Complementary Currency

What medium/form is used for the complimentary currency?

The Ithaca Hour is a paper currency based on one hour of work and the value has been determined by an average hourly wage of $10.

I can hear some of you jeering already, WHA, $10 an hour!!!

I've attached a pic. of a 2 hour note.

The US paper currency has many safeguards to try and prevent counter-fitting. There are great printers on the market today. How would you control the security of the paper currency and who would print the money for the participants?

$10 dollars an hour? I'm just wondering who would pay $60 dollars for a knitted hat, when they could go to Not-So-SuperWalmart and get a knitted hat for $.96.

The Ithaca Hour is a paper currency based on one hour of work and the value has been determined by an average hourly wage of $10.

I can hear some of you jeering already, WHA, $10 an hour!!!

I've attached a pic. of a 2 hour note.

I want my money in relative dollars. Not time. I can not grasp this concept of time. Time seems to go quickly in the morning, slowly at the end of the day. Faster when I have a deadline, slower when I am awaiting payment. If only time were constant.

The US paper currency has many safeguards to try and prevent counter-fitting. There are great printers on the market today. How would you control the security of the paper currency and who would print the money for the participants?

$10 dollars an hour? I'm just wondering who would pay $60 dollars for a knitted hat, when they could go to Not-So-SuperWalmart and get a knitted hat for $.96.

I would ask similarly, who would pay $60 US dollars for a locally crafted, hand knitted hat, when one could go to the Not-So-SuperWalmart and get a knitted hat for $.96 US cents? I think you and I both know who, the person that doesn't understand the true cost of the .96 hat to society, the planet, etc.

For the counterfeitting, you are quite right about this being a problem because of today's printing capabilities. I asked Stephen Burke, the Director of Ithaca Hours if they have had problems with the Ithaca Hour. He said he did not know of any instance of counterfeitting. The Hours are printed by a printing service they trust and they use serial numbers and faint images to limit someone's ability to counterfeit. Also, what would be someone's objective to counterfeit money? To become more wealthy, right. So, if someone all of a sudden started unloading a bunch of Ithaca Hours, the community is small enough this activity would be quickly detected. Counterfeitting local currency also carries the same illegal repercussions as counterfeitting US currency.

The hour of measure is more symbolic than a hard and fast rule. The businesses or individuals set the amount of Ithaca Hours they charge or accept for their services. It's no different than how the free market operates with US currency. One can choose to use the services of a house painter that charges x dollars per sq. ft., or a rate of x dollars per hour and another house painter may charge twice as much as the first.

I keep referring to Ithaca Hours because it has been well studied, but there are thousands of currency systems in place, each uniquely designed for the locale it serves. This would be the beauty of developing our own currency here. I also asked Stephen how they would measure the claimed benefits to the environment of using a local currency. One of the researchers found that the Ithaca Hour on average was used 30 times before it left the community, compared to US currency that was used on average 3 times. The reasoning is that by individuals keeping their purchases local, they have effectively reduced their ecological footprints. Since I'm working on this for an Ecological Economics course, this is the part that interests me most, determining the ecological value or cost benefit of such a system.

One thing I am curious about is not spending, which everyone seems to be focusing on, but what about saving? It would be hard to retire on a currency that has no potential for compounding interest. In saving for the future you would have to hoard your Ithica bucks at home (a risky prospect considering fire, theft, etc) or pay a bank to store them for you securely, which is a money losing endeavor.

I would ask similarly, who would pay $60 US dollars for a locally crafted, hand knitted hat, when one could go to the Not-So-SuperWalmart and get a knitted hat for $.96 US cents? I think you and I both know who, the person that doesn't understand the true cost of the .96 hat to society, the planet, etc.

Which is just about everybody. And if you want to get people to reduce their ecological footprint, why don't you get people in south Walton to turn off some lights. That has got to be the most lit up place I have ever seen. I went out to Driftwood last night and even saw where some guy had put lights in the top of 40' pine trees. I really thought conservation had taken place in that area of the county, but I was wrong, again.

