Yes, I can imagine this becoming a very large component of every village, every city, every neighborhood. In the largest cities, every building could have its own system of exchange, whether with a local currency, or computer credits, direct barter, or a combination of these.
— Paul Glover, Ithaca HOURS
Imagine for a moment a society of little communities, with people listing their services in local newspapers and selling their work in exchange for a local currency. People know one another, help one another, learn from one another. They see their place in the natural environment because they rely on local resources to fulfill their needs. These people turn for help to their neighbors, to local farmers, tailors, professionals, and general laborers. Life is based on quality rather than quantity, and on shared pride rather than arrogance. Does this sound utopian? Communitarian? Feudal and hopelessly antiquated?
Well, this impossibly idealized form of community is becoming a reality, thanks to Paul Glover, founder of a local currency system based in Ithaca, New York. Glover’s system is catching on, and several towns such as Madison, Wisconsin, are enjoying the fruits of local currency.
Think Locally
Local currency systems are “low finance” market systems. Using local media, members announce their services and goods by placing a “listing” in a local currency newspaper. Then they buy and sell their services using a locally printed money. Individuals can advertise almost any kind of service or good, from “Animal Care” to “Zipper Repair.” Businesses can advertise their services, too, using traditional advertising space.
The Madison HOURS program, for example, has a monthly paper called, HOUR Community: The Participant Directory of Madison HOURS. The local currency is called “the Madison HOUR” and it’s worth the equivalent of U.S $10.00. Members are given 40 dollars’ worth of HOUR notes when they list their services in order to help them begin using the HOURS system. For example, I signed up by listing “Herbal Teas, blended to suit” and “Homemade Soaps, all kinds,” In exchange, I received a handful of notes in one HOUR, half-HOUR, and quarter-HOUR denominations. The half-HOUR note is worth $5.00 while the quarter-HOUR note is worth $2.50.
It Works!
Madison HOURS began with about 100 people and 20 businesses who listed their services. So far, it has grown to include more than 400 people and over 35 businesses in just three months of operation. In Ithaca, New York, about 1500 people and dozens of businesses list their services. As these systems grow, more services become available and more currency circulates. Residents also have established local currency systems in Kansas City; San Antonio; Tucson; Santa Fe; Naalehu, Hawaii; Eugene, Oregon; Carberville, California; Summerfield, Florida; and many other cities.
In most systems, you simply send in a listing of your services, pay a small fee, and receive some local currency in order to begin participating in transactions. The HOURS project sends the new subscriber a newspaper and 40 dollars’ worth of HOURS notes with which to get started. From there, participants can start spending and earning the money. (Transactions are taxable, just like other kinds of earnings.)
A chain of community camaraderie builds with every HOUR circulated. When I listed my services, for example, I thought it would be fun to list my hobbies — soap making and herbal teas. I went to an HOURS potluck and met 25 other people committed to using local currency. We picnicked and traded stories about our services. One person bought soap from me and I earned two HOURS. Then I went to the optometrist, bought glasses, and gave him three HOURS and some federal money. The optometrist told me that he had recently spent three HOURS at Savory Thymes, a local vegetarian restaurant. Savory Thymes uses Madison HOURS to buy produce from local farmer’s market vendors and from the local food coop. Many of the employees at the coop and farms are active in the HOURS project and they take HOURS as partial wages.
From me to the optometrist to the restaurant to the food providers to the employees, the circle widens and supports real work in our own community. And while individual trades seem like small change compared to our federal dollars, collectively it does make a difference. Madison HOURS has released over a thousand HOURS (equal to ten thousand dollars) into the community in merely three months. This money enriches our lives without leaking into banks and huge corporate accounts. Nothing leaks out to profit a corporation or economic elite that doesn’t work for its profits.
Old and New
Local barter systems, scrip money during the depression, beaver pelts, and other forms of currency have been used in past decades in this country, but the first modern local currency system was created by Michael Linton in Toronto in the early 1980s. In Britain, there were 40 systems by late 1992. Two years later, there were 275 systems, and by mid-1995 there were 350 systems. As of 1994, Australia had 164 systems and New Zealand had 54 local currency systems operating.
Communities in other complex capitalist societies, including Argentina, Denmark, Finland, France, Germany, Holland, Norway, Spain, Sweden, and Switzerland, have also developed local currency systems. North America has lagged behind with only about 35 systems to date, although there are also about 100 service-credit systems, used mainly for helping elderly people get access to services.
Our lag time in starting these systems may be due to the fact that our rates of unemployment and underemployment are still quite low compared to other welfare states. Traditionally, the 1990s has witnessed a steady drop in official rates of unemployment in the Upper Midwest. Yet we already are working harder for less money. Author and columnist Holly Sklarnotes, for example, that wage rates have fallen behind productivity rates. This translates into more for the companies and stockholders who reap the profits. It also causes cracks in the nation’s “econobahn.” Local currency systems create an alternative route, one which creates an ecologically sound economy based on shared success.
Why Should We Use a Local Currency System?
On a balmy day in February, 1996, I interviewed Paul about the basic reasons for using a local currency system. I had rented a bike at the Cayuga Bicycle shop on Seneca Street and peddled my way up a huge hill on the way to our meeting. The door to a large wooden house was opened by Paul’s landowner, a friendly woman who had scraped enough money together to buy out the previous owner. She accepts HOURS in rent from Paul, an arrangement which seemed quite in keeping with their vision of economic mutuality.
