Lets look at the Seattle demonstrations against the World Trade Organization. What are the protesters actually protesting about? For one thing, they are angered about the removal of funds from local economies to some multi-national company. The money is earned for the company in a relatively small community and then, as if driven away in armored cars, taken out of that community to the vaults of the parent company located far from the working area. The local area suffers from the removal of funds from its economy while the parent company gets richer. Granted, this description is a bit simple, and at the same time, hyperbolicmy understanding of the greater workings of economics is unnaturally low.
What I do know is that local people around Vermont and the United States have been working with local currency plans in an attempt to revitalize small local economies and build a sense of community amongst people who utilize these systems. What, you may ask, is local currency? Is it legal? After all, printing up counterfeit money brings the full wrath of the FBI down upon the counterfeiter, or those who pass counterfeit bills, and everyone knows that passing bad checks is, well, bad.
The U.S. government states that local currencies (rural or urban) are perfectly legitimate as long as the monetary units can be distinguished from federal dollars. The IRS considers exchanges made with these currencies to be subject to taxation at their fair market value. What, however, backs these currencies? Gold? Silver? Promises? Local money is backed by the skills and resourcesthe peopleof the community. Paul Glover, the founder of Ithaca Hours, the resoundingly successful local currency program in Ithaca, NY, regards local currency as ...real money, backed by real people, real time, real skills and tools. Glover points out that US dollars are no longer backed by anything solid, neither gold nor silver, but really, less than nothing $4.3 trillion of national debt.
How does local currency work? Well, the same as US dollars with one Caveat: the currency cannot leave the local area. You can only exchange local currency for goods and services in your community. Vermont has three active local currency programs: Burlington Bread in Burlington, Green Mountain Hours out of Montpelier and Buffalo Mountain Hours based in Hardwick. Each of these currency programs prints bills of different denominations, publishes a directory of individuals, merchants and retailers who use the local currency, and disburses the currency to those who join the program. Some participants in the programs (retailers, etc.) will accept 100% of the local currency for every transaction. Other participants might only accept a smaller percentage of the purchase paid in local currency, the remainder paid in federal dollars.
I traveled to Burlington and Montpelier to see how the local currencies, Burlington Bread and Green Mountain Hours, have been received in those cities. As I talked to people and researched the topic of local currencies, my initial focus was on discovering how successful they were in terms of acceptance and numbers of bills in active circulation. Yet in listening to people talk about the various programs in Vermont, I realized that while local currencies are an economic system, a substitution of local for federal currency, they are more than that. Local currencies are as much about creating a sense of community around shared values and concerns as they are about economic transactions.
Green Mountain Hours have been printed in four denominations: one Hour ($10), one-half Hour ($5), one-quarter Hour ($2.50), and one-tenth Hour ($1). A Service Directory lists the goods and services that people are willing to provide in exchange for local currency. This Service Directory includes the phone numbers and business addresses of the participants. People who want to be listed in the Directory pay a $5 fee, for which they are given four GMHthe equivalent of $40to spend and recirculate into the community.
The Green Mountain Hours Service Directory includes tax accountants, graphic designers, movie theaters, bookstores, construction companies, restaurants and more, all willing to accept GMH. There are about 120 participants in Green Mountain Hours right now; 75% individuals and 25% established retail businesses.
Steve Gorelick, who is involved with the Montpelier local currency, says he would like to see more participants, especially retailers of hard goods (food, clothing etc.) get involved. One of the problems, Gorelick says, is that people have the perception that local currencies are only exchangeable for services like massage. We have to let people know about the wide variety of exchangeable goods and services available to them with GMH. Montpelier restaurants The Wrap and Horn of the Moon Cafe accept Green Mountain Hours. The Savoy Theater accepts Hours as a percentage payment for movie admissions. Moon Mountain Clothing Store accepts GMH for new and used clothing.
Gorelick says that GMH is trying to fill in some gaps in their directory. If we can get more providers of basic goods, like the Coop, it would be easier for us to attract a dentist. If we get a dentist, an auto mechanic might participate. Green Mountain Hours become more appealing and more useful as more people with different skills and goods participate. Gorelick says that there is a definite need for food coops to join in the program. If people could buy their basics needs with GMH, we could ensure more participants, more Hours circulating in the area.
There is an understandable conservatism among small business owners, Gorelick says. Small business like local bookstores and restaurants have to purchase much of their stock and supplies from out of the local area. Its ironic, says Gorelick, that the businesses we are most trying to help (small local shops) are often the most reluctant to participate. By accepting GMH, the local shops help keep business in town instead of away at a mall or a Wal-Mart or a McDonalds.
