E. F. Schumacher Society Blog

Dollars with Good Sense: Do It Yourself Cash

2009-06-23T14:45:00.001-04:00

June 2009, Yes! Magazine

by Judith Schwartz

Visit Judith Schwartz's Blog at http://litadventuresinpod.blogspot.com/

Local currencies value time, build community, and keep business moving even when credit dries up.

Total dependence on one currency is like total dependence on one crop, or, for that matter, a single energy source: there’s always the risk that crop failure or a cutoff in supply will topple the whole system. This is the scenario we’re seeing now—credit has dried up and unemployment is soaring. In small pockets throughout the world, in rural areas and inner cities, and spots as far-flung as Bavaria and Thailand to Massachusetts and Michigan, people are responding by launching their own currencies. Such monetary renegades are not simply thumbing their noses at the dollar (or the yen, or the euro, or the baht…) They are making a carefully considered choice to promote the well-being of their communities.

“From the beginning we had two objectives—to promote the region and promote local charities,” says Christian Gelleri. In 2003, Gelleri and a group of his students at a Waldorf School developed the Chiemgauer currency in the Lake Chiemsee region of Bavaria, Germany. Since then, some 3 million Chiemgauer notes (equivalent in value to the euro) have been placed in circulation. The currency, accepted by 600 businesses in the region, typically is spent and spent again 18 times a year, three times more than the Euro. This means that the currency is encouraging trade and cooperation in the region, which keeps the shops and restaurants and artisans active. Think of this faster rate of use (what economists term “velocity”) as a kind of reinvestment in the community.

Local currencies can help a community counter some of the problems with conventional money. For example, bank-issued currency tends to flow toward the money centers for investment. If you shop at a chain store, the profit gets whisked out of town and into the corporate coffers and then, often, to the speculative market. A local currency stays in the community, encouraging local business and trade, adding value to local products and services, and supporting the local infrastructure.

Reliance on national currency means being at the mercy of the national credit situation. As we’ve recently seen, credit constriction can paralyze local economies. Despite the availability of goods and the need for business, when there’s no money, consumers don’t buy. Stores don’t sell. Start-ups can’t get a toe-hold. An alternative currency gives people another way to buy, sell, lend, and borrow. If the community creates its own currency, local business can go on even if the supply of national currency dries up.

At the most basic level, currency functions as a means of exchange (I give you a dollar and you give me an ice cream cone), a unit of value (a dollar, pound, etc.) and a store of value (you can hold onto a dollar as it maintains its worth). It’s also a source of information about relative value, and about what is needed to keep trade flowing, for instance, by adjusting the supply of money or the exchange rate so that those in other markets can afford your goods.

With local currency, a community can meet currency needs that the national tender isn’t fulfilling. If the idea seems fanciful, here are models up and running—some for many years.

BerkShares

Author and urban activist Jane Jacob’s work was one inspiration for the monetary experiment called BerkShares—considered the best-designed and most successful local currency in the United States, with more than $2.4 million-worth passing from bank to hand to till and around again since fall 2006. The attractive paper bills—one BerkShare is worth $1, but is sold into circulation for 95 cents—are accepted at more than 400 businesses in the Berkshire region of western Massachusetts.

Jacobs pointed out that national currencies cover such broad geographical areas that they provide no local feedback. The way our system is now, regions subsidize each other, and weaknesses are not corrected. Local currencies, however, have clear feedback loops so that trade and production imbalances can be addressed more quickly.

As Susan Witt, executive director of the E. F. Schumacher Society, explains, “Whenever a BerkShare must be returned to the bank [instead of recirculated], that means there is not a source or product available locally to fill that business’s needs.” For example, say a toy store finds itself stuck with the currency. This presents an opportunity for a local craftsperson to provide the store with wooden figures, games, or puzzles to be purchased with BerkShares.

Witt, co-founder of the BerkShares program, took to heart Jacobs’ belief that regional economies need their own currencies to grow and thrive. “Businesses are now trading with other local businesses, so that they’re sourcing their printing, accounting, and food products locally rather than out of the area,” says Witt. “People are getting off Amazon.com and back to the local bookstore and camera store. They like the personal exchanges and the ambiance, so they stay.”

The currency belongs to the community, Witt stresses. And its use has been a valuable exercise in community empowerment. “The use of BerkShares is educating people on the importance of supporting local businesses. With that comes a sense of empowerment—that people can make positive changes in the local economy. The fact of BerkShares raises questions like: Can we issue currency that is not backed by the U.S. dollar? It’s prompting people to think about other ways of thinking about money.”

On a recent visit to Great Barrington, Massachusetts, I purchased Berkshares at Lee Bank and spoke to Branch Manager Paula Miller, who expressed enthusiasm about the currency. “Customers love it. We’ve gotten to know other businesses better,” she said, adding that it’s always fun when clients recognize the work of local artists who designed the bills. “It makes it a little more real.”

Time Banking

Time Dollars, now used in settings as varied as small towns, retirement homes, schools, and prisons, respond to conventional currency’s limited capacity to measure worth. “Dollars don’t measure value very well,” says David Boyle, a Fellow at the New Economics Foundation in the United Kingdom. They are good, he says, at measuring “the instantaneous value of Microsoft or currencies on the international exchange. But not the value of, say, a local shop, or of me if I’m very old or young. I might have skills, but not those that are conventionally marketable.”

Time Dollars were developed in 1980 by law professor Edgar Cahn, who lamented that crucial work to improve people’s lives—such as child and elder care—is much needed but little valued. He saw that many who could do these tasks were idle and felt useless. To get people economically engaged, Cahn proposed a system where people earn credit according to the number of hours they work. These Time Dollars can then be “cashed in” for services, like yard work, tutoring, etc.

Not only does Time Banking promote social justice by connecting people, promoting reciprocity, and improving neighborhoods—it has also proved quite versatile: People have exchanged Time Dollars for wool spinning, “rune making,” and having a baby delivered by a midwife. And there’s always an ample supply since no community is going to run out of hours.

TimeBanks USA offers a start-up kit that includes instructions and software for starting a Time Bank anywhere. Rose-Marie Pelletier is working on launching a Time Bank in her town of Pownal, Vermont, an economically diverse rural community of 3,500. At a town meeting, Pelletier looked at the listings of delinquent taxes over recent years and saw that they had increased geometrically. She’s a math teacher, and the numbers spoke to her; she saw the extent to which people were hurting. “People want to help each other—when we know how to do it,” she says. “I see Time Banking as a way of building community, one hour at a time.”

Chiemgauer Regional Currency

Conventional currency excels at serving as a store of value—so much so that use of money for actual trade slows down, leaving some local economies stuck. Coin and paper currencies do not lose value like the products one buys with them can, which makes hoarding and speculation attractive, particularly with the enticement of interest. Argentine economist Silvio Gesell described this phenomenon in 1913 and said that money also should lose value: that it should “rust” or go moldy like other commodities, and suggested a penalty, or demurrage fee, for holding onto it. Nearly 75 years later, then-teenager Christian Gelleri read Gesell’s work and was fascinated. As a high school teacher, he saw the chance to test the model with a local currency. This is how it works: Each quarter, every Chiemgauer bill loses 2 percent of its value. In order to spend the money later, the consumer needs to put a special sticker on the paper currency.

In the beginning, Gelleri got complaints. Then people figured out how to make the model work for them. For instance, one cinema owner said that business went way up at the end of the quarter when people wanted to shed their currency. Increased cash flow at quarter’s end was helpful for accounting, he said. The 2 percent loss, he added, was insignificant compared to the advertising he’d have to buy to secure the same level of customer loyalty he has from accepting the Chiemgauer.

A consumer can exchange euros for Chiemgauers at 50 offices in the region.Three percent of the purchase price goes to a nonprofit the buyer chooses. So far, more than $100,000 euros have gone to charities such as school athletic programs and environmental groups. The “good cause” component reinforces people’s investment in the currency, and in their community.

Maybe we’re asking national currencies to do too many things. As Thomas H. Greco, Jr. points out in his new book, The End of Money and the Future of Civilization, some functions are inherently contradictory: If money is for trading, you want to use it; if money is to store value, you want to save it. Greco and others such as David Boyle say that people could be better served by separating out the functions of money—and using different currencies, depending on whether you are, say, meeting friends at a local café or saving for college.

Back on Main Street in Great Barrington, Matthew Rubiner, of Rubiner’s Cheesemonger & Grocers, says the issue of local currency has shifted quickly from the theoretical to the here and now. “When BerkShares started we talked about what would happen if the economy falls apart and we were really forced to look local.” The economic downturn, he says, has “brought the question into bolder relief.”

Judith D. Schwartz wrote this article as part of The New Economy, the Summer 2009 issue of YES! Magazine. Judith is an author/journalist in Bennington, Vermont now writing about alternative/complementary currencies and localization movements. www.judithdschwartz.com

Buying Local: How It Boosts the Economy

2009-06-23T12:59:00.002-04:00

By Judith D. Schwartz, Time.com

Visit Judith Schwartz's Blog at http://litadventuresinpod.blogspot.com/

June 11, 2009

http://www.time.com/time/business/article/0,8599,1903632,00.html

"Buy Local"—you see the decal in the store window, the sign at the farmer's market, the bright, cheerful logos for Local First Arizona, Think Boise First, Our Milwaukee, and homegrown versions across the states. The apparent message is "let's-support-local-business", a kind of community boosterism. But buying close to home may be more than a feel-good, it's-worth-paying-more-for-local matter. A number of researchers and organizations are taking a closer look at how money flows, and what they're finding shows the profound economic impact of keeping money in town—and how the fate of many communities around the nation and the world increasingly depend on it.

At the most basic level, when you buy local more money stays in the community. The New Economics Foundation, an independent economic think tank based in London, compared what happens when people buy produce at a supermarket vs. a local farmer's market or community supported agriculture (CSA) program and found that twice the money stayed in the community when folks bought locally. "That means those purchases are twice as efficient in terms of keeping the local economy alive," says author and NEF researcher David Boyle. (See the top 10 food trends of 2008.)

Indeed, says Boyle, many local economies are languishing not because too little cash comes in, but as a result of what happens to that money. "Money is like blood. It needs to keep moving around to keep the economy going," he says, noting that when money is spent elsewhere—at big supermarkets, non-locally owned utilities and other services such as on-line retailers—"it flows out, like a wound." By shopping at the corner store instead of the big box, consumers keep their communities from becoming what the NEF calls "ghost towns" (areas devoid of neighborhood shops and services) or "clone towns", where Main Street now looks like every other Main Street with the same fast-food and retail chains.

According to Susan Witt, Executive Director of the E.F. Schumacher Society, "buy local" campaigns serve another function: alerting a community about gaps in the local market. For instance, if consumers keep turning to on-line or big-box stores for a particular product—say, socks—this signals an opportunity for someone local to make and sell socks. This is the way product innovations get made, says Witt. "The local producer adds creative elements that make either the product or materials used more appropriate to the place." For example, an area where sheep are raised might make lambs wool socks and other goods.

The point is not that communities should suddenly seek to be self-sufficient in all ways, but rather, says Boyle, "to shift the balance. Can you produce more locally? Of course you can if the raw materials are there, and the raw materials are often human beings."

And what about that higher cost of local goods? After all, big-box stores got to be big because their prices are low. Susan Witt says that the difference falls away once you consider the increase in local employment as well as the relationships that grow when people buy from people they know. (Plus, one could argue, lower transportation, and therefore environmental, costs, and you know what you're getting—which as we've recently seen with suspected contamination in toys and other products from China, can be a concern.)

