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OPINION

Local currency could work here

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Comments (7)

Sunday, July 19, 2009

(Updated 3:00 am)

Imagine everyone in Greensboro, particularly those chronically short of money, being able to meet many more of their basic needs.

Imagine a thriving community, with small and medium-sized local businesses supplying many goods and services to city residents and able to employ more workers. This attractive vision represents the real-life potential of a local currency in Greensboro.

A constructive and achievable way to boost Greensboro's economy is by creating an alternative to legal tender.

This is a perfectly lawful proposition. It is legal in the United States to issue an alternative paper currency. Local currencies are presently in use in the Berkshires, Mass. (the BerkShare), Ithaca, N.Y. (the Ithaca Hour), nearby Pittsboro (the Plenty) and elsewhere.

Today, as a banking and financial crisis drags down individuals, families and local economies, the time is right for local scrip, currencies and trading systems. The Greensboro Currency Project is exploring these options.

There is a distinction between real wealth and phantom wealth. Greensboro is a rich city, in terms of real wealth. In "Agenda for a New Economy," author/activist David Korten points out that the wealth of Wall Street is detached from reality. Much of it is phantom wealth.

He presents a startling comparison. In 2008, the financial assets of the richest 1 percent of Americans totaled $16.8 trillion. This superwealthy minority saw its billions in financial assets as representing its rightful claim against the world's real wealth -- all the goods and services produced. For some perspective, consider that in 2008 the estimated U.S. gross domestic product was slightly more than $14 trillion.

To appreciate the significance of these numbers, observe that the richest 1 percent of Americans could claim the entire gross domestic product. Keep in mind that you, your family and your community produce the gross domestic product. Theoretically, and legally, the richest 1 percent could take everything we produce, and we would still owe them more.

The point is this: Much of those billions and trillions listed as assets in the books of high finance represent phantom wealth. They are essentially computer keystrokes recording transactions, such as sales of toxic mortgage derivatives, and are not backed by goods and services.

Phantom wealth is not real wealth, which is why a house of cards made of phantom wealth collapses. Real wealth does not disappear overnight, but phantom wealth can and does. It is a mistake to simply equate money with wealth.

So, what is real wealth?

Real wealth has intrinsic rather than exchange value. Life, not money, is the measure of real wealth.

Some real wealth may not even have a market price. Healthy food, education, fertile land, pure water, caring relationships, loving parents, opportunities to serve others, time for spiritual growth -- these are examples of real wealth.

We have the labor power, skills, love and will to meet our local needs because real wealth abides within the communities of Greensboro.

The function of money ought to be as a token or placeholder, an accounting device. If I grow strawberries and you want strawberries, you may not have anything at the moment that I want. But I will accept a token from you in compensation for the strawberries I sell you. I will use that token to buy something I want from someone else.

The token is a placeholder to facilitate exchange, and you and I are part of a community that agrees to accept this token as an exchange medium.

We can agree to accept and use local currency as an exchange medium in precisely the same way we do with U.S. dollars.

Along with boosting Greensboro's economy by promoting local businesses and employment, the Greensboro Currency Project, in potential collaboration with a local co-op, Deep Roots Market, has a deeper vision of how Greensboro's supplemental currency will enhance the quality of life for our city's residents.

A local currency can help us improve environmental sustainability and build strong, connected communities that embody democracy and economic equity.

Signe Waller Foxworth is a Greensboro resident, social justice activist, and co-chair of the Greensboro Currency Project.

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gsostudent

July 19, 2009 - 6:01 pm EDT

This is a really exciting project. I've seen it work in Great Barrington, MA and I think it could be really beneficial here. Greensboro needs to stop salivating after economic plans such as job creation by 'attracting' companies with the promise of low wage and start looking at what will actually benefit local people. As far as I can tell, there aren't any drawbacks to bolstering the local economy thru the development of a local currency, but there is so much to be gained (reinvestment of $ to the community, supporting local businesses, and a discount for consumers).
I wonder what the candidates for City Council and Mayor think about this project?

