keeping it local – alternative currencies

One of the big problems with any big company shops, and supermarkets in particular, is that money leaves the local area. Think about it. If I spend £5 on fruit and vegetables at the little shop round the corner from my house, I know exactly where my money goes – it goes to Tony at Round Green Fruiterer, for him to use as he sees fit. He may go to the butcher two doors down and buy some sausages. The butcher may go to the florist, the florist to the launderette, the launderette supervisor to the off-license. Theoretically, my fiver could be spent several times along that same little stretch, each time passing from one local person to another.

If I go to Tesco for the same items, my £5 flies straight out of Luton and off to Tesco’s corporate headquarters, and probably re-emerges as someone’s city bonus.

Obviously that’s an oversimplification, but not grossly so. Andrew Simms gives a Luton-based example in his book Tescopoly, where the five Tescos within three miles of the Marsh Farm estate were found to be a major factor in the failure of re-generation efforts in the deprived neighbourhood. Reasearch found that nine out of ten people in the area shopped at the supermarkets. Others ordered takeaways from outside the estate. “For a community that was already poor,” writes Simms, “each of these spending patterns led to scarce cash leaking out of the area.” For re-generation to work, wages paid and profits made need to remain local. (This is as true of nations as it is of small English towns, which is why the IMF’s privatization agenda in developing countries is so unjust and counter-productive. But that’s another story)

One town in England has developed an interesting solution to this problem. To encourage people to spend money in local shops, and on local goods, they have launched their own currency. One Totnes pound is equivalent to one normal pound, but can only be spent in Totnes, in one of seventy participating shops or market stalls. “The currency distinguishes the local businesses that accept the currency from those that do not, building stronger relationships and a greater affinity between the business community and the locals” says one resident. “The people who choose to use the currency make a conscious commitment to buy local first. They are taking personal responsibility for the health and well-being of their community by laying the foundation of a thriving local economy.” Although the town hasn’t unanimously embraced the Totnes pound, it has proved very successful. Several small towns in Wales are considering similar schemes.

The idea came from across the pond, where Berkshares have become a viable alternative localized currency for the Berkshire region of Massachusetts, promoting what they call ‘slow money’: “Slow money is not sleepy money but awake to the flow of economic life pulsing through a region, shaping its future, providing warning signs and creating options for public policy and private initiative. Perhaps the greatest task of concerned citizens in the twenty-first century is to reclaim responsibility for the consequences of our economic transactions–personally, institutionally, and in public spending. Slow money is the start of this process.”