Some communities have created local currencies that can be used for a wide variety of goods and services in that region. A book that describes how to do this, with examples from Ithaca, NY, and other places, is Time Dollars: The New Currency That Enables Americans to Turn Their Hidden Resource-Time-Into Personal Security and Community Renewal, by Edgar Cahn and Jonathan Rowe. Since the book came out, many more communities have begun the process.
There’s a song that goes, “From you I receive, to you I give. Together we share, and by this we live.” Community currencies offer a tangible way of doing this.
Local currencies are perfectly legal; in fact, some local government agencies take part in Minnesota and Maryland. Created by local groups, the currencies can be used for exchanging services and often also for goods.
Community currency has potential for enhancing the sense of community and vitalizing the economy. It looks like quite a lot of work to set up, and not something that can be done overnight, but I find it tremendously exciting. Teenagers could do a variety of things and gain a sense of what it takes to run a successful small business; people on limited incomes could find it endlessly useful; artists and craftspeople could sell more wares, and so on. Unemployment would be lessened, since self-employment would be a much stronger option.
Perhaps the best-known local currency in the United States is Ithaca HOURS, in Ithaca, NY. One Ithaca HOUR is pegged at a value comparable to $10, and while professionals who are used to earning a lot more per hour are permitted to charge more, there is an egalitarian spirit that means that many of them don’t. You always have the choice of taking part HOURS, part regular dollars for the goods or services you sell. The bills are designed carefully, have serial numbers, and are printed on special paper (often hand-made), so that they would be very hard to counterfeit. They come in several denominations.
Since there is no incentive to save the HOURS, they change hands more frequently than the national currency. Here is a quote from the Ithaca HOURS website, which doesn’t seem to be up anymore:
Ramsey has sold bagels for HOURS at Ithaca Bakery and bought landscaping, meals, printing, air conditioning consulting, eco-goods, eyeglasses, insulating window shades, and groceries… HOURS are a regular part of his business income. “We count hours like taxable cash income and expense. There’s a separate HOUR account in the computer.”
He adds, “HOURS keep people in our community employed better than dollars that leave the community. Dollars that go to large corporations do not really trickle back down, they concentrate capital, making the rich richer and the poor poorer… What’s better about HOURS is that since you can’t bank them, you have to spend them to benefit, so you don’t get that concentration of capital.”
Barter has been growing in popularity in recent years, and local currency carries the concept further. If you wanted a massage, and had an excess of firewood, with barter you would have to look for a massage therapist who wanted firewood. With HOURS, you could find someone who wanted firewood and find a massage therapist, and they wouldn’t have to be the same person. Most communities with HOURS or similar currencies publish newsletters and member directories, listing what people are offering and what they are looking for.
While researching alternative currencies on the internet, I came across the thinking of a man named Bernard A. Lietaer, who comes from a strong background in international banking. He thinks that “local currencies will be a major tool for social design in the 21st century, if for no other reason than employment.” His research encompasses currencies all over the world, throughout history. He discovered that in ancient Egypt, during the Middle Ages in Europe, in Austria in the 1930s, and in the United States in the 1830s, 1890s, and 1930s, local currencies existed. Seems their time is coming around again!