Print Your Own Currency

I found this article this morning and thought it was interesting - maybe I've been asleep at the wheel for not realizing that this goes on regularly.

Basically, some local communities are printing their own currency and businesses can choose to accept it. Local banks circulate the local bills. In the example cited in the article, $0.95 gets you 1 BerkShare (which is what their currency is called).

The purpose here is to encourage people to shop locally and increase community spirit. I'll give props to the ones that devised the program, they actually created a financial incentive to shop locally - by discounting from the dollar. If you pay in dollars you spend $1, but in BerkShares you'd spend .95. Doesn't sound like much, but over time and on larger purchases that 5% starts to add up.

"Buy Local" campaigns generally annoy me. I came from a small town where you had to drive an hour to do anything and to get a decent deal on anything larger than your groceries. I'm not anti small local businesses. They are vital to the economy. I am against paying more just to prop up a business than can't compete - and being told that it's my duty to do so. Sorry Comrade, I'll pass, that's not my responsibility.

Getting past all the debt issues that our economy is currently suffering from, it is this type of protectionist thought that is making it harder to right the ship. Case in point: Detroit. You have inefficient companies making products that people aren't that enthused about (based on sales) and can't be sold for amounts that will support the business model. But it's our "duty" to buy American. Yeah, I want to support American jobs, but that's protectionism and doesn't end well. If we are going to be a capitalist economy, companies have to find a competitive advantage where they can compete on a level field and not require government bailouts or other unfair advantages. If we insist on giving preferential treatment to certain companies we'll just keep having to do it to keep the next company in business.

So back to the local currency thing. It's an interesting idea and maybe with the 5% discount you might be getting competitive pricing versus larger businesses who aren't participating. While I hope that Joplin doesn't try this, in isolated cases it's not harmful and if it makes a group of people feel better about their circumstances then have at it.

For me, I'd rather see communities find other things to rally around. You see examples every day. For Webb City it's high school football (or maybe youth and high school sports in general). For Stillwater it's a university that is the life-blood of the community. You even see an occasional example in larger cities (sorry for all the sports emphasis here, but that's what I pay attention to) when one of their teams make a run in the playoffs (Green Bay is a prime example, but even Pittsburgh was pretty excited with a SuperBowl win).

How about this. Let's stick to the dollar. Other local currencies are going to be tied to it anyway. Let's agree that we're going to let businesses compete, because when that happens innovation happens and people find ways to provide products and services that buyers actually want to buy (and the buyer gets a better deal). And let's find something other than local protectionist policies to rally our communities around - here's an idea on Easter weekend, how about Jesus. I'm just saying.