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  • 1. grassroots INNOVATIONSRESEARCHBRIEFING 17 November 2012 We investigate the global phenomenon of community currencies, and ask whether it represents a single unified movement (or ‘innovative niche’) for sustainable finance, or something more complex A Global Currency Movement? Unity and Diversity in Practice We present key findings of the GICC (Grassroots Innovations: Community Currencies) project’s analysis of the activities and characteristics of the international community currency movement There is an increasing interest in harnessing tainable local economies and encourage commu- the innovative potential of civil society to address nity engagement – from official government sup- policy objectives. Recent work on ‘grassroots inno- port in Brazil to the UK’s Big Society agenda en- vations’ argues that civil society is a promising but couraging ‘reciprocal exchange’ and self-help (see under-researched site of innovation for sustain- Box 1 for an outline of the four key types). ability. One such innovation is community curren- In this briefing we investigate the global phe- cies: parallel exchange systems which have nomenon of community currencies, and ask emerged from civil society all over the world over whether it represents a single unified movement the last thirty years. (or ‘innovative niche’) for sustainable finance, or They aim to deliver services and functionality something more complex. that mainstream money cannot – such as keeping To do this, we examine three distinct types of money circulating locally, providing liquidity in activity that individuals, networks and organisa- The international cash-poor areas to relieve unemployment and en- tions within the movement are undertaking: learn- currency niche is able people to meet their needs. They can pro- ing, networking, creating shared visions and ex- supported by a mote active citizenship or volunteering, or encour- pectations (see Box 2). range of broad age greener behaviour, and include initiatives such Our aim is to understand whether and how external networks as Time Banks, Local Exchange Trading Schemes, community currencies are developing as an effec- that promote ‘trueque’ barter markets and city-wide local cur- tive innovative niche, with the potential to diffuse complementary rencies. and influence mainstream systems. This analysis currencies for These have been attracting increasing policy could then point to fruitful ways of developing different reasons attention from governments keen to develop sus- currencies in the future. 1
  • 2. RESEARCHBRIEFING 17 November 2012 Learning Mutual exchange Examples of learning about currencies in- cludes shared lessons about how to run projects, Mutual exchange systems are currencies that best practice and ‘what works’, training, informa- are created by their members. Members ad- vertise their ‘offers’ and ‘wants’ in a directory tion resources to help new projects become estab- and a central accounts system records trans- lished and so on. This takes several forms: actions. Currency is created when someone knowledge-production, intermediary activists and spends (goes into commitment to the system), organisations to consolidate and distribute key and their trading partner earns (receives an information, and infrastructural resources to sup- acknowledgement). Local Exchange and port these activities. Trading Systems (LETS) are one of the most well known forms of mutual exchange system. Knowledge production Mutual exchange systems tend to exist in a A particular problem that currency projects civil society context, often with little support from state or other funders. face is accessing resources to codify and consoli- date learning. The resource-scarce, grassroots na- ture of many projects means that much of the Barter Markets tacit learning is only shared informally amongst Barter markets are intended to overcome activists or colleagues and is not often captured. shortage of cash, and facilitate exchange However, one type of learning that is captured is amongst a group of users, usually in a regular project evaluations, particularly where the cur- marketplace. Like local currencies, barter rency has been in receipt of either foundation or markets tend to use physical notes, which are public money. Yet, this knowledge production often issued to new users (as an interest-free rarely attends to the multiple objectives of com- loan) to enable them to participate in the mar- munity currencies, and measurement of impacts ket. Barter markets are often associated with tends to conform to the goals of project funders the idea of ‘prosumers’ (individuals who both produce and consume). The most famous and their view of what counts as ‘success’. Rarely example are the barter markets of Argentina do such evaluations specifically focus on generat- which grew to a significant size in the early ing knowledge about the overall nature of the 2000s, partly as a response to the country’s currency project itself and its place within wider ongoing economic problems. systems – this type of second-order learning is more normally carried out by other intermediary activists in the form of books, discussions about Service credits the nature of money and so on (see below). Service credits are time-based currencies that are earned by spending time helping another Intermediaries individual or organisation. Everyone’s time is We found several sets of intermediary actors worth the same - an hour given earns one time credit, regardless of the service provided. working to aggregate knowledge amongst com- Time credits can then be spent on services munity currencies, operating in different ways and offered by other members. Service credit sys- fulfilling different roles. National networking or- tems are often known as time banks. Some ganisations have emerged in some contexts and are based in a neighbourhood or community context, run by volunteers, and some are hosted by institutions. These sometimes focus The resource-scarce, grassroots nature of on a specific sector such as health, education many projects means or criminal justice. that much of the tacit learning is only shared informally amongst activists or colleagues Local currencies and is not often cap- tured Local currencies are geographically-bounded (often paper notes) currency which are in- tended to circulate within a given region. This aims to promote economic activity in the re- gion, supporting the local economy by pre- venting money from ‘leaking out’ of the local- ity. Several different local currency models exist, such as the Hours model (USA), Regio- geld (Germany), Banco Palmas (Brazil) and Transition Currencies (UK). Whilst all of these use a paper-based currency many are also experimenting with electronic platforms includ- ing debit cards and mobile phone transac- tions. Box 1: the four principal types of community currency 2
