Complements of the Currency
Simon Brett
Dec 08
 istockphotos.com
Complementary currencies are not an especially new idea. One of the most successful and well-established, the WIR, came into being in Switzerland in 1934. They generally come into their own at times of economic downturn, because they do what national currencies cannot; they encourage greater diversity and a larger number of connections.
National currencies (or even supra-national currencies such as the Euro) are tremendously efficient – they create the maximum number of transactions. The downside is that those transactions become ever more concentrated in the hands of the few. This results in the curious phenomenon many of us have experienced over the past few years: GDP keeps going up, but we feel poorer!
According to Bernard Lietaer and Sally Goerner, efficiency is one characteristic of a successful economy. The other is diversity. If an economy becomes too diverse, too much time is wasted in negotiation (you want how many goats?!). If it becomes too efficient – the situation we’re in now – it also becomes very brittle and prone to crashes.
So how do Complementary Currencies Work?
Anything can be used as a currency; all it takes is for two or more people to agree upon it as a medium of exchange. Complementary currencies generally take the form of time currencies (such as Timebanks) or local equivalents of national currencies (the Lewes Pound, in our very own Sussex, is one prime example).
A third form, and one which we at Smart are considering unleashing upon an unsuspecting public over the coming months, is a loyalty card offering discounts to people who shop at local businesses. OK, so it’s not strictly a currency in its own right. It does have the effect of rewarding people for shopping locally, however, and thereby creating a more diverse and resilient economy.
The Wedge card in London is an existing example – holders pay £10 for a card, which provides them with discounts and/or special offers in over 500 shops in London for a year.
Can You Give me an Example?
The closest-to-home example is the Lewes Pound, launched in September 2008.
Amongst other objectives, the Lewes Pound was designed to facilitate transactions in the local area, encouraging people to spend within Lewes.
Why? A significant percentage of sterling spent with supermarkets and other large businesses inevitably leaves the local area. Global supply chains mean a global flow of currency. That’s great for the businesses, but often it’s not such a boon for communities.
A local currency circulates within a community, and can be used and re-used by people within the locality. Networks come closer to home, and more business takes place between people who know one another. With a focus on the Sussex coast, it’s exactly the kind of approach we at Smart want to support.
We’ve already launched a ‘passport’ scheme; we ask our advertisers to offer something of value to you, our readers. Once you get in the habit of shopping locally, we hope you’ll feel inspired and motivated to keep doing so! A local currency, or a discount card in the style of Wedge, could provide an extra incentive.
The Scary Bit
Let’s not pretend otherwise: we’re currently facing an economic crisis that could have very serious consequences. While we always aim to be positive and focussed on what we can actually do to make a difference, it is important to be aware of the risks of inaction.
If we don’t find ways of supporting our local shops and businesses, we’ll lose them. We’ll also lose the choice and diversity of our shopping streets, and become ever more dependent on the large superstores. In turn, this will render us vulnerable to the vagaries of the global financial markets. With the newspapers bursting with bad news stories, it makes sense not to rely too heavily on a financial system that looks increasingly precarious.
Supporting local shops is a great first step. If you’re interested in learning more about local currencies, you’ll find some excellent resources at the foot of the page. And if you’re interested in the prospect of a local currency or a discount card for local shops in the Brighton and Hove area, you can email your thoughts to
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The Wedge Card (discounts and special offers in over 500 independently-run shops across London): www.wedgecard.co.uk
The Lewes Pound: Accepted at over 120 outlets in the Lewes area, the Lewes pound is the first ‘hard’ complementary currency in Sussex – although Lewes did have its own currency back in the 1800’s! The site also features an excellent two-minute clip of Rob Hopkins, founder of the Transition Towns movement, explaining the value of local currencies. www.lewespound.org
New Economics Foundation: If you’re interested in learning more about complementary currencies around the world, along with other aspects of monetary reform, the New Economics Foundation is a fantastic resource. www.neweconomics.org
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