Don Stowe

July 19, 2009 - 7:22 pm EDT

What is the plan as far as collecting and paying North Carolina sales tax? You can bet the Department of Revenue will not accept this counterfeit paper. If a merchant has a drawer full of this paper how is he going to buy merchandise to re-stock his shelves?

These dreamers have to come up wih a better pie-in-the-sky scheme than this.

lightening rod

July 19, 2009 - 9:29 pm EDT

Hello Dan,
Signe Waller Foxworth here. This is not a pie in the sky scheme. Yes, there are taxes on income obtained from local currency. We are not talking of counterfeiting anything. Local currency will be distinct; it is not a counterfeit of US dollars, which would be a crime. The local currency does not supplant US dollars; it is a supplementary or alternative currency. Merchants can re-stock their shelves using either medium or both, depending on whether their suppliers are in the trading network and will accept the local currency. Most will probably need to continue using US dollars for at least some of their expenses, but will be able to pay for other expenses, both business and personal, with local currency.

jbcarper

July 19, 2009 - 9:33 pm EDT

It isn't just the collection of sales tax. There is the whole issue of legal tender. Will your bank accept these tokens as payment on your credit card bill? NO. Will the mortage company allow tokens to be used for mortgage payments? NO. How about McDonalds? NO. What about the IRS?
Even if a group was to use tokens as a form of barter trade, they would still be responsible for accounting and reporting income to the IRS. Just because you don't trade in dollars doesn't mean the government, federal and state, won't come looking for a share.
Next question? where do these tokens come from in the first place? who decides how much each token is worth? will these tokens be denominated like dollars, just look different?
Better we spend the time addrressing real issues, like a President and Congress who think they can spend our way into prosperity by the use of debt and the printing press.
Come to think of it, once they destroy the value of the US Dollar, maybe we'll be needing the tokens after all. Full speed ahead.

KingofthePaupers

July 20, 2009 - 7:32 am EDT

"Imagine a thriving community, with small and medium-sized local businesses supplying many goods and services to city residents and able to employ more workers. This attractive vision represents the real-life potential of a local currency in Greensboro. A constructive and achievable way to boost Greensboro's economy is by creating an alternative to legal tender."

Jct: Don't call it legal tender or you'll get in trouble with the FEDS, just call it local or community currency.
Best of all, when the local currency is pegged to the Time Standard of Money (how many dollars/hour child labor) Hours earned locally can be intertraded with other timebanks globally! In 1999, I paid for 39/40 nights in Europe with an IOU for a night back in Canada worth 5 Hours.
U.N. Millennium Declaration UNILETS Resolution C6 to governments is for a time-based currency to restructure the global financial architecture.
See my banking systems engineering analysis at http://youtube.com/kingofthepaupers

jbcarper

July 20, 2009 - 9:04 am EDT

KingofthePaupers: Which hour of child(?) labor would be the base for this Time Standard of Money? An hour of labor at McDonalds? How about an hour of labor picking beans in the fields? Since child labor is illegal in the US, perhaps we should use an hours labor of a Wall Street attorney as the Time Standard of Money? Or the value of an hour's labor of a basket weaver in India?
Sooner or later, all exchange becomes based on money. Money's value floats with the needs of the individual holding the same.
The only real answer for currency is to stop allowing government to print money without any backing in reality.

brianheagney

July 20, 2009 - 5:46 pm EDT

Note that in the original editorial Signe states that it is an ALTERNATIVE to legal tender, she doesn't claim that it IS legal tender.

While I couldn't continue with the group, I am very excited for this project to come to fruition. And I am one small business that is excited to accept the local currency whether it's paper, or Time-Bank based, or whatever ends up working for Greensboro.

I went to the first three meetings of this project and what I find most interesting is that many of us independently had been either trying to figure out, or already living lives dealing in alternative forms of economics. I think while there are people who think this will fail, I believe there are enough of us who already yearn for something like this, and that this will turn into something beneficial, however it turns out. Good luck!