08 April 2009

OTR Dollars Next?

I want to throw an idea out there. I have been hearing about various communities that print their own money. I have heard that Jane Jacobs recommended that each city have its own currency. And some economists argue that currency should always be produced in the private sector since the private sector cannot produce currency which can be artificially inflated.

This USA Today story is just one of several articles I have seen lately:

...A small but growing number of cash-strapped communities are printing their own money. Borrowing from a Depression-era idea, they are aiming to help consumers make ends meet and support struggling local businesses.

The systems generally work like this: Businesses and individuals form a network to print currency. Shoppers buy it at a discount — say, 95 cents for $1 value — and spend the full value at stores that accept the currency.

... they encourage people to buy locally. Merchants, hurting because customers have cut back on spending, benefit as consumers spend the local cash.

...Under the BerkShares system, a buyer goes to one of 12 banks and pays $95 for $100 worth of BerkShares, which can be spent in 370 local businesses. Since its start in 2006, the system, the largest of its kind in the country, has circulated $2.3 million worth of BerkShares. In Detroit, three business owners are printing $4,500 worth of Detroit Cheers, which they are handing out to customers to spend in one of 12 shops.

During the Depression, local governments, businesses and individuals issued currency, known as scrip, to keep commerce flowing when bank closings led to a cash shortage.

There is also a book about this and related subjects called Going Local: Creating Self-Reliant Communities in a Global Age. I think something like this could work in maybe the OTR or Downtown Cincinnati community.


VisuaLingual said...

Ithaca Hours has been doing this for about 18 years. Not only are they accepted at tons of Ithaca-area merchants, but people even elect to receive part of their pay with the currency. It's a cool program.

dave said...

I'm interested in this idea as well. I don't know much about running a system like this, but I'd be more than happy to try installing something along the lines of this: http://www.opensourcecurrency.org/ in my web space if anyone wants to experiment.

Quimbob said...

I have heard of the Ithaca system a few times.
These programs are city wide, tho. I don't think it would be a great idea for Cincinnati neighborhoods.
I don't think the neighborhoods are or even should be self sustaining and something like this could lead to greater neighborhoodism (?), which, I think, is ultimately bad for the city.
It would probably be more practical to just sell neighborhood gift certificates to force shoppers into a particular neighborhood.
Downtown does it.

5chw4r7z said...

Like Quim said, why not just buy downtown gift cards? You don't have to reinvent the wheel and its only accepted locally. I'm sure any merchant who wanted to participate could, its just focused on the CBD and OTR right now.