There's a new economy in town, at least in the western part of Massachusetts in the region known as Berkshire. The monetary experiment known as BerkShares was inspired by author and urban activist Jane Jacobs and is considered one of the best-designed and most successful local currency in the United States. More than $2.4 million has been passing from bank to hand to till since 2006.
Here's how BerkShares work. An citizen takes $10.50 to a local BerkShare bank (Lee Bank in Great Barrington is one example). From this amount of money the citizen is issued 10 BerkShares. The citizen then takes these ten BerkShares and can trade them in at local, supporting businesses for goods and services. Then Suzy Q artist from down the street comes into the store and sells the owner a painting worth 8 BerkShares, which the owner exchanges for her painting, which is sold for 10 Shares to a customer. According to Susan Witt, executive director of the E.F. Schumaker Society, if a BerkShare must be returned to the bank and is not recirculated it means there is not a source or product available in the area to fill that business's need. If a local store finds that it has local currency an opportunity is provided for local craft makers to supply the store with product in exchange for excess currency.
This kind of local currency will become a great asset to communities as the mounting financial crisis and debt issues that plague our country continue to grow. According to Jacobs, national currencies cover such a broad area throughout the country (and world for that matter) that there is a lack of local feedback. According to her, regions subsidize each other so that weaknesses and imbalances are not corrected. A local currency shows clear and abundant feedback loops and issues can be addressed much more quickly on the local level.
Another positive aspect of the local currency is that it is, essentially, owned by the community and the use of it provides empowerment to that community.
Along with this idea of local currency, communities could also build worker owned businesses and use time-banking to trade services. These movements in our cities could cut the ever-growing distance between citizen and country. By keeping labor, currency and services in individual cities we build stronger, happier communities that are self-supporting and free of fearful repercussions.
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Wow, this sounds like a crazy way to keep money in the community, and keep local businesses afloat. At first I was pretty skeptical of this idea, but your post seems to clarify most issues I would have had. It makes a lot of sense to keep the money in local industry, and I feel like this would encourage more community involvement and would definitely keep smaller businesses more productive. Only problem I have is, what if you need to transfer BerkShares back into real dollars... Are you losing $.50 to every $10? May not be an issue on that scale, but with larger quantities of currency, this could be a pretty big profit loss...
ReplyDeleteThis is an excellent post! A friend of mine actually lives near Berkshire, Massachusetts and brought up the BerkShares currency issue in my Earth Sustainability class. According to his personal account, everyone loves using the BerkShares because it keeps money in local business hands which ultimately spurs the region's economy. He said that in a mere 2 months over 2 million Berkshares were in circulation! Amazing, really. Small family owned businesses under the BerkShare system are protected and more secure. It's funny that such a close state to us, has its own secret culture of BerkShare currency that most Americans are unaware of. The idea of a Berkshare encourages the go local buy local mindset which is excellent! Upon looking into BerkShare media hits I was surprised to find that they were at one point in News 7 and the NYTimes! I wonder why Americans are not educated about the BerkShare? Perhaps the BerkShare idea should be integrated into schools more.
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