Have local currencies got it wrong?July 25th, 2012 38 comments
Guest Post by Simon Carter who’s working with Transition in Tewkesbury
Here in Tewkesbury I am very keen to introduce an alternative currency, but upon reflection I have no desire to name it the Tewkesbury Pound in the tradition of the Totnes Pound, the Stroud, Lewes or Brixton Pound & very soon now the Bristol Pound.
It all started recently when my local Rotary Club made a donation to Tewkesbury Art Society (TAS) to fund prizes for a primary school painting competition. Tewkesbury has an art shop, which is pretty surprising considering that our High Street is made up predominantly of hairdressers, coffee & charity shops, plus a growing number of empty ones. Despite this fact TAS took the donation down the M50 to Ross on Wye & spent it there. This got me thinking that if we had made the donation in local currency they would have been compelled to spend it in Tewkesbury ensuring a double benefit, i.e. supporting a local charity AND a local business. That was until TAS explained to me how hard they had tried to spend the donation in Tewkesbury, but when they received such a poor level of service they felt they had no choice but to look elsewhere. The level of service they received in Ross was apparently exemplary, which begs the question, does local currency fly in the face of basic supply & demand economics?
In a recent conversation with those responsible for one of the existing local pound it was pointed out to me that it is supported predominantly by people who would probably shop locally in independent businesses wherever possible anyway. As such the local currency is largely a badge of honour, symbolic in nature. Meanwhile the vast majority, blissfully unaware of the significance of the Transition movement continue to shop at Tescos, & B&Q & Costa Coffee because they refuse to consider the wider implications of their shopping patters beyond what they perceive to be the best shop or internet e-commerce site for their individual needs. What if TAS had wished to buy the prizes for the school children from Staples or Craft World? They were very grateful for the donation. Would they have been less so if we had attempted to dictate where they must spend it?
This question & similar ones highlights for me the significance of the recent REconomy initiative within the wider context of the Transition movement. The rapid development of Transition has been nothing short of miraculous, but if it is to make genuine inroads into truly highlighting & facilitating a third option of sustainability over boom & bust then it is time to accept that we must compete in the real world in order for our message to resonate with enough people to really start to count. We may feel virtuous when we win an individual battle or as part of a small group, but what is the point if we win the odd battle, but ultimately loose the war?
Some may be uncomfortable with such terminology, or may be happy to carry on indignantly until such time as they are able to say ‘I told you so’, but what about those of us who believe it is our moral duty to fight for a better world & that the war analogy is not entirely inappropriate.
Which bring me back to the subject of local currency.
Until recently I like so many had no idea how our monetary system operates, that banks literally have the right to create money from nothing when they lend. It’s repugnant, but it is so much more than that. It is economically, emotionally & spiritually cataclysmic, & is almost entirely responsible for the cliff edge we are all now teetering upon. It has taken decades, maybe centuries to manifest itself in all it’s gory detail, but only now is it’s true horror unfolding.
The problem is that money created from nothing as interest bearing debt causes us to fight, both metaphorically & literally. The banks create the money, & then expect the interest, but paid from where? The answer can only be more borrowing & more debt, meaning more interest. Money is too scare to facilitate all the agreements to trade which we would like to enter into, & so we compete for what there is, in the process slowly but surely losing our innate capacity & desire to cooperate, to co-exist in harmony & to care for those less fortunate than ourselves. It’s dog eat dog, survival of the fittest.
If the only way to perpetuate this monetary system is for the banks to lend more money into existence in order to enable previous debts plus interest to be re-paid, in the process creating more debt, requiring more interest, then all the time our collective total debt must grow until we reach the grotesque sums we hear quoted on the news which are truly beyond comprehension. It’s an enormous Ponzi scheme & we all know how they end.
