New money meets the cost of change: how local currencies save economies and communities, and help them flourish
In times of crisis and other upheavals, local communities have discovered that one answer to being failed by the mainstream economy is to print your own currency. Responses also range from age-old barter systems to time-banking and modern digital currencies. They demonstrate the kind of re-imagining of the economy needed for rapid transition, and show how people and communities can reveal their greatest strengths when times are hardest and most uncertain.
Spurred by lessons from successful initiatives, now some major cities and regions are seeing permanent benefits from having their own money or exchange system. Local currencies can strengthen neighbourhood ties and allow people to make friends – they are a focal point for the community-minded. In the US, for example, California alone has 19 city currencies, many formed after the financial crisis of 2007 – 2008. Lending to small businesses plummeted, with impacts particularly hitting African Americans, women and Latinos – people from historically marginalised groups. Community currencies empowered people to have more say over where money circulated, giving them a greater stake in their economic future. A different approach, Time Credits in the UK – a national network of time banks – has been effective in addressing many different types of need, from eldercare and schools to drugs and alcohol misuse.
But with financial crises becoming seemingly more frequent and extreme, the speed with which communities in one European country devised its own solution during the Eurozone crisis, stands testimony to the potential for rapid economic reinvention. When trouble hit Greece, in the port city of Volos, people turned their backs on the failed mainstream economic system to grow their own parallel economy. In 2011, eggs, milk and jam could be bought at market using a new, informal barter currency, a Local Alternative Unit, or TEM as it is known domestically.
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