  • 3. RESEARCHBRIEFING 17 November 2012 We found evidence of view and report recent developments facilitate the circulation of currency e.g. the 2007 European Monetary Re- related knowledge, and are often expansion of networks gionalisation conference volunteer-led. and network building (www.monetary-regionalisation.de), the activities, both CC-Conf (International Confer- externally (to attract Network Building ence on Community and Complemen- resources and tary Currencies, Lyons, 2011)  and the We found evidence of expansion of networks and network building activi- influence) and First International Social Transforma- ties, both externally (to attract resources internally (building a tion Conference with a theme of "en- and influence) and internally (building a ergy money" sense of community to sense of community to encourage (www.teslaconference.com). Email lists encourage information- and Skype groups provide a virtual information-sharing), taking place at a sharing), taking place space where discussions are held. Vari- range of scales. at a range of scales. ous individuals and groups collaborate to develop and uphold key resources for External networking these can play an important role in col- the field such as the online database and The international currency niche is lating lessons, conducting research, de- resource bank supported by a range of broad external veloping new standards and best prac- (www.complementarycurrency.org); the networks that promote complementary tice, and then providing materials to Complementary Currency Magazine currencies for different reasons. Many support existing projects and facilitate (www.ccmag.net), a bibliographic data- ‘new economics’ think tanks and NGOs their replication. Other organisations base and library (www.cc-literature.de) within the green movement have been such as think tanks and policy advisory and the International Journal of Com- at the forefront of currency experimen- bodies can represent community cur- munity Currency Research tation over the last 30 years, for example rencies externally, and attempt to influ- (www.ijccr.net). All of these platforms the New Economics Foundation (UK), ence public discourse through their pub- Strohalm (the Netherlands), The Schu- lications, e.g. NESTA and the New Economics Foundation. Box 2: Analysing innovative niches Currency pioneers have also be- come key intermediaries in the growth A growing body of ‘sustainability Niche theories identify three key in- of the wider movement. Examples in- transitions’ research seeks to under- terdependent processes for success- clude Michael Linton (LETS), Paul stand the dynamics and governance ful niche-growth and emergence: Glover (Ithaca Hours), Edgar Cahn of system-wide transformations and managing expectations and shared (time banks) or João Joaquim de Melo social change for sustainability. From visions; building social networks, and Neto (Banco Palmas), as have writer- historical case studies, this work learning. activists such as Bernard Lietaer, Tom points to the transformative potential 1. Expectation management con- of experimental projects in ‘niche’ Greco, David Boyle and Margrit Ken- spaces, as sources of radical (rather cerns how niches present them- nedy. For example, Guy Dauncey’s selves to external audiences, and than reformist) innovation. (1988) After the Crash was significant in whether they live up to the prom- popularising LETS in the UK. In addi- Niches are protected spaces where ises they make about perform- tion there are a handful of key global projects can develop away from the ance and effectiveness. To best normal selection pressures of main- support niche emergence, expec- networking individuals who also act as stream systems, offering supportive tations should be widely shared, intermediaries, translating documents, networks to allow experimental new specific, realistic and achievable; collating evidence and reports, and pro- systems to take shape. This could be The niche should also develop viding links between currency systems. through business incubators, subsi- coherent internal visions about A number of other actors partici- dised technologies, or ecovillages. its aims and objectives; pate in the knowledge-aggregation ac- The transitions literature examines 2. Networking activities should tivities within the global currency niche. the conditions and characteristics of embrace many different stake- Specialist organisations working in the successful (ie influential) niches. We holders, who draw resources currency field include: the Dutch NGO use the example of community cur- from their organisations to sup- Strohalm (STRO); Value for People who rencies (as a grassroots ‘niche’) to port the niche’s emergence; in- test the relevance of niche theories in deliver training for currency activists; ternally, networking between pro- civil society contexts. and QOIN, a consultancy firm. Aca- jects is important for information- demics who research community cur- Under the right contextual conditions sharing and developing a sense rencies also produce knowledge about (in wider socio-economic systems), of shared identity and community the field. successful niches facilitate the diffu- to support each other; sion of innovative ideas and prac- 3. Learning should contribute not tices in three possible ways: replica- Knowledge infrastructure tion of similar projects, bringing only to everyday knowledge and A number of structures allow the expertise, but also to ‘second- about aggregative changes through circulation of currency knowledge, and order learning’ where people many small initiatives; projects can originate with or build on these net- question the assumptions and grow in scale and attract more par- constraints of mainstream sys- works and intermediaries. Periodic aca- ticipants; and they can translate tems altogether. demic and NGO-led conferences bring niche ideas into mainstream settings. together activists and academics to re- 3
