Recently, I was doing a little woodworking project at my mother’s house. We don't own any power tools, so I was forced to put in the screws with a hand screwdriver—a time consuming process.
I realized that one of my neighbor’s must own a power drill. I went across the street to my neighbor’s house and asked them if I could borrow a drill. The man didn’t remember where it was, but he dug around and finally found it.
Too often, sharing is looked down on—we're taught that we need to do and own everything ourselves.
But actually, it turns out that when we find new ways to put our time and money to work locally, it can reduce our financial burden, support local businesses and help us build community bonds with our neighbors.
Empowering TimeDuring the 1991 recession, Paul Glover, a resident of Ithaca, N.Y., created the
Ithaca HOUR, a form of paper money that could be redeemed for goods and services in Ithaca only. The HOUR denominations are marked with a value of time rather than a monetary value, with one HOUR note being equivalent to $10.
The concept was a response to a growing sense that actions not involving direct payments were becoming devalued. But with the introduction of the HOUR, neighbors could pay each other for “neighborly” things, thereby restoring value to unpaid actions.
The HOUR system is just one example of what’s known as “local currency.” Many communities have begun implementing local currencies to encourage people to buy locally or invest their time in local, unpaid actions.
The program started small, as HOURs were originally just used to purchase goods at the farmer’s market and buy movie tickets. But eventually more and more people began to trust the local currency. Now the HOUR can even be used to pay for things like rent and utilities in addition to services provided by people in the community.
Making It MichiganTwo Michigan cities—Detroit and Traverse City—have introduced their own local currencies. The
Detroit Cheer, available in $3 amounts, was
launched earlier this year and can be redeemed at certain businesses in the Detroit area. The Cheer can be exchanged with U.S. dollars at a ratio of 1:1.
Traverse City Bay Bucks were released in 2005. Bay Bucks come in denominations of 1, 5, 10, 20, and, like Cheers, are exchangeable with the U.S. dollar at a ratio of 1:1.
Time Banking is another way to attribute value to non-paid activity. It has garnered more attention in Michigan recently. A Time Banking project in Lathrup Village near Detroit was featured on
Time Magazine's Detroit blog in October, and won a
community innovation award at the 2009 convention of the Michigan Municipal League.
There is a
Time Bank project in the Hawk Nest area of East Lansing, and the
Michigan Alliance of Time Banks has been established to help other communities set one up.
How It WorksAs I've talked to people around Lansing about the idea of local currency, many say they’ve heard about it but that they know almost nothing it. When I show people the Detroit Cheer that I carry around with me, most people haven’t heard of it—let alone seen one for themselves.
In fact, many people wonder as to the legality of these kinds of local monies. The truth is that they are legal as long as they do not resemble U.S. dollars and as long as they are reported as taxable income. More and more communities are finding ways to make it work, and adding their own spin to the local currency model.
In Great Barrington, Mass., they're enjoying a great deal of success with their currency known as
Berkshares. When trading U.S. dollars for Berkshares at participating banks, you get more buying power in return. A 95 U.S. dollar investment yields 100 Berkshares—a five percent increase that provides an extra incentive to use the local currency and support local businesses.
Of the different local currency models, the Ithaca HOUR is somewhat unique in that it cannot be exchanged for U.S. dollars—the person who holds or accepts one must find a way to spend it locally.
No one is required to use the money. In Ithaca, some vendors only accept a percentage of the local money to constitute their payment. For instance, a grocery store may say that they will only accept half of the total purchase in the local currency, or accept the local currency only on certain days of the week.
Obviously the local currency doesn't always work for everyone all the time. Sometimes, more of a store's suppliers may live outside the community, making a national currency essential.
But it does encourage people to find ways to purchase more of their stock locally, support local civic actions, promote local businesses and help connect people to their community.
Lansing's Local Attempts Lansing has tried a few limited versions of local currency programs, but unlike Traverse City, Detroit and other examples, ours were simply using a representation of U.S. dollars, not an actual local currency.
Last summer, the
Lansing Principal Shopping District (PSD) helped sponsor the Swish Bucks program as a way to support businesses during a
major sewer reconstruction project. The
Swish the Fish mascot handed out $5 gift certificates called Swish Bucks, redeemable at local businesses.
But again, unlike Ithaca, Detroit or Traverse City, this program used a simply stand in for U.S. dollars. It wasn't a currency in itself, and vendors who accepted the Swish Bucks coupon simply turned them in for U.S. cash at the end of the program.
Though limited in scope, the project shows that people in Lansing understand the importance of buying locally. “It creates more jobs,” says
Mindy Biladeau, executive director of the Lansing PSD.
Though interest is growing, there are currently no plans to bring a local currency to Lansing. Brittney Hoszkiw of the
Old Town Commercial Association says her organization doesn't have anything in the works. Jeff Johnson of the
Capital Area Local First group did not respond to my inquiries about using local currency or what it might do for local businesses.
Of course, just because no group or government is ready to pick up the concept doesn't mean it can't happen here.
Ithaca, N.Y.'s Paul Glover was just an individual with a good idea, and no group backing him. While he never would have seen the fulfillment of a local currency in Ithaca without the help of others, it's helpful to remember he was the sole catalyst that got things started.
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Adam Molner is a freelance writer and frequent contributor to Capital Gains. You can reach him
here.
Dave Trumpie is the managing photographer for Capital Gains. He is a freelance photographer and owner of Trumpie Photography.
Photos:
Swish Bucks
Ithaca HOUR
Bay Bucks
Detroit Cheer
All Photographs © Dave Trumpie