Organic trade: food, money, and global economic democracy
Is an international green currency possible?
How might we build global economic democracy from the bottom up? Community currencies have been parochial so far, leaving their application to international trade unproven. Like mainstream finance, these will have to embrace online communications at distance. But we have hardly had time yet to find out how communities formed through the internet might benefit from the principles embodied by something. Recent developments, especially in the use of information technology, have made community currencies a fast, cheap and effective means of carrying out normal commerce. Smart cards registering transactions in up to fifteen currencies, linking businesses and non-profit organizations as well as individuals, allow these circuits to become partially integrated into the market economy.
The idea of people making their own money when liquidity fails is an old one. There are numerous historical antecedents for community currencies. These include instruments of credit in the pre-industrial states of Africa, Asia and the Islamic world, such as the hawala system; utopian communities in the nineteenth century; the Social Credit movement in North America during the Great Depression; and European experiments in the same period, such as Gesell's stamp scrip. The non-western cases reveal institutions of considerable durability, whereas the modern western examples have generally been short-lived. How can today's community currencies emulate the strengths and avoid the weaknesses of these antecedents?
Community currencies vary in the degree of their integration into the national economy. Other sources of variation include: the monetary measure (whether based on the national currency or on hours of work, for example); the degree of reliance on free labor or government grants; digital or material records of payment; involvement of businesses or exchange of services between individuals only; local or virtual association; forms of leadership and participation; and so on. Many LETS associations are reluctant to band together in case their autonomy is compromised. They form boards and committees, are insular and clubby, often only for the poor. Such institutions are usually time-consuming and dogmatic, with a bias against business and for public grants. Their aim appears to be to get away into a separate world of their own, however small.
I favor integration into the national and ultimately the world economy. But this is the stuff of schism in the movement. It is fatal for community currencies to think of each circuit as a stand-alone project. In future, many such currencies, reflecting diverse associations and interests, will collaborate and compete for the public's loyalty. And food-based currencies would have some advantages in such a context.
People could join other community currencies reflecting their various interests -- one for music buffs, another for sports fans, yet another for the congregation of a church. Neighborhoods could exchange highly localized services like gardening or baby-sitting. These associations would wax and wane in relation to their internal dynamics and their co-evolution with other circuits. Individuals could combine membership of several on one smart-card and switch their purchases between them, as we now do with credit cards.
Let us assume that city consumers would like to buy locally grown organic produce and farmers in the countryside nearby would like to satisfy that demand. There might be an organic food market in a suburb at weekends or some shops and supermarkets might be persuaded to sell the produce, even if it is more expensive. City-dwellers could spend time on organic farms and pay for their keep with work. All of this is unpredictable and costly to organize. A community food currency would supplement normal cash transactions, but in many cases, given unavoidable costs in national currency, prices would be calculated as some proportion of the two. Farmers could pay for seasonal labor, transport, warehousing etc., partly or wholly in the food currency. Distribution outlets could likewise charge a combination of the two, varying the proportion according to times of peak and slow demand. Consumers could offer not only farm labor in return, but their own specialist services to be exchanged within the circuit between themselves, not necessarily for food.
A community currency based on food and giving expression to organic values in the wider sense -- the integration of production and consumption, city and countryside, protection from unknowable market forces -- would soon be a popular staple of the alternative economy. We eat food regularly; food is an important symbol of other values; strengthening the home market for food has economic virtue; and so on.
How might such a food currency develop in the direction of international trade with the objective of supporting higher prices in developing countries? First, there is less incentive when using community currencies to buy cheap and sell dear, since the money itself is not scarce. Second, to combat adverse terms of trade based on average labor costs in rich and poor countries, a 'fair trade' community could set up international exchange with values weighted to compensate for differential labor costs. Transnational corporations are unlikely to be attracted by this model, but a coalition of ethical consumers in the first world might be. Third, even if prices remain the same and are measured in YE$ currencies, at least the value generated by community trade does not leak out of the network. The technology for such trading systems is already available, but implementation must await recognition of their potential, perhaps by some of you here.
My arguments are not just theoretical. Makato Nishibe’s LETS ‘Q’ in Japan is an online global-local network which already carries out some limited international trade.[1] So far this has been restricted to exchange of information goods such as Japanese books and videos (including manga comics) between participants at home and abroad, since they are expensive in London and Paris. There is a plan, as yet unrealized, for fairtrade in organic bananas planted in Negros between Japan and the Philippines. Most of Japan's bananas are grown and imported by Delmonte; and the Kyusyu co-operative wants to import organic bananas from Negros, even though the price is relatively high. Shimokawa, a small town in Hokkaido, has organized a network whose money is called the 'Fore' (from the forest, its main industry). Its leader runs an emu farm; he also imports arts and crafts from Mongolia and sells them in Fores to members of the network as part of a fairtrade initiative. These are admittedly small beginnings. But gradually LETS principles are becoming more widely known and implemented.
The case for community currencies is unassailable. They add to purchasing power at no or low cost. The value generated in exchange stays in the community. The circuit gives definition to abstract notions of community through everyday economic transactions. Community currencies teach people a more responsible attitude to the wider meanings of economic life. Learning to manage credit and debt in a new way shows members that the money system they know is relative, not absolute. The rules of each circuit are customized by its members to reflect what they want from it. Community currencies are thus practical exercises in local economic democracy and a great source of political education, not just about money. They belong to a family of popular democratic forms that includes organic agriculture movements; and this holds out hope that the principles they embody separately may come together as part of a pluralistic but integrated drive for a more equal world.
[1] I thank Makoto Nishibe, originator of the LETS 'Q' online trading network, for the information on local exchange circuits in Japan.