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Complementary, Community & Ecological Currencies

Complementary, community and ecological currencies are generally local in nature and have no interest attached to them. In order to understand how they work, it is helpful to compare them with conventional money.

About 97% of the new money supply at present is:–

• created as debt to a credit institution;
• created out of nothing;
• issued by the banking system;
• national; and
• bears interest.

In contrast, all complementary, community and ecological currencies are:–

• created without debt to a credit institution;
• created by the participants themselves in a transaction as a simultaneous debit and credit;
• issued by individuals;
• local; and
• bear no interest.

The best way to understand the currencies is to first think of doing a favour for a neighbour – say, mowing a lawn – and, in exchange, your neighbour does a favour, maybe some baby-sitting, for you. A ‘favour’ can be anything from decorating and teaching to the offer of goods. However, with the currencies there is a difference – you can have favours done for you by others who are not strictly neighbours but instead live in the wider neighbourhood and are members of the neighbourhood scheme.

Neighbourhood and Community

The words ‘neighbour’, ‘neighbourhood’ and ‘community’ express very important qualities about the currencies. In essence, they enable expression of the best qualities of old village life including co-operation, direct and indirect barter, and concentration on what is practical and necessary. To work effectively, the schemes require a degree of trust and, if not that, knowledge as to whether somebody is, or is not, trustworthy. Participation in a scheme can reinvigorate those who have forgotten what they had hoped their lives would be about.

Perhaps best of all, the currencies enable anyone to make use of what they can offer to other people. Someone in a depressed mood might think that she or he had nothing to offer but participation in a scheme soon lifts spirits and reveals that what we have to offer is really only limited by the extent of our imaginations.

The currencies also have subtler, but no less important, benefits. When we buy something in a shop at present, we offer cash and get the item in exchange and that is the end of the matter. The currencies, however, encourage continuing interactions between people who would not otherwise be in contact. By strengthening social relationships they are bringing back the networks which can bring help just as much as they can contribute to reducing crime. Community breakdown has happened in most societies today: the currencies are a way of reversing the trend.

Around the world

There are around 2,500 complementary, community and ecological currencies in the world. Examples are:–

Local Exchange Trading System (LETS)
LETS is the most common complementary currency. Invented by Michael Linton and David Weston in British Colombia, Canada, there is a central computer and each participant’s account starts with a zero balance. The participant then agrees to buy something, be it a good or a service, or sell something in exchange for ‘green dollars’. Payment can be all in ‘green dollars’ or partly in ‘green dollars’ and partly in normal cash. The thing to notice is that the ‘green dollars’ are not scarce – as soon as two participants agree to trade, the ‘green dollars’ are available. Moreover, all participants can easily discover the level of their balances and those of other participants. In 1999, there were about 450 LETS schemes in the UK. For further details see the website for Letslink UK

Time Dollars
Devised by Edgar Cahn, one person does something and gets a one-hour credit. The person for whom something is done has a reciprocal one-hour debit. Credits can be spent and debits redeemed with anybody else in the Time Dollars scheme.

Ithaca Hours
A twice-monthly newspaper advertises the products and services of people and businesses who accept Ithaca Hours, a paper currency issued in Ithaca, New York State. Each Hour represents one hour’s work and is worth $10. Advertisers may say that they want a percentage, say half, of their payment in ordinary dollars and half in Ithaca Hours.

The PEN (Philadelphia-Eastern Neighbourhood) Exchange
The PEN got off to a slow start because people did not realise that what they had to offer would be welcomed by others! It is now so successful that people often help each other as gifts rather than using the Exchange. A great community spirit has been created.

WIR, Switzerland
This is the oldest continuously existing complementary currency, started in 1934. Today the scheme has 80,000 members and operates in four languages. A member either sells goods or services to another member or obtains credit from the central administration. So WIR is a hybrid of mutual credit (whenever trading occurs between members) and fiat currency (whenever a loan is made from the central administration). The loans have a very low interest rate and often collateral (security) is required to ensure repayment.

Apparent weaknesses of the currencies

The currencies have three apparent weaknesses:–

• They cannot be used to pay government taxes.
• They are local, not national.
• They are not easily converted into food or other daily basic needs.


However, such is the originality being shown, that the distinction between a complementary currency and a conventional one is being blurred. Thus in some areas restaurants, cinemas etc. are encouraging use of their spare capacity at quiet periods by accepting complementary currencies for, say, 50% of the usual price. Nevertheless, there remain the two big hurdles for complementary currencies to overcome – legitimacy as payment for government taxes; and national-wide, rather than only local, acceptance.

To which should be added the problem that the currencies require some form of central administration. At present, volunteers do the work. Global Justice, however, proposes secure incomes throughout the population and such incomes will, in practice, provide a solution to the central administration problem by ensuring that the volunteers have income.

Those things said, the burgeoning number of complementary currencies demonstrates that they fulfil deep economic and social needs. Frustration from unemployment, poverty, social exclusion or loneliness is too often the lot of many but it can be overcome, or at least mitigated, through use of the currencies.

The need for informed and courageous people

It should be remembered, however that the currencies are complementary and that, in the search for a democratic means of pursuing the national and international issues of Global Justice, informed and courageous people will be needed. It is likely that a good source for them will be the participants in the currencies.

The currencies remind us that we need to create an economy of service rather than a self-service economy, which is what is currently exhausting us all. Indeed our human economy needs reference to the eternal principles that uphold the universe. Often the principles are personalised and named God. By God is meant the influence whose energy pervades everything and everyone with the life energy itself, effective but not coercive. There is no place where God is not: God is in everything; in every cell of our bodies; in every atom of the universe. Thus the essential nature of everything is divine and we are all part of the same divine essence.

N.B. Over time, in the Global Justice economy, interest-free money will come to replace interest-bearing money and not be in addition to it. Since it is replacing, it cannot be inflationary.

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