Finance

BerkShares, alternative currency, alternative monetary system
Stephan Savoia/AP
A BerkShare
sits alongside U.S. dollars in a
cash draw at the Berkshire Co-op Market

“BerkShares” Currency Helps Keep Up Local Western Mass. Economy

January 19, 2009 09:45 AM
by Anne Szustek
Banks in Western Massachusetts’ Berkshires region are helping gear money toward local businesses by way of BerkShares, a currency that offers customers 10 percent off purchases.

Mass. Community Takes Stock in Itself—Literally

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Susan Witt, the executive director of Western Massachusetts-based think tank E.F. Schumacher Society, a group focused on local production, was quoted in online publication Worldchanging: “In the last four years, there has been a renewed interest in local economy, local production.”

Berkshire Inc., another local nonprofit that Witt spearheads, got a $250,000 grant to research and develop a system that would keep money circulating at home. The result was BerkShares, a local currency flowing through some 350 businesses in the Berkshires region, adorned by portraits of local historical figures such as author Herman Melville and painter Norman Rockwell.

Since its inception about two years ago, more than $2 million in BerkShares has gone through the region. The currency’s price, 100 BerkShares to $90, offers customers an inherent 10 percent discount and gives them impetus to shop at participating businesses.

“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,” Shanace Sullivan told the AP, speaking about the effectiveness of the BerkShare in the local economy.

According to George Washington University Law School Professor Lewis D. Solomon, local currencies gain attention as a way to shore up local economies. The BerkShares have been no exception, with Witt getting calls from around the world, asking for advice on how to launch their own alternative monetary systems.

Related Topic: Other communities coin own currency

Two communities in the United Kingdom have launched their own BerkShares-inspired currency. In March 2007, the English town of Totnes launched its own money. Lewes, England, followed suit in September 2008. Both share the pound as the name of its local currency as well as a desire for residents to patronize locally owned businesses.

“The idea behind it is to encourage as many local people as possible to shop locally,” Lewes Mayor Michael Chartier told the BBC. “Lewes has a tradition of small shops and hasn't got a large number of major chain stores that a lot of other towns have.”

Euro co-founder Bernard Lietaer says that at least 4,000 alternative currencies are in use worldwide. In 1990, the number was below 100.

Among the newer of the complementary monetary systems is the “bia,” a currency implemented by Thai village Santi Suk about a decade ago to mitigate the effects of the Asian financial crisis, which weighed heavily on the Thai baht.

“We need our own money more than ever now,” Phra Supajarawat, a Buddhist monk who moonlights as the unofficial governor of the bank behind the bia, told The Wall Street Journal. “Things are turning bad in Thailand and people need something they can believe in.”

Also spurred on by economic hardship, in 2007, some parts of India were seeing shortages in small-denomination coins at the hands of hoarders who melted down currency and smuggled the metal to Bangladesh, where it was made into razor blades that fetched much more on the market than the face value of the coin. Some tea gardens in India’s northeastern state of Assam resorted to issuing homemade currency in the form of cardboard slips to be used on premises.

Closer to home, the Piedmont area of North Carolina offers the PLENTY, which like the BerkShare and local pounds in Totnes and Lewes, encourages shoppers to keep their money within the community.

Reference: Guide to U.S. Economy

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