As sterling wobbles, Clare Bryden investigates revolutionary approaches to money and economics
THE current economic system is broken. National, and often local, government policies are driven by GDP growth — infinite growth, which cannot be supported by a finite planet. Corporations are focused on profits and returns on investment for shareholders rather than the public good. And only a tiny proportion of money is cash that we actually touch. When about 97 per cent of money is debt — a burden on the public, and a risk to financial stability — we can no longer even render unto Caesar that which is Caesar’s.”
Capitalism, in its current form, is not delivering what actually matters to people: their well-being, and that of their family, friends, and the environment. This is a huge and complex problem. But people are resourceful, and increasing numbers of communities are taking matters into their own hands to provide solutions that offer hope for the future.
Last year, at 11 a.m. on 1 September, a new currency was launched outside Exeter Cathedral when the Precentor, Canon Victoria Thurtell, paid the Lord Mayor, Councillor Olwen Foggin, one Exeter Pound for a loaf of bread. Money-changers and independent traders had set up stalls for the day, and people swapped pounds sterling for the new Exeter Pound notes, so that they could begin spending them.
“A local currency is one way of helping cash to circulate more in the local community, and to sustain its economic life,” the director of social responsibility for the diocese of Exeter, Martyn Goss, says. He is one of the directors of the Exeter Pound.
“The New Economics Foundation has estimated that, for every £1 spent in a big chain store, only 36p stays in the local economy. The rest might end up in offshore accounts, or being invested in who knows what. [But] if you spend that £1 in a local business, it multiplies, and is worth £1.76 to the local economy.
“The Exeter Pound operates like a voucher, and can be spent only in local, independent businesses. It is equal in value to sterling, and available in £E1, £E5, £E10, and £E20 notes at exchange points throughout the city. Currently, 163 businesses accept the currency, and more than £E30,000 is in circulation.
“When we launched the Exeter Pound, we had a £E15 note to celebrate the Rugby Union World Cup coming to Exeter. All the notes feature local landmarks and people, such as the runner Jo Pavey, the Cathedral, and the street that J. K. Rowling used as the model for Diagon Alley. In July, we released a new £E4.50 note to celebrate the 450th anniversary of the Exeter Canal. The notes reflect our pride in our rich history, and connect us closer with the place.
“They are connecting people together, too. We are finding that spending Exeter Pounds encourages more contact between businesses and customers, giving people a greater sense of ownership over local production.
“Many have been involved in the Exeter Pound team, and others helped to crowdfund our move towards a digital currency, which is due next year, and will help us offer more.
“Local currencies show how we really are in it together. They are more human in scale than sterling.” They are also good for the planet, encouraging local trade and reducing food- and goods-miles.
THE Exeter Pound was modelled on the Bristol Pound, which is well established in a similar city economy. It also follows the Totnes and Lewes Pounds in smaller towns; the Brixton Pound, in a busy urban district; and other currency models worldwide.
One way to obtain the Brixton Pound — the £B10 note features Brixton-born David Bowie — is at what is believed to be the world’s first local-currency cash machine. Besides buying goods from about 300 Brixton retailers, it can be used, alongside sterling, to play a monthly community lottery, the Brixton Bonus. Proceeds from the lottery fund micro-grants, which, in turn, support social-justice initiatives, employment, and other opportunities for residents.
The Brixton Pound has also spawned a community give-back scheme among traders, which offers opportunities for volunteering, training, and resource-sharing, and a community shop space that provides access to cheap or free high-street space for clubs and organisations. In July, a pay-as-you-feel café opened, using surplus local food, in an attempt to reduce food waste and food poverty in the area.
In Hull, the launch of HullCoin last month signals the development of the world’s first community-loyalty point scheme. Although it is available to all residents, HullCoin is designed particularly to allow people on zero-hours contracts or low incomes to supplement their income without affecting any benefits: people earn HullCoin by volunteering, not by exchanging it for sterling. In return for their good works, HullCoin can be used to buy discounted goods and services with local retailers.
Setting up a new currency is not without its challenges, not least in dealing with the Financial Conduct Authority. The Guild of Independent Currencies was set up in 2014 to help support groups to launch independent currencies, through shared knowledge of currencies and social-enterprise governance, technology, best practice, and more. “There is a lot of collaboration between established projects and nascent projects. [And] there is no reason why our sharing of resources and support shouldn’t cross borders,” a project officer at the Guild, Melanie Shaw, says.
There are other currencies on the way. The Birmingham Pound project is working towards launching a pilot in several neighbourhoods, and plans for Cardiff and Liverpool currencies are under way. The Cardiff Pound project is aiming to offer notes as well as bank accounts into which several employers can part-pay wages. It is hoped that residents will be able to pay for council services, such as school dinners or business rates, with the Cardiff Pound.
In some locations, churches — including Exeter and Bristol Cathedrals — have signed up to local currencies as traders. Others are getting involved by default when they receive local currency in the collection plate. Interested churches can contact the Guild for advice.
