New Opportunities for Main Street

In the twelve months since the onset of COVID-19 communities have experienced immeasurable economic instability — closings of small businesses, reduction in tax revenue, growing unemployment, disruption of schools, in addition to loss of lives to the pandemic. Despite this fracturing, what we see emerging is greater adoption of alternative ideas for uplifting local economies–ideas that can inject capital into communities and help to increase circulation of goods and services.  One such idea is that of universal basic income (UBI), as championed by 2020 presidential hopeful and New York Mayoral candidate Andrew Yang. Another is the use of local currencies such as BerkShares.

Launched in 2006, BerkShares is a local currency for the Schumacher Center’s home region of the Berkshires in Western Massachusetts. In partnership with 3 community banks and 400 participating businesses, more than 10 million BerkShares have circulated within the local economy over the past 15 years. BerkShares has become a model for community economic empowerment.

In response to several inquires regarding the ability for local currencies to address COVID relief, in April the Schumacher Center released a concept paper entitled “Local Currencies Aiding Municipalities in Recovery.” The work of BerkShares and the excitement generated by this concept paper was profiled in The Boston Globe on December 24, 2020. The following is an excerpt from the piece authored by Julia Hotz.

In recent times, US alternative currencies have been used by the private sector alone. Could American municipalities start sponsoring, accepting, and making payments with local currencies, as their European counterparts do?… Not only are these policies “perfectly legal” — so long as the currencies are exchangeable for US dollars — they also have “plenty of behavioral precedent,” says Robert Hockett, a law professor at Cornell University and one of the proposal’s legal advisers. During the Great Depression, local governments issued and accepted scrip — essentially, IOU notes to pay taxes — to support cash-strapped residents.

We invite you to read the full text of this article on The Boston Globe‘s website.

Wishing All Well,

Staff of the Schumacher Center