Root of All Evil
Many think money makes the world go around, but the world would probably be better without it.
Just ask the people of Zimbabwe, Argentina, Spain and Sao Tome who have seen their life savings in dobras, dollars and pesos evaporate as their governments devalued their currencies trying to stay in power. Currency manipulation often causes shortages of basic commodities as prices double overnight. Those hit hardest consider suicide, some turn to crime, but millions get creative to save themselves.
Currency problems confront the world’s working stiffs partially because they don’t have their life savings in a Swiss or Miami bank account tied to reasonably stable U.S. dollars or Euros. That’s where the world’s rich keep their cash. When the economy tanks in Sao Paulo and the government devalues the currency, Brazil’s rich go on living the high life while the 99 percent scramble to put beans on the table.
Africa has three of the world’s five weakest currencies including Somalia and the seemingly idyllic island (mountains/reefs) nation of Sao Tome and Principe. Nothing idyllic about Zimbabwe. It has the world’s most worthless currency. When Zimbabwe printed 100 trillion billion notes in 2008 the man on the urban streets of Harare with a brief case and no job knew what millions of people living in the bush always knew—money is meaningless.
We live in a globalized world that capitalizes on currency contagion. You can buy those Zim 100 trillion billion notes on Amazon.com for $11.90, a bitter-sweet collector’s item that doesn’t help your everyday Zimbabwean.
In 2001 my wife and I celebrated our 15th anniversary with a trip to Buenos Aires. Argentina was fiscally melting down, the peso was crumbling and we thought we would enjoy it. We stayed in a four star hotel in posh Recoleta across from the cemetery where Eva Peron is buried. We paid $70 a night for a multi-room white marble suite that made us feel like reckless rock stars. It felt good until we left the hotel’s front door and met the people of Buenos Aires.
Every morning a young woman was waiting outside the hotel carrying a baby. She was begging and preying on our guilt. She knew our dollars were buying us a vacation we could only afford because Argentina was suffering. Our guilt was her business plan. Some days we gave her a few pesos and when we didn’t she followed us on the streets until we did.
Long lines were forming outside the banks and ATM machines as people were desperate hoping to withdraw their money before it further decreased in value. Mixed with the polluted air of BA were the evaporating hopes/dreams of millions who couldn’t afford the basics much less a college education. It was not the kind of romantic atmosphere we envisioned and Juliet got a bronchial infection. The trip had bad karma written all over it, but we were naïve to think we could enjoy ourselves amid the misery.
Millions of Argentineans quickly woke up to the reality that money was fleetingly meaningless. To their credit they escaped the freefall by forming trueque clubs and 450 sprung up in 20 of the nation’s 24 provinces. These exchange or barter clubs first spread by word of mouth then fanned out across the Internet. Scrip barter money known as creditos were created and people started exchanging goods for services. Dental work, plumbing, tarot card readings could all be exchanged for food and other daily essentials. It was completely free form, unregulated and untaxed.
Over seven million worth of creditos were in circulation and was barcoded to prevent counterfeiting. Suddenly cottage industries sprung up in people’s homes as they knitted sweaters, made mate tea gourdes and baked pizzas in their home ovens. The clubs looked like flea markets but they became places for the young to socialize and hang out. Romances were kindled there. People regained a sense of worth. A subculture and a parallel economy were born. Trueque clubs spread to other South American countries and when Spain hit the skids it jumped the Atlantic.
Teresa Sanchez, an out of work legal secretary in Valladolid, Spain trades massages and taking care of the elderly for English language lessons and haircuts for her son. “The world would work better without money,” she told USA Today in 2013.
Ditching the Dollar
But the world isn’t getting rid of government issued money, it’s reinventing it locally. The global financial meltdown caused by U.S. house lending greed fostered a new era of alternative currencies in the U.S. and Europe. New forms of money—Berkshares (Ma.), Baybacks (Mich.), Equal Dollars (Philadelphia), Butte Bucks (Montana), Brixton Pounds (UK), and Germany’s Chiemgauer are locally issued currencies. They are often backed by local banks and can be exchanged at local stores that accept them. Consumers get as much as a five percent discount at these local stores when they trade in their dollars or euros at the local banks for the colorful new currencies. For example, for $95 in Uncle Sam’s greenbacks you get $100 worth of Berkshares from Berkshire Bank in Great Barrington, Massachusetts.
These local currencies are eclectic. David Bowie in his Ziggy Stardust heyday is pictured on London’s Brixton Pounds while authors Herman Melville and W.E.B. Dubois are prominent on Berkshares, a currency circulating in the mountains of western Massachusetts. There are over 4.3 million Berkshares in circulation with over 400 stores accepting them and five banks issuing them. It’s a revolutionary concept, a revolution against the giants of globalization that many believed tanked the economy in the first place. By using these local currencies and supporting local businesses consumers are letting Wal-Mart know that the current monetary and economic system isn’t working for them.
Berkshares have made the most inroads in ditching the dollar by attracting international support. Dutch NGO Doen Foundation has extended Berkshares Inc. a $500,000 grant so it can start making loans to small businesses that have been spurned by traditional banks. These small businesses accept Berkshares.
This buy local currency revolution is a reaction to the impersonal hard edged national currencies that reflect pure commerce and have little to do with the way people live their lives. Money reflects the people using it and the primary currencies; the dollar, yen, and euro are tied to globalization, shallow relationships and free markets. Those benefits were obvious during the economic growth of the 20th century, but it’s a new century and those currencies have their drawbacks.
Innovation is a foot so start collecting those Ziggy Stardusts and get yourself down to your local Trueque or barter club with whatever talent you possess. Wean yourself from meaningless money.