Local currencies are backed by the national currency, such as sterling, and are often pegged at a one-for-one exchange rate. The digital cryptocurrency Bitcoin, however, is not controlled by a central bank, and its value can fluctuate wildly. Although it is not linked to a national currency, it can be converted to real money at online exchanges, and at least one church in England has been accepting donations in Bitcoin as another way of raising money for a regeneration project (News, 14 February 2014).
THERE are other alternative exchange systems, based on time or material resources. Local Exchange Trading Systems, or LETS, have been in existence since 1983, and provide a means to exchange goods and services without the need for money. LETS uses a system of community credits so direct exchanges can be avoided.
Timebanking looks similar to LETS, but operates to exchange units of time spent on tasks. An hour of childminding, for example, may earn an hour of carpentry, as each hour of time is rewarded equally. Timebanking can be set up to be person-to-organisation, and organisation-to-organisation, as well as person-to-person.
The sharing economy is booming, thanks to the internet. There are means of sharing your car; your driveway, as a parking space; your home computer for scientific research; your spare room for accommodation; your garden for growing food; or even your church, for “champing” (Feature, 16 September).
Streetbank is a means of sharing everyday objects and skills with your neighbours. On registration, participants must stipulate something that they are happy to help with, lend, or give away, making non-participation harder to justify. Dyfi Land Share, in Machynlleth, Wales, and Edinburgh Garden Partners connect people who want to grow food with people who have land to share. Freecycle matches people who have things to get rid of with people who want them, keeping items out of landfill and promoting community interaction in the process.
Sometimes the sharing is free; sometimes it involves a financial transaction. But the sharing economy is at its best when it unlocks resources that would otherwise be idle or wasted, prevents unnecessary consumption, and brings people together.
Just down the road from the Brixton Pound, the Library of Things, launched in West Norwood in July, provides a different way of community sharing: the “Library” is a space where people can pay a small charge (concessions available) to borrow useful items and learn how to use them, such as a sewing machine, or garden tools.
“Hundreds of other people and organisations have helped bring Library of Things to life,” its co-director, Rebecca Trevalyan, said. “We tested the idea in West Norwood Library. Local companies helped with designing and hand-building the containers, and with the graphic design. Corporate companies have donated items.
“Some day soon, we’ll see a Library of Things in our local libraries, churches, and post offices — perhaps alongside skill-sharing projects, community cinema, and practical making spaces. We have secured funding to help five teams around the UK build a Library of Things where they are. The dream is that Library of Things lets anyone, anywhere, borrow anything.”
AS FOR local currencies, problems would arise if they took off and there were different currencies in every town. One possibility is a regional currency, allied to regional banking
“Local currencies are reconnecting people with their local traders, who are their neighbours. If we all buy online, then we don’t get out and talk to people. You forget the damage that is done when people get socially isolated. I just want people to value stuff that doesn’t have a price-tag, and is therefore ignored,” Ms Shaw says.
It is not necessarily about rolling out a one-size-fits-all tool for a sharing economy. Grass-roots initiatives are usually about addressing a local need. But, in essence, they want to make money and the economy work for people, and, as a side effect that is potentially more significant, as they are gradually influencing values.
The recently retired director of the New Economics Foundation, Stewart Wallis, sees this change in values as fundamental. “Since the 1950s, the economy has been driven by the neo-liberal values of free markets, freedom of the individual, small government, and strong defence. The result has been financial crises, massive and widening inequalities, and the destruction of our planet home for short-term gain in the name of economic growth.
“We need a revolution in values that put people and planet first and recognise our limitations; that see security in terms of relationships, not walls and weapons; that value people as people, not as economic actors, and care for those in need. It is shocking how utilitarian we have become, and how little we value young, old, ill, and disabled people.“At the moment, corporations are looking to maximise their return on the money they invest. They view material inputs to production as infinite and freely available, and labour inputs as costs that need to be minimised. But material resources are not infinite; nor is the environment’s capacity to deal with pollution to land, water, and air.
“I want to turn things around so we think in terms of maximising return on scarce resources. We fully account for all the costs of our activities — pollution, road-traffic accidents, climate change — and move towards a circular economy that produces no waste or pollution. We see labour as a good thing, creating jobs that give satisfaction and pay enough that we can also enjoy leisure.
“Related to that, we stop valuing land and housing as investments, which has driven property prices and the cost of living through the roof, and value houses as necessary shelter and homes.”
Sabrina Groschel works for the Ecumenical Council for Corporate Responsibility (ECCR), a church-based investor coalition that collaborates with others on issues of business, human rights, and environmental stewardship, primarily through shareholder engagement. She considers that the Church is often at the forefront of pioneering social justice; nevertheless, she feels that many churches do not realise how much power they have to bring about change.
“[Some] churches focus too much on how to raise money to keep the roof over [their] heads and pay the parish share,” she says. “We are scared of money, and leave it to the treasurer to deal with, which generally means that all we hear is bad news. But instead of thinking only in terms of scarcity, we can view money as a tool that can be used to build the Kingdom of God.
“We can all take responsibility in considering what we can do with our money, and how we involve ;communities in what we are and what we do. It doesn’t matter how little we have. If we have any at all, we can use it in a positive way if we choose to. The same applies to buildings — all that space that is potentially available to the community. I’m happy to talk to any church that wants to explore these ideas.”
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