" />
Building a world of
resilient communities.

MAIN LIST

 

The challenge of re-localisation

Feasta’s particular approach to sustainability economics is to focus attention on the inadequacies of underlying systems. The development of local economies suffers from two particular adverse systemic effects – the in-built transfer of wealth from those that need money to those that already have money via the servicing of debt; and the transfer of wealth from the locality to the centre as globalisation progressively centralises economies. Local currency developers need to develop strategies that mitigate these two effects or they will remain limited in size and influence.

Re-localisation is often cited as a primary objective of local currencies. The recently launched Bristol Pound state their key objectives as: to support local independent traders ( “keep our High Street diverse and distinct”), and to boost the local economy “spending Bristol Pounds stops money leaking from the area”. These are objectives shared by all local economies (and arguably by any sub-economy with an identifiable identity such as a developing country).

This local focus can clearly have a positive impact on the local ‘brand’. It can highlight the businesses that have real roots in the area by providing sustainable employment, and which are owned by local residents. It can help residents identify more with their locality and builds a more solid sense of place – what Common Ground call local distinctiveness.

More than this, though, a well designed currency can facilitate local substitution and accelerate the frequency of exchange in the locality.

Any in-built promotion of local businesses (say via an online directory) can surface opportunities for substitution – for sourcing goods and services locally that were previously sourced out-of-area. Simply spreading awareness of local suppliers is valuable. [The synergy with the Transition movement is clear here - as some producers graduate from self-consumed production to selling produce locally, they need a market.] The extent to which this substitution is actually achieved though is often not clear. Currency designers can focus attention on this area by seeking out and publicising examples of substitution.

Another aspiration of local exchange currencies is to increase the amount of local trade – what we might call Local Domestic Product (LDP) above the level at which it would stand if it relied solely on the national currency. This ‘additionality’ is extremely difficult to prove, but being able to quantify the LDP attributable to the new currency is a good starting point.

Note that identifying and quantifying both substitutions and LDP effects is facilitated by access to the audit trail available to electronic currencies, and made difficult by anonymous paper ‘cash’ transactions.

Finally, the leaching of currency from local economies is in no small measure due to the repayment of interest on debt to national/ international lenders. For the currency designer this points to an important line of action – sourcing availability of capital finance from locally based institutions such as credit unions.

The Feasta Currency Group welcome the rich and varied responses to the challenge of re-localisation. The FCG itself continues to develop the ideas behind the Liquidity Network (LQN), as originally envisioned by the late Richard Douthwaite.

The LQN approach is to focus on currency as a means of exchange. Unlike the Brixton and Bristol Pounds, LQN currency (generically ‘quids’) is not formally exchangeable with sterling (or euros). It ‘designs in’ the possibility of rewarding users for pro-currency behaviours and indeed penalising them for anti-currency behaviour such as hoarding. Currency is spent or grant-aided into circulation rather than being exchanged for the national currency. A strong electronic currency element is preferred, to facilitate the generation of scheme metrics, as described above. For more information about LQN please email currency@feasta.org.

Graham Barnes
Feasta Currency Group
gb@feasta.org

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.


Degrowth by Designed Disaster?

The degrowth movement has been developed in response to neoliberal reality, …

Requiem for the Imperial City

Might it be time for policymakers to start thinking about ways of trimming …

The Music of Narcissus

Beautiful Narcissus leans over the musical pool. His marvellous ingenuity …

Connecting the Dots the P2P Way

The emerging answer for a new mode of value creation is the re-emergence of …

The Forest Economy: Woodland as New Economy metaphor

As we walked down through this ancient woodland, with its stream, its …

Our Fossil-Fuel Economy Destroys the Earth and Exploits Humanity - Here's the Shift We Need to Be Sustainable

A just transition to a regenerative economy restores our relationship to …

Why the P2P and Commons Movement Must Act Trans-Locally and Trans-Nationally

The only way to achieve systemic change at the planetary level is to build …