Printing Money, Locally
An old financial trend is witnessing a resurgence in the the US… local currency. The basic idea is you go into a bank and trade national US dollars for a local scrip that can be exchanged for goods and services locally. The goal is to keep money within a given region or community. It’s not illegal as long as the bills don’t pretend to be or resemble US currency.
From Wikipedia… “Scrip is any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns or occupied countries in war time. Other forms of scrip include subway tokens, arcade tokens and tickets, and “points” on some websites.”
During the Great Depression, businesses, local governments and individuals launched currencies known as scrips. Michael Shuman, author of The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition, estimates that 75 different local currencies have been created recently. He says that local money is a direct response to the national economic crisis.
One of the most successful local currencies is the BerkShare, launched 2½ years ago in the rural Berkshire region of Massachusetts. Consumers can purchase $100 worth of BerkShares for us$95. They can then spend BerkShares at local stores for their full value. Stores or individuals can convert their BerkShares back to U.S. dollars at a rate of 100 BerkShares for us$95. This means that they save five dollars out of every hundred if they spend BerkShares locally rather than exchanging them for U.S. dollars. Over $2 million worth of BerkShares have been issued since the currency’s launch. Approximately 350 regional businesses participate in the scheme, and an additional 200 businesses accept BerkShares on occasion.
Advocates of local currencies argue that they can help stimulate growth in the local economy. Rather than spending the money on things hundreds of miles away, local currencies give consumers a monetary incentive to buy local, keeping money in the local community.
The writer of this article may have betrayed their true feelings about local currency by their use of the word “scheme” at the end of the second quoted paragraph but I, for one, don’t feel skeptical at all. If anything, we should be printing more local money. It’s a pretty fascinating synthesis of too many current events to name.
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