I notice that Exeter is the latest city to launch its own local currency here. Similar ventures have happened in Brixton, Lewes, Totnes, Stroud and Bristol among other places in the UK. This set me thinking about the purpose and feasibility of 'local money'.
Economics as practised globally are designed to attract money upwards; the rich get richer and the poor get poorer. Large corporate chains extract money and siphon it away from the community where it is spent. Sometimes there are small schemes to invest a tiny proportion back into the local community. I'm sure we can all think of the supermarkets that present us with a token so that we can choose which local charity to support. I'm not knocking this - it certainly makes you more aware of local charities - but it's a mere drop in the ocean.
A local currency is an intervention that can help reverse the trend. Used in conjunction with Time Banks (where the currency is hours), LETS (Local Exchange Trading Scemes) and Credit Unions, a local currency encourages investment into the community, into local jobs and businesses and into the skills of local people. As we all know, paying off the UK's debt (and I'm not making a party political point here) will continue to require reductions in centralised public spending and this, in turn, is going to require local communities to be more resilient and self-reliant. So the time is right to consider the impact a local currency might have on your neighbourhood.
How does it work? Well, there are lots of different models world-wide and in the UK some of which have been in operation for over 20 years. Generally, a local currency operates alongside the national currency. It stimulates custom for local shops and businesses, encouraging them, in turn, to use local suppliers. This raises the acquisition of gardening, agricultural and small scale manufacturing skills among the local community and improves the range and profile of the local job market. It encourages life-styles that combine national and global work with local activity. Besides setting up a local currency, communities often make it possible to invest in local share schemes, to contribute renewably-sourced energy into locally owned energy schemes and to borrow from community controlled Credit Unions. All money systems are meaningless without trust; local schemes enable the building of a deep level of trust and understanding between individuals and businesses serving the same area with its common needs. Often the result is a flowering of co-operation and creativity in terms of local projects. One business's waste may be a valuable resource for another, one business's skill requirements may overlap with another's and so on.
The aim is not to abandon global currencies but to move gradually toward a healthier and more sustainable relationship between global, national and local control of economic organisation. What is sought is to create a diverse system of alternative currencies and financial institutions that are able to function robustly alongside the current energy intensive, globalised, corporate systems that dominate our vision of the economically possible. Over time this will lead to more human-scale, locally appropriate solutions to the challenge of providing and distributing essential resources. Local communities will have more influence in deciding what goods and skills they need and there will be a reduction in the transportation of goods. Low carbon solutions to energy demand can be sourced and one big result is what has been called 'the mindful use of money' where cause and effect are more locally controlled and there is a corresponding focus on local priority and need.
Naive and unrealistic or the only way to survive global warming and the peak oil crisis? To find out more, an interesting read is Peter North's Local Money: How to Make It Happen In Your Community, published by Transition Books, 2010. As well as looking at the philosophy and history behind local money, he examines in detail some of the schemes in operation and outlines the kinds of context in which local currencies have emerged and flourished through a process of committed learning-on-job.