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Faye Cox and Ben Werner.

Paul Wellman

Faye Cox and Ben Werner.


Money Ain’t a Thang

Is Santa Barbara Ready for Complementary Currency?


Wednesday, January 23, 2013

After two weeks of listening to presumably educated pundits seriously discussing the merits of minting a trillion-dollar platinum coin to pay off the U.S.’s gargantuan debt, it’s not hard to think that — even disregarding the obvious fact that dimes should be bigger than nickels — our monetary system is not all it can be. But it didn’t take a global recession to convince Belgian economist Bernard Lietaer of that fact. The high-profile advocate of “complementary currencies” has been planting the seeds of extra-national monies all around the world, including right here in Santa Barbara.

The primary purpose of secondary currency systems is to match unused resources with unmet needs, explained Ben Werner and Faye Cox, Santa Barbara residents who arranged a Lietaer visit to SBCC’s Center for Sustainability last year and, in turn, were invited to attend a workshop at ETH Zurich, Switzerland’s equivalent of MIT. Whereas the lucky owners of traditional dinero are incentivized to hoard their bounty in banks, and banks in turn — despite many of them recently having had their bacon saved by Joe Taxpayer — have decided to keep their cash safely tucked away in vaults, complementary currency incentivizes people to spend. In fact, the longer it goes unspent, the more worthless it becomes.

In ancient Egypt, for example, a currency called ostraca (or shards of pottery with text inscribed) was issued for farmers who stored their grain at the temple. It lost value over time, however, due to guard fees and the portion eaten by critters. The amount of money you received for 10 bags of wheat, then, would eventually only buy nine, and so on. Therefore, farmers quickly reinvested their ostraca, primarily into improvements in their farms.

An aid organization in Madagascar followed that example when it stopped distributing food and instead began distributing currency that could be exchanged for food. Farmers could earn said currency by trading in age-old crop production techniques for more efficient and sustainable practices. The ability to change human behavior makes complementary currencies quite powerful, as Cox and Werner learned through their workshop in Switzerland, where they, for instance, played a version of Monopoly — um, Polymoney — devised by an economics PhD student.

Other complementary currencies (torekes in Belgium or fureai kippu in Japan) encourage community service. Still others, like Ithaca hours, can be exchanged at a favorable rate to U.S. dollars to encourage residents to spend locally. The motivating idea behind such currencies is that they not only bolster the economy but also transform our relationships with each other and with nature.

Werner and Cox are working on the prototype for an online bank — provisionally called Sama Bank — that would issue complementary currency generated by users in Santa Barbara. Among the social issues they hope it can address are food, health care, homelessness, and the arts. They are seeking both community input and interested partners. They can be reached at bwerner@revolutionmotors.biz and faye.cox@me.com. Meanwhile, Lietaer is expected to speak in Santa Barbara again in March.