CONCLUSION

FUTURE DIRECTIONS AND DEVELOPMENTS

Reproduced by permission of the artist.

Life After Ithaca

Having considered everything, we must ask the question, Is Ithaca's situation a fluke, the product of a set of unusual circumstances which collided at the proper time? Is it instead a model whose factors are sufficiently under human control to allow successful replication? Part of Ithaca's success is due to a confluence of economic history and human personality. Ithaca HOURs began during the recession following the Gulf War, a factor upon which its imitators have not been able to capitalise, and most programs have lacked someone with the drive and idealism of Glover, who was devoted to the program full-time from the start.

Glover can in this sense be compared to Karl Marx, and some of his followers to twentieth century Communists. Though the parallel is limited and perhaps upsetting to some, it is instructive and provides some possible understanding by historical precedent of the future success of local currency initiatives worldwide. Marx once wrote "Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past."1 Glover's success has been difficult to replicate, and in almost every community which has tried and failed, it has been due to the absence of at least one of these two previously-mentioned key factors. From this, one can draw the pair of conclusions that Glover's model for success has not been disproven by these currencies' failures, and that the model's successful implementation is not fully determinable by regional activists but instead depends upon historical events beyond their control.

Marx's initial formulation called for agricultural communities to progress into industrial powerhouses whose ultimate ability to provide above and beyond all needs of mankind would lead him to set aside his selfish nature and renounce capitalism, banding together to work altruistically for the benefit of all. Unfortunately for the reputation of his theory and himself, followers like Lenin and Mao were not convinced of the historical necessity of progressing through all the stages of economic development before entering communism. The clear failures of the Sino-Soviet socialist regimes, having demonstrated the total inability of a human-run centrally-planned command-based economy to provide for the basic needs, let alone wants, of its populace has had proponents of capitalism crowing, Great Society proponents on the defensive, and Marxists repeating again and again the now-timeworn cliché that true communism has yet to be put into practice.

One key difference should be noted. Marx wrote; Glover did. The media attention paid to Glover's ideas has been not for his literary talent but due to his successful implementation in Ithaca. Yet the question must remain as to whether Ithaca will remain an isolated success as Glover's followers attempt to put into action his ideas in every conceivable circumstance except the one in which he succeeded. Some have sought to mobilise the impoverished in affluent communities, some have worked to develop momentum on the sheer basis of political ideologies, others have tried to revitalise communities suffering from a local economic downturn, but none thus far seem willing to wait for a national recession to provide context for their call to sustainability and import substitution through local currency issues. Rather, they have attempted to create sustainable local currencies during the longest economic expansion thus far in American history, beating out even the 1961-1969 Vietnam war era growth for duration.

Some of them have been motivated by true concern about the likelihood of global computer-based financial market meltdowns or the potential destructiveness of the Y2K bug, which we have since seen fizzle. Though these events did not come to pass, their possibilities did alter in a very real sense the perceived potential outcomes awaiting individuals, making precautionary preparations a rational response. It is one thing to act on fears, however, and another to act on present realities. To gain followers of a policy motivated out of fears, one must not only convince them that one's response to a problem is the best response, but also convince them of the existence of the problem and the need for action. Garlic may be said to chase off vampires, but if no vampires are to be found, one ends up with nothing but a potent aroma on one's breath to show for the effort.

Teen Bucks

One possible solution to several of the problems plaguing local currencies under the Ithaca HOURs model is to design one from the ground up, called Teen Bucks, with teenage leadership and involvement as a major strategic and marketing issue.2 Though generational overgeneralisations can be dangerously misapplied and should be viewed with a cautious scepticism, there are certain traits that are more common among teenagers than adults, and some of these traits are advantageous to the support and development of local currencies. Although younger children can play a role in the economic activity that would make such a program viable, teenagers are more likely to possess the leadership, understanding, brainstorming power, and credibility amongst adult business and community leaders than third graders. This "savvy" factor is essential if one is attempting to convince others to participate in a long-term enterprise; cute only works for Girl Scout cookies because of the size and duration of the investment requested. The discussion that follows is not intended to be exhaustive in any manner, but merely to consider a number of possible aspects that would help or hinder such a Teen Bucks program.

