Local Currency: The Green That Gives Back
In this age of online shopping and payWave readers, paying with paper currency seems a bit anachronistic. Who has the time to visit a physical store, "fumble for cash" (as Visa phrases it) and count every individual bill one by one? Especially when credit and debit cards provide the luxury of convenience and the illusion of endless funds.
And yet, paying in cash provides a crisp finality to a transaction that plastic never will. You're left knowing exactly how much remains in your wallet and merchants pocket what would otherwise be credit card service fees.
Take it one step further by using local currency, and you end up with a wider benefit: a boost to the local economy. A stronger local economy, in turn, can support more local jobs and a higher standard of living. Not to mention the added environmental benefit — avoiding the polluting effects of shipping and packaging goods purchased from afar.
See Exhibit A. The Wörgl experiment conducted from July 1932 to November 1933 in a small town in Austria succeeded beyond anyone's expectations. Unemployment in 1932 was at a record 30%. The local government owed 1.3 million Austrian schillings (AS) and local construction and civic maintenance had completely stalled.
The town's mayor, Michael Unterguggenberger, authorized 32,000 "Certified Compensation Bills" (or scrips) into print — each valued at 98% of an Austrian schilling. It catalyzed the local economy. In the one year that the currency was in circulation, the debt shrank dramatically. Local government revenue rose from 2,400 AS in 1931 to 20,400 in 1932. Unemployment disappeared, jumpstarting multiple civic projects.
Closer to home, the Ithaca Hours have been circulating in Ithaca, New York since 1991 strenghtening the Ithaca economy and community ties by keeping money local. RiverHours, based along the Columbia River Gorge, USA, lists several benefits to using local currency. Among them: retaining local purchasing power, creating earning opportunities from non-conventional jobs, attracting tourism, and encouraging local spending. What's also great about both of these currencies is the concept of equal pay for equal hours, whether you're a babysitter or the local physician.
These benefits resonated with Mary Jeys, a Brooklyn artist who, like many latter-day entrepreneurs, seized upon a period of unemployment to initiate the Brooklyn Torch Project. She cobbled together a handful of like-minded Brooklynites to research and design the local currency initiative. While her steadfast determination keeps the project afloat, she concedes that what is more important at this stage is not when the project is implemented, but how. As in, how well it reflects the needs of the community. If the Brooklyn Torch succeeds in securing that goal, it will provide some much-needed common ground in a neighborhood still enduring growing pains from the transitioning of this immigrant enclave to a high-rise haven.
In Akira Kurosawa's "Village of the Watermills," we're introduced to a village of residents who long ago decided to chose spiritual health over convenience. And if nothing else, a local currency, being quite the opposite of convenient, could very well purchase a little bit of community health.