The Baltimore BNote

About Local Currency

Local currency, also called complementary currency, is money that is designed to be used within a community, town, or city.  Whereas national currencies, like the US Dollar, are now loaned into existence, necessitating their repayment with interest to a bank or financial institution, local currencies exist solely to facilitate commerce within a community and to preserve and restore the social nature of trade and business. Dollars are universal, but they don’t have the same power that local currencies have, to promote and grow a local economy, in ways that benefit the people and not banks.

It lets our money benefit us first, by favoring local businesses.
The arrival in a community of Wal-Mart, Home Depot, CVS, and other national corporate chains can directly lead to local businesses shutting down. This is one way to counter that effect. A local currency will not end up at large chains – it only supports and grows local businesses. The money we spend at national chains may end up in Delaware or Texas; the money we spend at local businesses continues to circulate in the community and perpetually creates more value. Imagine the flow of money into and out of your community – paychecks bring a lot of it in, and some of it stays with local businesses, but a lot of it flows out to these national chains, and mainly benefits their shareholders. Having a local currency is like building a reservoir to hold more of the money right here and keep it circulating as it facilitates all of the things the community wants to accomplish.

Local businesses find that as their sales grow, they can expand what they offer and more effectively keep people from considering going to the corporate chains. The currency acts as a counter-balance to economies of scale, where the bigger you are, the more effectively you compete. It provides resistance against globalizing forces that take away our sense of place and of community.

It increases business in general and can lead to the creation of new jobs
The argument is sometimes made that the economy is a zero-sum game – that increasing business for some merchants will take away from the rest. In practice, however, this is a system that is designed to increase the overall level of commerce within the community and eventually, within the city as a whole. Complimentary currencies have been shown to circulate within their region many times faster than the national currency, which increases everyone’s sales. This is one reason local currencies became popular in the 1930’s – they were an effective way to build business and create jobs as the effects of the Great Depression continued to be felt across the country.

It increases the stability/resilience for community.
Using a local currency, the value of the labor that is done in the community and the value of the services that are provided there, stay in the community. Businesses have more sales, can provide more services, have more turnover of their stock as people seek to use the BNotes they have, instead of saving or hoarding them. Their sole purpose is to be used, and in being used, they grow your business, or your neighbor’s business, and jobs are created. There’s a real, tangible increase the overall prosperity of the area the more they’re passed around and used.

As the system becomes more widespread, residents realize that their use of BNotes is strengthening the community, that there are now local supply chains being created by people and business owners who may be their friends or neighbors, and they seek to use them more often. This is the economic feedback effect, the weaving together of the community economically and socially, to make it economically stronger and more resilient, by creating closed loops of trade wherever possible.

So, local currencies promote cooperation instead of competition and money use instead of hoarding or accumulation. Ultimately, it’s about promoting real transactions between neighbors, and not about competition or greed or derivatives, or any of the things that lead to bubbles and then to economic collapse. It will take people working in their own communities, region by region, to create the kind of systemic change that will lead to sustainable economic practices — practices that foster ecologically responsible production of goods and a more equitable distribution of wealth — and this is a tool to bring about such change. BNotes and other local currencies are about building community while building the local economy.

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