A Local Currency For Local People
What is the future for local currencies?
A local currency (eg the Totnes Pound or the Lewes Pound) is money that can be spent in particular local establishments. (Usually it acts as a complementary currency, to be used in addition to the national currency). The idea is to encourage spending within a local community, especially with locally owned businesses. This helps to reduce the environmental footprint, amongst many other advantages. Local currencies however aren’t necessarily backed by a national government, and they might not be legal tender in some cases. Local currencies can also raise awareness of the state of the local economy, which is of particular help when it comes to food production.
Can local currencies work in the real world? One of the main supposed problems is security. But the Brixton Pound is as secure as a sterling bank note, with nine features, including holograms, micro-printing and watermarking. Meanwhile, Paybytext is even more secure, using well established, secure and resilient web technology. So far there have been no reported fraudulent transactions.
Meanwhile, in alternative-friendly Lewes, 5p in every pound goes into a community fund. Some have argued that this means traders who sign up are essentially accepting a discount on their goods for the good of the community. Well, the good of the community is the idea – the traders are part of the community after all – but this levy is a tax, not a discount. As for the idea of locality, the whole process means shops in the scheme have a captive customer base – the main point of a local currency.
One of the other advantages of a local currency is how it provides what Manfred Max-Neef called economic invisibility, by which he meant a combination of independence and self-support inside an environment of capitalist exploitation, with that exploitation mostly arriving through national or international corporations. These independent communities, and the individuals in those communities, are free from the perpetual exploitation that is the most significant hallmark of capitalism.
Over in western parts of Britain, the Bristol Pound – backed by a credit union – promises to be even more tech-savvy than its Lewes counterpart, with the possibility of paying by smartphone as well as with real-world notes. Also included is online banking, with deposits backed by the Financial Services Authority (because the currency is backed by the Bristol credit union). This is the first UK scheme where businesses will be able to use the money to pay tax, including business rates – they won’t be stuck with ‘savings’ in currency none of their suppliers accept. Moreover, the mayor of Bristol, George Ferguson, as of 2013 takes all his salary in Bristol Pounds, while the chief executive takes ₤5,000 of her salary in local. The city also earns local currency from market traders who use their ₤B earnings to pay their pitch fees.
During the Depression, many British local authorities created their own local currencies to help put people back to work. They were eventually closed down by central banks and central governments – a more obvious deed of exploitation could hardly be dreamed up. But humanist/green policies like local currencies do work today, and their future, albeit in the long term, look positive.
So if you want to do one thing to extricate yourself from the economic disaster of globalisation and continuing capitalism, go local. The only other thing as powerfully effective is to become a vegetarian!