Complementary Local Currencies and TransitionTowns : LEARNING FROM BRIXTON
Fonds mondial pour le développement des villes (FMDV)
Complementary local currencies, which are an example of citizen ownership of the monetary system, have been undergoing renewed development in Europe, in cooperation with local governments. In a context of crises, many territorial development stakeholders are promoting local level as a relevant vector of change and of “sustainable” local and societal development. Local currencies are part of this tendency as tools that can bring economic development back to the local area and modify practices of consumption and exchange. The recent systemic crises have intensified an already existing process by which lifestyles and forms of consumption and exchange within societies have been called into question. A number of networks and initiatives that are questioning the credibility of the players traditionally in charge of regional development (public institutions as well as private players) have acquired new visibility at a local, national or international level. A majority of these initiatives champion local action as an appropriate level of development when it comes to initiating practical and operational solutions to current and future issues (exclusion, unemployment, food, etc.). Transition Towns and local currencies are part of these.
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The “Transition Towns” network was founded in Great Britain, in 2006. It supports communities that want to create a future that is “more sustainable and less vulnerable to ecological, energy and economic crises1”. Their objective is to reposition global issues locally and to make the local level a platform for proposals and changes. The Transition Towns combine processes of reflection, action and support for local citizen initiatives. They are now acknowledged internationally and include more than 1100 initiatives in 43 countries. The success of the network demonstrates the desire of many communities or municipalities to become driving forces of regional development and of the building of truly “sustainable” societies. This type of societal project goes handin- hand with many initiatives that seek to reassess regional economic planning. Complementary local currencies, which are a way for citizens to take on ownership of the monetary system, are one such initiative. They have existed since the beginning of the 20th century and promote the local community as a renewed space for exchanges. Local currencies are defined as “local systems that provide the necessary framework for exchanges, organised by and for communities of citizens, through the use of a monetary organisation defined ad hoc and their own internal currency enabling accounting and payment2”. These currencies are not supported by the national government and are intended to be exchanged within a limited area among citizens and local businesses, parallel to the national currency. While they can come in different forms (paper money, electronic payment, etc.), what local currencies have in common is their specific economic philosophy, which seeks to bring back economic activities to the local area (use of local goods and services, enrichment of the community, and reconnection between spaces of income generation and spending), give dynamics to exchanges (encouraging the circulation of wealth and the multiplication of exchanges) and transform practices and lifestyles (creation of a community identity and of new ties among people involved in the exchange, and giving consumers a sense of responsibility). Local currencies have gained new momentum in Europe since 20083 and are being used as tools that can meet shortand long-term challenges. However, it is often a challenge to implement them, starting with convincing local stakeholders of the credibility of such a system. In this context, local governments are playing an increasingly prominent role: by offering financial or logistical support, by including the local currency in their public policies or by accepting it as a means of payment of taxes or municipal wages, they seem to be becoming real actors in the development of local currencies. As an example, we have selected the case study of the London district of Brixton, where a local currency created in 2009 in cooperation with the local government has enabled the development of many innovations, thereby illustrating the importance of local currencies and the potential of local governments in this area.
The Brixton Pound, a local currency inside a neighbourhood
Brixton, a neighbourhood in the southern part of the Lambeth district of London, is home to one of the first local-currency networks in Britain to work in an urban environment. It was the Transition Town Brixton network that initiated the Brixton Pound project, with help from several sponsors, including the New Economics Foundation (Nef). The local currency was first launched in 2009 in a paper version and then in 2011 in an electronic version (with the possibility of paying via text message), thereby becoming the first electronic payment system for local currencies in Great Britain. Today, the Brixton Pound is an acknowledged success. In 2013, more than 100,000 Brixton pounds (nearly €120,000) were in circulation, with over 250 shops accepting cash payment and 170 accepting payment by telephone. Furthermore, more than 65% of Council public servants who accepted to receive part of their salary in local currency declare that they have changed their consumption habits and are purchasing more locally. The system is being constantly improved: consultations and polls are frequently organised with local businesses, residents and the municipality in order to make the currency evolve according to expectations and needs. Support from the local government has been essential to this success. For example, the Lambeth Council, of which a representative sits as a member of the Brixton Pound board, has authorised the use of the local currency by businesses to pay part of their taxes and by the Council to pay part of the wages of municipal employees. These measures have reinforced the currency’s credibility and encouraged its development, all the while enabling the local government to start up reflection on the coproduction of services and the role of citizen initiatives in its public policies. Recently, the Lambeth Council has participated in developing the Brixton Bonus, a programme seeking to ensure the financial autonomy of the Brixton Pound and to create a fund to finance local projects.
Local governments: catalysts for bringing economic activity back to the local area?
This initiative shows the relevancy of complementary currencies for revitalising and increasing the resiliency of the local economy, insofar as the Brixton Pound enables exchanges that would not necessarily exist just on the basis of the pound sterling. The goal is not to attract businesses to the area or to increase consumption, but rather to give dynamics to existing local organisations and the real economy4 by redirecting demand towards local products. Local currencies also have the advantage of circulating faster than national currencies, insofar as they are not made for being saved5. Finally, as they are accepted only inside the local community, they make it possible to both enrich the community and to trigger a virtuous economic process in the area that facilitates the emergence of value chains6. The currency put into use in Brixton goes beyond the economic dimension to create a true identity-based vector that helps implement a societal project. In this context, local governments emerge as increasingly crucial players, insofar as their support contributes to the development, continuity and credibility of the initiative. The currencies are also beneficial to local governments, as they help identify local businesses that can respond to calls for tender for public procurement (see the Manchester case study) and create new lines of funding, for tax collection for example. However, the success of such projects remains subject to the level of commitment and conscience of those involved. This brings up questions such as who participates in these networks and why, and to what degree these currencies must seek to increase the number of users.
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2 Fare M. and de Freitas C. (2012), Enjeux territoriaux des monnaies sociales et complémentaires, introduction systémique, bit.ly/FMDVReso-Monnaies
3 Derudder P. (2012), Les monnaies locales complémentaires : pourquoi, comment ?, Yves Michel publishers
4 Less than 5% of transactions are currently made to finance the real economy. (Derudder, 2012)
5 In some cases, its accumulation is limited by a ceiling value or by the establishment of a “melting” system by which the currency depreciates if it is not used after a certain amount of time. Thus, for the same amount of currency in circulation, the local currency is used more often and leads to greater overall economic activity.
6 Network of businesses where the local currency can be exchanged.