One thing I am curious about is not spending, which everyone seems to be focusing on, but what about saving? It would be hard to retire on a currency that has no potential for compounding interest. In saving for the future you would have to hoard your Ithica bucks at home (a risky prospect considering fire, theft, etc) or pay a bank to store them for you securely, which is a money losing endeavor.

This is a great point to bring up. Complementary currency is meant to be a medium of exchange, not a means of savings. The idea is that complementary currency is used to complement the existing currency and help free up some of those US dollars, so they can be used for savings and investing.

Which is just about everybody. And if you want to get people to reduce their ecological footprint, why don't you get people in south Walton to turn off some lights. That has got to be the most lit up place I have ever seen. I went out to Driftwood last night and even saw where some guy had put lights in the top of 40' pine trees. I really thought conservation had taken place in that area of the county, but I was wrong, again.

Thanks for responding Walton GOP. I'd like to hear more on your thoughts about bringing an alternative currency to DeFuniak that you mentioned earlier.

I'd love for people in SoWal to reduce their ecological footprints by turning off some lights, though that's not the only thing we need to do.

Please speak for yourself if you'd prefer to shop at Wal-Mart or with the lowest bidder. I choose not to and I know I'm not alone. That's not to say that I don't shop at any big box stores, I do., but I try (the best I can in SoWal) to make conscious purchasing decisions that are more favorable to local and or hand crafted goods and services. I also on occassion choose to go without. This is my personal choice, but I believe strongly in voting with my dollar. Some choices are out of our control right now and I'm certainly not saying that my choices are better than someone elses, but I think we as consumers can learn to consume in a way that restores the social, cultural, economical and environmental integrity of natural and human communities.

Familiar with Buckminster Fuller?

Familiar with Buckminster Fuller?

Sure. Great architect, love those geodesic domes, and a great visionary. The Buckminster Fuller institute is devoted to building a sustainable future.

Sure. Great architect, love those geodesic domes, and a great visionary. The Buckminster Fuller institute is devoted to building a sustainable future.

"Critical Path" a good tough read. I think it was in that book, as well as other places, where he presented the idea of inexpensive housing for the future using the geodesic domes you mentioned (reminds me of the opening of the tv show "Buck Rogers in the 25th Century" showing New Chicago). Anyway my point- His idea, or what I recall, was to carpet bomb the forests in Brazil to then drop premanufactured houses down for the natives into the fresh clearings. It was written 50 or so years ago? and read by me 10 or so ago. I remember being amused and horrified. I bring him up because this thread reminds me of the solar energy ideas presented by Fuller. Essentially closed systems and open systems - taking in and keeping more than you send out thus building wealth/quality of life.

Hmmm...I haven't read Critical Path, though it sounds like something I'd like to add to my long reading list. From your comments and I'm admittedly not familiar with Fuller's solar energy ideas you speak of, it's unclear to me if you find this thread to be amusing and horrifying or potentially a way to build wealth and quality of life. Maybe you could explain more or connect the dots for me.

I really don't know much about Ithaca, but with SoWal being mostly a tourist destination, I wonder how many times the complimentary currency would be spent locally, in comparison to Ithaca. Along those same lines, Counter-fitting the complimentary currency would not simply be used as a means to grow wealth. It could be a way to live for almost free. The Ithaca system may not know of counter-fit local currency, but I wonder who is testing it to know? The Banks or Feds check US $. If you have ever seen how the Feds print $$$ you know how complex the paper making and printing can be, and the security has to be very tight. Hiring out a local trustworthy printer might sound good in theory, but it takes only one employee to steal the digital image. It would also be very easy to scan the money and print your own. Even with our US currency, it would be fairly easy to scan and print the money, and pass it off.

I cannot think a way around this counter-fitting possibility, other than using some sort of debit/credit (that's +/-), where you could buy into the local currency, and have your Local Card credited, much like a gift card. The kink with that is how do you add the credit for producing hours of labor (like making a hat)? I guess you could have a few places for exchange such as that, but then it is still up to a system of honesty, which may work in most cases, especially in a place like SoWal. Maybe it would help grow even more trust into our already, fairly safe area.

I still think the IRS is going to want to be able to track income and sales tax, and this local currency seems almost invisible to the Feds and State. Since WalCo also charges a Local Option Sales Tax of 1%, they too would want a piece of the pie. If I had to guess, the governments would want some sort of tracking method.