First, teens are considered by many to be idealistic, rebellious, activist, or some combination of the three. Each of these has within it a willingness to devote time and energy to doing something in a different manner than how it is presented by others. Teenage rebellion is not confined to choosing outrageous dress and listening to obnoxiously loud music; it can include refusal to believe in the time-honoured maxims of society, including that altruism and working purely for the benefit of others are mere pipe dreams. Those who grow up with the encouragement that they can do anything they put their mind to and with a certain picture of ideal world economics may work to make that picture come to life. A student base for a local currency would bring a level of energy and enthusiasm that is crucial to a currency's success; burn-out has destroyed numerous local currency programs even before they began trading currency.

This activism does not only have effects upon the participants in the demand and supply sides of a market, but also the market shapers, whose efforts will determine the range and depth of the market, and may shape how pervasive this market is in the lives of its participants. Their ideals may not only translate into greater economic substitutability and elasticity in favour of goods purchasable by Teen Bucks to support their cause, but also could lead them to work for free to make this happen.3 Finding committed long-term co-ordinators for local currency programs has been very difficult because of the lack of funding available; if students donate their time, this problem is resolved. Time in general is on the side of students, as they lack a need to establish themselves as breadwinners and can instead devote themselves to ideals of service. At current exchange rates, they have more time than money, and so would be willing to invest time to make something happen.4 In addition, they may not measure the time-money trade-off in the same manner as adults, not having as much experience making that exchange as others. In either case, it has been shown anecdotally by communities such as Durango, Colorado and Olympia, Washington that the success of any local currency system is not going to be determined by the amount of money put into it as much as the amount of time put in by its co-ordinators. Teen Bucks will likely be able to recruit energetic volunteers much easier than other models have.

Second, teen consumption habits are more ideal for a local currency. Cash purchases represent a much higher percentage of teenagers' financial transactions than adults'. Their legal status as minors prevents them from being able to sign legally-binding contracts. This greatly limits their ability to use other common forms of money, most specifically credit cards. Further, adults tend to face large expenditures that require federal currency, such as mortgage or insurance payments to state-wide or national companies and combination washer/dryers at the local appliance store. As Gary Pace, one of SEED's organisers, explained, local currency is

"a hard concept to wrap your mind around at first, and so really I think it starts with non-essentials, and as that starts working, and people start understanding how it works a little better, it can expand out to the more essential items but people aren't going to base their rent money on SEED at first because what if they're told that it doesn't work? Then they're screwed."5

Teens may not need to worry as much about the need for credibility in their currency because of their consumption habits. Promoters armed with statistics on the market value of teen purchasing power in dollars could make a strong case for the desirability of accepting a teen-oriented currency, especially if the data is broken down into types of expenditures to demonstrate their market power in certain categories like clothing, music, and fast foods, since teens do not tend to pay housing, utility or medical expenses, and possibly not as much on grocery staples, letting their parents pay these. This age does not generally purchase many essentials traditionally-defined, unless we are to accept the teenage daughter's plea across the ages, "Mom, I really need that skirt!" as a definition of essentials. As a result, if their choice of currency is not accepted by one vendor, it likely will not be a drastic assault to their health or well-being, merely their pride. Their purchasing habits are elastic enough that acceptance of a currency which caters to them could draw in business.

Another advantage of teen consumption habits is that they tend to be more locally-based. Adults may live in one community and work in another, running their errands in either or doing the shopping in a third community in between. Most teens, even those with drivers' licenses, tend to spend a much greater proportion of their time in a much smaller region, going to school in the same neighbourhood as they live, making their purchasing habits that much more valuable to each individual local retailer, since he is competing with a correspondingly smaller number of retailers. Thus, businesses that cater to student populations will have that much stronger an incentive and belief that they can differentiate themselves in the minds of their potential customers by accepting Teen Bucks.

