Alternative Currencies and the New Sharing Economy

Alternative Currencies and the New Sharing Economy

Around the same time as the Great Depression of the 1930s was laying waste to the American economy, nations around the world were feeling the pinch. An Austrian man by the name of Michael Unterguggenberger came up with a novel idea to help save his small town of Worgl. He persuaded the town’s government to issue paper tickets that were worth one, five, and ten Austrian schillings a piece. Unemployed people could earn this “money” by doing good works in the commu­nity, like repairing bridges or cleaning drains. The tickets could then be spent like money in the shops; in turn, the shopkeepers paid their local taxes and their local suppliers with them.

“This new currency led to a dramatic increase in economic activ­ity, which was partly due to a special feature of the notes,” writes James Robertson in The History of Money. “They lost one percent of their value every month, unless their holders attached a stamp bought from the town council. People were eager to spend them as soon as possible before they lost value — which increased what economists call the ‘velocity of money’; the sooner people spend it, the faster it circulates.” This alternative currency was so popular that soon the Austrian government began to feel like it was losing control over the country’s monetary system, and, as we know, maintaining control is very important to the status quo.

So, despite its success, Austria outlawed the scrip in 1933, right about the time when New York bankers convinced President Roosevelt to do the same in America. The new bank system that emerged in both countries was far more centralized and tightly controlled than before. That should tell you something about the power of currency and how significant it can be when people opt out of the socially acceptable monetary systems.

Local Currencies: A Way To Survive, Also A Bold Way To Opt Out

Throughout history, local currencies have been used not only as a way to survive during periods of economic uncertainty, but also as a bold way to opt out of a global monetary system that many find exclusionary and, in some cases, corrupt. The only thing that gives modern money value is the fact that the majority of people agree that it has some value. If a community comes together to replace currency with another measure of value, they can flourish outside a broken system.

BerkShares is a local currency created in the Berkshire region of Massachusetts. Under the BerkShares system, a buyer goes to one of 12 local banks and pays $95 for $100 worth of BerkShares, which can be spent in 370 local businesses, including restaurants, pharmacies, nurseries, and law firms. More than $2.5 million in BerkShares has circulated since 2006. As noted on their website, the currency is meant to provide an alternative to conventional money, not replace it: “The people who choose to use the currency make a conscious commitment to buy local first. They are taking personal responsibility for the health and well-being of their community by laying the foundation of a truly vibrant, thriving local economy.”

The PLENTY in Pittsboro, North Carolina, is an alternative currency created back in 2002. The paper currency is available in denominations of $1 through $50 that can be used to pay for goods from dozens of participating businesses. In the decade since the first PLENTY currency was issued, participants have noticed that ben­efits aren’t limited to savings or profit. “Members seek each other out, meet face-to-face, and get to know their neighbors,” reads the PLENTY website, “The PLENTY allows the ‘small town values’ of neighborliness, generosity and self-reliance to blend with our community’s traditional support for diversity, social justice, and responsible development.”

Ithaca Hours, created in Ithaca, New York in 1991, adds a twist to the local currency concept by incorporating time as part of value. Ithaca Hours can be purchased at the local Alternatives Federal Credit Union (AFCU) or at any local business that accepts it as currency. One Ithaca Hour costs $10.00 — or one hour of basic labor. Since its start, several million dollars worth of Hours have been exchanged among thousands of residents and over 500 area businesses, including the Cayuga Medical Center, the public library, many local farmers, movie theatres, restaurants, healers, plumbers, carpenters, electricians, landlords, and the AFCU itself.

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And that’s just focusing on the United States.

All Over the World...

Alternative Currencies and the New Sharing EconomyLETS (Local Exchange Trading System) is a mutual credit currency that makes electronic currency available as it is needed in the form of ATM cards. There are over 2,500 LETS networks around the world, primarily in Europe and Canada. Another currency, Salt Spring Dollars, emerged in the Canadian Gulf Islands as a printed currency that is 100% exchangeable with Canadian dollars. Japan has developed over 600 operational complementary currencies in an attempt to address socio economic problems stemming from more than a decade of recession.

In 1998, the residents of the Palmeira District, a slum in Fortaleza, Brazil, decided they were tired of living on the bottom rung of a monetary system controlled by a wealthy few. The community came together and created an organization called Association of Neighbours of the District of Palmeira. This Association then created a new bank — the Bancos des Palmas, or Palm Bank — and a new currency, the Palmas.

The bank was set up to fight poverty and improve the living conditions of the residents of the district of Palmeira, but it has achieved much more over its 14 years of existence. Before the bank was set up, local producers rarely sold produce to their neighbors and the local residents tended to buy their goods elsewhere. As participation in the community bank became more widespread, community mem­bers slowly altered their consumption and spending habits to take advantage of the bank’s service. Spending on local commerce jumped from 16 percent of purchases to 56 percent. Now, the Palm Bank of­fers low-interest or no-interest micro-loans to community members to create small businesses and offers the PalmaCard credit card, giv­ing residents the ability to make purchases all month long, further stimulating the local economy. As an organization, Banco Palmas has grown from 200 to 2100 associates, 60 percent of whom live well below the poverty line.

