In my town, the tiny organic café 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 (commercially devastated in the 1970s by the chain stores and malls on the auto-friendly main strip).

So John’s idea was to sell VIP cards, which 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 restaurant. If I buy a thousand-dollar card. I get twelve hundred dollars’ worth of food: a 20 percent 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.

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 nonprofit 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.

It’s not as anarchist as it might sound. 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. One system, called ITEX, which allows businesses to trade merchandise, reported a 37 percent increase in registrations for the month of October alone. Utilizing more than two hundred fifty 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 Barter News.com, business-to-business bartering already accounts for S3 billion of exchanges annually in the United States. As the credit crisis continues this figure is growing exponentially.

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 purchased with traditional currency. Instead, members of the Fourth Corner 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.

The currency system isn’t there for people to accumulate lots of money. In fact, most people’s accounts are at or close to “zero” most of the time. You start with a zero balance, which goes down below zero if you get something, or above it when you do something - at rates usually determined in negotiation with the person on the other side of the deal.

It works. Economic activity doesn’t have to start with a loan from a bank. All it takes is a person with a need, and another person with a skill. If the banks, in concert with the Treasury, have decided to extract so much debt-based currency from the economy that we can no longer use it for peer-to-peer exchange, then we owe it to ourselves to account for our transactions in another way.

Local or complementary currencies are as easy to begin as visiting the websites for local economic transfer systems (LETS) or Time Dollars. 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, for example, 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 eamed 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 certtralized 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. Thanks to the success of the Fureai Kippu and other pioneering models, close to a thousand alternative currencies are now in use in Japan.

Complementary currencies make it easier to record and administrate 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 or bank. 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 fin de siecle, when central banks and treasuries are more consumed 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.

See, the stuff in your pocket is not money. It’s a kind of money - one loaned into existence by banks, and biased toward the interest of the already rich. It wasn’t invented to help us transact, but to help the wealthy stay wealthy simply by being wealthy. There used to be other moneys - ones that weren’t loaned into existence by central banks, but earned into existence by real people doing stuff for one another. These local currencies weren’t invented as a means of hoarding value. but exchanging it. Instead of promoting exploitation, they promoted transactions.

It’s not too late to save the economy; but we have to do it by trashing the obsolete operating system on which it’s based. Our money doesn’t work for people anymore. That’s why we people owe it to ourselves and one another to start printing our own.