But some business owners claim they cannot use Green Mountain Hours, not only because they must purchase their stock with US dollars, but because they dont feel that there are items or services listed in the GMH directory that they can use either for their business or for themselves. This problem seems to be one of cyclic participation. The more businesses willing to participate, the wider variety of goods and services available. More exchangeable goods means more people will participate, thus, more and different products available.
Fred Wilber, owner of BuchSpieler Records says, I support the idea fully but I do not use Green Mountain Hours. None of my suppliers, the people I do business with, will accept the Hours as payment. There just arent that many services or things I can use for my personal use from GMH participants. This is just one of the impediments to widespread use of local currency.
Rivendell Books in Montpelier hit another snag with Green Mountain Hours. Owner Kathi McClure once accepted 100% GMH for purchases. But then people would come in and want to use $100 worth of Green Mountain Hours. At first I was very happy, it seemed like a big success. But then I started accumulating way too many Hours. I was paying taxes on the currency but not using them. I couldnt use all of my Hours and people didnt want them as change. In effect, I was losing money.
This is one of the reasons that Hunger Mountain Coop in Montpelier does not accept GMH, says General Manager, Leslie Nulty. Already, one of our vendors who has accepted GMH has told us that he would not accept them from us because he had too many. Some merchants do not have this problem. Susan Lawrence, owner of the jewelry and gift shop Phoenix Rising in Montpelier uses all of her Green Mountain Hours for food from the Plainfield Coop, for visits to a homeopath and for movies.
One of the problems I discovered while interviewing people in Montpelier and Burlington about their local currency programs was that many people, business owners included, were unaware that their city even had a local currency. This unawareness seems to stem from a lack of organization and a lack of budget. Someone has to get the knowledge out, explain how local currencies benefit the community and make people aware of what local currencies are, how they work, and the benefits of getting involved. The problem is that this takes time and energy. Most of the people on the steering committees for Green Mountain Hours and Burlington Bread already have full time jobs. Even though there is community participation, there doesnt seem to be any real spearheaded coordination to reach possible participants and educate the public.
Paul Glover, the founder of the successful Ithaca Hours program, is hosting Burlington organizers late this August to address the problems of organization and advertising. Glover says that Ithaca Hours relies on ...regular publication of a directory, press releases when there are newsworthy events, milestones and accomplishments, signs on stores, and media publicity. Glover himself was, for many years, a one-man advertisement for Ithaca Hours.
Green Mountain Hours hosts monthly meetings that are open to the public on the third Monday each month, at the Horn of the Moon Cafe9 in Montpelier. Burlington Bread features a potluck dinner/ informational meeting each second Friday of the month. Sadly, these meetings dont seem to be enough to get information out to the general populace.
It is argued that the success of local currency systems is not measured solely in the number of participants, but in the sense of community created between their members. As Susan Lawrence in Montpelier stresses, besides strengthening the local economy, Green Mountain Hours makes us work more as a cooperative community. By using this currency, we get to know our neighbors better. We need more businesses courageous enough to commit to the community by using local currency.
In that sense, local currencies take their place among other micro-communities that spring up around the exchange of shared ideas, interests and values: civic clubs, food coops, babysitting coops, service organizations, swing dance clubs, church groups, soup kitchens and any number of volunteer-based and community groups. Long before Green Mountain Hours, Buffalo Mountain Hours, or Burlington Bread, communities helped each other out and bartered for goods and services. Storekeepers extended credit to customers on the basis of trust and friendship. Neighbors shared equipment on their farms, pitching in at haying, harvest time, barn raisings and quilting bees, followed by potluck suppers and dances. And how many chickens, eggs or apple pies have served as payment through the years for everything from doctors visits to yard work?
While barn raisings and quilting bees have gone the way of the one-room school house, local currencies could be regarded as an ancient yet modern reinterpretation. They work best when there is little money, lots of elbow grease, and lots of participants. They do not work in isolationin fact, they cannot exist without a community, without reciprocity, without shared values and commitment to the larger group. They are manifestations of the need to be part of a caring community. That need will always find solutions, in one currency or another.
For more information on these local currency programs, check these websites:
For Burlington Bread: BurlingtonCurrency.org
For Green Mountain Hours contact Steve Gorelick at: firstname.lastname@example.org
For Ithaca Hours: www.lightlink.com/ithacahours
Information for advertisers
Suggestions? Send us email