Community Currencies

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Burl Humana
Gilson Schwartz

People have always traded or bartered with each other, using different tools and materials to represent and store value in various kinds of transactions; trade, investment, consumption, production, marriage, kinship, sacrifice. In complex, urban and global capitalist societies, money expands the potential for growth and accumulation, while also creating new forms of wealth and power concentration, regulated by central banks and other supervisory authorities at national and international levels. Community Currencies or “complementary currencies” offer a solution for local markets deprived or unserved by global or national currencies.


Thomas Greco states three basic ways in which conventional money malfunctions: there is never enough of it, it is misallocated at its source so that it goes to those who already have lots of it, and it systematically pumps wealth from the poor to the rich. The symptoms of a "polluted" money supply are too familiar: inflation, unemployment, bankruptcies, foreclosures, increasing indebtedness, homelessness, and a widening gap between the rich and the poor. However, the ultimate resource of the community, the productivity, skills, and creativity of its members, is not limited by lack of money. (Meeker-Lowry, 1995)


According to Michael Linton, "Money is really just an immaterial measure, like an inch, or a gallon, a pound, or degree. While there is certainly a limit on real resources -- only so many tons of wheat, only so many feet of material, only so many hours in the day -- there need never be a shortage of measure. (No, you can’t use any inches today, there aren’t any around, they are all being used somewhere else.) Yet this is precisely the situation in which we persist regarding money. Money is, for the most part, merely a symbol, accepted to be valuable generally throughout the society that uses it. Why should we ever be short of symbols to keep account of how we serve one another?" (Meeker-Lowry, 1995)

"The proper kind of money used in the right circumstances is a liberating tool that can allow the fuller expression of human creativity. Money has not lived up to its potential as a liberator because it has been perverted by the monopolization of its creation and by politically manipulating its distribution -- available to the favored few and scarce for everyone else."2 Creating community currencies may foster exchanges among people that need it most.

Conventional money is strictly regulated by central authorities at a federal level. Its regulated scarcity is a major source of powerful economic policy (i.e..raising interest rates to curb inflation) that plays on the rules of capitalist competition. Community currencies, on the other hand, are designed to counterweight scarcity by promoting exchanges founded on cooperation or collaboration. The emergence of new information and communication technologies has promoted numerous local projects that use “open source money” or “collaborative money”. Both “conventional” money and “community” currencies, however, rest on the same foundation, that is, confidence in the agreed on rules of production and supply of monetary and financial instruments (credits, loans, time sharing, etc.). Both are “conventions” designed and operated by living human communities.

Community currencies may also be qualitative rather than quantitative, so that the “purchasing power” of the currency takes advantage of specific ranges of skills and resources (child and social health care, environmental campaigns or edutainment projects), unlike the conventional economy which values certain skills and devalues or ignores others as effects of blind market forces. The move toward “community” currency is motivated by the desire to bridge the gap between what we earn and what we need to survive financially.

Local currencies are seen as a community-building tool. Communities may range from solidarity economies in slums and vulnerable social areas, to game players, to collectors or charity donors; spread throughout the entire world as digital networks promote new forms of community life. Community currencies not only prove a commitment to community building and to supporting what’s local but also may function as a path towards a greater experiential understanding of the role of economics and money in our daily lives. Any community can, in principle, design currencies backed by something, tangible or intangible, that the community agrees has collective value.

Hundreds of community currency models are at work these days. These are a few of the community currency reference sites - Bernard Lietaer,; Resources for Community Currency Activists,; Luca Fantacci, "Complementary Currencies: a Prospect on Money from a Retrospect on Premodern Practices",; Social Trade Organisation,; Open Money,

ITHACA HOURS, where everyone’s honest hour of labor has the same dignity and LETS, Local Exchange Trading Systems are examples of such models. These two community currency models illustrate new forms of social and communicative practices that have a real impact on living structures at a local level.

The ITHACA HOURS system was created in 1991 by Paul Glover, a community economist and ecological designer. With ITHACA HOURS, each HOUR is equivalent to $10.00 because that’s the approximate average hourly wage in Tompkins County, Ithaca, New York. Participants are able to use HOURS for rent, plumbing, carpentry, car repair, chiropractic, food (two large locally-owned grocery stores as well as farmer’s market vendors accept them), firewood, childcare, and numerous other goods and services. Some movie theaters accept HOURS as well as bowling alleys and the local Ben & Jerry’s. (Meeker-Lowry, 1995)

The LETS model was created on Vancouver Island, British Columbia, Canada, as a self contained network in which members buy and sell services to other members and are paid in the LETS currency. Every member has an individual account which records their debit or credit. Members do not "owe" the person or business providing the service, instead their debt is to the LETS system, and their debt is thus socialized.( James DeFilippus, 2004)

"Currencies are powerful carriers of feedback information, and potent triggers of adjustments, but on their own terms. (Jacobs, 1984) “A national currency registers, above all, consolidated information on a nation’s international trade." (Jacobs, 1984) National dollars tend to flow out of local communities where they are needed the most to those who already control large pools of wealth like banks and corporations. Community currency is also a tool that can help revitalize local economies by encouraging wealth to stay within a community rather than flowing out. It provides valuable information about the community’s balance of trade and collective values. (Meeker-Lowry, 1995)

People who are time-rich and cash poor can be socially and economically productive without necessarily using only national or international, centrally regulated money. If community currencies can also be used in conjunctions with national currency their use does not have to become an all or nothing proposition, thus leading to the notion of “complementary” currencies.

Local currencies empower their members to improve their circumstances and environment while protecting the general community from the negative influences of other capital flows. This gives the community more control over investments and allows the poor to become emancipated beings in the economic choices and conditions that affect their daily lives. Local currency systems offer the opportunity of transforming labor power or working time into local purchasing power. (Meeker-Lowry, 1995)


There are unique challenges in implementing a community currency system, both technical and political. Shared values and multiplayer commitment by community members are needed to build a sustainable currency. Adequate management at the local level may involve monetary policy issues similar to those experienced at national or international spheres. The community may be local, but also involve participants from distant places acting towards a common goal that can be social, educational and cultural. If successful, a community currency system can leverage local projects in economically depressed areas of the map and put them on the road to a hopeful and fruitful future.

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People have always traded with each other, using various ways to represent and store value. In complex capitalist societies, money encourages growth, accumulation, and new forms of wealth and power concentration. Community Currencies can offer a solution for local markets deprived of or unserved by national financial policy. If successful, it can promote local projects and put them on the road to a hopeful and fruitful future.

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