Do you get the potential of local currencies?

Money is like blood for the body economic. It has to keep circulating for local economies to prosper. But what if that economic lifeblood is being drained away by national or international businesses?

I spent Monday and Tuesday this week at an inspirational conference hosted by the Far North District Council (FNDC) – the governing body for the northernmost district in New Zealand. There is only about 55,000 people in the Far North, but the quality of thinking at the conference impressed mightily.

The district has beautiful beaches and magnificent forests, but like many other rural areas in New Zealand, is in decline. Population is slowly declining as people drift to cities to find work. A reason for this decline is the increasing presence of national and multi-national businesses. In earlier times, the money spent in the district, largely remained and circulated in the district, but now increasing amounts are syphoned off as profits to businesses head-quartered out of region.

The conference presenters focussed on solutions. Economic instruments, including local currencies and time-banks were the focus on Monday afternoon. Here is an introduction.

In regions such as the Far North there are people who have no work, and there is work that needs doing. The current means of exchange, the orthodox financial system, isn’t meeting the needs of rural communities. Time-banks, or local currencies, create a new means of exchange. And the local currency circulates in the local economy building wealth back into local communities.

Di Maxwell, an FNDC Councillor, looks to the city of Bristol as an example for her district. The Mayor of Bristol is paid with Bristol Pounds.

Recession-proofing?

The last recession had its roots in the corrupt practices of large corporates. Their failures reached deep into rural communities around the globe. There is no doubt that our global economy is now deeply inter-connected, and I believe that that is ultimately a good thing. Local economies need to participate in the global economy, but they need to do it from a position of strength, and not left exposed to the full blast of global competition. Laurence Boomert, speaking at the conference compared a local currency to a safe harbour. If, or more likely, when, we have a major global economic failure, local currencies have potential to shelter people from the harshest impacts. They encourage local suppliers and may give them the edge required to  survive and thrive.

Bristol plans to spread the Bristol Pound concept around the U.K. We need local kiwi currencies too!

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