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Global examples of complimentary currencies to meet the needs of people in a failing worldwide money system.
By Justin Ritchie
There are many international examples of municipalities and even national governments taking a leadership role in implementing complimentary currency systems that do not rely on money supported entirely by bank debts.
In a time of severe economic volatility, complimentary currency systems can help to dampen the impact of rapid swings in financial markets. One of the most powerful business-to-business currencies was created during the first Great Depression in the early 20th century.
Seventeen business owners met in Zurich, Switzerland in 1934 to lay the foundations of the complimentary currency known as the Wirtschaftsring (WIR), meaning “economic circle” in Swiss. This system was founded because these business owners could not receive financing from banks during the Great Depression as the velocity of money had slowed dramatically.
The WIR is essentially a mutual credit system where each business can bypass bank loans to keep commerce moving, even in hard times. When initiating a transaction between Swiss businesses that use the WIR system, a business can lend to another business, giving them a surplus of WIR or a business can borrow from another business, leading to a debit of WIR. Each WIR is equal to one Swiss Franc so the accounting system doesn’t have to change, though Swiss Francs are not convertible to WIR or vice versa.
Complimentary currency systems can assist in bridging multinational communities to encourage cooperation. In Flanders, Belgium, a large immigrant population in the Ghent community of about 8,000 people and over twenty languages was being ghettoized among the larger city.
After this community was surveyed, they made it clear that they wanted small patches of land where they could grow vegetables, flowers and fruit trees. Garden plots were created on the land of a defunct factory. The city of Flanders developed a currency that was created for rental of these garden plots called turoqous, meaning ‘little towers’ in Flemish because many of the immigrants lived in the nearby apartment towers.
Community members are able earn turoqous by completing community service projects such as environmental restoration, planting flowers, and cleaning up after soccer matches.
Within a few months Ghent saw an overflow of interested volunteers and after an analysis was completed by the Belgian Federal Government it was determined that the economic benefit was from 3-20 times that as if the same services had been undertaken by paid city staff. The city’s population saw a dramatic change in perception regarding the immigrant community as well.
Complimentary currency systems can also have a dramatic impact on educational opportunities. In Brazil, the saber is a complimentary currency that receives its name from the Portuguese word for knowledge.
Units of the saber currency are provided to youth in poor neighbourhoods or favelas. Seven- or eight-year-old students are given the saber in order to use it to hire an older student as a tutor. The saber can then be passed from the older student to another even older student who serves as a mentor, thus creating a chain of peer-to-peer learning up through Elementary School, through High School and eventually to students at a University who can use the saber to pay their tuition. At this point, a University can exchange the saber they receive from students with the Brazilian Ministry of Education in order to cover the expenses of educating students.
This process of the saber facilitates peer-to-peer learning, a process that has been shown to provide learning retention rates of up to 90%, far more than the traditional classroom model. Brazil uses their national 1% tax on cell phone bills to supply funding to the Ministry of Education, supplying the funding for this entire process. This chain of learning exchanges has been determined to provide value of over 100 times that of just handing out scholarships because a multiplier effect is present in the peer-to-peer interactions.
Like Brazil, Lithuania uses a complimentary currency to enable its national goals for education and learning. Because the land of Lithuania doesn’t consist of beaches or beautiful scenery, the nation hopes to create a learning society.
As part of the Lithuanian National Learning Program, the country has created a complimentary currency known as the dora, managed by the Lithuanian National Learning Foundation (LNLF). The dora facilitates transactions between groups that make a “learning contract” in order for students to actualize their educational dreams.
The LNLF writes up contracts between students and various support groups to achieve these goals. Students can undertake peer-to-peer learning activities or community service projects to earn the required amount of doras as determined by each contract. Examples of dora contracts include students that have been sent to learn sailing at the coast, or Zen meditation in the Burmese mountains. Another dora project sent a student to visit a particle accelerator so he could meet his hero, an expert in particle physics.
The Swiss WIR, the Belgian turoqous, the Brazilian saber and the Lithuanian dora could be emulated in communities around the world. As explained by Gwendolyn Hallsmith, co-author of Creating Wealth: Growing Local Economies and Local Currencies, in Extraenvironmentalist #29:
“Local currencies are the easiest thing for a lot of people to start doing if they want to take action to address some of the inequities that we have in our system – because of the increasing disparity between the rich and the poor. That disparity is a function of our monetary system and we can take matters into our own hands and introduce new forms of exchange that start to equal that balance again.”
As more governments worldwide find themselves consumed with debt crises and unrest, needs of individual citizens will fall further off the map. These complimentary currencies provide templates for ways that we can achieve our community, educational and business goals, even if our monetary system begins failing us.
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