Alternative Currencies Grow in Popularity

Judith D. Schwartz
TIME
Dec. 14, 2008

Most of us take for granted that those rectangular green slips of paper we keep in our wallets are inviolable: the physical embodiment of value. But alternative forms of money have a long history, and appear to be growing in popularity. It’s not merely barter, or primitive means of exchange like, say, seashells or beads. Beneath the financial radar, in hip U.S. towns or South African townships, in shops, markets, and even banks, throughout the world people are exchanging goods and services via thousands of currency types that look nothing like official tender.

Alternative means of trade often surface during tough economic times. “When money gets dried up and there are still needs to be met in society, people come up with creative ways to meet those needs,” says Peter North, a senior lecturer in geography at the University of Liverpool, author of two books on the subject. He refers to the “scrips” issued in the U.S. and Europe during the Great Depression that kept money flowing, and the massive barter exchanges involving millions of people that emerged amidst runaway inflation in Argentina in 2000. “People were kept from starving [this way],” he says. (Find out 10 things to do with your money.)

Closer to home, “Ithaca Hours,” with a livable hourly wage as the standard, were launched during the 1991 recession to sustain Ithaca, New York’s local economy and stem the loss of jobs. “Hours,” which are legal and taxable, circulate within the community, moving from local shop to local artisan and back, rather than “leaking” out into the larger monetary system. The logo on the Hour reads: “In Ithaca We Trust”.

See also: The Lewes Pound (below)

Alternative (or “complementary”) currencies range from quaint to robust, simple to high-tech. There are “greens” from the Lettuce Patch Bank at the Dancing Rabbit Ecovillage in rural Northeastern Missouri. In Western Massachusetts one finds fine-artist-designed BerkShares, which are convertible to U.S. dollars. According to Susan Witt, Executive Director of the E.F. Schumacher Society (the nonprofit behind the currency) more than $2 million in BerkShares “have been issued through the 12 branches of five [local] banks.” And in South Africa, proprietary software keeps track of Community Exchange System (CES) “Talents”; one ambitious plan is to make Khayelitsha, a vast, desolate township of perhaps a million inhabitants near Cape Town, a self-sustaining community.

The currencies are generally used in conjunction with conventional money, as in using local currency at the farmer’s market and regular greenbacks at the supermarket. “It doesn’t try in any way to replace cash,” says Christoph Hensch, a Swiss national and former banker now living in Christchurch, New Zealand. Rather, it offers a way “for people to share and redeem value they have in the community.” He says the currencies are most useful in geographical areas or social sectors where money doesn’t flow sufficiently, citing for example New Zealand’s Golden Bay, which is so remote that it sometimes nearly functions as its own economy.

Advocates of alternative currencies say that they are a means of empowerment for those languishing on the margins of fiscal life, granting economic agency to people like the elderly, disabled, or under-employed who have little opportunity to earn money. For example, in some systems one can “bank” Time Dollars for tasks like childcare and changing motor oil. It’s not whether you’re employed or what financial assets you have that matter, says Les Squires, a consultant on social networking software who has been working with groups developing alternative currencies. Each person has “value” which is “exchangeable” based on time spent or a given task.

Read the rest of the article here (includes UK examples): TIME

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