Five Arguments for Complementary Currencies
How Time Banking and Barter Build Local Communities
May 24, 2009
In response to environmental challenges and economic hard times, communities around the world have been seeking to build resilience, so that people can thrive without relying so much on far-away sources of fuel, goods and services. Part of this effort has involved thinking differently about money.
Initiatives such as complementary currencies, time banks and other forms of barter are not new. According to the Wairarapa Community Exchange System (PO Box 2100 Kuripuni, Masterton 5842 New Zealand), Michael Linton designed Local Employment and Trading Systems (LETS), a trading system using locally created currency, in Canada in the early 1980s. Similarly time banks , which allow people to earn time dollars by performing services, have long existed as a way of providing compensation for skills that may have little value in the cash economy.
Community Development Through Trade
There are a number of arguments in favour of alternative approaches to exchange.
- Complementary currencies direct resources into local economies, keeping wealth in the community. After receiving currency units or vouchers from customers, shopkeepers are encouraged to use the vouchers as payment or part-payment to employees and suppliers. Organisations such as Transition Towns advocate building stronger communities on such simpler ways of life and exchange, on the basis that complex global economic systems are no longer realistic (given the challenges of peak oil and climate change).
- Complementary currencies and time banks reduce unemployment and improve the economic participation of people in the community. The Wairarapa organisation observes that its unit of exchange, the WAIS, roughly equivalent in value to a New Zealand dollar, is available to anyone who wants to work, or who has a skill or goods someone else has a use for. Similarly time banks, such as those in Lyttelton in New Zealand’s South Island, are based on the concept that everyone has something to contribute, including (as examples) new immigrants, artists and homemakers.
Ethical Shopping for Environmental Protection
- Alternative approaches to exchange that encourage the use of local goods and services can help to reduce global warming, by cutting down on carbon emissions from shopping, transport and packaging. The green-living advocacy website Sustainable Table estimates that about 23 per cent of the energy used in the American food production system is devoted to processing and packaging, and the average American food item travels 1500 miles before being consumed.
Fair Exchange for Social Change
- Time banks have the potential to improve relationships between people and to achieve other social policy objectives. As an instrument of social change, time banks have the potential to be used to improve outcomes for minorities, the aged and others who have been hit by the decline of voluntary labour in western society. This is because relationships can be formed based on reciprocity rather than on one party giving and one receiving.
Opponents of local currencies may argue that such approaches are too inward looking. Being an ethical consumer, for example, may involve considering issues of world hunger as well as environmental challenges. (The Suite 101 article Green or Hungry reviews this debate.)
In fact—and this is a fifth argument in favour of barter-based systems—voucher-based currencies can work well as supplements (rather than alternatives) to national economies, and to ethical commitments such as the support of international fair trade.The Wairarapa Community Exchange, which has been in operation since 1991, observes that participating in a local currency does not mean isolating one’s community, but strengthening it. In this way local choices may remain available that otherwise could wither away.
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