Local Money

05/05/2010 07:37
bannertop
Just when I was beginning to lose interest in Adbusters, I was flipping through a backissue and came across a little article about a local currency project happening in western Massachusetts called Berkshares. This is interesting to me, because I’m doing a lot of research right now into the period (between the Jacksonian Era and the Civil War) when local currency abounded.

The rural merchants that I’m studying spent a lot of their time getting credit notes on inventories, drafts on consignments to urban merchants, etc. And then converting these instruments to forms of currency they could use to pay local farmers, that the farmers could in turn use to buy stuff from them, other merchants, and each other. They worked with a dozen banks throughout their region, as well as many of the local rich men who had money laying around or were willing to endorse their notes. Later in their careers, a couple of them even started their own banks.

I think these guys really created a cash economy in their region. But, contrary to some of the histories I’ve been reading about the “transition to capitalism,” I don’t see them as outsiders, imposing some alien, urban (and corrupt, or corrupting, many of the histories imply) economic system on these poor, unwary rural folk. In the first place, these merchants are rural folk. And not only that; they’re popular. People like them. Sure, they get into occasional beefs with their neighbors -- but that doesn’t seem to be that rare, and it doesn’t seem to alienate them from their society. I’m going to keep digging at this, and see what more I find to back up my observations so far.

berksharesprinting
So, anyway, there’s this group of people in this region of the Berkshires around Great Barrington and Lee, who have decided to print and circulate their own banknotes. They’ve put about $2,500,000 into circulation, according to the E.F. Schumacher Society. They redeem them at 95% of the value of a U.S. Dollar, which they promote as meaning Berkshares users get a 5% discount on everything they buy with Berkshares (since retailers only list prices in US$, and take Berkshares at face value). The bargain for the retail merchants is that Berkshares are local currency, so their users are making a commitment to buy locally.

According to another little article in the same Adbuster issue, 68% of money spent in locally owned retailers stays local (mostly in the form of payrolls and taxes), versus 43% of the money spent at box stores or big chains. The effect is obviously enhanced if you can also buy stuff that is produced locally (and not surprisingly, local producers, artisans and service people are big supporters of Berkshares), but even if you buy a mass produced product at a local shop, you can do it with Berkshares. They look nice, too. And I’ve gotta believe they feel like money, since for generations Dalton Massachusetts has been the source of the paper used in US$ greenbacks.

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