Can Introducing a “Local Currency” into DTLA Make a Difference?

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Introducing a remarkable complementary currency…

Skid Row “$cript”

During the Great Depression in Europe, a small Bavarian village adapted just such an idea with positive results:

  • Of its population of 4,500, a third–(1,500) were without a job. Two-hundred families were penniless.
  • The mayor had a long list of projects he wanted to accomplish, but there was hardly any money with which to carry them out…(1) repaving the roads; (2) street lighting; (3) extending water distribution across the whole town; and (4) planting trees along the streets.
  • Rather than spending the 40,000 Austrian Schillings in the town’s coffers to start these projects off, he deposited that money into an account at a local bank as a “guarantee” to back the issue of a type of complementary currency known as ‘stamp scrip’.chiemgauer
  • The “stamp” referred to a requirement that a stamp needed to be placed on a Note each month to indicate that the Note was in fact “in circulation” and therefore was valid and could be freely accepted as payment for goods, services, produce, other products.
  • In that village, Wörgl–the stamp amounted to 1% of the Note’s value. The money raised was used to run a soup kitchen that fed 220 families.
  • Because nobody wanted to pay what was effectively a “hoarding fee”, everyone receiving the Notes would spend them as fast as possible.
  • The original 40,000 schilling deposit allowed anyone to exchange scrip for 98 per cent of its value in Schillings. This offer was rarely taken up though.
  • Of all the business in town, only the railway station and the post office refused to accept the local money.bavarian stamptrain station
  • When people ran out of spending ideas, they would pay their taxes early using scrip, resulting in a huge increase in town revenues. Over the 13-month period the project ran, the council not only carried out all the intended works projects, but also built new houses, using skillsa reservoir, a ski jump, and a bridge.
  • The people also used scrip to replant forests, in anticipation of the future cash-flow they would receive from the trees.bavarian garden
  • The key to its success was the fast circulation of scrip within the local economy, 14 times higher than the Schilling. This in turn increased trade, creating extra employment. At the time of the project, Wörgl was the only Austrian town to achieve full circLocal Currencies Today
  • Local currencies are still alive in central Europe today, with something like sixty-five regional currencies competing with the Euro, according to Ambrose Evans-Pritchard.

There are some examples of local currency, alive and well in the U.S. as well.  Ithaca HOURS and BerkShares are great examples.

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  • John Robb thinks local currencies are a useful tool for building resilient communities, but notes that they remain “a lifestyle choice” at present. BerkSharesRobb believes that the Worgl experience in the 1930’s indicates that script can work if:
  • Community members are allowed to use the $cript to pay all or part of their tax liabilities to local governments. This instantly establishes a market for the currency.
  • Also, if $cript can be used to pay City/County local government employees a portion of their wages in $cript.
  • The means of avoiding deflating or devaluing the value of the $cripT by perhaps one percent per month to promote immediate use rather than hoarding
  • Connecting script to local production rather than just emphasizing retail use. Locally produced food (farmer’s markets) for example. Also encouraging its use and freedom to be spent for locally produced products and for manual labor/services.
  • Further, work with local banks to establish checking accounts for scrip and to enable conversions to hard currencies (at a slight discount).
  • Its worth noting that local currencies did exist prior to the (literal) Renaissance before they were replaced with centralised currencies.
  • Centralized currency — invented during the Renaissance, really — favors the kinds of business practices and centralization of power that actually works against good, honest, local commerce. In short, it favors Wal-Mart over, say, Community Supported Agriculture.
  • There are other kinds of money – and they were in existence until they were outlawed by kings and queens looking to centralize authority. Money that is lent into existence by a central bank will tend towards scarcity and competition. Money that is earned into existence by people in a specific place has very different properties, and works on a model of abundance.
  • Like the ancient Greek philosopher Aristoteles, Gesell recognised money’s contradictory dual role as a medium of exchange for facilitating economic activity on the one hand and as an instrument of power capable of dominating the market on the other hand.ancient Greek philosopher

From… Local Currencies Aren’t Small Change

Joel Stonington

Most people don’t think much about money beyond the fact that it seems to leave their wallet quickly.empty pockets

Soooo…..people …are re-inventing money!make it happen

The reinvention is taking place in the field of complementary or local currencies that work at local and regional scales to build sustainable communities.Oklahoma is IN

Local economy activist Margrit Kennedy : “Money can be made to serve rather than to rule, to be used — rather than profit-oriented — and to create abundance, stability, and sustainability…… “money is one of the most ingenious inventions of mankind”. It has the potential to be the most destructive or most creative.creation of money

Money should empower people to care for each other and the earth.helping

From Ithaca Hours to the Time Dollar to the Local Exchange Trading System (LETS), dozens of local currency systems are already being used throughout the world alongside a national currency.sample

Paul Glover started Ithaca Hours — denominated in hours of labor — in 1991, distributing the notes to local businesses willing to accept them for goods and services.ithaca 2

Perhaps in DTLA: local stores –our Farmers’ Markets and all the people we regularly interchange with will see the value our skills and our Time can contribute? Let’s explore how to encourage growing our local economy by creating a program to accept Local Hours for produce, and for other hand-produced items…even for time spent helping other people with a variety of tasks.give and get

Glover said, ‘When I started Ithaca Hours I thought it would be illegal but it wasn’t. It’s too bad, the supposed illegality was part of the fun.’ahnold wants local money

The Ithaca Hours program continues to grow today. It now includes a local credit union that provides an optional Hours account and a health insurance program — Ithaca Health Fund — that relies on a simple $100 yearly payment. The Hours maintain a strong value independent of federal dollars because they are backed by future productivity in the community.

Over 50 communities throughout North America have adopted local currency programs using the Hours framework.

Who’s ready to start here?ideas


jb–signing off…10:04 a.m.

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