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Local Currencies in the 21st Century: An Interview with the Schumacher Center About Its Upcoming Conference

Rachel Schneider interviewed Executive Director Susan Witt and Conference Coordinator Chris Lindstrom on the importance of developing local currencies within a community setting. In June of 2004 the Schumacher Center for New Economics convened the conference “Local Currencies in the 21st Century”at Bard College. Witt and Lindstrom’s conference report provides details of this landmark event. To see the full schedule of events and to read the workshop descriptions and speaker biographies, see the PDF of the Conference packet.

Rachel Schneider is the director of the Place Based Learning Center at Hawthorne Valley Farm.

Rachel: Susan, can you tell us a little about the history and mission of the Schumacher Center?

Susan:  Yes, of course. E. F. Schumacher was a German-born British economist who authored the book Small is Beautiful: Economics as if People Mattered. Schumacher argued that the soundest economic system is one in which the goods consumed in a region are produced in the region using socially and ecologically responsible practices.

The Schumacher Center for a New Economics was founded in 1980 in Great Barrington, Massachusetts. The Center maintains a Library (including E. F. Schumacher’s books and papers), conducts lectures and seminars, publishes papers, and works on practical programs to implement Schumacher’s vision. Our focus is to create new regionally-based, democratically-structured initiatives to hold land, issue credit, and organize labor. The intent is to decommodify land, labor, and capital so that they realize their full potential for renewing local economies.

Rachel: Chris, you first came to the Center with the idea for the local currencies conference. What was the need you saw?

Chris:  I see the flow of capital in the life of the economy similarly to how the human body works. In the human organism, the body has a sense of what it needs and through a process of osmosis, every individual part of the body receives what it particularly needs as nutrition in order to thrive. It should be the same with how capital flows through the economy. We can no longer function as a world body unless capital is adequately distributed amongst us as a whole. We all contribute to producing that capital, but right now a very few people dictate who and how one gains access to capital. “Local Currencies in the 21st Century” seeks to teach people that the power to issue credit should not reside solely with commercial banks, but needs to be brought to the level of community and the individual. I see this transition as critical to creating peace on earth. The beauty of it is that everyone can participate in making this transition happen. This is not in the jurisdiction nor the responsibility of government. But first we need to get educated.

Susan:  In the late 1800s every region in the United States issued its own currency through local and regional banks. It was not until the Federal Reserve Bank came into existence in 1913 that centralized currency issue predominated. Local currencies helped to create the diversified economies that contributed to the country’s prosperity. Each region was encouraged to develop according to its own strengths in natural resources and human ingenuity. Local currencies were the source of local capital and allowed people to invest in their own communities as they saw fit. Now at the beginning of the twenty-first century, developing countries are taught to rely on credit and capital from global lending agencies and international banks and so have lost the power to create their own economic destinies.

Rachel: What is the main goal of this conference?

Susan:  The main goal of this conference is to help foster an understanding of sound monetary principles so that communities can actualize their legal right to issue their own currencies, create their own criteria for access to credit, and determine their own economic futures.

Rachel: Here’s a kind of basic question. What exactly is money?

Susan:  In a simple barter economy production methods are highly visible. The value of the carrots we offer in trade is directly related to our memory of hoeing in the garden; and we probably have watched our neighbor cut the cordwood we receive in exchange. Barter transactions link us inextricably to a particular place and time.

Money introduces an element of abstractness into the economic process. It allows us to store value and then reorganize it for a different project at a new time in the future, an obvious advantage. But this abstractness needs to be balanced. In the past currency was backed or denominated in real goods. Value could still be imagined in terms of an actual product created by applying labor to natural resources (a bushel of soybeans, a brick of tea, a hank of spun cotton).

Most of today’s national currencies are no longer commodity-based. They are at best pegged to each other, or tied in a vague way to the general productivity of the country of origin. At the beginning of this twenty-first century money has become altogether abstracted from our daily experience. We talk of earning 6% interest, but have no picture of “what our money is doing tonight:” whether it is working to build wheelbarrows in Brazil, grow corn on chemically fertilized land in Iowa, make shoes in a crowded factory in Thailand—or worse.

Chris:  Money is really no more than an accounting system that helps explain and track the deeds we do for one another. It, in its ideal form, is a way of creating a balance between lending and borrowing, because that is really all money is; a promise to pay with something of REAL value, and building trust based on this balance.

Susan:  Ideally money should be the record of our labors for one another, the deeds of love we do for one another. Such a system indicates a cooperation between consumers and producers. To find ways to encourage this cooperation the Schumacher Center developed the SHARE program in which individuals opened up savings accounts to serve as collateral for loans for new businesses needed in the community. Our neighbor Robyn Van En and her farm team beautifully applied the concept of consumer producer cooperation when they formed the first Community Supported Agriculture project in this country at our neighboring Indian Line Farm.

Rachel: Let me play the Devil’s advocate for a moment. We have explored the relationship between money, local currencies and local and regional economies. I understand that local currencies would develop local economies. But why should I buy local? What’s the difference where I get my clothing in the end?

Susan:  Local currencies demonstrate a community’s commitment to support local production. They bring us back to our local market places and away from catalogue and Internet shopping. Local merchants again have an incentive to seek out local producers. This is important because the items we see visibly before us are really the tangible results of a life story. The homemade shawl you buy at a wool fair, contains the history of the mother that wove the shawl and provides income for her family, a real family that lives in your community. To be in touch and interested, vitally interested in that story, is what economic life is all about. Such work is not just about revitalization of your own community but is providing a vision for renewal in village after village around the world, each with their own unique natural and human resources.

Chris:  We live in a world with a global economy, and we will continue to have global trade. But in recent times this globalization has caused us to completely forget about our neighbors. We have become completely disconnected from one another as a result. As communities begin to dissolve and local, rural and local economies fail, we become more and more dependent on government and large chain stores to fulfill our needs. But the federal government and large corporations are so far removed from the people they serve, they loose the sense of reciprocity that occurs when people have a face-to-face interaction.

Publication By

Christopher Lindstrom

Christopher Lindstrom is committed to his work to help transition the economy from a paradigm of extraction to one of regeneration. He has had an interest in and passion for the area of alternative monetary systems and local currencies since 2002. In 2003 he became a volunteer staff member at the Schumacher Center for a … Continued

Susan Witt

Susan Witt is the Executive Director of the Schumacher Center for a New Economics, which she co-founded with Robert Swann in 1980. She has led the development of the Schumacher Center’s highly regarded publications, library, seminars, and other educational programs, which established the Center as a pioneering voice for an economics shaped by social and ecological principles. Deeply engaged … Continued

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