Monday, August 17, 2009
This story about local currencies must have popped up in about ten different places since it was published last week at the LA Times. The public apparently has an odd fascination with the idea that something other than the U.S. dollar might be also be worth something more than its intrinsic value of zero.
Local currencies cash in on recessionTreasury Secretary Tim Geithner and Federal Reserver Chairman Ben Bernanke are certainly not going to like the sound of that - competing currencies.
Communities in North Carolina, Massachusetts, Arizona and elsewhere print their own money to encourage shoppers to patronize local businesses. Local money was last popular during the Great Depression.
The stimulus for this mill town turned artist's colony arrived in the form of green bills bearing sketches of herons, turtles and trees.
A few dozen local businesses banded together this spring to distribute the Plenty -- a local currency intended to replace the dollar. Now 15,000 Plenties are in circulation here, used everywhere from the organic food co-op to the feed store to, starting this month, the Piggly Wiggly supermarket.
Last popularized during the Great Depression, scrip, or locally created stand-ins for U.S. currency, is making a comeback. Pittsboro, population 2,500, is one of a handful of communities that launched its own money in recent months. It reports an avalanche of calls from other communities that have lost faith in the global financial system.
The thing is, this particular currency is much better looking than the staid old greenback, even after its recent redesigns.
And the "Plenty" will probably hold its value better to boot.
"The Plenty is not going to get siphoned off to Wall Street, or Washington, or make a stop in Bentonville on its way to China," said B.J. Lawson, a software entrepreneur who is president of the board of the Plenty cooperative. "It gives us self-reliance."A few local businesses reportedly pay their employees with Plenties.
Over the last two decades, a few communities have created their own cash in an effort to preserve local ties or businesses.
These whimsically named bills -- such as the "BerkShare" or the "Cheer" -- can be spent at neighborhood merchants, who then can use them at other local shops or, should they choose to, trade them in for dollars or other goods.
So far, none of them face the extreme pressures that popularized scrip during the Depression -- bank failures that dried up the supply of cash in circulation, requiring governments to come up with novel ways to keep commerce alive.
"Right now there's a lot of interest because of the economy, but a lot of these efforts come about to rebuild social capital," said Ed Collom, a sociology professor at the University of Southern Maine who studies local currencies. "There's been concern about lack of trust, neighbors not knowing each other. They see this as a way of neighbors helping each other."
They better be careful, because, according to this report out of Las Vegas, the government doesn't like that sort of thing one bit.