Regarding the "fair exchange," I hear what you are saying about using the $/hour system as a guide or example. I would love to make Gordie Hinds a hat in exchange for a painting which takes him six hours to create. It seems very interesting. Think about this scenario, you have a plumber and a doctor. The plumber's kid has a nasty cough and needs to see a doctor for a diagnosis and medicine. The Doctor's house has a toilet which is leaking onto the floor and going to mess up the entire 1st floor of his home if it is not repaired. The plumber's kid will eventually recover from the cough, but that leak in the toilet at the Doctor's home, isn't going to stop on its own. The Plumber's work may actually be worth more than the doctor's, in this particular case. Treating a compound fracture on the plumber's kid, may be a different case. Anywho, this local currency somewhat levels everyone's wages depending only the hours involved, but not noting that the doctor had many years of expensive school and training.

Exchange is interesting though. I can remember being in the second grade question my teacher why diamonds were more expensive than water. She could only answer that it was supply and demand. There was a lot of water and not many diamonds. That never answered my question because (close your ears, BeachBummet) 99.99+% of people have no real value of use for diamonds, but 100% of people will die within a few weeks of not drinking water.

SJ, I have similar questions, which may or may not be satisfactorily answered within the scope of my course work. I venture to guess there is much more to this than the brief answers I've provided and would entail more extensive research to actually put something like this into place. You mention debit cards being another option and this falls more in line with the LETS system which has been around for about 30 years. It doesn't use currency, but instead an accounting system. The point of having a circulating currency is to alleviate some of the confusion and necessary education with an accounting system. Everyone knows how to use cash. The credit does have to start somewhere and it does require trust. This is the part that is suppose to be community building. The obligation to the IRS is the burden of each user of complementary currency, just like I'm suppose to tell the IRS if I receive part of payment for my business in the form of knitted hats. If I don't, then I'm the one at fault and guilty of tax evasion. Who's checking? Who knows. Someone, I'm sure.

I really liked your anology of the water and diamonds, BTW.

Exactly, how currency came into being in the first place, so people could trade goods that weren't necessarily of value to them personally. If you have hats and Gordie has paintings, but he can't use your hats, the only way you two can trade is if you trade something else of value that other people can use. Otherwise, Gordie would have to take your hat in the hopes that someone else will want to trade the hat for something of value to Gordie. In a LETS system, no currency would trade hands in this exchange, just a credit or debit would be recorded for each transaction.

Anyhow, enough about that, back to leveling the playing field. I think one of the goals of complementary currency is to create more equality and value for services and goods that are currently undervalued, like the making of the $.96 hat from Wal-Mart.

Lastly, in response to tourism, this would be a unique situation for our area and somehow would have to be cleverly incorporated into the whole system.

Well first of all, you need to get over the evils of Walmart. While I certainly am not there biggest fan, you have to admit, they have kept prices low which has led to a higher standard of living for people, especially the working class.

You are never going to get people to buy a significant number of any product at $15 when they can get the same basic thing at $1. As much trouble as we have educating people in things like math, how are you going to make a dent in the general feelings of their own economic well being?

When I looked at Berkshares, the idea was to introduce something like that into the culrural side of business in DeFuniak Springs. Thinking was it would be easier to explain to the more educated persons. From there we would start trying to bring in businesses that wished to participate. I think it would be a great way to tie nowal and sowal together in a more symbiotic relationship. All those sunburned tourist need something else to do after the first day of roasting, at least until they recover a bit.

I'm not proclaiming any evils of Wal-mart, simply saying I choose not to shop there. Yes, I'd say they have given people access to more goods at deeply discounted prices, there by raising some aspects of their standard of living. But at what cost to the environment, other people in other countries, and the local culture? Maybe in the short term this is a positive cost benefit, though couldn't we move beyond Wal-mart and possibly come up with some other creative means to raise peoples standard of living, which BTW is different from quality of life. Improved standards of living may improve quality of life, though quality of life transcends monetary gain or increased standards of living once our necessities have been adaquately met. Education and increase in wages raise peoples standard of living.