  • 4. RESEARCHBRIEFING 17 November 2012 geld), and local government and business associa- tions (UK Transition Currencies, which don’t have a network). Network organisations often emerge from a proliferation of projects within a specific country and contribute to the further diffusion of the particular type. There can be conflict between national net- works of different community currency types within a country, for various reasons including ideological conflicts, and perceived competition for scarce resources; for instance, tensions existed between LETS and Time Banks in the UK. Per- haps for this reason, multi-system national net- works are not common. Similarly, at the time of our fieldwork there were few established, formal- ised, international currency networks (Time Banks USA extending outside its national base is one example). However, we observe a range of over- lapping informal international networks that con- tribute to the sense of community among actors in the field. These take a number of different forms, for example a Skype list, academic mailing lists and the personal networks of activists and inter- mediaries. Creating Shared Visions & macher Society (USA), SANE (South Africa) and Managing Expectations Living Economies (New Zealand). In several cases Expectation management is a significant part it is these networks and actors that are responsible of the currency development process, and oper- for the initial ‘importing’ of a currency model or ates both by building a coherent community experiment. around the currency, and in terms of managing Other networks include environmentalist expectations of user groups and stakeholders. networks such as the Transition Town movement (which has spawned its own model of local cur- Creating shared visions rency in the UK), and solidarity economy move- Currency projects (like other forms of grass- ments such as ALOE (Alliance for a Responsible, roots innovation) attempt to manage a range of Plural and Solidarity Economy). Each of these stakeholder group expectations about the ability of contributes by enrolling actors, providing re- the currency to fulfil various functions. User or sources, and distributing knowledge. Non- supporter groups may have different expectations governmental organisations have also played a key about what the currency can do for them. In order role in the growth of the global currency niche, to maintain and develop the project the currency responsible for the instigation of new experiments activists or managers need to be able to balance or ‘importing’ models, having the ability to attract these different expectations at the project level resources to the niche. For example the Argentin- whilst also seeking to draw in new actors; this ian Trueque (barter) system was set up by an envi- process can be problematic if there are strong ronmental NGO and Time Banking was first in- differences between different groups, for instance troduced to the UK through an alliance between between those who see community currencies the New Economics Foundation and The King’s themselves as a radical (perhaps anti-capitalist) Fund (a health-focused think tank). new monetary system, and those who see commu- nity currencies as useful solutions for particular Internal networking social, economic or environmental problems. Internal networking is also important. Na- These disagreements can cause serious problems tional networking umbrella organisations fulfil in the management of networks and systems, such multiple roles including supporting new projects, as in the case of the Argentinian Trueque where lobbying for supportive policy changes, and acting there were at least two factions which had very as the hub of system-based information-sharing different visions over the purpose of barter cur- networks, e.g. Time Banks UK, the German Regi- rency. ogeld Network, or LETSLink UK. Other national networks have successfully linked with large com- Expectation-management mercial banks (Banco Palmas), while projects have Tensions can also be observed at higher levels built relationships with banking partners (Regio- of niche development where intermediaries and 4
  • 5. RESEARCHBRIEFING 17 November 2012 national networks make claims about within wider currency types. For exam- But, to what extent is this a single the ability of specific community cur- ple, the first Transition currency – the movement? rencies to address social, economic and Totnes Pound – was very closely linked We began by suggesting that an environmental problems. At this level with the emergence of the Transition international community currency the claims are to enrol external actors Town movement; it shared a website niche can be identified. However, our (policymakers, funders) to support the with Transition Town Totnes and research indicates that situation is niche. However, the need to ‘sell’ the adopted a discourse around economic rather more complex. Figure 1 illus- innovation to potential supporters can localisation – still a fairly radical eco- trates the point in terms of just two of create pressure at the project level. The nomic development approach. This can the four principal types of community management of such expectations be- be contrasted with the most recent currencies model (for clarity). The dia- comes a critical factor on maintaining Transition currency, the Bristol Pound. gram shows four different ‘levels’ of the flow of resources. These claims- Its website contains no mention of eco- movement-building activity taking making activities are productive when nomic localisation nor its connections to place. This overall structure could be they correspond with particular policy the Transition Towns social