|Greening the local economy|
Local currency systems are now being integrated into the plans of Transition Towns in preparation for the inevitable life-style changes demanded by Peak Oil and Climate Change. These community-led currency systems connect underutilised resources with unmet needs, facilitating the exchange of goods or services using currency designed and created by and for each community.
Initiated by grassroots groups, local currencies work alongside the conventional money system, complementing and stimulating the local economy and fostering a sense of community. While there are a diverse range of currency models, the first to be introduced to New Zealand, in 1991, was the Local Exchange and Trading System (LETS), commonly known as Green Dollars (G$).
Community currency involvement began for me 20 years ago when I joined the newly-formed Wairarapa Green Dollar Exchange. I saw G$ as a means to supplement my income and liked the ‘self-help’ and community-building potential of the system.
Also, since community exchange systems are interest-free, they don't - unlike conventional money systems - exploit people and the environment. This is a vital consideration, given concerns about the increasing degradation and depletion of natural resources, the dangers of climate change and the attendant stresses on people and all living systems.
Using a means of exchange designed to honour and respect rather than exploit is fundamentally a matter of social and environmental justice. It’s also a matter of survival!
So, what is a LETSystem, and how does it work?
A LETSystem is a community-based mutual credit system designed to stimulate local trade and employment opportunities and retain more wealth within the community.
A directory lists offerings and contact details; an accounting system records each member’s sales and purchases.
Individuals can offer skills like computer work, gardening, tuition, produce, knitting, baby-sitting etc. While business members sometimes sell for 100% G$, they more often prefer a percentage of the payment in G$ with the remainder in conventional money. For businesses, this acts like a loyalty incentive.
Regular market days see lively trading, as well as providing an opportunity for members to meet socially. Stalls are set up in town, and non-members are welcome to purchase with conventional money. Getting to know one another personally encourages trading to take place between markets.
We’re not talking here about barter, where there needs to be a double coincidence of need. Barter is usually impractical, which is the reason that money is preferred to swapping chickens for labour or cattle for potatoes! LETS currency works just like conventional money, but instead of exchanging notes, coins or cheques, ’chits’ are used to record trading details for later processing.
Members manage their own trading data, generate their own ‘bank’ statements and update their goods and services listings with Community Exchange System (CES) software. Local administrators process data for members lacking internet access.
LETS for sharing and self-help
Being a LETS member has been a great way for me to share surplus produce and plants from my garden. In return I’ve been able to employ help and purchase gifts and treats. Some members have been encouraged to start their own gardens through purchasing my seeds and plants with G$.
Being involved with community currencies has also enabled me to meet people I may never have otherwise met, locally, nationally and internationally. This has vastly extended my network of contacts and widened my circle of friends!
Green Dollars have been good for the local economy too. Keith Sawyer, co-ordinator of the Wairarapa G$ Exchange, reports ‘more than $1m in trades has been facilitated through the Wairarapa Green Dollar Exchange since its inception. That’s good for the members, the economy and for the community!’
Most trading is done locally, but trading between Exchanges is also possible. Groups operate in Thames, Rotorua, Taranaki, Wanganui, Wairarapa, Blenheim, Golden Bay, Motueka, West Coast, Wanaka, Christchurch, Timaru and Invercargill.
To date the contribution of G$ to regional economies has been miniscule in comparison to conventional economic activity. However, the system could very easily expand to accommodate increased demand, and help is readily available for new groups wanting to start. For areas yet to establish a group, the NZ Community Exchange enables individuals to begin trading until they recruit enough members to open a local Exchange.
Trading with local currency is increasingly being recognised as one of the essential tools for regions planning relocalisation strategies. For New Zealand the big advantage with LETS as opposed to other attractive and effective currency models is that LETS is already functioning in several centres.