This article comes from The Bay Guardian, an alternative weekly in San Francisco, CA, USA . The Bay Guardian has a website: http://www.sfbg.com
August 27, 1997
Printing their own
A national currency sucks local communities dry -- so Berkeley residents are launching a local one.
By Eric Stephan
SHOW A GREEN U.S. dollar to Jyl Safier and Miyo Sakashita, and they don't just see a potential coffee or bagel. They see a vehicle by which economic value is sucked out of local communities and into the service of distant corporations. They see an anonymous coupon that keeps individuals strangers to one another. In a tattered U.S. dollar they see the root of a host of social, ecological, and economic problems -- but one that can be simply, and legally, replaced.
That's right, the mighty dollar can be replaced. Like people in 40 or so other communities throughout the United States, Safier and Sakashita have discovered that there has never been a law against printing a local currency. Far from it: during the Great Depression, as many as 400 local currencies circulated. (The national currency itself didn't even exist until the nation was almost 100 years old.) And just as communities in the bankrupt 1930s used local currencies to regain their grasp on their own resources, which had been declared worthless when the economy crashed, these Berkeley residents believe that by printing their own they can stem the outward flow of value that carries local wealth into the hands of global institutions -- where it is invested in projects that work in direct opposition to the local community's interests.
In May, a group founded by Safier and Sakashita introduced a new local currency for the Berkeley area -- one that will stay put in the community where it was born. The currency, titled BREAD (Berkeley Region Exchange and Development) is unlike the U.S. dollar in that it is backed by an absolute economic value (the dollar finally lost all ties to gold in 1970) -- the labor of the person presenting it. When exchanged for goods, one BREAD hour is valued at $12. BREAD comes in hour, half-hour, and quarter-hour denominations and is redeemable for that amount of labor or an equivalent value in goods. The government requires only that any tax owed is rendered unto Caesar in U.S. currency. Therefore, a Berkeley resident paying for a $3 sandwich with a quarter-hour BREAD note must also hand over 25 U.S. cents for sales tax.
"Everything we do is economically related," Sakashita says. "By changing our currency and economy, it allows us to bring all of these economic and social issues together, to address a multitude of things at once."
So far, the project has made rapid progress. In only a few months BREAD has recruited 70 members, listed in its directory, who offer services as diverse as architecture, elder care, investment counseling, psychotherapy, Web site production, and carpentry. Sakashita says that so far $1,680 worth of BREAD -- 140 hours -- has entered circulation.
"People in the community have just taken off with it," Sakashita says. "One person decided to have a potluck to introduce their friends to BREAD. Another one already had a community group and they got together and had a group garage sale, accepting BREAD as payment. It's completely word of mouth."
Debt versus sweat
The drive to keep wealth within communities is anything but a sterile economic goal. Rather, local-currency advocates argue, it is directly tied to the quality of life: by shifting residents' business to the local economy, the alienating aspects of shopping in nationwide chain stores are avoided.
"When we walk into a department store to get something, we don't know where it was made or where the materials are from. You can't dick around on the price, and then you go home. It's an isolating experience," says Jhym Phoenix, who has helped launch four local currencies and consulted with the BREAD organizers. "Clerks in the store feel disconnected, and we feel neglected. It's just a bad system. We should just stop it."
"U.S. dollars are based on debt, whereas ours are based on cooperation," Sakashita says. "By just switching currencies you can foster values in the economic system that didn't previously exist."
"It's not just some fluffy desire for neighborhood harmony," says Andrew Bartlett, a San Francisco resident who has used Berkeley's BREAD to buy and sell child care. Bartlett is part of a group of San Franciscans that is planning to introduce a local currency in our city by fall. Titled RAFT (Resource, Access, Finance, Trade), the effort is headquarted at an organization called Partnerships for Change, based in the Presidio. "Community needs to be built on economic transactions and economic interdependence. [Local currency] values community service and women's work more than the traditional money system. And it gives you an excuse to know your neighbors."
The next big step is for local businesses to sign on, and a number of Berkeley restaurants have already come knocking. Though it might seem a tall order to convince wary shopkeepers of the value of a new currency, precedents have demonstrated that local currencies and local business get along famously. For proof, currency advocates need only point to Ithaca, N.Y.
The birthplace and shining example of the local currency movement was the 1991 effort in Ithaca by Paul Glover to launch a new currency that he titled Ithaca HOURS. The 40-odd local currencies that now exist nationwide were inspired by the spectacular success of the Ithaca experiment -- to date, $63,000 worth of Ithaca HOURS have circulated through millions of dollars of transactions, all of which returned wealth directly to the local economy. It's difficult to talk to local-currency activists without seeing their eyes glaze over when they speak in reverent tones of the Ithaca project.
