Community Currencies Defined
 
 
 
Community currencies provide a means for returning to communities and regions some level of control over their economic resources and means of production.  They focus on the idea of increasing local sustainability, decreasing reliance on larger market systems, and fostering a sense of community through the promotion of local trade and local purchasing.  This is accomplished through locally created, locally traded forms of currency.  The practice of bartering, or trading, services is not a new phenomenon.  People have done this for centuries, with both formal and informal systems in place throughout that time.  What might be new, though, is the idea of using community currencies as a tool for community and economic revitalization.  
 

How do Community Currencies Work?

Community currencies, in general, function as a supplement to the standing market currency.  There are a variety of systems in place around the country, most of which fall into two major categories:

Programs using printed currency make the currency available for redemption and trade within a certain geogrraphic area, usually bounded by city limits.  Many of these efforts are modeled after Ithaca HOURS, a program supplying community-based currency in Ithaca, NY.  Individuals and businesses advertise their goods and services in a newsletter and receive a limited number of HOURS in exchange for their participation in the program.  The Ithaca HOUR holds a value of $10.00, which is tied to the average minimum wage in the area.

Individuals accept Ithaca HOURS as payment for goods and services they offer, legitimizing work that may not have been regocnized in the traditional employment market.  This system also encourages new transactions and interactions between community members.  Local businesses and also participate, accepting the local currency as payment for all or part of their good or service charges.

The general purpose here is to support and encourage local transactions, increasing the local capacity to gain control over it's economic life while generating new community-level interactions.

Programs using time as the community currency have a slightly different focus.  Based on the Time Dollar created by Edgar Cahn and Jonothan Rowe, these programs maintain a computer system whereby individual accounts are managed.  If Mary spends one hour taking Jane to the grocery store, she logs one hour on her account.  She can then cash in her hour by receiving help from Jim, who might clean Mary's house.

Time Dollars allow participants to access goods and services they previously paid for with the standard currency.  Oftentimes these are goods and services we used to rely on family and neighbors for.  But as our society has changed, the service economy has expanded to fill in these gaps.  Time Dollars are about reclaiming a sense of community by offering our time to one another.  They also serve to validate all participants' contributions as holding equal value, regardless of the work being performed.  One hour of work is worth one Time Dollar credit.  This provides the basis for empowering the individual participants as well as building the community's capacity to address it's needs.
 

Evaluation of Community Currency Initiatives?
 
We can analyze the logic behind community currencies and anticipate some set of effects a community currency system might have on a locality, or on the people who participate in it.  But analysis has not gone so far as to actually calculate the direct economic impacts of community currency efforts.  This area of study will be important if the movement is to ever become part of the mainstream in community economic development.
 

How are Community Currencies Beneficial?

Community Currencies Can: