Bowie Bucks Finance & Development, March 2016, Vol. 53, No. 1
Municipalities and neighborhood organizations establish local currencies to invigorate their communities
David Bowie’s death in January 2016 struck a chord with baby boomers who mourned the eclectic musician’s tunes of their youth, while millennials recalled his cameo appearance in the movie Zoolander and his compositions in The Life Aquatic. But it’s not only as an entertainer that Bowie was innovative.
In 1997 the pop star pioneered Bowie bonds, offering investors the opportunity to purchase a share in future royalties of 25 of his albums. And in 2011 he lent his support to the local currency of his birthplace, the south London neighborhood of Brixton, by agreeing to be featured on its £10 note.
The Brixton pound is part of a resurgence since the turn of the century of local currencies, which hark back to an earlier era.
(Not so) golden yearsDuring the Great Depression, uncertainty led to hoarding and thus shortages of currency. U.S. economist Irving Fisher advocated “stamp scrip”—time-stamped currencies that effectively carried a negative interest rate, called demurrage, if not spent quickly enough. This encouraged spending and turnover of the currency. Some municipalities resorted to scrip, which merchants were assured they could eventually hand in to city hall, school, or community organizations for U.S. dollars. Austria and Germany also issued scrip during the Depression.
Today, local currencies are being adopted, primarily in Europe and North America, to cultivate a sense of community, supporting locally owned businesses by attracting “main street” and “buy local” spending. In Brixton alone, £150,000 worth of the neighborhood currency is in circulation, boosting customer loyalty. Money spent with independent businesses circulates within the local economy up to three times longer than when it’s spent with national chains, according to research by the New Economics Foundation.
The few circulating, paper-based—as opposed to virtual—local currencies also offer an outlet for local creativity and egalitarianism. “You look at regular currency, with all the dead presidents, monarchs, and establishment tropes and you see the cold dead hand of hierarchy and history. It can’t be much fun designing money whose sole purpose seems to be reminding the great unwashed that the wealth isn’t really theirs,” says Charlie Waterhouse, Brixton pound designer.
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