LETS BARTER NL
General Benefits of Local Currency Systems
From the Complementary Currencty Resource Center - http://complementarycurrency.org/helpdesk/benefits.html
1. Increased volume of currency in a local area
Given that the volume of conventional money in a local area is scarce, evidenced by the level of underutilized human and material resources in a given area, local currencies increase the volume of money in a local area to mobilize these resources. By tying a local currency to the conventional currency when making a purchase, it can be assumed (and in some cases measured) that the velocity of money in circulation is increased.
2. Increased liquidity in a local area
Parallel currencies are designed to circulate within specific areas and not leave that area for another, and by staying local work to create more wealth for those in the community. Whereas the national currency drains out of the economy when it is spent at a non-locally owned business, or on goods that are sourced from outside of the community, local currencies remain where they are, increasing the liquidity of money. The effect of parallel currencies working to keep money within a specific area longer is called a "multiplier effect".
3. Increased access to the local market
By creating a new free market for the exchange of goods and services, participants in local currency systems have a new and stable market for the goods and services that they offer.
4. Increased possibility of local import substitution
By encouraging locally-generated business, goods and services that were formerly sourced from outside the locality may be substituted by goods produced from within the locality. National and multinational corporations are unlikely to accept local currency in payment, due to the impossibility of repatriating profits.
5. Increased employment opportunities
By providing a new market for goods and services, the participants in the system offer what they want, rather than being forced to perform work that they would prefer not to do if they had the choice. As well as discouraging harmful activities simply for the money, local currencies give their participants a safe way of trying out their new employment choices.
6. Increased importance of traditionally undervalued activities
Community members themselves decide the value of such things as childcare, artisan skills or community organizing. In particular, this gives them the opportunity to reassess the value of women's work, either undervalued or unvalued in the larger market economy. (Salverda & Powell, 1998)
7. Discouragement of environmentally destructive activities
Without the payment of interest to encourage environmentally destructive activities for its monetary value, there is no incentive to cut down a tree today in order to begin accumulating interest from its sale. Indeed, in some systems where a negative interest rate is used, future units of local currency are worth more than those exchanged today. This encourages activities which will facilitate future exchanges, such as planting trees.(Salverda & Powell)
8. Increased support for small enterprise development
Rather than relying solely on a high interest commercial loan, entrepreneurs are able to procure at least part of the goods and services they need for startup simply by making a commitment to supplying the fruits of their labour to the community sometime in the future. (Salverda & Powell)
9. Increased strengthening of social relationships
Community currencies are designed and intended to help the members of a society to overcome social inequities based on wealth. An intricate social network is reinforced/created as a by-product of members meeting to value and exchange each others' goods and services. In an indirect way, it may be exactly these social benefits which determine economic success over the long run, such as has been shown by the lending circles program and resulting community cohesion. (Salverda)
10. Counter-cyclical economic tendency
According to Professor James Stodder, who did a study of business intertrading systems in America, alternative currencies exhibited a tendency to increase during economic downturns, which he concludes by supporting the introduction of alternative currencies in areas hit by economic recessions.
11. Money stays local longer, reducing need for external input
The less money that is flowing out of a community, the less that needs to flow back in.
12. Multiplier effect from increased circulation
The more money that stays in a community, the greater the spinoff benefits from the circulation. Economists call this a "multiplier effect".
13. Using community currency saves national currency for non-local purchases
This means increased local capitalization and personal savings, or disposable income.
14. Reduced need to migrate to urban areas in a search for money
If there is enough income to mobilize local production using local resources to meet local needs, people do not need to leave the village for the city in order to earn money.
15. Fostering local self-reliance & individual self-esteem
By meeting local needs using local resources, people are active in helping each other. Many people structure their time and value their life through their work, leading to happiness and increased self-esteem.
16. Decreased gap between the richest and poorest members of a community
When the lower-income people in a community have access to a local means of exchange, and possibly increased access to capital, the gap between the richest and poorest members of a community decreases.
17. Access to credit at very low rates
Lowering the barriers to accessing credit means more opportunities for people.
18. Reduction in fees & interest becomes profit
The money saved by not paying interest becomes an addition to people's income and their profit. This cycles back into the community and everyone benefits.
19. Increased purchasing power at the local level
An increased money supply means increased purchasing power at the local level.