There are local or community currencies in several British towns, including Bath, Stroud, Totnes, Calderdale, Bristol and Brixton – and in many countries around the world. The most recent reports have come from India and South Africa.
Jeremy Williams writes that with the financial system in disarray and the economic downturn, local currencies come into their own: “They are counter-cyclical: when the mainstream economy falters, the alternative economy soars . . . In times of recession, it is hard to generate new cash for investment, especially for local businesses or small initiatives. Alternative currencies can create new opportunities in the same way that banks do, but much more organically”.
Shopkeepers in Bhopal, India, have floated their own currency. Faced with the shortage of Rs. 5 coins and undamaged notes, shopkeepers have introduced a plastic coin as a parallel currency – which they are willing to trade with.
A liquor shop proprietor in the market initiated the scheme which is supported by other shopkeepers selling snacks, stationery, eggs and other ‘edibles’. They accept the coin ‘issued’ by the liqour shop and after having collected five or 10 such coins, return them to the liquor shop and take Rs. 100 or Rs. 50 in lieu of these.
As the boy at the liquor shop counter hands over the coin to a customer, he would say “you can use it anywhere in five no market stop” before you could ask him any question. A person at the counter sits with a bag full of these plastic coins.
On Radio 4 recently there was a report about Orania, a town in the northern Cape populated by white Afrikaners. They are working towards building a self-sufficient community.
Since 2004 they have used notes designed by a local artist, known as the ora, which can only be spent within the town. As in many other schemes the Afrikaners want to keep money in the local economy.
David Boyle – in his book Funny Money – mentions a deli that wanted to move to a new premises. When the bank refused to lend the money they needed to do this, the deli owner invented his own currency – the ‘deli dollar’. A deli dollar was simply a voucher that could be redeemed later in the year. The owners sold $5000 worth of deli dollars to regulars, and created a loan for themselves from their customer base. As customers brought the vouchers in over the next year, the loan was re-paid in food.
His conclusion: though these currencies cannot do everything mainstream currencies do, they can be effective in many areas where dollars and pounds are simply not effective:
“They do not build communities, they do not respond to needs, they do not build families, they do not tackle poverty. Local money does, and for that reason, I believe it will work.”