SUSTAINABILITY & CURRENCY

Here’s an aspect of sustainability that – when I first read about it – hit me as “off the wall.”  But the more I learn about it, the more it seems essential to sustainable living.

I recently spenT a day with Paul Glover, who organized the largest and most established system of alternative currency in the U.S., “Ithaca Hours.”  His opening comment set me back.  Paraphrasing …

“National currency controls people;  local currency connects people.”

 Sustainability goes way beyond food, clothing and shelter.  The ultimate goal of sustainable living is joy … happiness … quality of life feelings.  The more local currency circulates, the more everyone in the community has the goods and services they need.  “Sustainable living” includes living in abundance.  Not hoarding mountains of wealth;  not greed – wealth for the sake of wealth;  but abundance … an ability to get those goods and services you need to live a joyful life.

Is it legal?

According to our constitution – and Paul’s discussions with government agencies – private organizations can print currency if it doesn’t look like a U.S. dollar.  It can be taxable if it’s earned by a professional whose main income is derived by providing those goods or services.  Time dollars – such as Ithaca Hours – are exempt by IRS.

How does it begin?

In Ithaca, when someone volunteered to participate, they were published in their directory … their name, contact information, and the goods and/or services provided.  The person is then issued a starter amount of four Ithaca Hours, as payment for agreeing to be on a list of traders.  The directory is then printed and made available on-line.

Roughly 90 participants began to use the currency.  One might hire another to baby sit, and pay with Ithaca Hours.  The baby sitter would buy food at the farmers’ market.  The farmer might take his family bowling.

Paul mentioned that the movie theater owner began amassing large amounts of Ithaca Hours and didn’t know what to do with them.  Paul went through the directory with the owner and identified a huge range of goods and services that the owner needed … someone to clean the theater, groceries, lawn maintenance, dry cleaning.

Paul wrote articles for an accompanying newsletter, featuring success stories that happened because of the currency’s use.  The newsletter included advertisements from retailers and service providers – including professionals such as physicians, attorneys and accountants.  As more people became aware of the system, more joined … climbing up to 600 participants.  That provided an enormous range of goods and services.

An Ithaca Hour was valued at the average wage in the area, $10.  Some retailers accept Ithaca Hours for a percent of the goods, and regular dollars for the rest … such as 50-50.  If a surgeon felt that an hour of his or her time was worth more than an hour of a baby sitter’s time, they negotiated a ratio that felt fair to both.  In practice, Paul reported that such negotiating turned out to be easily done.

The biggest problem was the kind experienced by the movie theater owner.  People who amassed a lot of Ithaca Hours had to be helped to see opportunities for acquiring things they needed.  If too many Hours are pulled from circulation by someone who doesn’t know how to spend them, the system can stagnate.  Keeping the currency circulating is what leads to greater abundance.

In Ithaca, the currency strengthened new shopping patterns – especially with local retailers.  And people felt a greater sense of abundance.

The vitality of the system – especially initially – seems to depend on the vitality of someone who wants to promote and build it … finding volunteers, recruiting retailers, working with people who amass much more than they spend, and spreading the word – as with the newsletter.

Ithaca Hours has an Advisory Board.  Such Boards – usually 5, 7 or 9 people – help the system feel more community based.  They are helpful in brainstorming new ideas and new ways to use the currency.  And if the person who gets the system started wants to do something else in life, the Board can find a replacement, so the system’s not dependent on one person.

Evidently, whether full-time or part-time, the system does need someone to maintain it … to answer questions, work with new retailers, enlist new participants, update the directory, and print new currency as the number of participants grows.

Inflation is printing more money while assets the money represents do not change.  Each unit of the money – such as the dollar – is then worth less.  Because each participant is issued four Hours, and new currency is only issued as new people enter the system, inflation can’t happen.

“Fiat” describes a currency with no backing other than the confidence placed in it by its users.  When the U.S. went off the gold standard, our dollar became fiat.  When confidence in the dollar wanes – as is happening – the price of gold goes up – as is also happening.  (Technically, gold is fiat;  you can’t eat it.  It’s only worth what others believe it’s worth … though it’s the most stable fiat in history.)

The Ithaca Hour is not fiat.  It represents an hour of someone’s time who’s providing you with a service (or commodity) you need.  That hour is a tangible commodity.  It therefore has greater credibility.  And it can provide more support for living sustainably … with abundance.

One thought on “SUSTAINABILITY & CURRENCY

  1. Jct: Millennium Declaration C6 for a UNILETS time-based currency has the Ithaca Hours as an ideal model! I especially like their interest-free loan program. In 1999, I paid for 39/40 nights in Europe with a timebank IOU for a night back in Canada worth 5 Hours which I recorded on my public do-it-yourself timebank account: http://johnturmel.com/unilets.htm I’ll gladly take Ithaca or anyone else’s Hours chez moi in Canada if you’ll take mine chez vous.