There's also the matter of local/regional resilience. Says Witt: "While now we're largely a service-providing nation, we're still just a generation away from being a nation of producers. The question is: what economic framework will help us reclaim those skills and that potential." Say, for example, the exchange rates change or the price of oil rises (and it has started to creep up, if not at last summer's pace) so that foreign-made goods are no longer cheap to import. We could find ourselves doubly stuck because domestic manufacturing is no longer set up to make all these products. While no community functions in isolation, supporting local trade helps "recreate the diversity of small businesses that are flexible and can adjust" to changing needs and market conditions, says Witt. (Read "How to Know When the Economy Is Turning Up.")

Another argument for buying local is that it enhances the "velocity" of money, or circulation speed, in the area. The idea is that if currency circulates more quickly, the money passes through more hands—and more people have had the benefit of the money and what it has purchased for them. "If you're buying local and not at a chain or branch store, chances are that store is not making a huge profit," says David Morris, Vice President of the Institute for Local Self-Reliance, a nonprofit economic research and development organization based in Minneapolis and Washington, D.C. "That means more goes into input costs—supplies and upkeep, printing, advertising, paying employees—which puts that money right back in the community."

One way to really make sure money stays in the community is through creating a local currency. Christian Gelleri, a former Waldorf high school teacher in the Lake Chiem area in Germany, has launched a regional currency, the Chiemgauer, equivalent in value to the Euro. According to Gelleri, the Chiemgauer, accepted at more than 600 businesses in the region and with about $3,000,000 Euros worth in circulation, has three times the velocity of the Euro, circling through the economy an average of 18 times a year as opposed to 6. One reason for the fast turnaround is that the Chiemgauer is designed to encourage spending: there is a 2% demurrage fee for holding onto the bills beyond three months.

As an economic principle, velocity has been considered a constant. According to Gelleri, it was stable in the 1950s, '60s, and '70s but starting in the '80s velocity has decreased as more money has been diverted to the financial sector. This scenario may benefit financial centers, but money tends to drain away from other places. Gelleri says that both the Euro and the U.S. dollar have slowed way down. "In the last several months velocity has declined sharply because there's less GDP and more money," he says. "The money doesn't flow. More money is being printed, but it's not going into circulation."

As the nation limps through the recession, many towns and cities are hurting. "Buy-local" campaigns can help local economies withstand the downturn. Says Boyle: "For communities, this is a hopeful message in a recession because it's not about how much money you've got, but how much you can keep circulating without letting it leak out."

Economic Transition Moment

2009-06-20T16:53:00.002-04:00

Dear Friends,

Our economy is in transition. A new economic system must respond to the realities of climate change, collapsing financial markets, disparities in wealth, and industries too big to manage sustainably.

Inspired by the writings of Fritz Schumacher, Jane Jacobs, Martin Buber, the Gandhian J.C. Kumarappa and other decentralist economic thinkers, the E. F. Schumacher Society has worked for three decades to develop the theory and application of place-based economic institutions that link people, land, and community.

These small examples of positive citizen action are now helping to inform a vibrant national and international dialogue about creating solutions to our common economic problems. The BerkShares local currency program alone is drawing over 43,000 hits per day to the Schumacher Society’s information rich websites.

A big thanks to our members who have supported the E. F. Schumacher Society in the past. Your new donations are most welcome to enable staff to respond to the opportunities of this transition moment with economic models carefully framed and shaped on the ground. Donations may be made on-line (http://www.smallisbeautiful.org/donation_form.html) or by mail to 140 Jug End Road, Great Barrington, MA 01230.

Several conferences over the next few months are addressing the economy in transition including the Annual E. F. Schumacher Lectures on October 17th in Stockbridge, Massachusetts with Bill McKibben, Benjamin Barber, and Alisa Gravitz and the Economics of Peace conference in October in Sonoma, California. You will find links below and at the events page of the E. F. Schumacher Society’s website.

Best wishes,
Susan Witt, Sarah Hearn, and Stefan Apse
E. F. Schumacher Society
smallisbeautiful.org
berkshares.org
youtube.com/efssociety
efssociety.blogspot.com
twitter.com/efssociety

Board of Directors: Jessica Brackman, Starling Childs, Merrian Fuller, Hildegarde Hannum, Eric Harris-Braun, Daniel Levinson, Constance Packard, Joseph Stanislaw, Nancy Jack Todd, and Charles Turner.
Board of Founders: Ian Baldwin, David Ehrenfeld, Satish Kumar, John McClaughry, and Kirkpatrick Sale.
Advisory Board: Tanya Berry, Wendell Berry, Lisa Byers, Olivia Dreier, Hazel Henderson, Wes Jackson, Amory Lovins, John McKnight, David Orr, Michael Shuman, Cathrine Sneed, Lewis Solomon, John Todd, Greg Watson, Barbara Wood, and Arthur Zajonc.

* * * * * * * * * *
June 25th and 26th Washington, DC, Convergence on Zero conference on tools for moving to zero emissions (www.convergenceonzero.org)

September 10th and 11th, Santa Fe, NM, Slow Money National Gathering (www.slowmoneyalliance.org)

October 17th, Stockbridge, MA, E. F. Schumacher Annual Lectures (www.smallisbeautiful.org)

October 18th-23rd, Sonoma, CA, Economics of Peace (www.praxispeace.org)

October 22nd-25th, New Bedford, MA, Bioneers by the Bay (www.marioninstitute.org)

October 24th, 350.org, International Day of Climate Action led by Bill McKibben (www.350.org)

Radical Rethinking of Our Economies

2009-06-11T09:37:00.001-04:00

Dear Friends,

Stewart Wallis of London’s New Economics Foundation (www.neweconomics.org) says of Peter Victor that he is one of the few economists who is describing the practical steps needed to transition from our current economic system to one that is more sustainable. Wallis says we will need more economists like Victor to shape a new economy.

We are pleased to share Peter Victor recent essay “Bigger isn’t Better.”

Best wishes,
Susan Witt, Sarah Hearn, and Stefan Apse
E. F. Schumacher Society
140 Jug End Road
Great Barrington, MA 01230
www.smallisbeautiful.org

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Bigger isn’t Better

By Peter A. Victor
May 2009

There’s nothing like a good crisis to make us rethink old ideas. The depression of the 1930s led to the rejection of the prevailing idea that unemployment would right itself if only people would work for lower wages. Governments could do very little to help. These ideas were overthrown by experience and by the invention of modern macro economics by British economist, John Maynard Keynes. By the end of World War II, most Western governments had adopted Keynesian economic policies designed to ensure that total expenditures were sufficient to maintain full employment.

Keynesian economists soon discovered that full employment today meant a bigger economy tomorrow because some of the investment expenditures required to keep unemployment down: on infrastructure, buildings and equipment, also expanded the productive capacity of the economy. So does an expanding population and labour force. Initially, governments pursued economic growth to meet the more pressing concern of maintaining full employment, but this soon changed. In the 1950s, economic growth became the number one economic policy objective of governments and all others, such as productivity, innovation, free trade, competitiveness, immigration, even education, became a means to that end.

Until a year or so ago all seemed to be going reasonably well. Then came the breakdown in the financial sector followed quickly by a recession that through globalization, spread further and faster than swine flu. Now governments are congratulating themselves for acting together to stimulate spending to get the economies back on course, much as Keynes might have recommended. But times have changed since his day. World population has increased almost three times, world economic output has increased ten times and with this massive expansion of the human presence on earth, we are confronting limits to the availability of cheap energy, to fresh water, and to the capacity of the atmosphere to absorb increasing emissions of greenhouse gases. At the same time we are destroying the habitat of numerous species of flora and fauna and the security of our own food supplies is threatened.

It is time to rethink the old idea that the solution to all our problems lies in the incessant expansion of the economy. Rich countries like Canada should explore alternatives, especially if poorer countries are to benefit from economic growth for a while in a world increasingly constrained by biophysical limits. Some deny or simply ignore these limits and argue that economic growth in rich countries is necessary to stimulate growth in poorer ones. Others say that with ‘green’ growth we can expand economic output as we reduce the demands we place on nature through more efficient production, better designed products, fewer goods and more services, compact urban forms, and organic agriculture. While these measures may well help in a transition they are an unlikely prescription for the long term. What is required is a radical rethinking of our economies and their relation to the natural world.

Although no 21st century Keynes has emerged to prepare the intellectual ground for such a change in thinking, we do have a body of knowledge built up over many decades and now thriving under the name of ‘ecological economics’. Ecological economists understand economies to be subsystems of the earth ecosystem, sustained by a flow of materials and energy from and back to the larger system in which they are embedded. It is understandable that when these flows were small relative to the earth they could be ignored, as they have been in much of mainstream economics. Economists are not alone in treating the economy as a self-contained, free standing system largely independent of its environmental setting. It is a widely held view that environmental protection is just one among multiple competing interests to be traded off against the economy. And anyway, this mainstream perspective teaches that if resource and environmental constraints are encountered, scarcities will be signalled by increases in prices that will induce a variety of beneficial changes in behaviour and technology. Should this system of scarcity, price, response fail then economists can estimate ‘shadow’ prices which can be imposed directly through taxes or used indirectly through policies based on cost-benefit analysis to fix the problem.

To ecological economists, this is an inadequate response to the myriad problems of resource depletion, environmental contamination and habitat destruction confronting humanity in the 21st century. They question the pursuit of endless economic growth and contemplate a very different kind of future.

In my own work, I have examined whether and under what conditions a country like Canada could have full employment, no poverty, much reduced greenhouse gas emissions, and maintain fiscal balance, without relying on economic growth. Using a comparatively simple model of the Canadian economy I have explored scenarios in which these objectives are met. The ingredients for success include a shorter work year to reduce unemployment yet retain the advantages of technological progress, a carbon price to discourage greenhouse gas emissions, and more generous anti-poverty programs.

In such an economy, success would not be judged by the rate of economic growth but by more meaningful measures of personal and community well-being. We would adjust to strict limits on our use of materials, energy, land and waste, guided by prices that provide more accurate information about real rather than contrived scarcities. We would enjoy more services and fewer but more durable and repairable products, and we would value use over status when deciding what to buy. Rampant consumerism would be history, advertising would be more informative and less persuasive, and new technologies would be better screened to avoid problems to be fixed later, if at all. Infrastructure, buildings and equipment would be more efficient in their use of energy and we would think and act more locally and less globally. With more free time at our disposal we would educate ourselves and our children for life not just work.

Is all this simply wishful thinking of a sort that flourishes in troubled times? I think not. The undercurrent of discontent with modern life is rich with ideas for a better future, one that is not dependent on economic growth. For example, in March of this year the UK’s Sustainable Development Commission delivered its report ‘Prosperity without Growth?’ to the British Government endorsing and amplifying many of the ideas expressed here. The Centre for the Advancement of a Steady State Economy based in the USA has obtained over 3000 signatures on its position statement designed to help change the goal of the economy from growth to sustainability. At the local level, Transition Towns has spread in less than four years from the UK to many countries including Canada, to raise awareness of sustainable living and to build local resilience in response to the combined threats of peak oil and climate change. Even mainstream economists are moving with the tide. Nobel Laureate economist Robert Solow said last year: “It is possible that the US and Europe will find that…either continued growth will be too destructive to the environment and they are too dependent on scarce natural resources, or that they would rather use increasing productivity in the form of leisure.” Let’s add Canada to the list and go from there.

Economist Peter A. Victor is Professor in Environmental Studies at York University and author of Managing without Growth. Slower by Design, not Disaster, Edward Elgar Publishing, 2008. “Bigger isn’t Better” first appeared in the Ottawa Citizen (www.ottawacitizen.com).

Towns print money to help local merchants

2009-05-30T14:58:00.000-04:00

By Matthew Cardinale, Inter Press Services

http://www.berkshares.org/press/09May30.htm

Jun 19, 2009

ATLANTA, (IPS/GIN) - In the face of an economic system in full crisis mode, a handful of communities across the U.S. and the globe have begun experimenting with alternative forms of local currency as a pathway to sustainability.
Local currencies existing today in the U.S. include the Humboldt Community Currency in Eureka, California; Berkshares in the Massachusetts Berkshire region; Bay Bucks in Traverse City, Michigan; Ithaca Hours in Ithaca, New York; Cascadia Hours, Corvalis Hours, and RiverHours in Oregon; Equal Dollars in Philadelphia, Pennsylvania; and Madison Hours in Madison, Wisconsin, according to the E. F. Schumacher Society, which runs Berkshares.

These currencies all represent an effort to respond to the pressures of globalization, like the advent of massive chain stores competing with local merchants.
People in Great Barrington, Mass., can go to one of five participating local banks to trade 95 cents for one Berkshare, at a five percent discount to the dollar. They can then spend Berkshares at over 400 participating local stores as a direct replacement for dollars, thus saving 5 cents with every Berkshare they spend.
Even though store owners lose the 5 cents whenever they trade Berkshares back for dollars at a bank—which they have to do to buy something that can't be produced locally—they are still typically happy with the loyal, local customers they keep instead of losing them to chains like Wal-Mart, Starbucks, and Barnes & Noble.
“Local currencies are part of what educate people about the importance of their small, independent businesses,” Susan Witt, founder of Berkshares, told IPS. “It's bringing people off the internet back to Main Street, for the face-to-face exchanges. Once they're there, they like it.”
A local currency can help create a more sustainable economy in several ways, leaders in the local currency movement say.
First, since using a community currency forces people to buy locally, fewer goods have to be imported.
“By having economic transactions so focused locally, that's definitely, for one thing, reducing use of fossil fuel. If it's a local farmer's market ... food (is) produced 30 miles away instead of 3,000 miles away,” said Steve Burke, executive director of Ithaca Hours.
Trade theorists might object that it is less efficient, or less productive, for diverse goods to be produced in many communities than it is for each community to specialize in producing one product for export, even factoring in transportation costs.
A second way in which community currencies support environmental sustainability is that they can lead to reduced consumption, Ms. Witt argued. She believes people purchase more and more “stuff,” not because they need it, but to fill a void that community currency can satisfy.
“You know the full story about the goods you purchase. You know how they were produced. You know the carpenter who made the table. You know who her children are. You realize buying the table is supporting that family,” Ms. Witt said.
The products bought with local currency “link you to your neighborhood, your place, the people of your place. They're not just stuff ... they enrich your life the way that stuff would not. So you need less.”
A third way in which community currency can lead to sustainable economy is communities can print the currency they need to issue interest-free, or non-profit loans. Allowing credit to be issued interest-free eliminates the need to service growing debts. High-interest debt owed by individuals, businesses, and governments to private banks is one of the main factors pushing economies to constantly grow at an exponential rate. As these entities struggle to service the interest on their debts with a total money supply that was mostly created through issuance of credit, more and more new debt must be created in order for the system to be stable.
Thus, because high-interest debt pushes the economy to constantly grow, it also pushes industrialization into new markets, new products, and new technologies, which often lead to deforestation, air pollution, and the like.
By communities printing and issuing their own currency, in part through productive non-profit loans, the economy can function without the constant growth that is imperiling the environment.
There are at least two different models for how to organize and operate a local currency that local communities are using. One is used by Berkshares; the other was pioneered by the Ithaca Hour.
Founded in 1991, the Ithaca Hour is the oldest local currency to exist in the U.S. since local currencies disappeared in the 1900s. Numerous local currencies have since based their model on the Ithaca Hour.
Businesses become members in Ithaca Hours by purchasing a listing in the Ithaca Hours directory, and they receive two “hours” every year as part of their membership fee. Employees at these businesses then can accept hours instead of dollars for some of their wages. People can accept hours instead of dollars for services, like mowing a lawn, that they provide.
This, in addition to low-cost loans, is the primary way Ithaca Hours enter Ithaca's economy.
“There's a pretty fundamental difference between our model and the Berkshares model,” Mr. Burke said. “They sell them. With ours, you can't buy them; you can only earn them.”
They are called hours “to make a statement,” Mr. Burke said. The founders “wanted to emphasize the relationship between time and money.”
(This story is part of a series on sustainable development by IPS and the International Federation of Environmental Journalists for Communicators for Sustainable Development. See more at www.complusalliance.org.)

Civic Unreasonableness

2009-05-30T08:38:00.001-04:00

Dear Friends,

In its September/October 2008 article about James Gustave Speth, Orion Magazine (www.orionmagazine.org) comments, "If America can be said to have a distinguished elder statesman of environmental policy, Speth is it." His career includes leadership of the Natural Resources Defense Council, the World Resources Institute, the United Nations Development Programme, and the Yale School of Forestry.

It is this very life-long commitment to the environment that has turned Gus Speth into an eloquent spokesperson for a "new economy." In the essay below he argues for the urgent transformation of old and failing economic systems if we hope to achieve a sustainable and equitable future.

We are pleased to share the essay with you.

Best wishes,
Susan Witt, Sarah Hearn, and Stefan Apse
E. F. Schumacher Society

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PREAMBLE: NEW ECONOMY, SUSTAINING ECONOMY
by James Gustave Speth
May 28, 2009

The economic crisis has stimulated much soul searching and, more generally, searching for something better. Along with the environmental crisis, it has exposed the severe shortcomings of business as usual and the current order.

A great imperative Americans now face is to build a new economy – a sustaining economy. Sustaining people, communities and nature must henceforth be seen as the core goals of economic activity, not hoped for by-products of market success, growth for its own sake, and modest regulation.

We are told to seek a strong economy. We know now that we should seek first a strong society, a strong nature, and a strong democracy. Today's economy offers little help in these regards. We must move beyond it. We need to reinvent the economy, not merely restore it.

Political action must embrace a profound commitment to social justice and a powerful assault on economic privilege. It must embrace a sustained challenge to consumerism and commercialism and the lifestyles they offer, a healthy skepticism of growthmania and a redefinition of what society should be striving to grow, a challenge to corporate dominance and a redefinition of the corporation and its goals, and a commitment to deep change in both the functioning and the reach of the market.

Economic growth may be the world's secular religion, but for much of the of the world it is a god that is failing – underperforming for most of the world's people and, for those of us in affluent societies, creating more problems than it is solving. The never-ending drive to grow the overall U.S. economy undermines families, jobs, communities, the environment, a sense of place and continuity, even mental health. It fuels a ruthless search for energy and other resources, and it rests on a manufactured consumerism that is not meeting the deepest human needs.

Before it is too late, America should begin to move to post-growth society where working life, the natural environment, our communities, and the public sector are no longer sacrificed for the sake of mere GDP growth; where the illusory promises of ever-more growth no longer provide an excuse for neglecting to deal generously with compelling social needs; and where a truly democratic politics is no longer hostage to the primacy of powerful corporate interests.

Needed Policy Initiatives

America's open-ended commitment to aggregate economic growth is consuming environmental and social capital, both now severely diminished. At the same time, it is abundantly clear that American society and many others do need growth along many dimensions that increase human welfare, now and in the future: growth in good jobs and in the incomes of the poor; growth in availability of health care and the efficiency of its delivery; growth in education and training; growth in security against the risks of illness, job displacement, old age and disability; growth in investment in public infrastructure for urban and inter-urban transport, water, waste management and environmental amenity; growth in the deployment of climate-friendly and other green technologies, as rapidly as possible; growth in the replacement of America's obsolete energy system; growth in the restoration of both ecosystems and local communities; growth in non-military government spending at the expense of military; and growth in international assistance for sustainable, people-centered development for the half of humanity that live in poverty, to mention some prominent needs. Even in a post-growth society many things need to grow.

We need targeted policies that directly address these objectives and America's compelling social needs – policies, for example, that strengthen families and communities and address the breakdown of social connectedness; that guarantee good, well-paying jobs (including green-collar ones); that provide for universal healthcare and alleviate the devastating effects of mental illness; that provide a good education for all; and that ensure care and companionship for the chronically ill and incapacitated.

Of particular importance are government policies that will temper growth while improving social and environmental well-being, such as: shorter workweeks and longer vacations; greater labor protections, job security and benefits; restrictions on advertising; a new design for the twenty-first-century corporation, one that embraces rechartering and stakeholder primacy rather than shareholder primacy; strong social and environmental provisions in trade agreements; rigorous environmental, health and consumer protection, including full incorporation of environmental and social costs in prices; greater economic and social equality, with genuinely progressive taxation of the rich and greater income support for the poor; heavy spending on public services; and initiatives to address population growth at home and abroad.

If the market is going to work for the betterment of society, environmental and social costs should be incorporated into prices. Honest prices will ensure that people take into account the environmental and social impacts of their purchases, whether they're environmentally conscious or just minding their pocketbooks. High prices are a problem not because they are high but because people don't have the money to pay them and alternatives (e.g., truly fuel-efficient vehicles) are not readily available. Honest prices would be higher prices for many things, but that does not mean Exxon should pocket the difference or that equity issues should remain unaddressed.

Responsibly high energy prices, driven for example by a declining cap on carbon dioxide emissions, will help protect the earth's climate, increase demand for efficient vehicles and public transportation, spur new renewable energy industries, decrease the supply vulnerabilities and international entanglements of imported oil, strengthen local communities and encourage localization rather than globalization. But honest energy prices must be accompanied by measures that make them affordable by those on whom they would otherwise impose a serious hardship.

Conventional wisdom on the clash of economy and environment is that we can have it both ways, thanks to new technology. We do indeed need a revolution in the technologies of energy, transportation, construction, agriculture and more. This ecological modernization can be driven by quantitative restrictions that ensure extractions from the environment do not exceed regenerative capacities and discharges to the environment do not exceed assimilative capacities. But the rate of technological change required to deal with environmental challenges in the face of rapid economic growth is extremely high and rarely achieved. If pollution from an industrial facility is cut in half but growth spawns another similar plant, there is no net gain. Housing, appliances and transportation can become more energy-efficient, but the improvements will be overwhelmed if there are more cars, larger houses and new appliances--and there are. There's a limit to how fast and far new technology can take us; technological change alone is not enough.

Economic Crisis and Beyond

Americans are struggling with the combined impacts of crumbling financial assets, tighter credit and layoffs. These problems are associated with a slowdown in GDP growth, but the failure of growth is not truly their cause, and they will not necessarily be cured by more growth. We have had jobless growth before. As is now appreciated, the current economic crisis is the result of government failing to intervene appropriately in the marketplace--in financial markets, in housing markets, in labor markets and elsewhere. We are today on the receiving end of misguided policies, including massive deregulation, that have led to deep structural maladies. Major corrections are needed.