From traditional derisions of teenage spending patterns, it can be seen that businesses that tend to cater to teenagers may be more likely to employ them, offering opportunities for businesses to effect a circular flow by paying their employees with local currency spent by their peers. From movie tickets and snack items to larger-ticket items such as compact discs and clothing, businesses could seek an increased return on wages by the expectation that wages paid in Teen Bucks would be more likely to be spent at the stores accepting them.6 From the employee's perspective, wages would not merely be a contractual obligation for services provided, but might be able to include recognition of the return on spending variable, that recognition of course being proportional to the expected increase in business from paying in this limited-use currency.

The concept of local currency might even be integrated into high school economics courses, confronting students with hands-on opportunities to explore the question of value and its origin. The resource expenditure associated with educating others about the viability, legality, and operations of a local currency could be then transferred from being local currency start-up costs to pure education costs. This would eliminate the education externality and reduce the informational barriers to entry of competing currencies.

Starting a program with school-age individuals presents another advantage on the education front. Peer pressure, networks of friends, trend-spotting, and desires to be part of the 'in' crowd provide powerful informal mechanisms for communication of group values and community ideals. An idea like Teen Bucks can be spread through the halls during lunch or recess or promoted in on-campus organisations with a rapidity, comprehensiveness, and seriousness that would not be possible in the lives of most adults. Teens also are on the cutting edge of communication media in other forms, being typically some of the most technologically-advanced members of any community. Some of them will possess skills in graphic design, layout, and desktop publishing equivalent to local newspaper publishers, enabling them to produce professional-looking publicity materials and newsletters. Though at times their communication skills may occasionally lack some of the refinement of those twice their age, their computing skills should make up for that deficiency several-fold.

Of course, there are disadvantages as well to a local currency program basing its strength upon youth leadership. Teenagers, while prolifically connected to their fellow teens, are not business proprietors. Their lack of connections and experience in the business world may cost them credibility, requiring greater preparation and education on the part of the teen promoters to overcome businesses' wariness. They may face a challenge demonstrating that Teen Bucks is not only an interesting project for the youth community, but also makes financial sense from a business model perspective. They will also need to address the concerns of businesses which traditionally have catered to a variety of customers and worry about scaring off their other clientele by becoming a magnet for youths, even perhaps extra-regionally. Some neighbourhood communities would be opposed to the implementation of Teen Bucks, fearing that youths, especially ones from outside the local community, will be by nature violent, disruptive, or merely uncouth, and thus destroy the community factors which they have worked so long to build.

As minors against whom contracts may not be legally enforced, a group of teenagers starting a local currency program might have difficulty contracting for services. They would clearly need to arrange for adult involvement, either through the timeworn method of getting their parents to volunteer, or by other means, to provide co-signers in the event they needed an office space, a business telephone, the leasing of a photocopier and other assorted office equipment, or such administrative expenses as might be associated with their specific implementation of Teen Bucks.

Teen Bucks might also face challenges establishing continuity in its leadership. Whereas Paul Glover has been available full-time for nearly a decade, teenagers are supposed to be attending school for the majority of their day, and may not be capable of presenting a unified face to interested or concerned business leaders and community members. This would affect the level of confidence and trust in the currency, as graduation from high school might be expected to remove parts of the current leadership team as they pursued college or career goals. The soundness of the monetary policy of each incoming leadership team would require assessment, and distrustful expectations, founded or not, alleging the likelihood of future impropriety would negatively impact the community's desire to support the program in the present.

Youth currency promoters may also have some difficulty convincing persons of the need for such a program. As a sales booster or gimmick to increase foot traffic, it may actually not be profitable for the very fact that youths use cash a lot. Therefore, a much higher percentage of new business entering the store will be using Teen Bucks, rather than being excited about the business's decision to accept local currency and paying with a credit card or cheque for lack of cash on hand, as so many adults have chosen in other currency programs. This will either require businesses to place restrictions on acceptance or put more effort into discovering a variety of ways they can spend their Teen Bucks income. Plus, if youth foot traffic is high prior to this program beginning, it is quite likely through the previously-mentioned communication networks that much repeat youth business which would have used federal currency would now use Teen Bucks. This really fails to address any needs of the community or the business, and may add more concerns: the added effort of redeeming Teen Bucks from new and repeat customers may outweigh the profits from new traffic generated by the Teen Bucks program.

