In November of 2009, I gave a presentation at the conference on Michigan’s Future Energy, Economy & Environment, at Crystal Mountain Resort in Thompsonville, Michigan. More than 10 years later, this presentation is still timely.
Ken Freeman has recently augmented and adapted recordings of that presentation to produce this new video, titled, Exchange Revolution, which has now been posted on our Beyond Money Podcast site. It is a comprehensive description of the what and how of transcending the political fiat money regime, and building a new equitable system of value exchange.
It can also be found on YouTube at https://youtu.be/MvTMcvVzNuQ. The transcript can be found here.
Local Currencies—what works; what doesn’t?
By Thomas H. Greco, Jr.
Community currencies, and mutual credit clearing exchanges are key elements in the emergence of a new economic paradigm. These approaches to enabling the exchange of value are not entirely new, they have a long and varied history, but their enormous potential and possibilities have become widely recognized only within the past three or four decades. This is largely the result of increasing disillusionment with conventional money and banking systems, the emergence of Bitcoin and other non-governmental, non-bank currencies, and the growing interest in decentralized, peer-to-peer approaches in all realms of human activity.
The latest wave of exchange alternatives has seen the emergence over the past few decades of scores of commercial trade or “barter” exchanges, and hundreds, if not thousands of local currencies. The scores of commercial trade exchanges that have been operating in many countries around the world for the past four or five decades enable moneyless trading among their business members, and collectively “clear” tens of billions of dollars’ worth of trades annually. Their success provides the strongest proof of the viability of decentralized, non-governmental, non-bank, moneyless exchange options.[i]
On the other hand, the plethora of local and community currencies that have popped-up all over the world have not been so encouraging. The avowed purpose of local currencies has generally been to keep money circulating locally instead of “leaking out” of the community. It is hoped that by keeping exchange media circulating within the local community, the vitality of the local economy will be enhanced and local businesses will be better able to compete with large global corporations and merchandising chains.
That is well and good, but it misses the main point of what ails our communities, and our world. It is the very nature of the dominant political money system that is problematic. So, localization is not the end in itself, but the necessary means to an end, which is personal re-empowerment and freedom; community resilience, sustainability, and self-determination; and the revitalization of democratic governance. Community currencies and exchange systems provide an essential tool kit for achieving those goals but they need to be designed in such a way as to make people less dependent upon political money and banks. So long as we remain harnessed to the dominant money and banking regime, there will be little chance of significant improvement in the human condition, in fact, the trend has been exactly opposite. …. Read the full article or download the full PDF.
I helped RHD set up their Equal Dollars currency back in the late 90’s. Here is a recent report about it from CNN. Sorry about the annoying commercial at the beginning.–t.h.g.
How I buy groceries without cash – Video – Personal Finance.
Many people have gotten at least some sense of the inherent empowering potential of community exchange alternatives, but have no idea of how to make it happen. They ask, “How can we go about launching a community currency that will be widely accepted and make a significant beneficial impact on the local economy?”
Achieving the desired results requires proper system design, effective implementation strategies, and adequate management practices. These are matters that I have addressed in my books and articles. My favorite, and the most empowering approach, is to organize and/or support local credit clearing exchanges or associations that include several major businesses, service providers, and/or local government entities. These “trusted issuers” provide the economic foundation needed for a high volume, credible medium of exchange.
That is the centerpiece of the multi-stage regional development plan that I have described in my latest book (Chapter 16) and elsewhere. There are, however, other possible approaches that may be taken as preliminary steps to prepare the ground. These include loyalty schemes, discount or rebate programs, and currencies based on charitable donations.
The choice will depend upon the prevailing economic conditions, local circumstances, and available resources. One promising approach based on in-kind donations from local businesses to the non-profit sector has been articulated by Michael Linton, the originator of LETS. Linton calls this plan Community Way. He describes the basic plan in these videos: Part 1 and Part 2
Community Way monetizes some of the excess capacity of local businesses (transforms their valuable goods and services into a spendable medium), and allocates it to non-profit organizations and community improvement groups which can then spend it or sell it to cash-rich supporters who will then redeem it for donors’ goods and services..
There are of course a few details that must be added to make this approach operational. There needs to be some entity (non-profit) that will organize, recruit, and manage all of the myriad details involved in the process. That entity must eventually generate sufficient revenues to cover its costs and sustain the operation of the program. – t.h.g.