The economic crisis should also teach us to live more simply and focus more locally. It is time to move beyond our consumerism and hyperventilating lifestyles. There has been too little focus on consumption and the mounting environmental and social costs of American "affluenza," extravagance and wastefulness. Being less focused on getting and spending (initially, in part, because there will be less to spend) can help society rediscover that the truly important things in life are not at the mall nor, indeed, for sale anywhere.

Psychological studies show that materialism is toxic to happiness and that more income and more possessions do not lead to a lasting sense of well-being or satisfaction with life. What makes people happy are warm personal relationships and giving rather than getting, things that are possible at a human scale. The good news is that more and more people sense that there's a great misdirection of life's energy. In a survey 83 percent of Americans say society is not focused on the right priorities, 81 percent say America is too focused on shopping and spending, 88 percent say American society is too materialistic, 84 percent want to spend more time with family and friends. These numbers, even if half right, suggest there's a powerful base on which to build. More and more people are saying: Confront consumption. Practice sufficiency. Create social environments where overconsumption is viewed as silly, wasteful, ostentatious. Create commercial-free zones. Buy local. Eat slow food. Downshift. Public policy should support these directions, and it should devise new measures to track improvements in social welfare, a purpose for which GDP is a miserable failure.

Building a Unified Progressive Movement

What circumstances might make deep change plausible? A mounting sense of imminent crisis, occurring at a time of wise leadership, accompanied by the articulation of a new American narrative or story and the appearance across the landscape of new and appropriate models, all these would help. Most of all, we need a new politics and new social movement powerful enough to drive change.

We live and work in a system of political economy that cares profoundly about profits and growth. It cares about society and the natural world in which it operates mainly to the extent it is required to do so. It is up to us as citizens to inject values of fairness, solidarity and sustainability into this system, and government is the primary vehicle we have for accomplishing this. But mainly we fail because our politics are too enfeebled and government is more and more in the hands of powerful corporations and great wealth. Our best hope for real change is a fusion of those concerned about environment, social justice, and political democracy into one progressive force. We are all communities of shared fate. We will rise or fall together.
Environmentalists and social progressives must join to address the crisis of inequality unraveling our social fabric and undermining democracy. It is a crisis of soaring executive pay, huge incomes and increasingly concentrated wealth for a small minority while poverty approaches a thirty-year high, wages stagnate despite rising productivity, social mobility and opportunity decline, the number of people without health insurance soars, job insecurity increases, safety nets shrink and Americans have the longest working day of all the rich countries.

Progressives of all stripes must also join in seeking to reform politics and strengthen democracy. America's gaping social and economic inequality poses a grave threat to democracy. We have seen the emergence of a vicious circle: income disparities shift political access and influence to wealthy constituencies and large businesses, which further imperils the potential of the democratic process to act to correct the economic disparities. Corporations have been the principal economic actors for a long time; now they are the principal political actors as well. Neither environment nor society fares well under corporatocracy. We need to embrace public financing of elections, lobbying regulation, nonpartisan Congressional redistricting and other reforms as a core of our agenda.

For the most part, we have worked within our current system of political economy, but working within the system will in the end not succeed when what is needed is transformative change in the system itself. George Bernard Shaw famously said that all progress depends on not being reasonable. It's time for a large amount of civic unreasonableness.

* * * * * * * * * *
James Gustave Speth is author of "The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability" (Yale Press, 2009 paperback edition) available through your local independent bookseller.

WIR/Cooperative Credit and Exchange

2009-05-26T03:09:00.001-04:00

Erick B. Hansch was a colleague of Robert Swann and Ralph Borsodi at the International Independence Institute. One of the projects of the Institute was the launch of a currency called "The Constant" in Exeter, New Hampshire in 1972. Borsodi, an economist, was in his 90's at the time and decided to issue the currency as a one year experiment to prove it could be done, rather than just writing another book on the subject.

The Constants were issued by a bank in Exeter and were valued according to a weighted basket of commodities. The intent was to demonstrate how to issue a currency that would not deflate but which instead held "constant" buying potential.

The Institute was also the vehicle for launching the community land trust movement in this country. Erick Hansch was one of the authors with Bob Swann and Ted Webster of "The Community Land Trust: a Guide to a New System of Land Tenure in America" published in 1972, the complete text of which is available online:

http://www.smallisbeautiful.org/clts/clt_book.html

In 1974 the Institute hosted E. F. Schumacher's historic trip to this country. Swann and Schumacher formed a close alliance as a result.

Erick Hansch, Ralph Borsodi, and Fritz Schumacher all died within a month of each other in 1977. Bob Swann continued working with the ideas of his friends and mentors and in 1980 founded the E. F. Schumacher Society in Great Barrington, Massachusetts which has been a leader in the study and application of local currencies and community land trusts. The Schumacher Society's current work with BerkShares local currency (http://www.berkshares.org) has grown from this long tradition of economic scholarship and innovative practice.

Erick Hansch had a gift for languages. In addition to English he spoke Chinese, German, and Spanish. In anticipation of the launch of the Constant, he traveled to Basel, Switzerland to study the WIR currency program (http://www.wir.ch) that has been in circulation in parallel to the Swiss Franc since the 1930s. His unfinished typed report is in the archives of the E. F. Schumacher Library. Thanks to the good work of volunteers, it has been entered into electronic format and is available in full at the Society's website:

http://www.smallisbeautiful.org/local_currencies/wir.hansch.html

Best wishes,
Susan Witt, Sarah Hearn, and Stefan Apse
E. F. Schumacher Society

BerkShares on NBC Nightly News

2009-04-28T05:10:00.002-04:00

Dear Friends,

BerkShares local currency was featured on NBC Nightly News on April 26th.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Best wishes,
E. F. Schumacher Society staff

Democratizing Finance

2009-04-14T09:39:00.002-04:00

Dear Friends,

The incomparable Hazel Henderson has been campaigning and strategizing for a green economy for the past forty years in her writings and talks, and at board and government tables. Her pioneering work has led to many of the programs we now take for granted in the socially and ecologically responsible investment field. She has worked with both citizen groups and heads of states around the world. She has created a language for evaluating the ethical basis of financial programs. Her name is a trademark.

As a new generation puts its imagination to the task of relocalizing economies community by community, it is important to remember the handful of shoulders on which this work stands. Hazel Henderson's shoulders are broad, her intellect fast paced, her contributions prolific.

Following is her recent "Democratizing Finance" detailing how "local leadership is rising, offering many creative alternatives for communities to nurture healthier homegrown economies . . ." It is distributed by InterPress Service and used with the kind permission of Ms. Henderson.

You will find more of her writings at www.ethicalmarkets.com and www.ethicalmarkets.tv Enjoy rediscovering Hazel Henderson, as we have!

Susan Witt, Sarah Hearn, and Stefan Apse
Staff of the E. F. Schumacher Society

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Democratizing Finance
By Hazel Henderson
April 2009  

© InterPress Service  and Hazel Henderson,  www.hazelhenderson.com

The financial meltdown generated by Wall Street and the “too big to fail” culture of global money-center banks and financiers is generating local initiatives and demands to decentralize and democratize finance.  

Meanwhile, at the global level, the G-20 countries’ demands to democratize the voting structures of the IMF and the World Bank are essential to reflect the changing balance of economic power. The G-7 and G-8 group of countries are no longer relevant now that the G-20 group (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America, and also the European Union) has taken center stage.

While national safety-nets are unraveling due to budget cuts, local leadership is rising, offering many creative alternatives for communities to nurture healthier homegrown economies:

• Local barter-clubs, like Freecycle.com, Craigslist and LETS, and scrip currencies are proliferating – as they always do when central bankers and the International Monetary Fund fail or apply the wrong remedies and make matters worse. Some of the most successful complementary currencies are Switzerland’s WIR and in the USA, BerkShares, with equivalent to $2 million issued in the first two years and accepted by banks and businesses in Massachusetts. Similar complementary currencies are matching needs and resources and clearing local markets in Britain, Canada, Australia, Argentina, Brazil and other countries.

• People-to-people lending and microfinance projects are booming in many countries. Women’s World Banking, Grameen Bank in Bangladesh, now emulated in many countries, FINCA and ACCION in Latin America, as well as the newer online versions, including Microplace, Kiva, as well as lenders Prosper.com in the USA and Zopa.com in Britain. Credit unions, operated in Europe and North America for a century, are becoming more proactive. They are filling new local needs, reaching out to poorer people and adding microfinance and lending to small businesses.

• Associations of small local banks and businesses are wielding more political clout, as are credit unions. In the USA, they are demanding equal treatment in the government’s TARP, TALF, and other bailout funds currently showered on the big banks whose reckless lending triggered the financial mess. Venture capital and venture philanthropy firms, including the Rudolf Steiner Foundation, Acumen and the foundations of Ebay founders Pierre Omidyar and Jeffrey Skoll, are investing in social enterprises which meet social needs while making modest profits. Such social capital is now creating a new hybrid sector in many economies.

• The Business Alliance for Local Living Economics (BALLE) is such a network in North America, as well as the New Voice of Business, Green America, the Social Enterprise Alliance, the Fourth Sector Network and the Business-NGO Working Group. Entrex.net focuses on helping small businesses with their Private Company Index (PCI) which outperforms most stock indexes. Britain’s New Economics Foundation (NEF) has been generating both local initiatives, such as the Transition Towns movement, as well as its Green New Deal and alternative indicators to correct GDP, measuring wellbeing and ecological sustainability. NEF’s proposal to save Britain’s 11,500 postal offices by adding local banking functions is backed by trade unions, small businesses, public interest groups and pensioners.

• Time banking, a brainchild of Edgar Cahn in the USA (see www.ethicalmarkets.tv), is now helping local people connect and share services in Japan, Europe and other countries. Neighbors contact each other via a local “time banker” to provide meals and help for shut-ins, babysit each other’s children, watch over property, mow lawns and share appliances. Car-sharing has now spawned many new companies such as Zip Car in the USA and others in Canada and Europe where people can make ride arrangements rapidly on Blackberrys and laptops.

• China is host to many such local initiatives, linking small businesses on networks, including Baidu.com, Alibaba.com, as well as Qifang.com which provides affordable loans to China’s 25 million students. Circle Pleasure, a private company selling prepaid consumer cards, has formed a joint venture with Qifang for people-to-people banking, the first private company to receive a banking license from China’s Central Bank. In many countries in Africa, cell phone banking has taken off. Cell phones are the basis for the “phone ladies” in Indian and Bangladeshi villages, who rent out use of their cell phones to other villages. Rural farmers and fishers can consult prices being offered in nearby towns and markets on their cell phones to make sure they take their goods to the best places to sell them.

How far can people-to-people finance go in bypassing big, greedy banks and ethically challenged Wall Street financiers and their political allies? A long way, thanks to all the communications tools now widely available. Using these new information-sharing tools is helping people realize again what money is: just one form of information. Today it is possible to trade using pure information exchange. For example, in rural areas in Florida, radio stations have call-in programs where farmers can say “I have spare time on my tractor to exchange for fertilizer or pepper, melon, eggplant seeds.” The farmer gives her phone number and the trades are exchanged off-line. Similarly, the growth of farmers’ markets and contract-supported agriculture allows local consumers to buy fresh produce directly from nearby farms.

All these local solutions and people-to-people safety-nets raise the question “How did we allow big banks and centralized finance to grow so large that they become predators on the real living economies which produce the world’s real wealth”? Local people around the world are realizing that they can simply bypass big banks, stock exchanges and create all these services locally. The old, bloated financial sectors must downsize, cut their bonuses and take the losses from their reckless bets in their global casino. A truly efficient financial services sector should be less than 10% of a country’s GDP. Those in Britain and the USA grew to 25% of GDP, metastasizing with their “financial engineers” preying on the real economy. Now students are looking for jobs as real engineers, teachers, doctors and entrepreneurs.

