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
|• created as debt to a credit institution;
• created out
• 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;
by the participants themselves in a transaction as
a simultaneous debit and credit;
• 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
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
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.
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
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.
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
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
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
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
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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