Life Dollars: Finding Currency In Community

By Douglas Rushkoff. Published in The Futurist on 1 September 2010

The recent financial meltdown may not be punishment for our sins, but it is at least in part the result of our widespread obsession with financial value over values of any other sort.

As corporations gain ever more control over our economy, government, and culture, it is only natural for us to blame them for the helplessness we now feel over the direction of our personal and collective destinies. But it is both too easy and utterly futile to point the finger of blame at corporations or the robber barons at their helms–not even those handcuffed CEOs gracing the cover of the business section. Not even mortgage brokers, credit-card executives, or the Federal Reserve.

This state of affairs isn’t being entirely orchestrated from the top of a glass building by an elite group of bankers and businessmen, however much everyone would like to think so–themselves included. And while the growth of corporations and a preponderance of corporate activity have allowed them to permeate almost every aspect of our awareness, these entities are not solely responsible for the predicament in which we have found ourselves.

Rather, it is corporatism itself: a logic we have internalized into our very being, a lens through which we view the world around us, and an ethos with which we justify our behaviors. Making matters worse, we accept its dominance over us as preexisting–as a given circumstance of the human condition. It just is.

But it isn’t.

We need to figure out what–if anything–we are to do about it. Here are some ideas.

Like thousands of other people across the United States, I’m a member of a community-supported agriculture group, or CSA. People make a commitment to buy a season’s worth of crops from a local farm and then either pay up front or by subscription over the course of a year. Some farms require their members to work a few hours during the growing season; others let members work in lieu of payment. In 1990, there were just 50 CSAs in the United States. By 2008, there were more than a thousand.

The farmer running my CSA wanted to provide his members with an easy way to sign up for shifts and make special requests for their weekly food shares. An unemployed web designer I knew from the neighborhood built a site for the farmer that offered all this and more. In return, he earned a year of crops.

These activities are revolutionary for the way that they cut out the middleman. People create value for one another directly, rather than paying corporations. No one is extracting value from our engagements, separating us from our competencies, or distancing us from one another.

The one exception, of course, is the money we are still using to pay one another. When we aren’t coding web sites in return for kale, we are cutting the Federal Reserve and its network of banks in on every transaction we make. This extractive force is a drag on the system, particularly at times when speculation or banking-industry incompetence has made money too expensive to get hold of or too unstable to use as a means of exchange.

A tiny organic cafe in my town called Comfort decided to expand to a second, larger location. John, the chef and owner, had been renovating the new space for a year, but–thanks to the credit crisis–was unable to raise the cash required to finish and finally open. With currency unavailable from traditional, centralized money-lending banks, he turned instead to his community, to us, for support. Granted, this is a small town. Pretty much everybody goes to Comfort–the only restaurant of its kind on the small strip–and we all have a stake in its success. Any extension of Comfort would bring more activity, vitality, and commerce to a tiny downtown that was commercially devastated in the 1970s by the chain stores and malls on the auto-friendly main strip.

John’s idea was to sell VIP cards, or what I helped him rename Comfort Dollars. For every dollar spent on a card, the customer receives the equivalent of $1.20 worth of credit at either of John’s restaurants. If I buy a $1,000 card, I get $1,200 worth of food: a 20% rate of return on the investment of dollars. John gets the money he needs a lot cheaper than if he were borrowing it from the bank–he’s paying for it in food and labor that he has in ample supply. Meanwhile, customers get more food for less money.

But wait, there’s more: The entire scheme reinvests a community’s energy and cash locally. Because our money goes further at our own restaurant than at a restaurant somewhere else, we are biased toward eating locally. Since we have a stake in the success of the restaurant in whose food we have invested, we’ll also be more likely to promote it to our friends. By using its own currency a local business can even undercut the corporate competition. It’s not complex or even communist. It’s just local business, late Middle Ages style.

Local currencies are now used by several hundred communities across the United States and Europe, giving people the chance to buy and sell goods and services from one another no matter what the greater economy might be doing. Instead of favoring large, centralized corporations, local currencies favor businesses and the community members who own them.