Although crises have always encouraged people to embrace “outside-the-box” solutions, alternative currencies aren’t always a survival technique. Sometimes, they’re established to make a statement about the status quo and what it really means to live a simpler, more abun­dant life. Across the world, local, alternative, and complementary currencies are appearing; they provide citizens with a way to make a real, instantaneous impact because they force money to bang around inside the local economy for much longer than a normal dollar would.

Where Are We Now?

We learned early in our existence that cooperating improved our quality of life and often prolonged our survival. Successful cooperation was valued among early societies, encouraging individuals to behave in such a way that was beneficial to the entire community. This natu­ral inclination to work together for mutual benefit gradually evolved into the original barter system. Through simple barters, people could trade items of value to obtain things that they needed. As long as human demands remained relatively simple, a “coincidence of wants” was easy to generate: “You have a thing that I need, I have a thing that you need, let’s trade!”

As we moved from hunter-gatherer societies to established agrarian societies, cattle emerged as an early bartering currency, with certain types or numbers of cattle corre­sponding to common needs. Eventually, people needed a standard type of currency with agreed-upon value that was easier to carry around than a cow. Many different objects were utilized at some point, in­cluding seashells, beads, and grain. These early currencies teach us an important lesson about money and value, namely, that currency only has value if we say it does.

In modern times, people exploited this concept of value to bolster local economies through alternative and complementary currencies. The widespread success of these alternative currencies created interest around opting out of current economic systems. Fast-forward to current day, and some people have begun to wonder if we really need to mess around with “units of value” at all.

Enter the modern collaborative consumption movement, also referred to as the “sharing economy.” It’s based on the principle that the world already contains all of the supplies and resources we need to survive. It’s just that many of these resources are sitting idle, wasted, or hoarded by those who feel they’re entitled to more than their fair share. Whereas in the past, sharing or cooperative behaviors have been best executed within limited communities, the boom in mobile technologies and social networking we are experiencing today makes it possible to scale up the system and make something new.

Collaborative Consumption: Much More Than A New Market Trend

While the vast majority of commentary on the sharing economy has focused on how to fit collaborative consumption into the current economic ideology, there are many who feel that it is much more than a new market trend.

“I don’t think there’s anything else that can radically reduce poverty and resource consumption at the same time, something humans must do to stabilize our global climate and society,” writes Neal Gorenflo, co-founder publisher of Shareable magazine ( “However, the sharing economy is not only a real solution, it’s also an inspiring true story. People experience it as empowering. It puts people in a new, constructive relation to one another. In the sharing economy, we host, fund, teach, drive, care, guide and cook for friends and strangers alike. This is a world where people help each other. It’s also a world where self-interest and the common good align.”

The Sharing Economy: A New Twist On An Old Idea

Though it feels revolutionary, collaborative consumption (or the sharing economy, access economy, free economy, or gift economy — all are terms used to refer to this movement) is a new twist on an old idea. It’s a reimagining of old solutions tweaked to keep up with the size and speed of our current society. It leverages our fascina­tion with social networking to minimize waste and maximize access.

The sharing economy represents a fundamental challenge to the prevailing top-down consumption model, agrees Lisa Fox, founder of OpenShed, a popular goods-sharing service out of Australia. “There is no merchant or middle man in collaborative consumption,” says Fox, “individual private ownership is no longer the end goal, rather, access is.”

When we view ourselves as an element of an ecosystem, rather than an autonomous being, we begin to understand that amass­ing experiences, which often cost nothing and have no carbon footprint, is more important than loading up on material posses­sions. Examining our society from this new perspective allows us to see that when “mine” becomes “ours,” everyone’s needs can be met without waste.

©2013 by Beth Buczynski. All Rights Reserved.
Reprinted with permission of the publisher,
New Society Publishers.

Article Source:

Sharing is Good: How to Save Money, Time and Resources through Collaborative Consumption by Beth Buczynski.

Sharing is Good: How to Save Money, Time and Resources through Collaborative Consumption
by Beth Buczynski.

Click here for more info and/or to order this book on Amazon.

About the Author

Beth Buczynski, author of: Sharing is GoodBeth Buczynski is a freelance writer and editor who covers clean technology, sustainable design and environmental issues for some of the most popular green sites on the web. The coauthor of two popular ebooks on coworking, Beth believes that building a new economy based on sharing and community is key to ending our dangerous obsession with consumer culture and creating greater social equality. A regular contributor to,, and Shareable Magazine (, and Green Living editor at, Beth has been named one of the top 75 Environmentalists to Follow on Twitter by, and one of the Top 3 Green Twitterati by At Home magazine. Visit her website at

Watch a video on this topic:  The Unstoppable Rise Of A Collaborative Economy: Shane Hughes At TEDxLausanne


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