Regional Money comes to the United States

Early in this year I found myself very interested in the emergence of the concept of "regional money." I first became aware of the concept through a BBC report on the Urstromtaler, a currency in Magdeburg that could only be used for payment in local businesses. These notes could be exchanged with Euros at a 1:1 exchange rate; but every note had a time limit, after which it would begin to lose value. By the time SPIEGEL ONLINE ran an analysis of this idea, the approach had been adopted by 22 regions in Germany.

Today Scott Malone reported for Reuters that his concept has now surfaced in Great Barrington, Massachusetts. The unit of currency is the BerkShare note, one of which may be purchased for 90 cents. In other words the BerkShares currency system automatically builds in a ten percent discount for purchases from local merchants. Furthermore, as Malone reported, the BerkShare is far from the only regional currency in the United States:

The BerkShares program is one of about a dozen such efforts in the nation. Local groups in California, Kansas, Michigan, New York, Oregon, Pennsylvania, Vermont and Wisconsin run similar ones. One of the oldest is Ithaca Hours, which went into circulation in 1991 in Ithaca, New York.

Since the SPIEGEL analysis was not a particularly optimistic one, I am very curious as to how well these programs will fare. My guess is that the strength of the system will depend heavily on the strength of the community, doing best in settings that are tightly-knit socially and do not want to see their regional commerce swallowed up and spit out by the monster of globalization, over which they have no control, let alone a voice that can be heard. I also suspect that American regional money reflects discontent not only with globalization but also with a national government that is perceived as placing itself further and further away from the needs and aspirations of ordinary American citizens. In a way it is a variation on that small New England town that put all of its tax revenue into an escrow account, telling the Federal Government that the money would remain there until the country pulled out of Vietnam. Sometimes you have to do things just to get the Government to pay attention to you, and that may turn out to be the primary service that regional money provides.