Photo: Cash Money by Andy Thrasher on Flikr.
Before Christmas I attended a talk at my university and in all honesty, it was one of the most engaging and inspirational I’ve ever been too. I’m not a regular at university-run events (largely because I live quite far away) and I’m certainly not a regular to economics-based talks that are a world away from the laws of physics. But this particular talk caught my eye.
The lecture was being given by Kate Raworth, a rogue economist who amongst many things is attempting to break down the barriers and limitations of classical economics; doing so by swapping them for progressive and sustainable approaches that live within the social and ecological boundaries of the 21st century.
Over the course of an hour, Kate provided a snapshot view of her new book, Doughnut Economics, using each chapter as its own section of the talk, eluding to each and every approach that, she believes could transform us into 21st century economists.
Amongst all of her fantastic ideas, there was one that really stuck with me. A lightbulb moment, you could say. You know, when an idea just clicks, and you can almost feel each and every neuron shooting through your brain, blasting from point-to-point at the speed of light until your whole head is just a glowing network of ideas, all crisscrossing and interconnected as if viewing London by space.
Oops, sorry for going slightly off subject… where were we…
Kate had begun by talking about money. More specifically, she was discussing the possibilities for creation and ownership of money, alternative to those that steered us into the financial crash of 2008. Things like, a requirement to hold 100% reserves for all money credited at commercial banks, or the issuing of one-off tax rebates for all indebted households during financial dips, coined “People’s Quantitative Easing”.
These are all fantastic, but it was her next idea that really struck a note. The idea is called a complementary currency. It is used alongside a national currency and is typically distributed on a local scale so that individual communities can reap the benefits. They can come in various shapes and sizes but are usually paper, electronic or arbitrary objects, and are in most cases interest-free.
Whether they are used to steer the social tendencies of marginalised communities, boost the local economy, provide utilities and services to the poorest, or provide alternative payment for traditionally unpaid work, they are working. So well that there are now numerous accounts of local communities benefiting from these initiatives.
Take Kate’s example*, which comprised of a community in Kenya who created and utilised the Banga Pesa. This is a complimentary currency aimed at easing pressure off of families during hardship by providing them with a means to purchase local goods, without using their standard money for essentials such as electricity.
But there are other examples too. Here in the UK, I’ve managed to find information on 6 complimentary currencies, all created to help boost the local ecnomoy and provide an alternative means of transaction for indepedent businesses. Starting with the oldest, these are the Totnes, Lewes, Stroud, Brixton, Bristol and Exeter Pound.
Exeter, created in 2015 is of course the newest, but the one regarded as the most successful has to be Bristol, which since its inception in 2012 has been traded at a total of over £5 million.
Photo: A 2012 £1 Bristol Pound note by Samantha Bell on Flikr (CC BY 2.0)
The fact that over 2000 members** are in on the idea means that you can now receive some of your salary in Bristol Pounds, can pay your tax with some (a world-first!) and can even draw some out of a local Bristol Pound cash point. It is the perfect example of how alternative forms of currency can strengthen a local community, even in a seemingly developed country.
Research** conducted by the University of Bath into why this form of monetary design works in Bristol highlighted some specific attributes that communities most possess if they too are to succeed in introducing a complimentary currency like the one operating in the south west. Bristol’s unique social and ethical character is a key driver in the community’s vision to operate in a more local and sustainable manner that promotes a smaller but stronger economy.
Users of the scheme have expressed a “feel good” factor associated with supporting local business, created as a result of the ideology driving the whole idea, one that promotes a sustainable and circular economy that can become resilient to financial crashes and independent of globalisation and large-scale commercialism. I can’t help but think if more of us had this same feel-good factor when we shopped, then we might just feel a little happier. And in this current climate, I’m sure we could all do with a little pick-me-up here and there.
These ideas could also be applied to even smaller groups of people, like the homeless community in a certain town or city or the elderly in another. The reasons for their creation would of course be unique to each situation – the elderly might need an initiative to encourage social interaction, whereas the homeless or poorest of our community might need a way to purchase basic necessities, even when they don’t have the cash to do so.
I hope, with the use of the Bristol Pound, I’ve made you more aware of the benefits of complimentary currencies. I also hope you realise their potential and are able to see how in actual fact, they could be used for even smaller communities and social groups to improve public spending, by directing it towards a more sustainable and circular network of consumers and retailers.
If you found this interesting and would like to find out more about both complimentary currencies or sustainable economics then these resources would be a good place to start:
*Read more examples in Doughnut Economics by Kate Raworth, pp.182-8
**S. Johnson and H. Harvey-Wilson, “A realist evaluation of the Bristol Pound”, Centre for Development Studies, University of Bath, 2017.