ALTERNATIVE CURRENCY IN THE COVID ERA

Last spring, shortly after it became clear that COVID-19 was more than just a little flu and that local shops would be down and out for more than just a little while, America got to wondering: How can we save small businesses?

Many commentators demanded quick federal relief. Some consumers went on gift card shopping sprees. And 2020 presidential candidate Andrew Yang tweeted a proposal combining the two — government-issued debit cards redeemable only at locally owned small businesses.

The Twitterati mostly condemned Yang’s idea as “stupid,” “impractical,” and “useless.” And the debit cards never came to pass; consumers got stimulus checks and small businesses got Paycheck Protection Program loans instead.

But a piece of his idea — a currency that could only be spent at local businesses — has been a fixture of life in Massachusetts’ southern Berkshires since 2006.

BerkShares, the region’s currency, are redeemable at over 400 Berkshires businesses — good for buying a pastry at the bakery or an hour of a lawyer’s time. Printed as real paper bills and adorned with hometown heroes like “The Souls of Black Folk” author W.E.B. DuBois, BerkShares can be purchased at three local banks. And for shoppers, those fancy notes are more than just a reminder to “buy local”; they’re also a way to get 5 percent off, because $95 gets you 100 BerkShares.

It wasn’t the first alternative currency in the world. It wasn’t even the first in the region. But BerkShares are arguably the most successful. In the currency’s 14 years of existence, the region has circulated $10 million worth of BerkShares, and the model has inspired other regions abroad.

Now, almost a year into America’s COVID downturn, and with roughly 800 small US businesses closing each day, politicians are trying to repair the damage. Massachusetts is investing in a “buy local”' advertising campaign. California is offering technical support to help small businesses adapt to e-commerce. But some municipal governments are looking to go further: promoting the use of a local currency by borrowing, spending, and accepting it themselves.

The idea of getting municipalities involved, which comes from the Schumacher Center for New Economics, the think tank behind BerkShares, is still in its infancy. But if it catches on — if it helps to thrust local currencies into the American mainstream — it could provide a potent new means for reviving Main Streets, whether they’re battered by a pandemic or by the relentless hammer of a globalized economy.

In recent times, US alternative currencies have been used by the private sector alone. Could American municipalities start sponsoring, accepting, and making payments with local currencies, as their European counterparts do?

In the COVID-19 pandemic’s early days, city officials in New York and New Orleans reached out to the Schumacher Center with that very question. “They were less interested in the BerkShares program as we currently run it and more interested in applying it to solving their own COVID problems,” Witt recalls.

And so, this past April, the center drafted a proposal. It outlined how municipal governments could use currencies like BerkShares to pay local vendors, and vice versa. For example, says Rachel Moriarty, the Schumacher Center’s director of operations, a town could borrow the local equivalent of BerkShares to help finance a construction project and pay workers in the local currency. The workers could also use the currency to pay at least some of their local taxes.

As a pandemic relief measure, Schumacher’s proposal also allows local governments to issue emergency local-currency payments to businesses and residents in need.

To read the complete article, see:
When money is running short, print your own (https://www.bostonglobe.com/2020/12/24/opinion/when-money-is-running-short-print-your-own/)

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