A small but growing number of cash-strapped communities are printing their own money.
Borrowing from a Depression-era idea, they are aiming to help consumers make ends meet and support struggling local businesses.
The systems generally work like this: Businesses and individuals form a network to print currency. Shoppers buy it at a discount — say, 95 cents for $1 value — and spend the full value at stores that accept the currency.
Workers with dwindling wages are paying for groceries, yoga classes and fuel with Detroit Cheers, Ithaca Hours in New York, Plenty in North Carolina or BerkShares in Massachusetts.
Ed Collom, a University of Southern Maine sociologist who has studied local currencies, says they encourage people to buy locally. Merchants, hurting because customers have cut back on spending, benefit as consumers spend the local cash.
About a dozen communities have local currencies, says Susan Witt, founder of BerkShares in the Berkshires region of western Massachusetts. She expects more to do it.
Under the BerkShares system, a buyer goes to one of 12 banks and pays $95 for $100 worth of BerkShares, which can be spent in 370 local businesses. Since its start in 2006, the system, the largest of its kind in the country, has circulated $2.3 million worth of BerkShares. In Detroit, three business owners are printing $4,500 worth of Detroit Cheers, which they are handing out to customers to spend in one of 12 shops.
During the Depression, local governments, businesses and individuals issued currency, known as scrip, to keep commerce flowing when bank closings led to a cash shortage.
ittsboro, N.C., is reviving the Plenty, a defunct local currency created in 2002. It is being printed in denominations of $1, $5, $20 and $50. A local bank will exchange $9 for $10 worth of Plenty.
"We're a wiped-out small town in America," says Lyle Estill, president of Piedmont Biofuels, which accepts the Plenty. "This will strengthen the local economy. ... The nice thing about the Plenty is that it can't leave here."
I could pay my fuel bill in local currency? Cool.
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We belong...
To a local currency exchange:
Fourth Corner Exchange
Local currency avoids many of the problems of the credit based economy. Ours does not actually print scrip. It is all done electronically on a web based exchange system.
Couple more informative links about local currencies:
Doug Rushkoff - Let it Die
Doug Rushkoff - Hack Money
Rototillaphiliac
Those are very interesting on local currency...
And I wish you would post more about your experience, just on a mundane, every day level, to give people an idea how it would work.
Also, you write:
Any particular platform? Is it downloadable?
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi
Anyone familiar around here...
...with Octavia Butler's Parable of the Sower?
Not sure I understand the point?
Why would I invest in a currency that is only useful in certain locations? If the local shops are trying to stimulate by selling $100 for $95 then why not just give a 5% discount? Isn't that the same incentive without a middle man scrip?
The Point
The 'middle man scrip' when used at local shops stays within the local area, it is recycled over and over again at local spots. It has NO value outside the area. Each time you shop at a large chain store like a Wal-Mart .80-.90 cents out of every dollar immediately leaves the area headed back to where ever that corporation is located and then on to their overseas suppliers.(no help for local workers but great for China's new middle class)
Local scrip keeps money circulating in a community thus boosting business.
Fourth Corner Exchange is great. Two thumbs up!
Mark
Editor Community Currency Magazine
editor [at] ccmag [dot] net
Mark, feel free to post more
What I'd be most interested in is stories of how it works in real life... On the ground, as it were.
"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi