Do local currencies work?
November 27, 2012
Six years on from its launch, a local currency in the United States continues to inspire others. But what can it tell us about their potential to nurture vibrant, distinctive local economies? Austin Macauley reports
Two months on from the launch of the UK’s first city-wide local currency, the Bristol Pound, the scheme continues to create a buzz. Last week, the city’s first elected mayor’s decision to receive his entire salary in Bristol Pounds gave a huge boost to the emerging currency.
There’s a confident feel to the Bristol Pound website. The Pound will, it declares, ‘support Bristol’s independent businesses, strengthen the local economy, keep our high streets diverse and distinct, and help build stronger communities’.
The Bristol Pound is the first to have electronic accounts managed by a regulated financial institution – Bristol Credit Union – and the most ambitious of the local currencies seen so far in the UK. But what happens when the initial excitement wears off? Realistically, what can initiatives like this achieve?
A few clues as to what the future might hold can be found in The Berkshires, western Massachusetts. Its currency, BerkShares, was launched in September 2006, some eight months ahead of the UK’s first modern day local currency, the Totnes Pound.
Examine the Berkshares website and you find an altogether more sober and scholarly tone, perhaps reflecting its development by the E F Schumacher Society, now the New Economics Institute. It describes BerkShares as ‘a tool for community empowerment, enabling merchants and consumers to plant the seeds for an alternative economic future for their communities’.
Six years on, the evolution of BerkShares offers a reality check to other local currencies. But its plans for the future should also provide inspiration for those who genuinely want to bring about fundamental changes to the way their local economy operates.