The Latest in Money - Go Local
Santuary Magazine - Thomas Conuel - Local currency has a long tradition in this country—though you would need a good memory to recall the days when any type of currency other than the US dollar floated through the southern Berkshires and Great Barrington, a town of 7,000 or so that serves as the region’s center.
There was the time in 1991 when a local restaurant issued something called Deli Dollars as a self-financing technique, and a few other local enterprises followed with their own dollars, such as Berkshire Farm Preserve Notes and the Monterey General Store Notes—all attempts to give residents of the southern Berkshires a chance to support local enterprises. But before September 2006, the last time anybody used local currency around the Berkshires in substantial amounts was probably sometime in the midnineteenth century.
In those far-off days, some 1,600 local and state-charted private banks issued paper money throughout the country, and, with over 30,000 different forms of currency nationwide, all presenting varying designs and colors, counterfeiters found making money so easy as to nearly nullify the old saw that it “doesn’t grow on trees.” That couldn’t last, of course, and it didn’t. By the end of the Civil War, federal dollars were the mandated currency, replacing the many local variations. But, loca currency is still legal, though not coins, and it is not against the law for private citizens to create their own paper money ( US law prevents states from issuing their own currency) as long as there is no attempt to emulate the US dollar or pass the local money off as official United States currency.
Enter a coalition of local activists, community leaders, business people, and bankers determined to support local businesses in the Berkshires. With a big push from the E. F. Schumacher Society—named after the author of the classic book Small Is Beautiful: Economics as if People Mattered—a local currency known as BerkShares was designed to help people buy local and compete with the malls and Wal-Marts of America. The E. F. Schumacher Society, an educational non-profit organization founded in 1980, is closely aligned with the goals of Ernst Friedrich Schumacher (1911-1977), the German-born British economist who preached that to achieve a sustainable economy the goods consumed in a region should also be produced in that region. He introduced his anti-globalization message long before most had ever heard the term global economy. Schumacher’s message calling for human-scale decentralized economics resonated loudly in its day and found great traction with the generation coming of age in the late 1960s and early 1970s. Small Is Beautiful was an unexpected publishing success as well as a sort of bible for the back-to-the-land movement. Republished in 1999, the book continues to sell today.
Not surprisingly, in the age of global economics, Schumacher’s message in Small Is Beautiful is finding new adherents. Shorter supply lines and fewer middlemen make the local economy more efficient and produce better products than goods gathered or manufactured far away, he postulated. This in turn leads to less reliance on oil and gasoline to keep goods flowing, which in turn leads to a cleaner environment. An additional reason to buy and sell locally offered by Schumacher, whose prescience can be seen today, is the tendency of consumers to accept environmental degradation and abusive labor conditions when the goods are made far away—out of sight, out of mind.
The late Robert Swann, founder of the E. F. Schumacher Society and a friend and confidant of Schumacher, wrote often on the subject of local currencies and was a strong proponent of the idea of supporting the local economy in the southern Berkshires with a local currency. Swann, a peace activist and advocate of decentralism, believed that war could be avoided by strengthening rural communities with land trusts and alternative monetary systems.
The concept has a logic that fits in neatly with Schumacher’s original proclamation that sustainable local work leads to a healthier environment, increased productivity, and lower costs to consumers. Change your economic patterns from global to local, he urged in Small Is Beautiful, and return to the self-reliant economy of this country’s founders.
Perhaps, but in the Berkshires where the idea of sustainable local work has never really faded away—there are still family dairy farms that go back a hundred years and more—it seemed to be an idea worth trying. Several members of the southern Berkshire community and the E. F. Schumacher Society searched for a way to get consumers to buy locally.
The solution was a local paper crrency that rewards consumers who buy locally with a 10 percent discount when they use the local dollars. Buy local and pay with your local currency—at the pharmacy, at the coffee shop, at the local camera store, even at the dentist, and you could save 10 percent off the usual price. Some 300 merchants in the region now accept BerkShares, with around $1.5 millino of the notes in circulation after a year and five banks with eleven branches serving as currency centers. (Not all busineses in the area accept BerkShares—gas stations and the electric company don’t accept the local dollars.)
Residents purchase BerkShares at 90 cents on he dollar from one of the exchange banks. Partcipating businesses accept BerkSharse at full dollar value, creating the automatic 10 percent discount incentive to consumers for trading locally. BerkShares can be exchanged at the bank back to US dollars at 90 cents for each BerkShare. Still to come are BerkShare checking accounts, debit cards, and ATMs.
The notes themselves are unique and beautiful, featuring on one side portraits of local historic figures: author Herman Melville who wrote Moby Dick in nearby Pittsfield; beloved painter Norman Rockwell who lived and worked in Stockbridge for twenty-five years; W.E.B. Du Bois who was born in Great Barrington and was a founder of the civil rights movement; the Mohicans of Stockbridge, the region’s first residents; and the late local activist Robyn Van En. On the other side each BerkShare features a landscape, streetscape, and other view by a prominent local artist. The notes come in denominations of $1, $5, $10, $20, and $50.
And it is an idea that has drawn coverage from more than the local newspaper, The Berkshire Eagle. Media from Paris to Moscow, from New York City to Findland, have made the trek to the southern Berkshires to file securitizing reports. The New York Times, The London Times, ABC World News, CBS, BBC, Reuters, French TV1, Russian NTV, Finnish TV, and Yahoo News have all peeked in at the monetary experiment in the Berkshires.
For its part, the E. F. Schumacher Society is pleased. Other communities pondering local currencies are looking to the organization for guidance—including the Mayor’s office in Newark, New Jersey; the Martha’s Vineyard Commission; and nonprofit groups in Baltimore, New Orleans, Rhode Island, Houston, Utah, and several California towns.
“BerkShares have transformed the way the community thinks about money,” says Susan Witt, who oversees the currency experiement for the E. F. Schumacher Society. They provide support for local businesses and help develop relationships locally among producers, merchants, service providers, and consumers. “It’s really the only way to save Main Street,” she says. People now use the currency as gifts; for example, a local realtor gives BerkShares as a thank-you gift at real-estate closings.
The E. F. Schumacher Society is ready to help take BerkShares countywide—first to Pittsfield in the central Berkshires and then north to Williamstown, Adams, and North Adams.
Local currencies are not always a long-term success. A study by a professor at the University of Southern Maine tracked eighty-two local currencies started in the US since 1991 and found that only seventeen had survived by 2004.
But Susan Witt is optimistic. “We are creating self-sufficiency, diversity, and strength in the local economy,” she proclaimed. “These people using BerkShares are pioneers. It’s the wave of the future.”