On the basis of the two reports (One from the Guardian and One from the Times) the jury is out on the social benefits of Transition Towns new local Brixton pound. Most local shopkeepers the Guardian reporter spoke to (by the looks of things from the market stallholders) the new currency was at best a distraction and worst a waste of public time ‘keeping money in the community’.
Having met many of the original thinkers and creators of LETS schemes at various conferences here and in the USA, I must admit that I am skeptical about the story of ‘local money for local people’ which has become the normal justification for the value of such creations. As many of the local stallholders pointed out, there is nothing about them being small that means their own supply chain is somehow ‘local’. My ‘local’ florist for example, empties a lorry from the Netherlands every morning. Spending my local ‘Kingston’ pounds in there won’t save the planet, but can I really be asked to discriminate between local businesses and truly locally sourced product (and as far as I know they don’t grow many orchids in the local allotments). Likewise in Brixton, the stallholders bemoan the fact that you can get ‘authentic’ West Indian cooking ingredients anywhere in London now, which has reduced the number of outside shoppers whose money would benefit the community.
Yes, it is encouraging a perception of Brixton as a community, but having worked with some local groups there in the past, community spirit is one thing that local Brixtonians have in abundance. Lewes and Totnes (other Transition Towns) also have that local predilection, so in many ways the local currencies merely commoditize that community spirit and attempt to use it for economic ends and to increase local economic activity – arguably counter to the overall implicit agenda of Transition towns?
Perhaps it comes back to the limited idea of seeing money purely in its role as a medium of exchange rather than a store of value. LETS schemes encourage people to spend money which has a short term benefit and for money to circulate more quickly which is also beneficial to increasing economic activity but and it is a big but, it does not encourage investment locally. It sees the answer to recessions being the knee jerk ‘we must spend more’ which merely has the effect in the long run of making us feel less well off in the long run (and drives things like inflation).
What is needed is a local currency which encourages people to invest in their local community; something which can be targeted to create environmental benefits (if that is what you want as part of your entrepreneurial return). Such a currency has two benefits, firstly it could be structured to incentivize people to look for risk and return locally in the community and secondly it promoted the idea of money as capital without necessarily conforming to the ‘competition = the only efficiency’ model that is endemic to the cultures of the City and Wall Street. Such an investment could promote a more collaborative relationship and derive efficiencies from share social goals as well as economic ones.
Making money ‘social’ is all very well, but more important both for the future economic recovery and sustainability of our society’s way of life is that we find new ways of producing capital that allow the sorts of investments required to achieve both goals.