Saturday, February 6, 2010

I Want Money Part II - Local Currencies

As Goldman Sachs and JP Morgan hand out lucrative bonuses worth millions there are men, woman and children living on the streets who have to beg for a dollar. The fact that one man is hailed as a leader because he has more greenbacks and the other derided as a failure because he has none, speaks to me as evidence that our monetary system and the values that give it power, is where the true failure lies. I don't think we need "financial experts" to sniff out when something is in need of fixing, and local currencies might just be the answer.
This blog is a follow up to my earlier posting, "I want more money - seeking the holy grail," where I question why we empower money with our worship and essentially direct our lives towards the ultimate goal of obtaining more money. Certainly, it's not the money we want, it's the value money buys us: status, power, identity, and objects that mean more status and improved identity or power. As it is constructed presently, money, our system of trade is a scarcity based system of exchange that serves to divide communities because its value (the majority of it) is stored in and belongs to banks, creating a debtors society. Some folks have taken money matters into their own hands recognizing other systems of value that can be represented by money such as local trade and these are ideas worth fanning a flame over, although they've been around for a while perhaps their time is now, perhaps something bigger will ignite:

Local currencies with high velocity rates of exchange are active around the world but most documented in the Chiemgauer district of Bavaria, Germany and the Berkshire region of Massachusetts, USA. As Judith D. Schwartz reported in Yes, Magazine the local currency models keep spending local and bring communities together. For instance the Chiemgauer is issued in exchange for Euros, 1 Chiemgauer is 1 Euro. The Chiemgauer runs by a different set of rules, however, which are decided by the community. It depreciates overtime to encourage spending, retailers who accept Chiemgauer for marketing purposes and to encourage business, redeem them for 95% of their value, with 2% going to students for administration of the currency and the remaining 3% going to charities. Since there is incentive to use the money rather than store it, local businesses are stimulated, non-profit and charity work increases and jobs stay in town. About a dozen local communities or more in the US employ alternative currencies, check out this CNN video.

Another example is "Life Dollars," which are employed at Fourth Corner exchange based in the Pacific Northwest of the US. Life Dollars are an electronic currency, and at their heart, is that there "are always as many Time Dollars as members need to complete the trades they require." Members can access a database that lists out needs and offers, through that members can exchange good and services. Founder Francis Ayley bought his car and pays his rent in Life Dollars!

Time based currency is the easiest concept to get; created by Edgar Cahn, to receive time based dollars you may join a time bank where members give something of value, such as help with cleaning out a member's garage or yard and receives time dollars in return, which s/he may then exchange for help with creating a website or editing a story and so on. This gives value to skills that may not be marketable and also connects communities in a circle of giving. A list of time banks can be found here.

Ven is the currency traded by members of Hub Culture for goods, services, collaborations and knowledge. It springs out of social media models of engagement and in Andy Jordan's video for the Wall Street Journal, members report gaining Ven by offering good advice or connecting two parties together.

I've just mentioned a few alternative models here and some of the most successful. I feel like these really need much more attention than they have received and that this is the key to reshaping the unequal system of economics we run today. I encourage you to share your comments and knowledge about this here, the time for taking the leap is now. I plan to join the Fourth Corner Exchange, I'll report back on how that goes!