Teen Bucks also may not receive the respect or encouragement of older, more established programs and co-ordinators, since most local currency groups currently in existence have sustainability and financial security as key foci, and Teen Bucks would not likely share these, initially striving to create a program for teen consumption habits. This is not in any way to imply that Teen Bucks would be limited to convenience stores and record shops; as the program demonstrated success in limited circulation, it would be expected to expand as it integrated itself into the community. A likely expansion pattern for it would be first its use and promotion by businesses who successfully used it and attempts by their proprietors to increase its acceptance in the types of stores they frequented. Should this foray succeed, it could pave the way for future ripples outward; the exact manner of its growth will depend on too many factors to extrapolate its implementation herein. It will suffice to have suggested the idea and leave its detailed design to those more familiar with a specific community. Even intense planning and a teen-oriented perspective may not be enough to make a local currency successful without a recession.

The UTNE Reader Factor

Another odd factor that caught my eye while researching was a list by Utne Reader of the most "enlightened" towns in the United States. They claimed to "set out to find towns that are making a special effort to foster connectedness and contentment among all the people who live in them."7 (emphasis theirs) Of their ten most "enlightened" towns and one Canadian city, at least eight have implemented or are planning local currencies. The current status in two of these is unknown because of an inability to successfully contact their co-ordinators.

Table 4. Local Currencies Present in Towns Dubbed Enlightened

Sources: Utne Reader, Andrew Lowd.

To use the Utne Reader as a predictor of the likeliness of a local currency springing up could result in better than a 70% success rate. Jay Walljasper wrote, "We chose communities that we think are dealing creatively with the challenges they face."8 The currency's success is still subject to the same requirements and efforts previously mentioned, but these communities' conditions may provide more favourable prospects because of their high levels of community involvement and emphasis on local, rather than imported culture, making ideals of volunteerism and local production more likely to be embraced. Not being listed in Utne Reader need not doom a community's prospects, but the ideals which they considered, including connectedness and regional pride, seem to be important factors for any potential local currency co-ordinator to consider.

Last Words

Historically, most local currency issues have been short-lived, and beginning one requires much effort. There are opportunities for alternative currencies to compete against dominant national currencies if the appropriate theoretical and practical elements are carefully considered. The decision of whether to begin a currency at all is a difficult one, and may be re-evaluated often during the planning process. Without a clear set of both economic and non-economic objectives in mind, one will have a difficult time knowing whether one's efforts have been successful.

The picture Paul Glover paints of local currency’s potential effects is as vibrant as Willy Wonka’s Chocolate Factory. Unfortunately, Golden Tickets are scarce. The magical appeal of a community currency loses some lustre in practice. Dreamers would do better to ignore Roald Dahl and instead read Horatio Alger, for in Alger’s tales, it is not mere luck but virtue and much hard work that are rewarded by eventual success.

Endnotes:

1 Karl Marx, The Eighteenth Brumaire of Louis Napoleon, n.d. Available [Online]: <http://www.marxists.org/archive/marx/works/1852-18b/ch01.htm> [30 March 2001].

2 My thanks to Sarah Sieverson, past co-ordinator of Community Cash in Durango, Colorado, for the initial suggestion of involving youths in local currency.

3 The popularity of Rainforest Crunch as a way to save Brazilian rainforest by purchasing a nut and toffee mix demonstrates either the willingness of students to incur expenses for their causes, or their lack of fiscal savvy.

4 This can be empirically tested by offering the minimum exchange rate (minimum wage) for a variety of jobs. The number of students who are working the maximum number of hours permitted under state guidelines is but one indicator of the quantity of students who would gladly invest some time capital in a project that they thought would produce financial capital. Much better proxies can be established as well.

5 Gary Pace, interview by author, 15 July 2000, Boonville, Calif. (Tape recording).

6 This is another side of the Return on Spending variable.

7 Jay Walljasper, "America's Most Enlightened Towns," UTNE Reader, n.d. Available [Online]: <http://cafe.utne.com/towns/index.html> [12 April 2001].

8 Ibid.