Getting back to a barter and trade economy

Advocates gather in California to discuss ways to keep local moneyfrom seeping into global economy.

If globalism has got you down, take heart.

A flourishing movement that seeks to supplement the almighty dollar with an all-local currency is providing refuge around the country, and world, for those who feel that mega-economic forces are stripping individuals and communities of control over their own affairs.

"There is tremendous interest and energy" in the movement to establish local or community-based currencies, says Susan Witt, director of the E.F. Schumacher Society of Great Barrington, Mass.

The Schumacher Society is a firm supporter of the concept, and Ms. Witt says there is "revival" under way right now.

The concept is simple: Establishing a local currency within a town or region allows residents to exchange goods or services in a way that guarantees the currency will stay local and not seep out into the great sea of global commerce.

In communities with local currencies, the US dollar continues to circulate and remains the backbone of the local economy. But as seen by advocates, local money provides a powerful tool for community cohesiveness and rejuvenation.

Seed money

The north coast hamlet of Mendocino, Calif., plans to launch a local currency called Seed in the next few days. Further down the coast, a Time Dollar system that allows community service organizations to trade services is about to begin in Santa Cruz. And last year, local currencies became available in places as diverse as Toronto and Berea, Ky.

All this activity follows already well-established programs like the Ithaca Hours in New York and the Local Economic Trading System (LETS) pioneered in Canada and now operating in Great Britain, Australia, New Zealand, and in several European countries.

There are about 2,000 local currency systems in operation around the world, according to Bernard Lietaer, a former Belgium central banker who is now setting up a clearing house for community currencies from his base as a research fellow at the University of California at Berkeley.

Local currencies flourished in the US following the Great Depression, when jobs and money were scarce. Over the years, stressed communities have often created local currencies or scrip as a means to allow people to trade skills and goods, even when they're unemployed and have no traditional dollars to spend.

Fibers of a community

But today, the motivation behind local currencies stems more from a view that communities are losing their sense of interconnectedness among residents, who don't know each other and who buy goods that are imported with dollars that are often earned from a distant corporation.

"It's a counterpoint to globalization," says Lewis Solomon, a law professor at George Washington Law School and author of "Rethinking Our Centralized Monetary System: The Case for a System of Local Currencies." Local currencies have proven themselves viable, says Mr. Solomon, but their prevalence depends, ultimately, on "how much antipathy builds to the global economy."

The movement itself is diverse, blending primarily environmentalists and community activists,

but with a sprinkling of Libertarians, Y2K bug alarmists, and even survivalists who fear a major financial meltdown is inevitable.

But at its core is a yearning for more control, less seeming vulnerability, and greater interaction among people of the same geography. "Community is becoming a vacant term. We're not really even trading with each other any more," says Michael Linton, one of the founders of LETS in Canada.

While local currencies may appeal to some as a return to simpler times, it's quite modern in terms of taking advantage of technology.

Mr. Linton has been working on a smart card that would allow people to make purchases with local and even regional currencies, automatically. And software needed to begin a LETS system can already be downloaded from the Internet.

Local currency systems are usually set up and run by volunteers.

A typical program

The BREAD program, begun in Berkeley in 1997, is typical. Members apply to join, must be able to provide a good or service to the community, and must agree to honor the local currency.

Once admitted, members are listed in a local directory, which now includes about 350 listings, including gardeners, restaurateurs, artists, and auto mechanics.

Each member is initially issued paper currency worth four Bread hours, valued at $12 per hour. There is about $15,000 worth of Bread currency in circulation right now.

"We have quite a cross section of members," says Miyoko Sakashita, Bread co-founder. "Most are middle to low-income, and from all age groups."

As one sign of the movement's current vigor, advocates from all over the country and world began meeting this week in the Santa Cruz mountains at a church-owned retreat site.

Called simply "The Gathering," the aim is to "connect the local currency movement, and create the infrastructure for a new, more just economy," says organizer Carol Brouillet.

While some critics question the logic of a system that encourages buying local goods, even when better or cheaper goods may be available elsewhere, advocates say that kind of math is simplistic.

"Things may be cheaper over the hill," says Margaret Howe, one of the organizers of the new Seed program in Mendocino, Calif., "but there is a cost to the community in buying over there, instead of here."