Jana: In Ithaca it seems like you’re looking for people of many different backgrounds to participate. Have you approached that? I know it’s difficult to get many people of different social backgrounds to come together into one social project.
Paul: We do what we can given the limits of who we are and what we know, without having to reinvent ourselves. We say that this is who we are and this is what we’re concerned about. We would like to change the trading process so that its more equitable, more welcoming, more fair, opens doors between people, builds bridges, allows people to trade on a more fair basis, and get compensated doing what they like to do. Especially, the environment is a consideration in the market place for us, which ordinarily is not [a consideration for mainstream economic interests] at the present.
What about paying for the basics? Landlord, loan repayments, groceries? How can we get local currencies to be used for the basics?
You’re right, participation by landlords, utilities, food providers is essential. Actually, the participation by grocers is enormous — we have 40 venders at the farmer’s market who take Ithaca HOURS. We just got a call from a non-BGH yogurt company in the area...they’re going to start taking HOURS at full price.
There’s a very long list of places which take HOURS for food. This morning, for example, I went down to the deli and bought my breakfast with 100 percent HOURS. I just put in a call to a woman who decorates cakes for a birthday party, [and she’ll take HOURS]. A couple of people here do use HOURS for most of their trading and purchases. There are also quite a lot of landlords who are taking HOURS as part of the rent. We haven’t yet approached the utilities but we will be doing that soon. The utilities cover half of New York state so they aren’t local [and that makes it difficult].
Is this HOURS system just like capitalism if businesses are involved?
I call it a “mutual enterprise system.” Instead of calling this capitalism or socialism, I’ve taken the word “enterprise” from the capitalist realm and attached it to its socialist modifier, “mutual.” Socialism at its worst has become robotic, bureaucratic, dismal and gray, and anti-theological.
How is HOURS a non-capitalist market system?
HOURS are distinct from capital’s dollars. Capitalism is making money without doing work and HOURS can only be earned by doing work, that is to say they are designed to be spent rather than invested and no interest is earned on HOURS. That’s fundamentally non-capitalistic.
But businesses are out there to make a profit. What do they get out of HOURS?
HOURS doubles the minimum wage [one HOUR equals ten federal dollars]. People have paltry amounts of money in their pockets — we have the highest rates of working poor in New York state; they work full time but earn so little! So what you have is a city full of window shoppers, and if businesses want people to come into their stores and be loyal to them and buy their products we’re saying, “Hey, give these people a break, they have earned this money doing real labor and at a better rate of pay than usual.”
We should be pursuing a basic metaphor for life based on harmony, perhaps. Maybe some folks still use a social Darwinian approach to their lives, a metaphor based on disharmony.
If we could all meditate, sit quietly, we could accomplish symphonies of harmony. But because we have to get something to eat, because it gets cold, because mosquitoes come at us, we have to get up and do things, and in that process we stumble over each other...and the people who are the most frightened, I think, become the most greedy...to address that, and not to condemn them as just greedy [is the goal]. The most fundamental way to address that, I’ve begun to feel, is to create systems which relieve anxiety among all people.
There’s a growing movement called “ecological economics” and Ithaca HOURS is part of that cosmos. Last year I wrote an article which discusses moving us toward the provision of food, fuel, clothing, housing, transportation, [and other] necessities in ways which are healing of nature...or which are less depleting at least and which bring people together on the basis of their shared pride, not arrogance.
We keep HOURS flexible in our system...people may charge multiples of an HOUR for each real hour of service. I’ve talked to 18 massage therapists, 6 acupuncturists, 6 chiropractors, and half a dozen lawyers as well...these people are entitled to charge multiples of an HOUR per hour...but they aren’t knocking down the lowest pay...we are encouraging, culturally, an evolution to an equity...a lot of our professionals already have sliding scales...but we don’t require that. We want it to evolve, eventually to that condition of non-violence.
Why is the concept of equal trade so difficult for some people to understand? Do you think this really is confronting capitalism?
I call it “underthrowing the system.” We create alternatives. So many people are so dependent on destructive systems — so it’s a process of disentangling and reweaving by creating something different that proves itself capable of carrying the weight of human need.
[An] interviewer for Good Morning America interviewed me right here [where we’re sitting]. I said, “well, we’re doing this because the multinational corporations today in America aren’t behind many of the people who have skills which are no longer profitable to those corporations, but notwithstanding are still essential to the daily lives of our communities.” And then he said, “Yeah, a lot of my friends at CBS have lost their jobs and they’re just cooking hamburgers.”
Well, that segment never got aired. They’re not going to allow the revolution to start on television, they’re not going to give a voice to the destruction of corporate control, but we use them as much as they use us.
He did say at the end of the show, “Ithaca HOURS are backed by real people, dollars are backed by nothing.” He said that on national television.
To start a local currency system in your own community, write for a starter kit called, “Hometown Money: How to enrich your community with local currency” at Ithaca Money, Box 6578, Ithaca, NY 14851.
Jana Fortier is an Assistant Professor of Anthropology at Southwest State University, Marshall, MN. She specializes in the study of non-capitalist economic and exchange systems. Jana is a founding member of Madison Hours in Madison, Wisconsin. She can be reached at fortier@ssu.southwest.msus.edu or fortier@students.wisc.edu.