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A Review Of ‘Local Money’ By Peter North

By Jeremy

22 July, 2010
Transition Culture

Here is a review of ‘Local Money’ by Jeremy over at MakeWealthHistory. The book can be ordered here. It was also mentioned recently by Lucy Siegle in the Observer.

“I’ve really enjoyed the last three books to come out of the Transition Books stable, so I was pleased to see the latest instalment was out: Local Money – how to make it happen in your community. It’s another big square book, following Local Food, and it’s got the same practical, inspiring, can-do approach. This time, it’s all about creating local money networks.

The Transition Towns movement is all about resilience – preparing towns for the challenges of climate change and peak oil. What’s money got to do with it, you may well ask, but money is a valuable tool in relocalisation. Our current money system doesn’t serve us very well. It is beyond our control, in the hands of bankers and politicians and people we might hesitate to trust. It flows in vast quantities to people who don’t seem to do very much to earn it, while others work hard for very little. It is endlessly available for some tasks, and in short supply for other very necessary things. Most of all, it has an unpleasant habit of vanishing out of the places where we live and ending up in London and New York. Local money is a way of re-imagining money as the tool it should be, rather than the master it often becomes.

Since money is just an agreed mechanism of exchange, there are many different kinds of money, and endless possibilities for re-creating it. Local Money begins with an introduction to money and a history of alternative currencies, and then dedicates a chapter each one to a series of experiments with money. Time banking is one, a currency based on hours of work, and a great way to value all labour equally. Local Exchange Trading Schemes are an less formal way for people to trade skills that were successful in the past. North then explains the four Transition currencies so far, and ends with some tantalizing glimpses of the future of money, including feed-in tariff based bonds, mobile phone money, and tradeable energy quotas.

Among the more interesting systems that the book explores are Germany’s regional currencies, which operate alongside the Euro. Reading at a time when the Euro is in considerable danger, I bet Germany is glad it put the regional alternatives in place. “Monoculture of money,” says Peter North, “just like a monoculture of crops, is not resilient.” I’m not sure why I hadn’t heard about it before, but Germany has “a rich ecosystem of currencies”, as North puts it. Each one serves a different purpose, and this is perhaps the closest to the healthy and resilient model that the Transition Towns are after.

Totnes, Lewes, Stroud and Brixton are the three Transition currencies. They each have a slightly different philosophy, Stroud being the most radical – it is democratic money, owned by a co-op. The main aim of these currencies is to build the local economy and encourage more local supply chains. It’s a little early to tell whether it’s working or not, and North hints that they are “perhaps mere glimpses of what could be” in future. This is the really practical bit if you’re ready to have a go at creating your own money – lots of advice about getting buy-in from businesses, how much to print, why you should think long and hard about the name of your currency, tax implications, and so on.

There are some real strengths to Local Money. Peter North knows that everything in the book is an experiment, and that there’s no one formula. It’s an iterative process, and the book is great at breaking down historical examples to see what worked and what didn’t. It’s honest too, acknowledging the failures and limitations of what has been tried so far as well as the successes. If you’re ready to embark on the rather exciting journey of local money in your town, this is the most helpful book I’ve come across so far.

However, if you’re not that far along, the book is less useful. The previous Transition book, Local Food, had all kinds of different projects of varying levels of complexity. Whatever stage your town was at, there were inspiring ideas to get started. Local Money starts further along the road, with actual currency, when there are lots of smaller ways to build resilience in the local economy. I’d have loved to have read about local loyalty cards, such as the Wedge Card in London, or the 3/50 Project that invites people to pledge to spend money in three favourite local businesses. Both of these are a whole lot simpler, quicker, and less risky than launching a fully fledged alternative currency. But perhaps that’s for another book, a Local Economies title perhaps.

There’s also a lot more that could have been included. Local currencies aren’t the only way to generate local money, and it would have been great to hear more about zero interest banks (see Jak), peer to peer lending, shared equity mortgages, local banking and credit unions, local bonds, microfinance, or the ‘moneyless’ credit clearance schemes that Thomas Greco champions. Some of these get a passing mention, but they could all be considered valid options for making local economies more resilient and deserve more attention.

In other words, Local Money is great on currencies, but could have been much broader in scope. The Transition currencies are wonderful experiments and this book will get you well on your way to launching your own, but there is so much more to try.