In a very real sense, we humans don’t have a financial crisis but a crisis of perception. We are beginning to see our world differently than mainstream media portrays. We see our choices with new eyes. We know that money is not real wealth. We learn as we watch central bankers printing money on TV. Real wealth is generated by productive people using the Earth’s resources wisely. Money is a great invention. When it is managed properly, locally, nationally, globally or electronically, it is a useful medium of exchange. Hoarding money is no longer a reliable store of value. We are all rediscovering the many stores of value in our own communities. We find wealth beyond money. We can change our values for the new times we live in and restore the love economies to their central role in our lives.

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Hazel Henderson, author of Ethical Markets: Growing the Green Economy (2006), is president of Ethical Markets Media, an independent social enterprise covering local economies, new currencies and the growing green sectors (www.ethicalmarkets.com). She co-created the Calvert-Henderson Quality of Life Indicators, updated regularly at www.calvert-henderson.com. She lives with her husband in St. Augustine, Florida.

Value Added Economy

2009-03-01T12:19:00.001-05:00

Dear Friends,

Users of BerkShares have circulated over two million of the local currency in the Berkshire economy since launch in September of 2006. The success of this initial stage of the program has enabled a strategic adjustment to the exchange rate between BerkShares and U.S. dollars. Now, 100 BerkShares can be purchased for 95 federal dollars (100B$ = $95).

This modification of the exchange rate will facilitate expanded use of BerkShares by the business community, providing more opportunities for citizens and businesses to recirculate the scrip before it is returned to a participating bank. The change is one of a series of planned enhancements, including extending the service area of the local currency to all of Berkshire County, BerkShares checking accounts, and BerkShares loans to businesses producing goods and services now imported into the region.

BerkShares has recently been featured in "Time," "Newsweek," and other national and international news media. Rodrique Ngowi's Associated Press story (see below) was reprinted in over 150 newspapers around the country and drew 56,000 hits to the BerkShares website in one day. The site averages 12,000 hits per day.

Increasingly, people are looking to BerkShares as a model citizen-initiated program for shaping a stable, localized, value-added economy as an alternative to a slumping national economy.

Berkshire merchants, restaurateurs, farmers, carpenters, auto mechanics, lawyers, service providers, and non-profit administrators are learning how best to use a local currency in their businesses. Berkshire bankers are streamlining their process to integrate BerkShares exchanges seamlessly with other banking functions. Berkshire residents are discovering new economic habits that expand their use of BerkShares and help them learn what their money is doing tonight. BerkShares staff and board are developing new ways to support BerkShares businesses. There is no blueprint for issuing such a robust local currency in the twenty-first century. Together our Berkshire community is writing the handbook.

All of this exploration and development is being conducted under intense media scrutiny, at a whirlwind pace, amid knocks on the door from other regions asking how it is done. The program carries sufficient depth in its conception, sufficient integrity in its application, sufficient vision for its future, to earn and meet such attention. We welcome the rapid unfolding and public visibility, simultaneously challenging and fitting. However to shape BerkShares into a local currency program that shines as a beacon of possibility for other communities, we are responsible for building organizational capacity equal to this opportunity. We estimate it will take an additional three years to complete the research and development phase of BerkShares and we must rely on grant support to fund these costs.

Donations to the E. F. Schumacher Society earmarked for BerkShares research and development can be made online at:

http://www.smallisbeautiful.org/donation_form.html

Thank you for your support,

Susan Witt, Executive Director
E. F. Schumacher Society
140 Jug End Road
Great Barrington, MA 01230
www.smallisbeautiful.org
www.berkshares.org

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January 15, 2009

http://www.google.com/hostednews/ap/article/ALeqM5iheOyI-EE_UMYu1FiKnpEbqzBcPAD95NOVE82

By RODRIQUE NGOWI
GREAT BARRINGTON, Mass. (AP)

Diana Felber brought her groceries to the checkout and counted out her cash — purple, blue and green bills that are good only at businesses in western Massachusetts.

Known as "BerkShares," the colorful currency is printed by a nonprofit group to encourage people to spend close to home in the state's Berkshire region.

Customers who use the money also get a built-in 10 percent discount, since they can get 100 BerkShares for just $90 at local banks.

"I like all the ideas about local," said Felber, a 64-year-old artist shopping at the Berkshire Co-op Market. "I also like that it's a discount. Who wouldn't like that?"
The BerkShares program is one of the most successful of its kind in the country, and it is attracting attention as other communities look for ways to insulate their economies from the deepening financial crisis.
Susan Witt, co-founder of the nonprofit Berkshire Inc., said her group receives about three calls a day from other people interested in creating local currencies.

So far, more than $2 million in BerkShares have circulated through 350 businesses since the bills were first printed two years ago. BerkShares look similar to real money for good reason: They are printed on specialty paper from Crane & Co., a local company that has been the sole provider of paper for U.S. currency since 1879.

The bills come in denominations of 5, 10, 20 and 50 and feature portraits of well-known local figures: a Mohican Indian, the original inhabitants of the area; civil rights leader W.E.B. DuBois, who was born in Great Barrington; community leader Robyn Van En, who died in 1997; Herman Melville, author of Moby-Dick; and painter Norman Rockwell, who lived in Stockbridge.

National retail chains in southern Berkshire County have not signed up to accept the currency, and BerkShares cannot be traded online with out-of-state merchants, Witt said.

"I'd much rather take BerkShares than you giving me your credit card," said Steffen Root, co-owner of Berkshire Bike & Board, citing card processing fees. "I think that we can keep our money local, it's a good thing — especially with our economy where it's going."

Interest in local currencies often spikes during a recession as communities scramble to promote their businesses and curb unemployment, said Lewis D. Solomon, professor at the George Washington University Law School and author of "Rethinking our Centralized Monetary System: The Case for a System of Local Currencies."

The U.S. Constitution prohibits states from coining their own currency, but it is silent on local paper money. The courts have allowed private groups to print complementary currency, provided it does not compete with federal money and does not circulate beyond a limited area.

For accounting purposes, the Internal Revenue Service requires that income received in BerkShares and other local currencies be declared in U.S. dollars.

The Massachusetts program is one of several local currency systems, including those in New York, California, Kansas, Michigan, Oregon, Pennsylvania and Wisconsin. One of the oldest is Ithaca Hours, which went into circulation in 1991 in Ithaca, N.Y.

"If you have local networks, you can trade within them," said Paul Glover, founder of the Ithaca program. Whether they are business, religious, neighborhood or professional groups, "there is a capability within those to trade without strict dependence on dollars."

Starting a local currency isn't cheap.

In the Berkshires, Witt's group spent $250,000 in grant money to pay for research and development and to create the alternative financial system. The group has made its research available for free online, hoping to help reduce costs for other communities seeking to set up a similar program, she said.

The bills are traded an average of four times before finding their way back to the banks, Witt said.

Not everyone is a fan of the local currency. Machal Snyder, a bookkeeper for several businesses, said she stopped going to the bank to get BerkShares. "I just started using my debit card for everything," she said. "I hate to admit it, but I think that I have become a bit more about convenience."

Those concerns may be resolved by an expansion program that includes branching into debit cards and offering loans to business startups, Witt said.

Shanace Sullivan said BerkShares help her support relatives tied to the local economy.

"A lot of my friends and family are people who work in the local trade, so it's important for me that business stays in the area. And any business that I have, I can try to keep it here," she said.

On the Net: BerkShares: http://www.berkshares.org
Ithaca Hours: http://www.ithacahours.org/

Economic Life/Grace of Innovating

2009-01-28T19:20:00.002-05:00

“Economic life develops by grace of innovating; it expands by grace of import-replacement.”
--from "Cities and the Wealth of Nations: Principles of Economic Life" by Jane Jacobs

In October the E. F. Schumacher Society bought a house for staff and interns. It was not a simple transaction, rather a complex and marvelous adventure weaving our work lives together with the story of a small manufacturing company: the innovation of its founding, the history of its employees, its significance in the regional community, the role of a regional equity fund in financing its growth, and the power of the vision of the fund's founder. It was (though we did not know it at first) a story about ingredients for building strong regional economies and the grace of that process.

We are pleased to share the story in the narrative below.

Photos are at:
http://www.smallisbeautiful.org/PAS/photos.html

Best wishes,
Susan Witt
E. F. Schumacher Society

Economic Life/Grace of Innovating

For the past four years the Schumacher Society has rented a small house for staff and interns that we call Guilder House, located a short walk through the orchard from the Schumacher Library and office building. Because housing prices have been so high in the Berkshire region of Massachusetts, it has been essential to provide free and/or affordable housing in order to enable young staff and interns to work with us. With its four bedrooms and two-and-a-half baths, Guilder House has served that purpose.

In June the owner of the house offered to sell it to us, donating one third of its current appraised value as a gift to the Society. The offer was irresistible; nevertheless, repair work was necessary to responsibly care for the building. How would we get it all done?

A week after signing the contract to purchase Guilder House, we had a call from Dan Levinson, the founder and managing partner of Main Street Resources (www.mainstreetresources.com), a private equity firm in Westport, Connecticut, that provides investment capital and resources to companies with great potential and great people. Main Street had recently invested in Protective Armored Systems (www.pasarmored.com), a small manufacturing firm in the Berkshires making bullet-proof glass for multiple applications. Dan told us that one of the autoclaves used to heat and pressurize the glass had exploded. Miraculously, no one was hurt, but a building was rendered useless, and production would be shut down for over a month. Like other good corporate citizens before it, PAS wanted to keep its workers employed during the rebuilding. The company was reaching out to community groups for appropriate volunteer projects. This was a welcome opportunity for us.

For four weeks we watched as a crew of up to twelve per day worked to transform Guilder House--clearing brush and trees to open the site to more light, sealing cement walls against moisture, staining the exterior to protect the wood, replacing a rotting deck, removing moldy carpeting and sanding the newly exposed floors, insulating walls for heat efficiency, tiling, painting, cleaning. What was merely housing is now a warm, secure, lovely home, thanks to the team from Protective Armored Systems (PAS).

Schumacher staff provided coffee, homemade muffins, home-cooked hot lunches served family style on a row of picnic tables, a refrigerator full of soft drinks, a priority list of projects, and plenty of ahs and heart-felt thanks. The PAS crew provided multiple skills, hard work, good will, and stories about what it takes to run a small manufacturing firm. Main Street Resources provided the inspiration, connection, and funding for building materials. Over lunches and coffee breaks we learned a great deal about the history of industrial development in the region.

The Berkshire region was once home to a diversity of local manufacturing firms. Water from the Housatonic River powered wool, paper, and log mills. We grew much of the food we ate and processed much of the wood used in building our homes. Wood stoves provided a significant quantity of heat from October through April. There was a spirit of self-sufficiency coupled with a rich cultural tradition.

However like many developed regions, the Berkshires have since “outsourced” that manufacturing. Remnants of the infrastructure remain, such as abandoned factories clustered along the river, but we are losing the memory of manufacturing skills and its ethos. The Berkshire economy is changing to a service economy.

PAS is unique in the region, manufacturing its signature product for export and providing jobs for technically skilled employees. What are the characteristics that grew this firm, and how can we encourage additional manufacturing appropriate in scale and nature to the region?