There are two main types of local currency employed today. The simplest, like Comfort Dollars or the BerkShares created for the entire Berkshire Hills region in Massachusetts, have exchange rates for regular dollars. The BerkShares themselves can be spent only at local businesses that accept them, which keeps the currency circulating close to home. Local currencies such as these encourage local buying, put large corporations with no real community involvement at a big disadvantage, and circulate much more widely and rapidly through a community than conventional dollars. Further, the non-profit bank issuing BerkShares is not an extractive force; no one needs to get rich or pay anyone back. Businesses that refuse to accept the local currency do worse than just brand themselves as apathetic to local development; they cut themselves off from a potential source of revenue.

Townspeople with their own money systems still need conventional currency. The three automobile repair shops in Great Barrington that accept BerkShares must still buy auto parts from Mopar or BMW with U.S. dollars. But they are willing to break down their bills into two separate categories, selling parts at cost in U.S. dollars and markups and labor in the local currency. The object is not to replace centralized currency altogether, but to break the monopoly of centralized currency and the corporations it supports over transactions that keep money circulating locally This is why many advocates now call local currency “complementary” currency–because it complements rather than replaces centralized money.

Larger businesses have begun to embrace alternative currency systems as well. In October 2008, as the credit crisis paralyzed business lending, companies started signing onto barter networks in droves. Utilizing more than 250 exchange services now available through the Internet, companies can barter directly with one another, or earn U.S.-dollar-equivalent credits for the merchandise they supply to others. According to, business-to-business bartering already accounts for $3 billion of exchanges annually in the United States.

Life Dollars

An even more promising variety of complementary currency like the grain receipts of ancient times, is quite literally earned into existence. “Life Dollars,” such as those used by the Fourth Corner Exchange in the Pacific Northwest, are not exchanged for traditional currency. Instead, members of the Exchange earn credits by performing services or providing goods to one another. There’s always enough money, because money is a result of work exchanged, not an existing store of coin. There can’t be too much money either, since every service provided is a service someone else was willing to be debited for.

These local or complementary currencies, and many others, are as easy to begin as visiting the Web sites for community exchange systems (CES), local economic transfer systems (LETS), or Time Dollars. According to the most recent data available from the community exchange system (, more than 180 community exchanges have sprung up around the world, including 55 in Australia, 26 in South Africa, and 33 in the United States. A local currency system can be as informal as a babysitting club, where parents earn credits for babysitting one another’s children, or robust enough to serve as the primary currency for an entire region or sector.

In 1995, as recession rocked Japan, unemployment rose and currency became scarce. This made it particularly difficult for people to continue to take care of their elderly relatives, who often lived in distant areas. Everyone had time, but no one had money. The Sawayaka Welfare Foundation developed a complementary currency by which a young person could earn credits for taking care of an elderly person. Different tasks earned different established credit awards–bathing someone earned more than shopping, and so on. Accumulated credits–Fureai Kippu, or “elderly care units”–could then be applied to the care of one’s own relative in a distant town, saved for later, or traded to someone else. Independently of the centralized economy–which, thanks to bad speculation and mismanaged banking, was no longer supporting them–people were able to create value for themselves and one another.

Although that particular financial crisis has passed, the Fureai Kippu system has only grown in popularity. At last count, the alternative currency was accepted at 372 centers throughout Japan, and patients surveyed said they like the care they get through the Fureai Kippu system better than what they get from professional service agencies. As I originally wrote for my book Life Inc., close to a thousand alternative currencies are now in use in Japan, thanks to the success of the Fureai Kippu and other pioneering models.

Complementary currencies make it easier to record and administer value exchange in an increasingly decentralized marketplace. They initiate the process through which local regions or specific sectors learn to create value for themselves instead of having it drained unnecessarily by an artificially chartered monopoly entity. They remind us that some of the things we have in abundance are still valuable, even though markets have not yet been created for them. And they give us a way to transact business during a recession or depression, when central banks and treasuries are more concerned with their own solvency and that of the speculative economy than they are with our ability to conduct the basic transactions through which we take care of one another.

Bartering in the Big City

The most recent recession saw the closure of big Wall Street firms like Lehman Brothers and Bear Stearns affecting the entire New York City economy. Not surprisingly, a lot of New Yorkers turned to the popular classifieds on Craigslist to find cheap goods or to sell them. But the site also saw an increase in the number of New Yorkers willing to barter services to one another. These ranged from the exchange of IT work for dental repair to free professional portrait photographs to tanning sessions, according to a Daily News story.

