FROM MAY NEWSLETTER OF
HAWTHORNE VALLEY ASSOCIATION
LOCAL CURRENCIES IN THE 21st CENTURY
An Interview with the E.F. Schumacher Society About Its Upcoming Conference
Hawthorne Valley Association
has always had the deepest respect for the work of our neighboring
organization, the E.F. Schumacher Society. Recently Rachel
Schneider interviewed Executive Director Susan Witt and Conference
Coordinator Chris Lindstrom on their upcoming conference at
Bard College on the importance of developing local currencies
within a community setting.
Susan, can you tell us a little about the history
and mission of the E. F. Schumacher Society?
Susan: Yes, of course. E. F. Schumacher was a British
economist who authored the book “Small is Beautiful: Economics
as if People Mattered.” Schumacher argued that the soundest
economic system is one in which the goods consumed in a
region are produced in the region using socially and ecologically
responsible practices.
The Schumacher Society was founded in 1980 in Gt. Barrington,
Massachusetts. The Society maintains a Library (including
E. F. Schumacher's books and papers), conducts lectures
and seminars, publishes papers, and works on practical programs
to implement Schumacher's vision. Our focus is to create
new regionally-based, democratically-structured initiatives
to hold land, issue credit, and organize labor. The intent
is to decommodify land, labor, and capital so that they
realize their full potential for renewing local economies.
Q: Chris, you first came to the Society with the
idea for the local currencies conference. What was the need
you saw?
Chris: I see the flow of capital in the life of
the economy similarly to how the human body works. In the
human organism, the body has a sense of what it needs and
through a process of osmosis, every individual part of the
body receives what it particularly needs as nutrition in
order to thrive. It should be the same with how capital
flows through the economy. We can no longer function as
a world body unless capital is adequately distributed amongst
us as a whole. We all contribute to producing that capital,
but right now a very few people dictate who and how one
gains access to capital. "Local Currencies in the 21st Century"
seeks to teach people that the power to issue credit should
not reside solely with commercial banks, but needs to be
brought to the level of community and the individual. I
see this transition as critical to creating peace on earth.
The beauty of it is that everyone can participate in making
this transition happen. This is not in the jurisdiction
nor the responsibility of government. But first we need
to get educated.
Susan: In the late 1800s every region in
the United States issued its own currency through local
and regional banks. It was not until the Federal Reserve
Bank came into existence in 1913 that centralized currency
issue predominated. Local currencies helped to create the
diversified economies that contributed to the country's
prosperity. Each region was encouraged to develop according
to its own strengths in natural resources and human ingenuity.
Local currencies were the source of local capital and allowed
people to invest in their own communities as they saw fit.
Now at the beginning of the twenty-first century, developing
countries are taught to rely on credit and capital from
global lending agencies and international banks and so have
lost the power to create their own economic destinies.
Q: What is the main goal of this conference?
Susan: The main goal of this conference is to help
foster an understanding of sound monetary principles so
that communities can actualize their legal right to issue
their own currencies, create their own criteria for access
to credit, and determine their own economic futures.
Q: Here’s a kind of basic question. What exactly
is money?
Susan: In a simple barter economy production methods
are highly visible. The value of the carrots we offer in
trade is directly related to our memory of hoeing in the
garden; and we probably have watched our neighbor cut the
cordwood we receive in exchange. Barter transactions link
us inextricably to a particular place and time.
Money introduces an element of abstractness into the economic
process. It allows us to store value and then reorganize
it for a different project at a new time in the future,
an obvious advantage. But this abstractness needs to be
balanced. In the past currency was backed or denominated
in real goods. Value could still be imagined in terms of
an actual product created by applying labor to natural resources
(a bushel of soybeans, a brick of tea, a hank of spun cotton).
Most of today's national currencies are no longer commodity-based.
They are at best pegged to each other, or tied in a vague
way to the general productivity of the country of origin.
At the beginning of this twenty-first century money has
become altogether abstracted from our daily experience.
We talk of earning 6% interest, but have no picture of "what
our money is doing tonight:" whether it is working to build
wheelbarrows in Brazil, grow corn on chemically fertilized
land in Iowa, make shoes in a crowded factory in Thailand—or
worse.
Chris: Money is really no more than an
accounting system that helps explain and track the deeds
we do for one another. It, in its ideal form, is a way of
creating a balance between lending and borrowing, because
that is really all money is; a promise to pay with something
of REAL value, and building trust based on this balance.
Susan: Ideally money should be the record
of our labors for one another, the deeds of love we do for
one another. Such a system indicates a cooperation between
consumers and producers. To find ways to encourage this
cooperation the Schumacher Society developed the SHARE program
in which individuals opened up savings accounts to serve
as collateral for loans for new businesses needed in the
community. Our neighbor Robyn VanEn and her farm team beautifully
applied the concept of consumer producer cooperation when
they formed the first Community Supported Agriculture project
in this country at our neighboring Indian Line Farm.
Q: Let me play the Devil’s advocate for a moment.
We have explored the relationship between money, local currencies
and local and regional economies. I understand that local
currencies would develop local economies. But why should
I buy local? What’s the difference where I get my clothing
in the end?
Susan: Local currencies demonstrate a community’s
commitment to support local production. They bring us back
to our local market places and away from catalogue and Internet
shopping. Local merchants again have an incentive to seek
out local producers. This is important
because the items we see visibly before us are really the
tangible results of a life story. The homemade shawl you
buy at a wool fair, contains the history of the mother that
wove the shawl and provides income for her family, a real
family that lives in your community. To be in touch and
interested, vitally interested in that story, is what economic
life is all about.
Such work is not just about revitalization of your own community
but is providing a vision for renewal in village after village
around the world, each with their own unique natural and
human resouces.
Chris: We live in a world with a global economy,
and we will continue to have global trade. But in recent
times this globalization has caused us to completely forget
about our neighbors. We have become completely disconnected
from one another as a result. As communities begin to dissolve
and local, rural and local economies fail, we become more
and more dependant on government and large chain stores
to fulfill our needs. But the federal government and large
corporations are so far removed from the people they serve,
they loose the sense of reciprocity that occurs when people
have a face-to-face interaction.
Rachel Schneider is a member of the General Management Group
at Hawthorne Valley Farm.
Susan Witt and Chris Lindstrom can be reached through the
E. F. Schumacher Society, 140 Jug End Road, Great Barrington,
MA 01230, (413) 528-1737, www.smallisbeautiful.org