Just maybe, there is another option besides Wal-Mart that can give people what they need and strengthen our communities. Plus, I don't think you give people of lesser economic means enough credit. Having been there myself (having to choose between going to Wal-Mart because it was what I could afford or choosing to shop with a local vender, which I could not) I would have welcomed something like an alternative currency that I could participate in and give me some sense of pride and connection to my local community.

Anyhow, I appreciate and would encourage your idea of bringing NoWal and Sowal together in a more symbiotic relationship. You mention introducing local currency into the cultural side of business in DFS. It would follow that you see something amiss or lacking with this culture that you feel moved to do something about. Maybe you'd be interested in collaborating in the future?

I'm not proclaiming any evils of Wal-mart, simply saying I choose not to shop there. Yes, I'd say they have given people access to more goods at deeply discounted prices, there by raising some aspects of their standard of living. But at what cost to the environment, other people in other countries, and the local culture? Maybe in the short term this is a positive cost benefit, though couldn't we move beyond Wal-mart and possibly come up with some other creative means to raise peoples standard of living, which BTW is different from quality of life. Improved standards of living may improve quality of life, though quality of life transcends monetary gain or increased standards of living once our necessities have been adaquately met. Education and increase in wages raise peoples standard of living.

Just maybe, there is another option besides Wal-Mart that can give people what they need and strengthen our communities. Plus, I don't think you give people of lesser economic means enough credit. Having been there myself (having to choose between going to Wal-Mart because it was what I could afford or choosing to shop with a local vender, which I could not) I would have welcomed something like an alternative currency that I could participate in and give me some sense of pride and connection to my local community.

Anyhow, I appreciate and would encourage your idea of bringing NoWal and Sowal together in a more symbiotic relationship. You mention introducing local currency into the cultural side of business in DFS. It would follow that you see something amiss or lacking with this culture that you feel moved to do something about. Maybe you'd be interested in collaborating in the future?

The difference is you seem educated. We have a serious problem in this country, and in this county. We are not putting enough emphasis on education. Educated people tend to see the bigger picture and not just their little part of the world. Educated people understand that we are here today because of our own actions.

Yes I would love to talk about this further. I am still trying to figure out just how something like this would be implemented up here, but I have already met with some of the more culturally involved people and discussed the idea. They are also very interested.

Although I haven't read through the entire thread, I'd like to offer up an eye-witness experience of a process similar in nature to that being discussed.

Several years ago (before Hurricane Ivan), I visited a small zoo out near Pensacola. Someone in front of me in line paid for their admission with some sort of "Trade Dollars." Being the economic wonk that I am, I asked the clerk about this program...this is how I remember it:

There was a cooperative of local owners of service/retail operations (shops, doctors, dentists, car repair, etc). They "bought in" to the bartering program with a lump sum (let's say $500) and were given either paper "currency" or a "charge card" that they could use in any of the members' operations. The "dollars" were exchanged at face value with no change given, so for an admission charge of $12.50 the buyer could either hand over $13.00 in "trade dollars" or $12.00 in "trade dollars" and 50-cents in US currency; any tax due, however, would have to be paid in US currency. The sale is rung up on the register, and at the retail operation (in this case the Zoo) the tax and trade dollars are put in a separate envelope to be turned into the accounting department. The actual "trade dollars" are, I assume, turned over to the boss who will decide how they want to spend them.

All-in-all, it appeared to me be a very tedious process (the clerk said it was a "pain in the azz" as it took some time to do the additional work to record and separate the sale documents and tax currency), and I assume there was some fee paid to the "Trade Dollar Overlord" who took care of handling the membership documents/manuals; lists of members; printing/distributing the trade dollars; and recording information from the "credit cards."

IMO on a small scale, I agree with the clerk--on a very large scale (with the public involved), it is a disaster in the making.

This may have been the program they used: http://www.floridabarter.com/barter_benefits.html

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In response to WaltonGOP, I'll just add that giving people hope for a better future, as well as desire to achieve a better future are equally important. Ok, that's it and possibly the research I'm currently doing could be of some use in your future project. Ta ta, and I think it's easy enough to figure out who I am if you want to brainstorm in the future. Have a happy holiday!