Changing Currency

Citizen activists, listen up! We all know how loud money can talk in American culture, especially in these days of global capitalism. But money isn't only about power. It can also be about empowerment. Rather than try to turn down money's volume, an increasing number of people from many walks of life are working to create a new language for currency. The local currency movement, which has been steadily gaining in popularity over the past 30 years, includes activists, economists, farmers, environmentalists, regional planners, community development professionals, academics, and small businesspeople from around the world. At its forefront is the E.F. Schumacher Society, named for the author of the now classic text on sustainability, Small Is Beautiful. This month, the Great Barrington, Massachusetts-based E.F. Schumacher Society is hosting an international three-day conference at Bard College on "Local Currencies in the 21st Century."

"The Schumacher Society has, since its formation, been interested in local currencies as a tool for encouraging more vibrant regional economies," says the organization's director, Susan Witt. "What Schumacher proposed was that you produce locally for local consumption - that was his basic concept. What we're about is trying to figure out: What are the local tools that would encourage local production? What are the solutions that citizens can shape themselves rather than looking for government solutions? "

Although the local currency movement is generally little known, the concept is not exactly new. "Local currencies have actually been going on for centuries," says Chris Lindstrom, who is coordinating the conference. For instance, tribal commerce is traditionally based on a gift economy, he explains, "with everyone taking care of whatever needs to be taken care of," and during the Dark Ages, "everyone had their own currency in Europe; it's when economies evolve, becoming more complex, that currencies usually enter the picture."

In the US, local currency reemerged in the early part of the 20th century, gaining headway during the Great Depression, says Lindstrom. "A lot of communities throughout the world started to create their own currency systems as a way of addressing the deflation or inflation of their own currency."

The Wir Network (its name is the German word for we), founded in Switzerland in 1931, is the first established system and the longest lasting, with over 80,000 members today. "It's a hybrid of community-issued loans of the currency within the network and mutual credit - the direct debiting and crediting of accounts between members. When I buy something from you my account is debited, your account is credited," Lindstrom explains. "It's brought Switzerland through a lot of ups and downs in their economy, and allowed the Swiss economy to remain relatively stable."

Next on the local currency movement's chronology is the establishment in Canada of the first Local Economic Trading System (LETS) network. With local networks numbering over 1,400 throughout the world, LETS members trade goods and services among each other, and use a central operator to acknowledge each trade.