PAS is a small company with only forty employees. Its founder, Phil Martino, has deep roots in the Berkshire community. He basically built the business from scratch, inventing the manufacturing process for the bullet-proof glass, designing the equipment, and gaining the confidence of customers. He worked alongside his employees, training them in cutting the glass to specification, grinding the edges smooth, keeping the work space meticulously clean, and packing in such a way that no damage occurred during shipping.

When asked about the philosophy of work behind his success, Phil Martino modestly claims that it is nothing special--essentially that of the Shakers, who believe that God is met in your work, so you perform each task with the love and care appropriate for that meeting. Further, you treat co-workers as you would be treated by them. That simple but profound work ethic permeates the business.

Several of the PAS workers came from the closing paper mills (some of them third generation in the mills) or were laid off when General Electric closed its nearby Pittsfield, Massachusetts, operations. Ranging in age from nineteen to sixty, they have worked as carpenters, as linemen trimming trees, as equipment installers, as stock clerks, as theater-set builders. Most were raised in the Berkshires. Two are recent immigrants from Eastern Europe. One is African-American with a young family. Another is Phil's grandson, learning the business by working alongside the others. The younger ones might have had some training in the trades in public high school. They wish they had had more.

The employees all have friends who are looking for jobs, and they are grateful for the manufacturing job at PAS. It provides a relatively good salary, enough to provide security for a family. They are proud of their role in the business and report that PAS is different from other worksites. Because of the relatively small scale of the firm, they know all the stages of making the glass, not just their one task. That gives them greater ownership and pride in the finished product. They have read letters from American soldiers in Iraq thanking PAS for the bullet-proof glass in their vehicles that protects lives under fire. They have seen the copy of the U. S. Constitution kept safely behind their glass and know that it is a document of enormous significance to the history of this country.

These men trained by Phil work alongside him in the production line, fish with him, see and respect the discipline it took to build the company, and so they do not hesitate to labor hard for him. If GE or the paper mills had been shut down by equipment failure, their employees would be on the dole, not working on a community project supported by PAS.

I asked Phil Martino what he sees as the limitations to creating more manufacturing firms of the scale and quality of PAS.

* Distribution of tax incentives
Regional economic development programs provide tax incentives to lure big corporations to the region but fail to offer similar incentives for smaller home-grown businesses.

* Infrastructure
Building and site selection, while a concern, is not an insurmountable problem. Remnants of a once thriving industrial base along the rivers mean that suitable buildings remain vacant and affordable. It is important, however, to cultivate a citizenry that welcomes appropriately scaled manufacturing in their neighborhoods.

* Transportation
A lack of sufficient freight-train service to the region puts reliance on trucking, thus narrowing choices of locations to easy access from the few highways.

* Skilled workers
There is a base of good workers in the region, but they are not trained, so businesses must take the time for and bear the cost of training on the job. Though more technical education in the public schools would be helpful, better yet would be funds for apprenticeships so that job-skill development can be specific to the manufacturing process.

* Financing
Phil named lack of financing for small and medium sized businesses like his as the biggest hindrance to business start-ups and expansion. Large enterprises have national sources of funding, but not so the regional firms on the scale of PAS. Phil is quick to credit Main Street Resources with providing an answer to the problem of financing.

Dan Levinson earned an MBA from Stanford Graduate School of Business and holds a joint degree (with honors) in applied mathematics and economics from Brown University. But his real skill lies in recognizing the talent of individuals and encouraging those talents. His equity fund, Main Street Resources, is shaped in a particular way to best apply his skills and inclinations. Investing primarily in businesses within a hundred mile drive from his home in Westport, Connecticut, he knows the companies and their management teams personally. He is available on short notice for consulting and trouble-shooting. He is well-informed about his portfolio businesses, without micro-managing them.

Phil Martino personally funded the startup of PAS, putting his home and family at risk. When PAS was ready to grow in an organic way, it needed a financial partner. Main Street understood the scale of the business, made the personal contact, and provided the right amount of financing while still keeping the successful management team in place--a team that knows the product as well as the ins and outs of the manufacturing process, the suppliers, the markets, and the local community.

Main Street's engaged, personal, proven approach to financing has turned clients into new investors. Under Main Street's leadership a group of former owners of small businesses has coalesced into an informal mentoring team to help a new set of entrepreneurs, ensuring the success Main Street’s partner enterprises.

It was Main Street that provided the capital to open a new facility at PAS to house a new autoclave. When the explosion occurred, the leased building next door was already under renovation and the autoclave was on order. Main Street's investment meant that production would resume in one month, not one year. What would the employees do during that time? For PAS, with its deep local roots and in partnership with an equity fund with strong social values and a commitment to the region, the answer was simple: seek a community service opportunity, supporting the workers and the community group at the same time.

By good grace, that group was the E. F. Schumacher Society.

For four weeks staff of the E. F. Schumacher Society and the Protective Armored Systems team ate lunch together on picnic tables stretched out across the lawn of Guilder House. Our co-worker, Kristen, spent the morning cooking, using fresh produce from local farms and my kitchen garden. The red, white, and yellow checkered table cloths and napkins were washed fresh each day. We all experienced a note of subdued festivity.

I spent two hours every day interviewing each member of the team, learning what brought them to their work and asking what they thought was needed to create more manufacturing jobs in the region. Their stories lingered with me over the weekends, when they were not with us, and I began to realize that our stories, told over many lunches, lingered with them.

One Monday morning I went over to Guilder House and found the crew already hard at work. Oronde, meaning the Appointed, whom everyone called "O," was scraping old paint from the side of the house in preparation for a fresh coat. "O," says I, after a pause while watching him work, "You are all pouring so much love into this house." "Susan," says O, "that's because you are all pouring so much love into us."

Grace.

President's Energy Speech

2008-12-11T20:09:00.003-05:00

Joseph A. Stanislaw has spent his career concerned about the future of energy production and consumption. The J.A. Stanislaw Group specializes in strategic thinking and investment in energy and technology, advising industry and governments as they set energy policy.

Deeply influenced by the writings of E. F. Schumacher, Mr. Stanislaw has authored several papers on alternative energy technologies and their promise.

He writes of his latest innovative essay: "With the historic election of Barack Obama to President, our nation enjoys new opportunities to confront monumental challenges--especially the convergence of energy, climate change, and security. This is the speech I would like to see President Obama deliver when he takes office in January 2009."

We have excerpted sections of it below. The full essay is at www.smallisbeautiful.org/publications/stanislaw_08.html

Best wishes,
Staff of the E. F. Schumacher Society

* * * * * * * * * *
TOGETHER WE WILL EMPOWER AMERICA IN THE 21st CENTURY

My fellow Americans, this is my first address to you as your President. It is also one of the most important speeches I will ever make.

Our nation confronts many challenges. . . . one challenge transcends them all.

It is--at once--our most critical economic, national security, foreign policy, and environmental challenge. It lies at the heart of how we educate our children and operate our government. It is the key to unlocking millions of jobs, and to preserving and developing our local communities. And it is our way out of this economic crisis, the most severe crisis our nation has faced since the Great Depression.

This issue is energy--how we produce it and how we consume it.

The threats we face today that are linked to energy have multiplied. Not only are our economic security and well-being at risk, but so too is our fundamental security. Our reliance on foreign oil threatens our independence. Our exposure to climate change poses an unacceptable risk to our communities, our environment, and our culture.

It is this convergence of economics, climate change, and security that
makes energy the most important issue of our time.

In leading our country into a new energy era, I have on my side one all- powerful weapon--a weapon none of my predecessors ever fully enlisted in their efforts: you, the American people. Each and every American, beginning today, has the power to drive our country to greater energy independence. Each and every American can contribute in a meaningful way to creating the green economy of the 21st century and to combat climate change.

I will be accountable to you. And I expect you to be accountable to me and to each other. This is what democracy means.

We will appeal to American common sense by expediting the era of cutting-edge clean vehicles, energy efficient homes, and smart appliances--all of which will save you money and improve your lives.

We will build on the American ethic of fairness by allowing competing technologies to prove themselves on their true merits -- making our markets reflect and capture the true cost of energy . . .

We will inspire and support America's spirit of innovation and entrepreneurship by investing in research and providing powerful incentives to bring new technologies into the marketplace.

We will lead the way by making energy a force for international unity, not division, and by seriously addressing climate change.

And we will honor America's forward-looking spirit by investing in education, from cradle to grave, so that we change how Americans of all ages view our energy challenges and the related environmental issues.

Nor will we suddenly turn our backs on oil and gas. No matter how fast the progress on alternatives, the world will be primarily reliant on fossil fuels for at least two generations--the bridge to tomorrow's new energy future depends on this. . . . There is no quick fix. But a rising tide of alternative sources of energy--combined with new demand patterns and new demand efficiencies--will mitigate the eventual, gradual drop-off in hydrocarbon production that should begin in the next quarter-century. This will create a bridge to the new, cleaner energy era ahead and will create a wave of new jobs--a new industrial revolution.

Allow me to outline five areas of action, including specific targets, on
which my administration will begin working immediately.

The first, and most vital goal, is education. There is only so much that presidential leadership alone can accomplish. For this great American project to succeed, we must make knowledge of energy part of our national DNA. This can only be done through education.

So tomorrow, I will convene a blue-ribbon commission of high school and college educators, business and labor leaders, economists, and technology experts to look at every aspect of our education, training, and public awareness systems. . . .Their first goal will be to identify the skills our schools must teach so that we develop a world-class workforce that can usher in a new era of energy and environmental progress – these include basic skills needed from electricians, to welders, to plumbers, to more advanced engineering skills.

But education requires not only learning in the classroom, but learning in the real world. So today I am announcing the massive expansion of AmeriCorps. Every graduating high school senior will be encouraged to undertake one year of national service. The top priority will go to projects that will rebuild our communities so that they become energy efficient and environmentally aware.

Our second goal is one that also enlists every single American--energy efficiency.

The greatest proven reserves of fossil fuels that we have are not in Saudi Arabia or the Gulf of Mexico--they are in your cars' gas tanks, in your homes' oil heaters, in the electricity plant down the road. A barrel of oil saved is a barrel found. Everything we do today, we could be doing more efficiently as soon as tomorrow--consuming less energy by using technologies that are already available to us.

By the end of my first term in office, our goal is to put in place energy efficiency programs and initiatives to promote alternative transportation technologies that will eliminate the need for oil imports by 2025.

Our progress towards energy efficiency, however, will only be possible if we continue to develop smart technologies and alternative forms of energy. For this to happen, we need markets that are honest and fair--markets that reflect the true price of energy. This will be my administration's third goal.

Simply put, when you buy a gallon of gas today, or fill your boiler, the price of these fossil fuels does not reflect their true costs to our society. Over the course of my first term, therefore, I will confer with the energy industry about adopting a carbon tax or a carbon trading system that creates a cost for carbon to make the economics of our energy systems reflect the honest cost of fossil fuels. The revenues we raise from such a tax or trading system would be invested in helping to finance the upfront costs of energy efficiency technologies for Americans, as well as in the research we need to develop clean and alternative technologies.

This is my fourth goal: to make America the world leader in every promising clean and alternative energy technology. There is no silver bullet to achieve our energy targets--we need every bullet.

As importantly, my government will renew our country's aging infrastructure, laying the foundations for the green economy of the 21st century. A smart energy grid will be one of our signature projects. Specifically, within two months from today, we will begin work on demonstration projects for a smart grid system in two to three locations in America, so we can prove the worth of these technologies. We will then reward states that allow for the rapid implementation of smart grids and we will develop programs to speed the construction of such grids across the country.