Bartering systems and local currencies are just one possible step in the slow subordination of market activity to social activity, and corporate behavior to human behavior. After all, we don’t spend time volunteering in our public school because we want to earn local credits; we do it to make the place better for our kids. The psychological hurdle to cross is the inability to accept that $10,000 worth of one’s time spent making a local school better will create more value than $30,000 of one’s money spent on a private school. The money guarantees a great education for our own kid; the time improves the school for everyone’s kids. Still plagued by internalized competition and self-interest, most of us are not quite ready to choose the better path or to convince our neighbors to join us in the effort. Luckily, a desperate lack of funds and employment opportunities can help nudge us toward the more socially beneficial choice.

But the more social we get, the more one voluntary act will encourage another one, and so on. We learn that it’s more fun and less time-consuming to provide real help to our local elementary school than to take on an extra corporate job to pay for a private school. We reverse the equation through which we calculate how much money we’ll need to insulate ourselves from the pitfalls of modern life, like diminishing real-estate values, stock-market collapses, and layoffs. Instead, we could calculate how much we can get from and give to that world with no money at all. Reciprocity is not a market phenomenon; it’s a social one. And when the market is no longer functioning properly, reciprocity is a necessary life skill.

This is where the Internet might be of some help. Networks can connect those looking to reinforce their sense of hope and connection to others. We can share new models that work, collaborate with like-minded members of other communities, and build decentralized constituencies to fight our common battles. Beneath all its flashy, advertising-based social networks, the Internet is still a communications medium. We can use it to find the people and ideas deemed unready for corporate media’s precious prime time.

Perhaps more important, by restoring our connections to real people, places, and values, we’ll be less likely to depend on the symbols and brands that have come to substitute for human relationships. As more of our daily life becomes dictated by the rules of a social ecology instead of those of a market economy, we will find it less necessary to resort to the behavior of corporations whenever things get rough. We might be more likely to know the names of our neighbors, and value them for more than the effect of their landscaping on our block’s real-estate prices.

I’ve offered a few suggestions here, but the ones you’ll find will be particular to your life, your neighborhood, and your situation. That’s the whole point. Although corporatism offers itself up as a universal answer to our needs, it really just reduces the myriad complexity of human need down to individual selfishness.

This monolithic approach to society and its recovery is antisocial in intent, dehumanizing in effect, and, dare I say it, fascist in spirit. It’s also entirely temporary. We will either arrest corporatism, or it will arrest us. The alternative–local, day-to-day, mundane pleasure–is what makes us human in the first place.

Reigniting Economies by Reinventing Community: In this fifth installment of the 2020 Visionaries series, a best-selling author and a team of architects suggest new ways to think about money, community, and how they interact

Welcome to the summer of our discontent. In case you missed coverage of the street protests in Greece, or of the ruling party’s loss in the recent British and Japanese elections, populations across the industrialized world are fed up with their institutions of power. In a word, they’re angry.

Americans, too, are showing short tempers. Just 25% of respondents in an April 2010 Pew poll approved of the job the U.S. federal government was doing. But government is not the only target. Only 25% of respondents in the same poll felt that private corporations had a positive effect on the way things were going across the country. Banks and other financial firms received an approval rating of just 22%. Following the collapse of Lehman Brothers in 2008 and General Motors in 2009, and BP’s mishandling of their operations in the Gulf in the spring of 2010, is it any wonder that Americans have lost faith in corporations to provide for their future prosperity, or in government to regulate for the public good?

In this issue, writer Douglas Rushkoff and architects Kuo Pao Lian and Pavlina Ilieva look toward a post-institution future. They present two essays linked by a common thread: common good beyond big business or big government. Rushkoff’s essay, adapted from his 2009 book Life Inc. (Random House) makes a proposal that is simultaneously radical and modest: community currency to make local goods and services more economically competitive against corporate products shipped in from afar.

Lian and Ilieva take the same concept further and imagine a neighborhood where consumers have been replaced by producers, where more energy is collected than is spent, where more money is made than is lost, where more food is grown than is eaten, and where every neighbor feels connected rather than isolated. Or angry. -Patrick Tucker

Douglas Rushkoff is the author of such best-selling books as Media Virus and Innovation from the Inside Out. This piece adapts material from his most recent book, Life Inc: How the World Became a Corporation and How to Take It Back (Random House, 2009). Web site