Can DIY money be a stimulus?
Small town launches its own currency
It's catching on slowly because most businesses still want to be paid in old-fashioned greenbacks. This 2011 article is from the Los Angeles Times, Jan 15.
by Alana SemuelsLocated almost in the dead center of California, North Fork, like a lot of other rural outposts, is losing businesses. To keep wealth in this tiny town nestled in the foothills of the Sierra Nevada near Yosemite National Park, Josh Freeman is launching a local currency.
Freeman grew up in LA’s Pacific Palisades and drives a car powered by vegetable oil. To make a living in tiny North Fork he repairs computers and develops websites. The former lumber town is on a two-lane road dotted with rustic barns in Madera County.
"Wall Street is making more money than it's ever made, and Main Street is evaporating," said Freeman. "That's unsustainable."
Many rural areas in eastern California and western Nevada shed residents between 2005 and 2009. The rural California county of Inyo, for example, lost 2.8% of its population from 2000 to 2009. The US population grew by nearly 10% over the same period.
In the last two years on North Fork’s Main Street, an insurance company, a beauty salon, and a boutique closed, leaving behind empty storefronts. Many of the town's residents, who commute to jobs in Fresno, find it easier and cheaper to shop in the Central Valley.
Freeman moved to North Fork from San Francisco with his wife and daughter in 1991. He wanted to be closer to a nearby meditation center, where he has spent up to 10 days in complete silence.
To create community, Freeman, founded a weekly coffeehouse held in a studio where residents gather to play musical instruments, read poetry, and listen to an eight-piece ska band Freeman put together by recruiting residents. He's trying to organize a living chess match using townspeople dressed up as pieces, and play one another. He and other residents formed a group that gets together every weekend to perform chores for their neighbors, similar to an Amish barnraising.
Perhaps the biggest of Freeman's projects is North Fork Shares, the local currency he created last year with resident Dan Rosenberg, also 45, who was a congressional candidate in 2000, winning the Democratic primary but eventually losing to his Republican opponent. The pair developed the scrip -- which is worth $12 per share. If someone needs help fixing their car, for example, they pay a local in North Fork Shares, rather than driving elsewhere for repairs. That money will then be spent on another local service -- on homemade food, say, or gardening supplies.
The currency is a type of bartering service. One share is worth roughly one hour of labor, so if someone mows a lawn for an hour, for example, they can get paid a full share. People can also obtain the bills by buying them or by attending meetings about the shares, where they're sold at a discount.
The money spent on the shares helped defray the cost of the ink and paper used to print them. Leftover money -- a few hundred dollars -- now sits in a group bank account. Those involved are considering issuing loans, throwing a party, or creating a scholarship.
A local artist designed the three paper bills. The quarter-share, worth $3, features a Mariposa lily and an insect, and green ink. The $6 half-share, with words in red ink, depicts a hummingbird and a compass. The full share, which has blue printing, features a picture of a woven basket.
A group of residents hand-printed about 1,400 bills, a process that took about 900 hours. The bills are slightly smoother and smaller than US bills. They're made of a special waterproof, synthetic paper called yupo.
Currency collectors from overseas have contacted Freeman about buying some. But he wants it to circulate.
North Fork isn't the first community to launch its own currency. Probably the most successful is Ithaca, in upstate New York, which launched its in 1991. About $100,000 worth of Ithaca scrip is now in circulation; it's accepted by public transit and a number of local businesses.
Most efforts have failed, however, including Freeman's initial push in North Fork. He first attempted a local currency in 1998 but abandoned the project to work on Rosenberg's congressional campaign.
His latest experiment has been slow going. Only about 100 shares are circulating, mostly between individuals. A local family farm accepts it, as does an auto repair shop, a dentist, and a resident known for making bread. But most businesses in town are still looking for old-fashioned greenbacks.
As Freeman wanders around the sloped streets of North Fork, he can barely make it a block without being stopped by residents who want to talk about the weather. He encourages them to get more involved in town events. Some residents don't know about the shares; Freeman is quick to educate them.
JJS: Why not let towns or barter groups issue currency? Why should the federal government or central bank enjoy a monopoly in creating new money? Who would know best how much new currency is needed? Those engaged in politics or those engaged in actual producing and consuming?
Imagine if issuing new notes into circulation became a function of the market, no longer a privilege of the banking elite. How would economies differ? It should become easier for regular people to borrow. Loans should cost less. Bankers would not be so filthy rich. More money would become available for actual economic expansion, less available for mere speculation. And there’d be less inflation, maybe even a falling cost of living.
All those are desirable results. But one thing about desired results -- they drive up land values. They make life better, and people are willing to spend more to reside where life is better. So monetary reform can make life better, but still expensive. For fundamental reform, it is still necessary to employ geonomics, to recover and share the socially-generated values of land and resources.
Editor Jeffery J. Smith runs the Forum on Geonomics.
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