In Ithaca, 360 businesses accept Ithaca HOURS as at least partial payment for goods and services. Residents can use the local currency to get into movie theaters, to exercise at health clubs, to get produce at the farmers market, to eat at dozens of restaurants. A number of landlords accept the local currency in partial payment of rent.
And in the example that truly marks a local currency's coming into its own, Ithaca residents can use HOURS to help pay for health care: Cayuga Medical Center, Ithaca's main hospital, recently began accepting HOURS for the first $20 of any payment. What would a hospital want from the local economy? "The chief purchasing officer says he thinks one of the first things they'll buy is local organic food," Glover says. Of the $20 limitation, Glover says that's how he advises all new participants to start. "I ask them to start by taking HOURS at a small rate, then gradually expand as they learn more ways to use them." Berkeley's BREAD organizers are using the same technique. "We advise [businesses] to use caution -- maybe start accepting it on only slow days. That way you have control over how much comes in," Sakashita says. "Then they can start giving it to their employees, who can use it to get haircuts, and so on."
Paul Glover's advocacy has a bare-bones, down-to-earth manner that hints at how he managed to push through a massive project with such success: no time was wasted on hot air.
"Help out those who are ready to try it, be friendly to those that aren't, and allow it to happen at its own pace." This was Glover's response when I asked him for advice to people trying to set up a local currency. Glover, who extensively researched the history of local currencies before launching his effort, is respected by community activists nationwide, but he is modest about his accomplishment. "The fact that the community was ready to do it is the main credit," he says. "It expands as people explain it to one another, much faster than I can."
Small is beautiful
The institutional champion of the local currency movement is the E.F. Schumacher Society in Great Barrington, Mass., which eagerly keeps tabs on community-based economic efforts that relate to the philosophy of Ernst Friedrich Schumacher, the economist and author of the 1973 book Small Is Beautiful: Politics as if People Mattered. I spoke with the society's Erika Levasseur, who tracks the various efforts at creating local currencies and edits Local Currency News, the society's newsletter for the movement. Levasseur can recite from memory the particulars of the currency movements in Portland, Ore., Philadelphia, and New Orleans, which boasts Mo Money, the first local currency to be based in a public housing project.
Levasseur isn't so gung ho as to deny that the battle is often uphill. "The biggest problem facing these movements is burnout," she says. "It always takes a lot of investment in education. This is such a new concept to a lot of people. To those of us who think about economics a lot it seems simple, but in the general public it's a new idea."
"It's a real cultural shift," she says. "Many of these [currency programs] have almost no funding at all." But, she says, the phenomenon is "only getting stronger."
The prospect of endless explaining doesn't daunt the BREAD group. "It winds up being an educational tool. When you tell people that we can print our own money ... they get so shocked," Sakashita says. "They say 'Is that legal? Ha-ha-ha.' Then they want to know why, and it becomes a chance to talk about what is happening -- about the multinationals, globalization. It's a neat tool to raise issues, and you don't have to be superinvolved to take part in it. It's appealing to a larger audience."
At a recent meeting of the BREAD group, one participant asked the visiting Jhym Phoenix, "Why isn't this all set up on computer? It seems like a natural."
Phoenix told a story. "When I had set up the local currency in Boulder, Colo., and it had gotten quite a bit of press, I got a phone call from the IRS. And they said, 'Could you please send us copies of all your files, describing the amounts of the transactions and the names of the people involved?' "
"I just said, 'All I do is publish this directory of people advertising their services, and I also print this funny money, which isn't worth anything. I don't have any info about what people have done with it. Sorry!' They never called me back. This system is strong because it's totally decentralized."
For the same reason, the currency can catch on like wildfire. The principle of decentralization is cited as an important factor in the explosion of the Internet. Which, though it serves as a counterexample of the sort of localized strength that BREAD hopes to create, would be a fine model of success. As Levasseur puts it, "How long until this is a naturally in-the-wallet experience for everyone, we don't know. But the critical mass isn't too far out of sight." http://www.radio4all.org http://www.radio4all.org/freepacifica
****** A-Infos News Service ***** News about and of interest to anarchists
Subscribe -> email MAJORDOMO@TAO.CA with the message SUBSCRIBE A-INFOS Info -> http://www.tao.ca/ainfos/ Reproduce -> please include this section