Taking charge of our community with local currency
“Money is like an iron ring we've put through our noses. We've forgotten that we designed it, and it's now leading us around. I think it's time to figure out where we want to go -- in my opinion toward sustainability and community -- and then design a money system that gets us there.”
--Bernard Lietaer in Beyond Greed and Scarcity
Cleveland Heights and University Heights are wonderful places to live. We possess tremendous physical and human assets and diversity. But an increasing number of residents and community-based businesses are hurting due to, among other factors, the current financial crisis. The worst may still not be over with more homeowners, businesses and banks facing loans that can’t be repaid.
Our state and federal tax dollars are going to the wrong places while many banks still refuse to increase lending after receiving billions of federal bailout dollars.
While the need to organize for more sane and humane federal budget priorities and fundamental change to our monetary and financial systems is urgent, so is developing ways to support ourselves and our communities. This should be done now, where we live, building on the assets we already possess.
A local or community currency is one way.
During the Great Depression, when credit was tight and too few dollars were available for trading for essential goods and services, municipalities across the nation legally printed and circulated their own money. Among them were University Heights, Shaker Heights and 30 other Ohio cities, towns and villages. Money was reinvented to meet local needs.
Throughout history, money has been whatever people accept it to be – from tobacco, hides, gold, and silver to nonprecious metals, sticks, and paper.
It’s time to reinvent money again – but this time to expand it locally to connect businesses and residents who are rich in available services, goods, skills and time but dollar poor. The mere absence of national dollars should not prevent local transactions from happening.
A local currency is money printed, circulated, and accepted by people within a designated community. It has boundaries and roots that communities can control. This differs from a dollar that can be in Cleveland Heights today and China tomorrow or in University Heights today and Uzbekistan tomorrow. Local currency is meant to be constantly circulating – not hoarded, gaining interest or speculated. It’s backed by goods and services offered by participating individuals and businesses.
There are many economic advantages of using community currencies. They supplement the amount of scarce official money, enabling local businesses to sell more of their goods and services and consumers to buy them. They increase the ability of local businesses to compete with large corporate chains since only local businesses accept them. They result in greater income, which protects jobs and reduces the need to borrow from banks and to use credit cards, thereby diminishing the risk of default. Finally, they serve as a partial “safe harbor,” a local economic breakwall to the national manipulation of interest rates and money supply.
Community currencies exist legally in more than 35 countries; local exchange programs number more than 4,000 worldwide. Two of the most successful systems in the U.S. are in Ithaca, NY www.ithacahours.com and the Berkshire region of western Massachusetts www.berkshares.org, involving hundreds of businesses and community organizations and thousands of people who are circulating more than $1 million worth of local money.
It’s time we take charge of creating and circulating our own money – interest free, democratically allocated, self-adjusting, stable and sustainable – that serves our needs.
Greg Coleridge is director of the Northeast Ohio American Friends Service Committee and a Cleveland Heights resident.
FutureHeights would like to know what you think about the idea of creating a local currency. Respond to the Daily Question at www.heightsobserver.org.
If you are interested to meet with other residents to explore this concept, send your name and phone number or e-mail address to email@example.com or call 216-320-1423.