The problem is that monetary systems are not passive or benign. I say systems because there are choices. There are some who are lobbying to get our government to choose another from the one we have, but our politicians are so ensnared with those who profit that other than minor concessions, major route & branch reform is extremely unlikely to say the least. The question is can we afford to hold out hope, or should we adopt a more radical pro-active response?
The significance of all of this is that to ignore, or mearly attempt to tinker with our monetary system within the wider context of Transition makes our efforts frankly futile. We may delay marginally the march toward unsustainability & all that this entails, but we will not prove the viability & indeed the desirability of genuine sustainability.
So what can we do? To quote Thomas Jefferson”The issuing power should be taken from the banks & restored to the people to whom it properly belongs”. Do we need government permission to do that? The short answer must be no, otherwise the Totnes Pound etc. would not exist.
The reason local currencies such as they are make so little difference I would suggest however, is because they focus almost entirely upon where they can be spent whilst the majority of shoppers simply will not be restricted in this way. They may sympathise, but not enough to be supportive in any meaningful way. If they think Aldi offers better value & they are struggling to feed their family, they will shop at Aldi. The market mechanism is not necessarily a bad thing. It’s just that those with power & influence have skewed it in their favour. Our monetary system has played a huge part in that process. Profit is the God. Bigger & bigger businesses that can negotiate their costs down whilst hoovering up sales are far more attractive to the banks. Corporate buy outs, mergers & acquisitions make ever more money for the few, all the time crushing diversity & the chance for the small independent to compete in a fair & equitable arena. Put simply, the game is rigged.
So where does this all leave Transition, REconomy & not least of all our consideration of alternative currency? I would say in a position which is far more profound that we have perhaps realised thus far. REconomy especially represents a quantum leap forward as it signifies our acceptance that we must compete for what we believe in, but not as some fringe protest movement but right where it matters. In simple terms we must beat them at their own game, on their turf.
Our opportunity to do so is actually far more positive than we may imagine. There is undoubtedly a sea change taking place, both in this country & around the world. If Tewkesbury is anything to go by the majority are ready to fight back. They are sick & tired of seeing their communities decimated, their high streets reduced to ranks of empty shops & corporate clones. They are ready to demand answers to our challenges that address the needs of the majority, not just powerful self interest groups. More pertinently, they are ready to provide their own answers
Whilst the FSB & chambers of commerce profess to represent independent businesses, what in actual fact they promote is business as an anachronism, where profit & self-interest is the only mantra. REconomy has the potential to develop into something unique that can champion a new kind of business, educated & aware of the significance of the triple bottom line, the three P's of profit, people & the planet. We have it within our grasp to level the playing field so that once again all the benefits of a strong diverse independent sector with a genuine awareness of its contribution to its community can once again thrive & prosper.
In order for this to happen we need above all else joined up thinking. Encouraging & supporting individual projects around the country & around the world has served Transition well, but if we wish to lead the commercial sector toward sustainability as it's primary focus we must develop a coordinated plan of action designed to fuse commerce & community so that once again they become interdependent & reliant upon each other in a healthy symbiotic functioning manner for the benefit of all, as opposed to parasitic where business slowly but surely kills community.
By working together I believe strongly that we can do this, primarily because I know that the majority support us. The corporate & banking world that dominates our lives have manipulated & controlled us for long enough, & most people feel that, especially when a few home truths are explained to them. The banking system is at the heart of this. As Henry Ford said, "If people understood money there would be a revolution in the morning". Revolution is rarely less than bloody. Far better that we instigate an irresistible evolution.
I look forward to seeing the conversation develop as REconomy starts to fulfil its potential & indeed it's responsibility, but here are just a few of my ideas to cogitate upon.
First a genuinely alternative, not complementary monetary system is fundamental. It cannot be based upon debt.
Here in Tewkesbury we have established a ring fenced community fund that has so far donated £800 to good causes. The fund is largely business lead to date, but it is now starting to resonate with & spill out into the wider community. At the moment it's a drop in the ocean, but there is no reason once people start to understand its significance that it could not grow massively.
My question is, what if ever pound sterling was converted into local currency before it was donated? In such circumstances, not only would we be caring directly for the most needy & vulnerable in our community & funding community projects, we would be converting every pound given from debt based to gift based, in the process stimulating our local economy in a very direct manner. What if our neighbouring communities started to do the same? Collectively our joint efforts would represent a completely new paragym of money creation.
I would then advocate a concerted campaign to get the currency accepted everywhere, yes, including Tescos or B&Q, or any other chain or superstore. The point is this currency is designed to be spent & to circulate. Tescos would be compelled to find ways to spend it as it is intended, as a medium of exchange, not to horde it until such time as they are ready to open yet another store, or send it back to head office to pay bonuses to their executives whilst the majority of their staff struggle on a subsistence wage. Perhaps they might like to pay them a bonus in community currency!
This approach could ultimately create a currency accepted from one end of the country to the other. The emphasise would not be where it can be spent, but where it was created. In fact I would advocate writing on each note. 'Community Currency, ethical money'. 'Created from the kindness of the people of Tewkesbury', or Totnes or Stroud etc. or whatever the case might be. The only competitive element would be to see which community is most generous. A note gifted into existence in Totnes, initially used to fund a local cause, but which eventually turned up in a Tewkesbury till would not in my opinion be a bad thing, in fact on the contrary as it would confirm that it is serving the purpose for which it was intended. It would be money serving us, as opposed to debt based money that serves the banks.
There is another aspect to this, perhaps just as significant. If we are transferring sterling into our community currency, the sterling remains in the bank ostensibly to under-write our currency But is sterling any more reliable than our own?. Is there anything behind sterling? The fractional reserve system has long since resulted in that not being the case. Can we not therefore move away from anything to do with debt based interest bearing money? Can we not under-write our own currency by investing the sterling principal wisely in community assets? By definition they would not remain liquid, but could in actual fact end up being much more valuable than money kept as sterling, eroded by inflation on deposit. In such a circumstance we will have effectively turned our debt based interest bearing money in to gift based money, paying interest, not charging it. We will have turned our existing system completely on its head.
What about if in order to encourage our community charitable giving we issued credits for every donation that represented a stakeholder interest in our community assets, specifically I am thinking energy production projects?. Our goal could be to make each community energy self reliant. We could also fund credit unions, local shop units with affordable rents for new ventures that meet certain criteria that benefit the community.
The potential is for each town to become a microcosm of self reliance, but interlinked with its neighbouring towns & cities right across the country with a new focus of sustainability, slowly but surely extricating itself from dependency upon corporate monsters, ravenous banks & fossil fuels. All the while Transition & REconomy could be providing guidance & support through a network of representatives who share a desire for a different kind of economic system where we once again have time to stop & talk & appreciate the gift of life deprogrammed from the fixation of how much we can accumulate if we are lucky, or where the next meal will come from if we are not.
Image Credits: Simon Carter
Here's some posts you might like:
Trackbacks for this post
Leave a Comment
- Admin (Shane Hughes) on The amazing story of community currencies in Brazil: Interview
- Diogo F on The amazing story of community currencies in Brazil: Interview
- Admin (Shane Hughes) on Herefordshire Economic Evaluation – reports now available
- Chris Dyer on Herefordshire Economic Evaluation – reports now available
- Sandie on The new economy in Brazil: Through the eyes of a REconomist
Tag cloudAsset transfer audit Bakery Bristol bus Business and livelihoods group Business case Cards Circular economy Collaboration Communication Cooperatives debt definition Economic evaluation Economics Energy efficient Energy resilience Enterprise group Events Features of the new economy Finance Funding Gift economy Growth Guest post Inspirations Investment Local currency Local enterprises Macro Materials Money Money saving Natural capital New economics foundation Outreach Prezi REconomy road trip Resource limits Resources Story Strategy Transition Enterprise Vision