If we are willing to spend $1 trillion to bail out banks, surely we can invest an equal amount to build the basis of our future prosperity. In doing so, government will lead by example. We will use America's might in the market to set the highest standards for energy technology. Those companies that lead the way will be rewarded in the marketplace through the government's purchasing power.

Your government will construct buildings that meet green LEED standards. Your government will retrofit its buildings to the highest "green" standards. Your government will purchase automobiles and electronics that rate in the top 10 percent of energy efficiency. By doing so, we will create economies of scale for these technologies that will bring down prices for all Americans. And your government will hire employees who have received certification in energy efficiency.

I expect that city and state governments, many of which have been visionaries in this field, will follow the federal government's lead. In fact, we will help them do so by offering federal guarantees for municipal bonds raised for this purpose. We also will require any entity drawing on federal funds to meet federal energy standards.

In everything we do, in fact, we will be guided by a profound commitment to our local communities--it is the prism through which we will develop all of our energy policies.

. . . in cooperation with today's top technology companies, we will launch a major web portal to allow local communities nationwide and worldwide to share their best ideas and practices for transforming themselves into green economic leaders.

Government also will use the current crisis in our economy to transform local communities. As we rebuild our financial system, we will ensure that it functions to promote housing and urban transport improvements that are responsive to our energy goals. This includes, among other measures, providing mortgages with lower rates for more energy efficient homes.

And when the smoke clears--and the smoke will literally clear--we will have created millions of new jobs--jobs that pay well and stay put for all those students educated by the "green economy" schools we will have created. Jobs that revitalize local communities. Jobs that make America a global industrial leader once again. Jobs that cannot and will not be exported.

But if there is one thing we have learned during the economic and foreign policy crises of the past decade, it is that we cannot go it alone. America is not an island.

On the energy issues that matter most, we need to reach out and develop deep cooperation with our allies and trading partners. This is my fifth goal.

Our ultimate destination is energy independence. But, the path to that ultimate destination is mutual interdependence. We will achieve this by creating transparency in energy markets, by investing jointly with our allies in new and renewable technologies, by leading negotiations for a successor treaty to the Kyoto protocol, and by creating a G20 for energy security.

To oversee all aspects of this greatest challenge of our generation, I am creating today a National Energy Council, which will be located in the White House.

Their core mission will be to create the vision, the direction, and the conditions to drive us to this new energy future.

We should not expect short-term miracles from this plan. Over the next four years, we must do the hard work of defining and putting in place a 50-year vision for the wholesale transformation of our society to one that has a sensible long-term energy policy – and is also clean and green. If we do this, our energy costs and our foreign dependency will drop dramatically each and every decade. This is the promise I make to you and your children and your grandchildren.

* * * * * * * * * *
Used with permission of Joseph A Stanislaw and
Deloitte Touche Tohmatsu (www.deloitte.com).

Scale Limitations/Shaping a Future Economy

2008-11-30T14:29:00.002-05:00

John Fullerton described the current financial collapse in his May 2008 essay "The Relevance of E. F. Schumacher in the 21st Century." It now seems prophetic.

In the same article he warned us not to look to the tweaking of current economic systems to solve our problems, but rather to reach to the teachings of our common wisdom traditions to find new ways of assessing the truth of our situation and to collectively build new economic systems that are just, ecologically responsible, and permanent. In fact he names this rebuilding as the central task of concerned citizens in the first decades of this century.

We have posted his full article at the E. F. Schumacher Society's website (http://www.smallisbeautiful.org/publications/fullerton_08.html) and excerpted sections below for your reading.

Best wishes,
Staff of the E. F. Schumacher Society
140 Jug End Road
Great Barrington, MA 01230
www.smallisbeautiful.org

********************************
Excerpts from:
"The Relevance of E. F. Schumacher in the 21st Century"
By John Fullerton
May, 2008

Our global economic system is broken not because of the credit crisis; it is broken because it is predicated on perpetual, resource driven growth with no recognition of scale limitations.

What we are not hearing, at least in the mainstream media, is a critical reframing of the questions that address root causes. . . . . We are not hearing a debate about the sustainability of a perpetually growing global economic system nested within our finite biosphere. We are not hearing a debate about the wisdom of allowing financial power (and systemic risk) to be increasingly concentrated in the hands of a few financial institutions of increasing complexity and scale. We are not publicly questioning the wisdom of the system we have allowed to evolve in response to capital's quest for ever increasing financial returns. Nor are we debating where to look for creative responses.

However, nothing could be more important at this critical time. What we must grasp is that the financial crisis we are reacting to is but a cyclical side show to the bigger issues we face regarding the sustainability of our economic system. We should see the present financial crisis as a wake up call to this far greater challenge. We should search with an open mind for the wisdom we need to transition our economic system onto a sustainable path, grounded in ecological reality, with a respect for human justice and a deep appreciation for all life.

What is needed is nothing less than a new economic myth, which incorporates the central issue of scale in order to supplant and transcend the "invisible hand" of the free market. We need a "post-modern (post-materialist) economic theory".

At the beginning of the 20th century, scale did not matter. At start of the 21st century, scale redefines our economic challenge.

In my personal quest for this new economic myth, I was stopped dead in my tracks after discovering E.F. Schumacher several years ago. Most who know of Schumacher know him from his seminal work, Small is Beautiful - Economics as if People Mattered (1973). The fortunate ones have also read his final published work, A Guide for the Perplexed, a title that grabbed me and did not disappoint. Most disciples of Schumacher probably encountered his clear thinking during the 70s. Many went on to become leaders in the environmental movement. I was in junior high school when Small is Beautiful was published, and then was busy building a career in global finance during the 80s and 90s on the belief that finance rather than politics would dominate international relations during my lifetime. I got that right, but not in the way I expected. Seeing global finance, what I do, as a root cause in fueling our unsustainable economic system, has shaken many of my prior beliefs on economics.

. . . it is now time that we transcend to an economics built upon wisdom. Schumacher's instruction is clear and compelling. "From an economic view point, the central concept of wisdom is permanence. We must study the economics of permanence." This intention takes us in a profoundly different direction than conventional, Cartesian thinking. "Permanence" suggests valuing durability over efficiency, stability over speed. These are different values from those typically celebrated in the marketplace.

We need to think about what adjustments are necessary to "insure" the permanence of our collective home, which must include a stable civil society. Such thinking must address the very nature of our economic system. Without a sustainable and just economic system, there is no permanence. We need to inject these ideas into the public debate by reframing the cyclical economic concerns that preoccupy the mainstream media. We see little true recognition of this profound challenge among our business, financial and governmental leadership, which remains absorbed with short-term tactical issues.

Following Schumacher's lead, we should look to the great wisdom traditions for direction in this truth. Where better to look than to the ideas and teachings from all cultures that have stood the test of time, rather than restrict ourselves to contemporary economic theories that we know are limited and incomplete.

Schumacher is relevant to our critical 21st century challenges precisely for this reason. His philosophy, his concern about the limits of materialistic scientism, his distinctions between divergent and convergent problems, and his ideas of decentralism, appropriate technology, and human scale to name but a few, are all rooted in the great spiritual and philosophical teachings. Not surprisingly, his ideas, in addition to being humane and just, are aligned with nature and nature's sustainable way, the only truly sustainable system we know. They are, I believe, rooted in truth as best as Schumacher could discern it, and therefore they represent wisdom, the wisdom of permanence.

If you examine Schumacher's personal library, which is carefully stewarded at the
E. F. Schumacher Society in the Berkshires, you will find that most of the texts are not about economics. Instead, they include the great philosophical and spiritual texts from all traditions. Schumacher's gift and genius was to derive economic principles and ideas from these teachings, to have the courage to speak the truth, despite knowing it often flew in the face of conventional economic thinking, and to make the truth accessible with his clear and witty prose. What emerges is certainly not the final word on the economics of permanence. Some of his thinking is outdated, or simply missed the mark. But as a foundation to build upon, it is invaluable. The reason his ideas about economics ring true is because they are built upon these wisdom traditions. The contradictions of modern economics are gone.

Our challenge now is to refine and update this thinking and to chart a practical path of convergence between the reality that exists in our economic system today and the principles we strive to uphold and upon which our long run prosperity undoubtedly depends. . . . The opening decades of 21st century may be our best chance to launch the critical transformation of our economic system to an economics of permanence. We need to get it right, as only our collective consciousness will allow.

Transitioning to a sustainable and just economic system is the ultimate challenge of the 21st century. History no doubt will judge our generation by how well we acknowledge, embrace and take up this challenge.

******************************
John Fullerton is a former Managing Director of JPMorgan where he worked for 18 years in New York, London, and Tokyo, and subsequently was CEO of an energy focused hedge fund. He is now seeking to launch an investment fund focused on investing in high impact sustainability initiatives, and is working on The Purpose of Capital, a book about the role of investment capital in sustainable economics. He is a friend and supporter of the E. F. Schumacher Society in Great Barrington, Massachusetts. John can be reached at john@level3cap.com.

Co-producers of Our Own Economies

2008-09-06T11:56:00.002-04:00

If our common interest is to build more independent regions and their unique regional cultures, then part of that effort will be to build more independent regional economies --ones in which the goods consumed locally are produced locally.

In her Cities and the Wealth of Nations, the late Jane Jacobs brilliantly argues that the best strategy for economic development is to generate import-replacement industries. She would have us examine what is now imported into a region and develop the conditions to instead produce those products from local resources with local labor. Unlike the branch of a multi-national corporation that might open and then suddenly close, driven by moody fluctuations in the global economy, a locally owned and managed business is more likely to establish a complex of economic and social interactions that build strong entwining regional roots, keeping the business in place and accountable to people, land, and community.

What then is the responsibility of concerned citizens to help build sustainable regional economies?

An independent regional economy calls for new regional economic institutions for land, labor, and capital to embody the scale, our endeavors. These new institutions cannot be government-driven, and rightly so. They will be shaped by free associations of consumers and producers, working cooperatively, sharing the risk in creating an economy that reflects shared culture and shared values. Small in scale, transparent in structure, designed to profit the community rather than profit from the community, they can address our common concern for safe and fair working conditions; for production practices that keep our air and soil and waters clean, renewing our natural resources rather than depleting them; for innovation in the making and distribution of the basic necessities of food, clothing, shelter, and energy rather than luxury items; and for more equitable distribution of wealth.

Building of new economic institutions is hard work. Most of us rest complacently in our role as passive consumers, not co-producers and co-shapers of our own economies. But it is work that can be done, and fine beginnings are being made in the development of local currencies, community supported farms, regionally based equity and loan funds, worker-owned businesses, community land trusts, and business alliances for local living economies.

These initiatives are motivated by the affection that the citizens of a region have for their neighbors and neighborhoods; for the fields, forests, mountains, and rivers of their landscapes; for the local history and culture that binds these all together; and for their common future.

We encourage you to join regional economic projects in your own communities or create them anew. Inventory the
multitude of human, natural, and financial resources available for local production. Support existing businesses. Share information. Apply the genius of local knowledge to shape new enterprises. Celebrate successes.

On Saturday, September 20th BerkShares local currency will celebrate the two millionth BerkShare exchanged at one of our five participating banks with the Second Annual BerkShares Bash. Featuring some of the Berkshire businesses that define the program and our local economy, the event is scheduled for 1-5 PM on the front lawn of the John Dewey Academy at the historic Searles Castle, Main Street, Great Barrington, Massachusetts.

