stable local currency initiative
Dear Friends,
At a time when national currencies are proving vulnerable to ill-considered
government policies and fluctuations in the global economy, how can regions
establish some degree of economic sovereignty? Local currencies provide a
tool for local economic stability in otherwise unstable economic times.
In its early stages BerkShares, a local currency issued in the Berkshire
region of Massachusetts, is a simple buy-local program. However it is
designed to evolve into an effective citizen tool to foster new
import-replacement businesses and grow the local economy in a way that is
responsible to the people and landscape of the region. At its full
potential as an independent locally-based medium of exchange, BerkShares
will calculate exchanges according to a non-inflationary local standard of
value.
The Drucker Institute recently named the Schumacher Society as a finalist
for the Peter Ducker Award for Non-Profit Innovation for BerkShares. Your
tax-deductible contribution to the E. F. Schumacher Society will help
support the continued evolution of the BerkShares program in its research
and development phase.
The following application to the Buckminster Fuller Institute details the
vision of the program.
Sincerely,
Susan Witt, Executive Director
E. F. Schumacher Society
140 Jug End Road
Great Barrington, MA 01230 USA
www.smallisbeautiful.org
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BerkShares Local Currency Project
Application Narrative
Urgent Issue of our Time
E. F. Schumacher argued that if we are to achieve a sustainable economic
system (what he called an economy of permanence), then the goods consumed in
a region should by and large be produced in that region. With shorter
supply lines and fewer intermediaries between the producer and consumer,
fuel use is less and carbon dioxide emissions decrease. Individuals engaged
in their local economy may rely on more trips downtown but on fewer trips
across oceans and countries.
Consumers are more likely to tolerate poor labor conditions and
environmental degradation when they are made invisible by the distancing
effect of the global economy. Incorporating production into the local
economy helps to illuminate poor practices and their impact on the
community. Ultimately we learn that content workers, sustainable farming
practices, and a healthy environment lead to increased productivity and
decreased true costs to the consumer.
Accepting the urgent need to change production patterns from global to
local, the question becomes, How can concerned citizens help create
conditions that foster more self-reliant local economies in a manner that is
socially, environmentally, and culturally responsible?
In her book Cities and the Wealth of Nations, Jane Jacobs suggests local
currencies as an elegant tool for rebuilding regional economies in a
sustainable way. She believed that currencies circulating only in a defined
region encourage import-replacing businesses, which in turn create new jobs,
foster technological innovation, retain manufacturing skills, and further
regional capital.
BerkShares is the local currency developed by the E. F. Schumacher Society
for the southern Berkshire region of Massachusetts. The notes were first
issued in September of 2006 in cooperation with BerkShares, Inc., a
non-profit membership organization. The program was designed to create
consumer awareness about the consequences of spending practices, to support
local businesses, to facilitate the development of new productive
capabilities in the local economy, and to serve as a model for other
regions.
Implementation
BerkShares have transformed the way the Berkshire community thinks about
money. Over 1.2 million BerkShares have been issued from eleven branch
offices of five local banks in its first year of operation. Residents
purchase BerkShares at ninety cents on the dollar from one of the exchange
banks. Participating businesses accept BerkShares at full dollar value,
offering a 10 percent discount incentive to consumers for trading locally.
Businesses can then recirculate BerkShares at full value with other
businesses, or if more BerkShares are received than can be used, BerkShares
may be exchanged back to federal dollars at 90 cents for each BerkShare.
Beautifully designed and printed, the currency honors local historic figures
and features landscapes, streetscapes, and gardenscapes by local painters.
It reflects the culture and values of its place. Residents are proud to
handle and display the notes.
Once in circulation BerkShares provide much-needed support to the local
businesses of the region. BerkShares have helped to redevelop relationships
between producers, merchants, service providers, and consumers that had been
lost to the continued growth of the global economy. People are returning to
Main Street and experiencing new conversations about the important role
money plays in determining economic policy. They are seeing how BerkShares
spent at local businesses circulate through the community, creating value
beyond the initial point of purchase.
For both businesses and customers BerkShares provide a talking point about
supporting independent business, the importance of local economies, and the
possibility of regaining economic sovereignty.
Research and Development
BerkShares currency is in its research and development phase. In the
southern Berkshire region with a population of only 15,000, nearly three
hundred prominent businesses are formally signed on to accept BerkShares and
many more do so informally. Growth in use is steady. Still BerkShares is
only at stage twenty of fifty stages in building a truly independent local
currency that will be an engine for local sustainable development.
Future plans include identifying new import-replacement business ventures,
making loans in BerkShares, fostering greater philanthropy in BerkShares,
and eventually creating a local standard for the currency independent of
fluctuations in the federal dollar. For example, Buckminster Fuller
envisioned a kilowatt hour currency backed by renewable energy sources.
These energy sources‹inherently local in scale‹produce a necessary commodity
with a relatively fixed value. In this way the value of the currency would
be directly tied to the ability of the community to expand local production
of renewable energy, creating value within the community for other
productive purposes.
Recognizing the importance of innovative sustainable development models, The
New York Times, The London Times, ABC World News, CBS, BBC, Reuters, French
TV1, NTV (of Moscow), Finnish TV, and Yahoo News have all carried prominent
stories on BerkShares. The E. F. Schumacher Society has been asked to
provide consulting to other communities including the Mayor's office in
Newark, the Martha's Vineyard Commission, and nonprofit groups in Baltimore,
New Orleans, Rhode Island, Houston, Utah, and several California towns.
This international and national attention to the model led the Drucker
Institute to name E. F. Schumacher Society as a finalist for the Peter
Drucker Award for Non-Profit Innovation for its BerkShares program.
Program Evolution
All the evolution of the program must occur organically with support of the
local community behind it. BerkShares board of directors is deliberately
staging this growth.
Our still locally owned banks have proven invaluable partners in the success
of the BerkShares program, providing, among other things, eleven brick and
mortar offices where the public can exchange federal dollars for BerkShares.
Banks are taking the lead in developing BerkShare checking accounts, debit
cards, and ATM. These innovations will increase the velocity of BerkShares
trade between customers and businesses and from businesses to business.
Increased circulation of the currency between businesses is a vital step in
the creation of local enterprises producing for local consumption. Our
business and banking partners are encouraging BerkShares to expand outside
its present area of operations to serve all of Berkshire County requiring
additional staffing and community outreach.
The E. F. Schumacher Society is seeking additional grant support to develop
this model program to its full potential during this research and design
phase of implementation. We welcome your contribution to this important
effort.
Innovative Program
Local currencies represent a trim-tab approach to enacting Jane Jacobs's and
Fritz Schumacher's vision for sustainable economies. BerkShares are the
leading application of the concept. When BerkShares are used it is assured
that the highest percentage of each dollar spent will remain circulating in
the community. This increase in community capital creates a positive
environment for new entrepreneurial ventures. New businesses sprouting from
this generation of wealth begin replacing the imported goods that were
originally drawing money and resources from the region. Instead of relying
on the products of a vulnerable global economy, transported over long
distances and using fossil fuels, the region gains greater control over its
own economic destiny.
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BerkShares is a research and development project of the E. F. Schumacher
Society, a 501c3 educational organization, working in cooperation with
BerkShares, Inc. Donations to the E. F. Schumacher Society are
tax-deductible.
For more information visit:
http://www.smallisbeautiful.org
http://www.berkshares.org
Donations may be sent to:
E. F. Schumacher Society
140 Jug End Road
Great Barrington, MA 01230
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