Homemade money: Printing regional banknotes to build a local economy

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As Walletpop writer Zac Bissonnette noted yesterday, Great Barrington, Massachusetts has developed a new, regional form of currency. The BerkShares program follows in the footsteps of several other regional currencies, but takes the idea of local economic planning to a new, impressive level.

One obvious reason for printing money is the fact that it's exceedingly lucrative: the raw materials of paper and ink are relatively cheap; the hard part is convincing someone to exchange them for cold, hard cash.

To this end, it helps if the bills in question are attractive, original pieces of art. For example, the Antarctica Overseas Exchange Office, a Canadian company, produces "Antarctican notes." These beautiful, brilliantly-colored banknotes are printed in limited editions on long-lasting polymer and proceeds from their sale allegedly finance scientific study of the seventh continent.

Featuring illustrations of Antarctica and the various explorers who studied it, the notes can be exchanged equally for US dollars during their issuance period, after which they are essentially worthless as money. However, given the limited run, they may continue to appreciate as art.
In a similar vein, "Antarctica Dream Dollars" are actually produced by an artist, Stephen Barnwell, who has accompanied his designs with extensive, almost mythological tales of the country of "Nadiria," a fictional Antarctic colony that allegedly thrived for 30 years before disappearing completely. Unlike the "Antarctican Dollars," the Dream dollars don't really make any pretension to legitimacy. They are a beautiful, artistic fabrication from start to finish

On a corporate level, homemade money offers a way for communities to develop their local economies and encourage local businesses. For example, in 2004, Floyd Virginia developed "Floydian hours." Each "hour" represented an hour of work and could be exchanged for ten dollars. Local businesses accepted the money, but large chains didn't, which meant that a citizen of Floyd could conceivably exchange an hour of work for a bill, which he could then use in a local business, ensuring that neither his labor nor his commerce extended beyond the borders of his town.

Floydian hours didn't last for long, in part because of the smallness of the town, but also because the bills never really became much more than an interesting oddity. Printed on blue construction paper, they featured fun, cartoonish images, but they were certainly not works of art. Moreover, with a one-to-one exchange rate, there was never a compelling reason to use them, particularly when Floydians needed to do much of their shopping outside the town.

Great Barrington's money, by comparison, is far more complex. The largest regional currency in the country, there is approximately $2.4 million in BerkShares in circulation, and they are accepted by 400 stores in Western Massachusetts. At this point, residents and visitors to the area can buy an extremely wide variety of goods and services with the regional currency; moreover, with an exchange rate of $0.95 "federal" dollars to one "Berkshare," consumers essentially get a 5 percent discount from using the bills.

Beyond this, the banknotes are also quite attractive. Designed by John Isaacs, they feature locally-produced portraits of regional heroes W.E.B. DuBois, Herman Melville, Norman Rockwell, Robyn Van En, and the Mohican indians, the first settlers of the area. Professionally printed, they have counterfeit protections and resemble British pound notes.

On one level, BerkShares, like Floydian Hours, are designed to undermine large chains and "box stores," which don't accept them. However, in a broader context, they are the first step in what their creators see as the development of a self-sufficient regional economy. Co-founder Susan Witt notes that Berkshares can help economic planners uncover "leaks" in the regional economy, offering "opportunities for import replacement." Thus, instead of contracting trans-national corporations like Wal-Mart to provide goods and services to the area, the Berkshires will be able to identify opportunities for local business growth and encourage the development of regional commerce.

The ultimate goal of BerkShares is to help develop an economy that consumes what it produces and produces what it needs. Eventually, Witt hopes to decouple the regional currency from the US monetary system, tying it to a "basket of local commodities." In the meantime, however, BerkShares are a handy way to encourage people in Western Massachusetts to support neighborhood businesses, while helping to defray the increased costs of regionally-manufactured products.
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