Admission is 5 BerkShares. Kids 12 and under are free. Delight in local musicians, yummy food, fine crafts, Roger the Jester, face-painting, stilt walking, neighbors and friends. Bring the family, a picnic basket, a blanket for sitting, extra BerkShares for treats, and the expectation of a great time.

Susan Witt for the
E. F. Schumacher Society

BerkShares Inspired Currency

2008-08-20T10:41:00.005-04:00

Another town in England, Lewes, has issued a local currency that takes inspiration from BerkShares right here in western Massachusetts.

Check out the story Small UK Town Creates Own Currency to Beat the Credit Crunch

In addition to the inspiration taken from BerkShares, the Lewes Pound is modeled on the Totnes Pound.

Nourishing Traditions

2008-07-29T12:18:00.003-04:00

This video of Sally Fallon Morell comes from the Weston A. Price Foundation Annual Conference.

Sally Fallon Morell will speak at the 28th Annual E. F. Schumacher Lectures on October 25th with Anna Lappé and Dan Barber

Visit www.smallisbeautiful.org for more information and to register for the event.

Grub: Ideas for an Urban Organic Kitchen

2008-07-16T10:59:00.009-04:00

E. F. Schumacher Lecturer, Anna Lappé's new book is one part investigative journalism and one part celebration of delicious meals.

Check out a review of Grub by Sustainable Table

Anna Lappé will be joined by Dan Barber and Sally Fallon Morell at the 28th Annual E. F. Schumacher Lectures on October 25, 2008

E. F. Schumacher Lecturer Dan Barber

2008-07-14T14:22:00.006-04:00

This New York Times op-ed piece by Blue Hill Restaurant co-owner/chef Dan Barber brings rising food prices into a positive light. Small-scale local farmers are starting to feel a competitive advantage over oil intensive industrial agriculture.

Check out his article Change We Can Stomach

Dan Barber will speak at the 28th Annual E. F. Schumacher Lectures on October 25, 2008, along with Sally Fallon and Anna Lappé.

The event is sponsored by Gardener's Supply Company

Local Currency Mini-Conference

2008-07-11T15:30:00.000-04:00

As BerkShares Board of Directors considers the future evolution of the program, the American Institute for Economic Research, a Great Barrington economic research organization founded in 1933, has called a mini-conference entitled "Prospects for the Acceptance of Competitive Local Currencies: The Future of BerkShares." Several eminent monetary scholars will join BerkShares board and staff on Friday July 18th from 3 to 5 pm on the AIER campus to imagine growth to a more independent currency.

BerkShares will be discussed in the context of the history of independent currencies. Speakers will then address how BerkShares could move from federal dollar backing to an index of locally produced commodities such as maple syrup, wool, wood products, local beer, field greens, and local cheese. The conference will also consider the responsibilities of a local reserve board for BerkShares, including regulatory authority, oversight capacity, and other policy-making tools. This discussion will suggest a framework for how and on what basis to issue additional currency. Finally, panelists will suggest strategies for making loans denominated in BerkShares.

Seating is limited to 75 people for this event. Please RSVP with AIER.

Save the Date

2008-06-27T10:17:00.009-04:00

The 28th Annual E. F. Schumacher Lectures will be help on October 25, 2008 at the 1st Congregational Church in Stockbridge, MA.

This year's speakers:

Sally Fallon is founding president of The Weston A. Price Foundation, a non-profit nutrition education foundation with over 400 local chapters worldwide helping consumers find local grass-based animal products. Fallon speaks to the importance of returning to organic farming, pasture-fed livestock and whole traditional foods, properly prepared, if Americans are to regain their health and vitality, as well as the benefits of an economy based on small scale organic production and food processing that returns added value to the independent farmer, rather than to large-scale food processing conglomerates.

Anna Lappé is a national bestselling author respected for her work on sustainability, food politics, globalization, and social change. Named one of TIME’s “Eco-Who’s Who,” Anna has been featured in The New York Times, Gourmet, O-The Oprah Magazine, Domino, Food & Wine, Body+Soul, Natural Health, Utne, and Vibe. Since 2002, Anna has been collaborating with her mother, Frances Moore Lappé, through their Cambridge based Small Planet Institute, an international network for research and popular education.

Dan Barber began farming and cooking for family and friends at Blue Hill Farm. It was there that he was first introduced to and gained respect for locally grown and seasonal produce. Since May 2000, Dan has seen Blue Hill Restaurant grow from a noted neighborhood restaurant to receiving a 3-star New York Times review. In 2004 both Blue Hill at Stone Barns and Stone Barns Center for Food and Agriculture opened their doors. As the restaurant’s chef/co-owner and a member of the Center’s board of directors, Dan focuses on the issues of pleasure, taste and regional bounty and how these imperatives are threatened.

Reliving the Seminar

2008-06-06T15:34:00.003-04:00

From the first read through of participants for the 2008 Building Sustainable Local Economies Seminar it was obvious that we had collected a special group. Susan said that never before had she experienced having such a talented and involved group collected for a Schumacher Society seminar. Attendees included community organizers, educators, farmers, social investors, and more. We could easily tell that we would be surrounded by wealth of knowledge, but we could not have foreseen how the connections between participants would heighten the entire experience.

On the evaluation forms filled out by seminar participants after the event—which I have shared with you below—almost every person mentioned the connection among group members as integral to his or her overall experience. From sharing our community's stories on Wednesday night to the final action plans on Sunday morning, jokes, suggestions, and encouragement abounded.

We captured some of the workshop presentations and discussion in audio format, which are now posted online.

Enjoy.

Chris Lindstrom
http://www.archive.org/details/lindstrom_money

Alex Thorp and Elizabeth Keen
http://www.archive.org/details/keen_thorp_ILF

Charles Turner
http://www.archive.org/details/turner_seminar

Eric Harris-Braun
http://www.archive.org/details/harris-braun_wealth

Susan Witt
http://www.archive.org/details/witt_clt

Joseph Stanislaw
http://www.archive.org/details/Stanislaw_energy

Energy: Global is Local

2008-05-08T16:33:00.002-04:00

International Energy Expert and E. F. Schumacher Society Board member Joseph Stanislaw will be presenting a talk, Energy: Global is Local at the First Congregational Church in Great Barrington, MA on Thursday, May 22nd at 7:30 pm.

Joseph Stanislaw is the lead organizer and chairman of the Athens Summit 2008, a meeting of 61 countries to foster closer, deeper, and more effective cooperation on attaining energy security and combating climate change. His work as the founder of the advisory firm JAStanislaw group and as an independent advisor to Deloitte has involved him with the stark realities of energy security throughout the world. "We are now," Stanislaw says, "collectively acknowledging the qualitative limitations of hydrocarbons and the challenges these pose --especially in light of mounting global energy demand." The threat in terms of climate change and international social unrest requires that actions be taken that both deal with carbon emissions and provide continued access to energy.

2008-04-23T13:34:00.003-04:00

In his closing remarks at the 2007 Building Sustainable Local Economies Seminar, Chuck Turner spoke of the economic models presented, and being implemented throughout the world, as the beginning of a change in our mode of thinking. They embed a more appropriate way of relating to each other and to the natural world. As the old paradigm of materialism that is causing social, ecological, and economic injustices crumbles, it is essential to consciously participate in the shaping of a new paradigm. Communities that are evolving place-based institutions for land, labor, and capital will be the support for this new system.

Turner closed by saying that the beginning lies with the seminar participants. Each has the power to start a local project that will be a root for developing an entirely new consciousness. All we must do is start.

Chuck Turner will again be a member of the core faculty for the Building Sustainable Local Economies, May 21st to May 25th, joining Eric Harris-Braun, Elizabeth Keen, Chris Lindstrom, Joseph Stanislaw, Alex Thorp, and Susan Witt.

Turner's 2007 E. F. Schumacher Lecture "What about Us––The Earth's People?" has just been published. You can find the complete text or order it in pamphlet form at www.smallisbeautiful.org.

Renewing America's Food Traditions

2008-04-10T15:12:00.002-04:00

The E. F. Schumacher Society and the Orion Society are co-sponsoring a talk by Professor and MacArthur Foundation "genius grant" recipient Gary Paul Nabhan. He is the co-founder of Native Seeds/Search and a leading voice for conserving and renovating native plant agricultures. His books include Renewing America's Foor Traditions and Coming Home to Eat: the Pleasures and Politics of Local Foods.

The event is free and will be Friday, April 18th at 7pm at the Berkshire South Auditorium, 15 Crissey Road, Great Barrington, MA

Schumacher Events

2008-04-03T13:36:00.002-04:00

Simon Trace. Monday, April 7th 7:00 pm at the Kellogg Music Center on the Simon's Rock campus in Great Barrington, MA. Simon Trace is Chief Executive Officer of Practical Action, an United Kingdom organization that develops intermediate technology for the developing world. Practical Action, formerly the Intermediate Technology Development Group was founded in 1966 by E. F. Schumacher to bring real and sustainable improvements to people's lives. Tickets are 3 BerkShares, available at the door. This event is co-sponsored by the E. F. Schumacher Society, Simon's Rock College course on Globalization and Community Ecology, and the Center for Ecological Technology.

Susan Witt. Friday, April 11th 7:30 pm at The First Congregational Church in Great Barrington, MA. Susan Witt, Executive Director of the E. F. Schumacher Society, will give a talk entitled Conscious Economics: The Intimacy and Complexity of Local Production and Exchange for Think OutWord Think OutWord is a peer-led training in social entrepreneurship for young adults loosely situated in the northeastern United States. It is grounded in, though not limited to, an understanding of the threefold nature of the human being and of society, primarily as it was articulated by the early 20th century philosopher, Rudolf Steiner.

Michael Gordon. Monday, April 14th 9:00 am at the Latham Community Baptist Church in Latham, NY. Michael Gordon, outreach coordinator for the E. F. Schumacher Society, will present an overview of the E. F. Schumacher Society and Schumacher's philosophy of Small Is Beautiful for the Interfaith Alliance of New York State.

Gary Nabhan. Friday, April 18th 7 pm at the Berkshire South Regional Community Center in Great Barrington, MA. A talk entitled Renewing America's Food Traditions: Endangered Diversity in Our Hands and Mouths. Author Gary Paul Nabhan, a professor and the recipient of a MacArthur "genius grant," has been the primary shaper of the local and indigenous foods movement in the U.S. He's an expert in local foods and indigenous foods and an advocate for their preservation. His books include Coming Home to Eat: The Pleasures and Politics of Local Foods; Arab/American: Landscape, Culture, and Cuisine in Two Great Deserts; and, coming in May, Renewing America's Food Traditions. This event is co-sponsored by the E. F. Schumacher Society and the Orion Society.

Cathrine Sneed. Tuesday April 29th 7:00 pm, location to be announced. Cathrine Sneed is the founder of the Garden Project in San Francisco, CA will be speaking about her experience of innovatively empowering both former offenders and at-risk youth through training and education while transforming the urban environment.

Joseph Stanislaw. Thursday, May 22nd 7:30 pm at The First Congregational Church in Great Barrington, MA. Joseph Stanislaw is founder of the international advisory firm JA Stanislaw Group, LLC, specializing in strategic thinking, sustainability, and environmentally sound investment in energy and technology. He will lead the audience through an examination of a new locally-scaled energy economy.