movement. characterised as one of fractal niches, agendas. One currency developer felt Instead the claims relate primarily to with distinct (but overlapping) sets of that managing the expectations of support for Bristol and local small busi- actors and different types of niche- stakeholders was one of the biggest nesses. This more mainstream presenta- building work being carried out at each challenges facing currency projects, tion of the project appears to be a con- level, and with varying consequences however, another interviewee felt the scious effort to broaden the appeal of for movement growth and innovation initial over-hyping was a necessary step the currency and make claims that are diffusion. in enrolling users at the project level in not directly associated with a more It shows the highest level of ‘global’ the first instance. However, currency radical green agenda, and which are niche represents the international, movements can also falter when there is more achievable and realistic. multi-currency niche. At this level, we a failure to meet the policy expectations see the work of international interme- that are being raised. For example, the diaries and knowledge structures such One Movement or growth of LETS in the UK was at least as the IJCCR journal and community partly curtailed by its failure to meet Many? currencies resource centre, sharing policy expectations as a tool to address We have examined the key niche- knowledge about various community economic deprivation. building activities taking place within currencies types and strategies – but We observe the process of develop- the international community currency crucially, not being involved in direct ing shared, robust expectations through movement. We found evidence of all support for community currencies pro- an evolution of the way in which com- the types of niche activity deemed nec- jects. munity currencies are presented to the essary to be potentially effective at dif- The second level represents inter- wider world. The claims made by cur- fusing into wider society, although there national networking by currency types, rency systems evolve and adapt over were some notable strengths and weak- illustrated here by Service Credits time, both within a specific project and nesses among the portfolio of activities. schemes and Local Currencies. This is Community Currencies International community currency niche International currency Service Credits Local Currencies type-based niche Spice Regiogeld National currency TimeBanks UK Germany type-based niche USA Transition TimeBanks UK UK National currency projects within a type Figure 1: The community currency field, displaying fractal niches 5
  • 6. RESEARCHBRIEFING 17 November 2012 With suitable support for niche-building activities, community currencies may develop the potential to have greater influence on mainstream social and economic systems the least institutionalised of the niche Whilst it is possible to ‘see’ these With suitable support for niche- levels, with little evidence of formal different levels of activity analytically, in building activities, community curren- structures or institutions. There have practice the picture is far more complex cies may develop the potential to have been some attempts at building a formal with people and organisations working greater influence on mainstream social relationships (e.g. between Time banks in multiple roles across the various lev- and economic systems. UK and USA) but most relationships at els, and with blurred boundaries be- this level appear to be informal and tween them. periodic, for example, between different This analysis tells us that the cur- Suggested citation: barter systems in South America or rency movement is a nested movement, Seyfang, G. and Longhurst, N. (2012) LETS in Europe. Collaboration at this with internal divisions and overlapping A Global Currency Movement? Grassroots Innovations Research Briefing 17 (Norwich: level often appears to be primarily visions. Niche-building activities are University of East Anglia) funding-driven, such as the ‘importing’ taking place at various levels, for differ- of LETS into Hungary, funded by the ent sub-groups of currency projects. British Council. Funding to support these activities Read more research briefings at The third, national, level is where tends to be located at the national www.grassrootsinnovations.org we see significant niche-building proc- level, but most learning and 1 Introducing Grassroots Innovations esses, particularly where national net- information-sharing takes place at the 2 Complementary Currencies for working organisations have been able to highest, international level, which is Sustainability 3 Community Innovation for Sustainable establish themselves. Policy and business primarily run by volunteers and is con- Energy engagement is strongest at this level, sequently the most precarious. This 4 Innovating Complementary Currencies 5 A Thousand Flowers Blooming with intermediary organisations helping mismatch has implications for the po- 6 A Glimpse Into Grassroots Climate Action to translate community currencies into tential of the niche to develop effec- 7 Seeing Community Climate Action 8 Measuring Community Energy Impacts policy-relevant forms. tively, and suggests that where possible, 9 What Lessons Get Shared? These national niches are aggrega- learning and information-sharing 10 Intermediation in Shifting Policy Contexts 11 Community Energy Scenarios tions of learning and experience of should be done at national levels where 12 Community Energy: Taking stock, moving multiple local community currency pro- funded networks exist, and additional forwards? 13 Global Spread of Community Currencies jects, which constitute the fourth level. support should be sought for interna- 14 Mapping Community Currencies tional cross-currency networking. 15 Community Currencies and Sustainability Gill Seyfang 3S, School of Environmental Sciences University of East Anglia Norwich NR4 7TJ 01603 592956 g.seyfang@uea.ac.uk Noel Longhurst 3S, School of Environmental Sciences University of East Anglia Norwich NR4 7TJ 01603 591385 n.longhurst@uea.ac.uk www.grassrootsinnovations.org 6