free exchange. You walk my dog; I wash your car, transaction complete. Basic barter breaks down if you don’t have what I want: for instance I wash your car but I don’t have a dog for you to walk. It also breaks down if there is a significant valuation difference between the items being exchanged. Thus more sophisticated bartering quickly becomes necessary.
· Time Banking Time banking is a form of sophisticated barter. As you perform tasks within the community, you “bank” hours which you can spend on things within the community as a whole. I wash your car, you walk Mary’s dog, Mary bakes Ted a pie, and I trim Ted’s bushes. Within the system we are whole. Usually a computer is used to track the credits, but it can be done manually as well. Time banking is best for exchanging services; since the basic unit being exchanged is an “hour,” you have to invent a local protocol for when you try to exchange goods.
· Time banking proprietary software is somewhat “plug and play,” but your community will incur an ongoing fee in U.S. currency. I hesitate to recommend this given the content of the Stoneleigh lecture. (note: Before you sign up with the U.S. proprietor of the Time Banking software, please do your homework and learn about the history of the company).
· Cities and larger communities might look into the regional work being done by Fourth Corner Exchange. http://www.fourthcornerexchange.com
· In Ithaca, New York, they printed physical paper “Ithaca Hours” to exchange; their system has attributes of time banking and local currency, combined.
· LETSystems (Local Economic Trading Systems) are very much like time banking, except that (1) the software is open source, thus potentially free to your community; and (2) the valuation of each credit is set by the individuals who are making the exchange transaction, thus there is much more flexibility.
· Edgar Cahn’s book No More Throw Away People emphasizes how bartering systems can be used to reward and cultivate previously undervalued services within a community. Examples he gives are care for the elderly, neighborhood watch, volunteerism, and more. These jobs are necessary to make a community functional, yet our U.S. dollar system dismisses them without value. Neighborhood bartering networks are a chance to bring these necessary-yet-undervalued skills into the local economic sphere.
· Time banks and LETSystems can become tools to ease mainstream people toward more of a “gift culture” mentality. One LETSYstem explanation said to think of it like “trading favors.” The goal of either LETS or time banking is that your account balance should hover around zero – close to “even” in giving and receiving favors within your community. It takes a passionate time bank coordinator – a cheerleader – to keep encouraging mainstream participants to use an unfamiliar system in Transition times. But this is what it takes to rebuild the fabric of social relationships and culture of reciprocity.
· Older books by Edgar Cahn such as Time Dollars explain how LETS and time banking could be achieved without computers – a very important criteria for some of our less affluent communities. (see my prior insights on “Diversity and Internet Connections”) Tracking can be done on paper, for instance with a passbook system akin to the banking passbooks which were prevalent in the 1960’s, and a periodically printed magazine-style directory.
· Both time banking and LETSystems seem to require a dedicated “cheerleader” to keep the excitement going and keep the system feeling fresh, exciting, and new. Over a two year period in our Los Angeles area, we saw four time banks/LETSystems started, of which only two are still going. The ones with staying power have a driver – a cheerleader, plus in each case the local Transition group is using the time banking system to run their reskilling classes, which helps keep the system alive.
The Peter North vision includes business-to-business exchange. A Google search for “business to business exchanges” pulled up several existing networks. I have not reviewed any of them, but as your community begins to need it, know that some networks do already exist.
· Harvard Business Review, “The Exploding Business of Bartering,” Sept 2012 http://blogs.hbr.org/cs/2012/09/the_exploding_business_of_bart.html
· Business Week “The Rise of the Barter Economy,” April 2012 http://www.businessweek.com/articles/2012-04-26/rise-of-the-barter-economy
· Business Week “Using a Barter Exchange to Conserve Cash,” July 2012 http://www.businessweek.com/articles/2012-07-12/using-a-barter-exchange-to-conserve-cash
· Local currencies are perhaps the most high-profile of these suggestions. They gain the most press, they command attention, but they also represent a huge step up in both complexity of setup and cost to create and run. If your community is considering creating a local currency, please refer to Peter North’s Local Money to understand the foundational decisions you will need to make – including fiat, demurrage, security features, circulation, mutual credit, backed currencies – so that your currency will work well for the specific needs and issues of your community. My review of his book is here.
· Creating Wealth: Growing local economies with local currencies, by Gwendolyn Hallsmith and Bernard Lietaer. Particularly the Appendix: “The Community Currency how-to model”
NATIONAL CURRENCY / U.S. DOLLARS
· For managing those U.S. dollars that we do have, community banks are typically more in touch with the unique culture and needs of their local neighborhood. Hopkins and North don’t mention them because apparently community banks have vanished in the UK, but we still have a few here in the U.S. Find out if your neighborhood has one http://www.icba.org/consumer/BankLocator.cfm Support them, educate them, and fold them into your Transition activities.
· Keep in mind, however, Stoneleigh’s cautions about the banking system. The repercussions of past banking practices will likely affect all banks, whether Big or local.
· Learn more about the bank within the Mondragon cooperative complex and its unique policies and practices. https://sites.google.com/site/LAtransitionenterprise/project-updates/themondragonmodel
· See more at Practical Tool #6 about community-based investments.
THE GIFT ECONOMY
How to start a gift circle http://opencollaboration.wordpress.com/2009/11/28/gift-circle-faq/
Heart-warming video about gifting in Mali http://www.youtube.com/watch?v=3ELNsQdSMOc
“The Gift,” Charles Eisenstein video, Amsterday Sept 2009 http://youtu.be/cS07gM74tww
The Gift, by Lewis Hyde (1979), particularly Part I : “A Theory of Gifts”
Sacred Economics, by Charles Eisenstein
“How a gift economy powers education in rural Nepal,” by Simone Cicero, originally published by Shareable | JAN 18, 2013 http://www.resilience.org/stories/2013-01-18/how-a-gift-economy-powers-education-in-rural-nepal
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