Do-It-Yourself Money And The New Alchemists - growing movement in France known as SEL and a recent history of local currencies

Ecologist, The, March, 2001 by David Boyle

Faced with the bankruptcy of their local bank, Tenino in Washington State even minted their own coins in wood. They were snapped up by hungry collectors at enormous profit to the town.

Then on 4 March 1933, it was all over. Advised that the monetary system was in danger, President Franklin Roosevelt gave them a short time to wind themselves up. Local money disappeared for two generations. The only one that survived was in Switzerland.

WIR stands for Wirtschaftsring and it is Europe's oldest barter currency, aiming specifically at small and micro-business, and it is now so widespread that it amounts to a virtual parallel currency with the Swiss franc.

It started in 1934, and by 1993 it had a turnover equivalent to [pound]12 billion and 65,000 corporate members. Its main areas of specialisation are the building trade, restaurants and food. But members include most kinds of business - even a circus.

What they can't do is exchange WIR currency for Swiss francs, any more than grains of salt can be converted. That is both a disadvantage and an advantage at the same time: the disadvantage is that local currency will never have the buying power of a global currency The advantage is that it stays circulating locally, providing mutual credit to members either free (in the case of SEL) or very cheap (in the case of WIR).

MARGINALISED

The establishment history of money sets all this aside. Conventional economists regard local currencies as 'barter' and therefore as a throwback. They dismiss the idea as 'fringe', 'wacky' or - worse - an attempt to defraud the tax system.

Actually, parallel currencies are already mainstream - it's just that they're not designed for poor people.

International barter among multinationals now makes up well over 10 per cent of world trade, with giant corporations like Active International or Atwood Richards using electronic barter currencies like trade dollars to exchange resources like outdated stock, media advertising or hotel rooms.

And when any local exchange can't immediately find what they need, they can use an international currency called universal to barter it from elsewhere. The Australian company Bartercard encourages UK members to donate their trade pounds to Metropolitan Police charities, so it can be used to buy play equipment for children.

Loyalty points like beenz, iPoints and air miles are playing an increasing role in our lives. The latest loyalty card from Boots has space on it for more than 20 different loyalty currencies. And in case you didn't think this is money: until recently Northwest Airlines used to pay their entire worldwide PR account in frequent flyer points.

Even the deputy governor of the Bank of England, Mervyn King, says that a new generation of private currencies exchanged on the internet is emerging which might sideline central banks altogether - though he had to go to Wyoming to admit it.

The point is that big currencies like the euro and the dollar don't work very well for everybody all the time - even if you're a mega-corporation bartering unsellable purple toothpaste. Global corporations realise that as much as anybody - but when local communities want to create their own money, they end up in court.