section>> Follow the Money
Despite the demands that all people participate in the traditional
system of monetary exchange, more and more people are finding
other ways to provide for their and their community's needs.
Here are a few alternative money systems in use around the
In order to better control the flow of money through their communities,
some cities have developed local currencies. Local currencies
limit consumers' choices to things produced locally, ensuring
that the profits of these purchases stay within the community.
For example, this is how the Toronto
- It's Saturday morning and Lydia wants to do her weekly
grocery shopping early in the day. She hops on the streetcar
and heads down to the St. Lawrence Market. Before visiting
any of the vendors, Lydia stops at the Toronto Dollar Information
booth and buys 10 Toronto Dollars in exchange for 10 Canadian
- Lydia moves on to a produce stand and buys fresh broccoli,
eggplant, and zucchini as well as apples, raspberries, and
peaches. She pays 10 Toronto Dollars to Farmer Eva in exchange.
- Later in the day Eva uses the Toronto Dollar as partial
payment to Amma who has helped her for the day.
- Amma takes the money and spends it on clothing on her
next trip to the downtown Goodwill (another participating
- The Goodwill store uses the Toronto Dollar to hire a cleaner
to clean the rugs in their store.
- The rug cleaner uses it to pay her employee.
- The cycle continues until one day Mariama ends up with
10 Toronto Dollars. Mariama is short on cash that day and
doesn't need any of the services provided by the participating
businesses. She decides to trade in her Toronto Dollars
back at the Toronto Dollar Information Booth.
- In exchange, she receives only 9 Canadian Dollars - even
though she had 10 Toronto Dollars, bought for 10 Canadian
So what happened to that other dollar? When someone buys
a Toronto Dollar, 90 cents of the dollar they use to buy it
goes into a reserve fund that people like Mariama can access
when trading in their Toronto Dollars. The other 10 cents
goes into the Toronto Dollar Community Projects Fund. Because
people 'lose' money by ending the cycle, the system encourages
people to keep their Toronto Dollars circulating within their
community. And the funds generated contribute to the Spirit
at Work program (funded by the Community Projects Fund) which
distributes Toronto Dollar gift certificates to local community
agencies. In turn, these agencies give the Dollars to volunteers
in recognition of the important contribution they make to
the community. When volunteers exchange their Dollars at local
businesses in exchange for things they need, the cycle starts
To read about another local currency visit Equal
LETS is a system of local barter and exchange which encourages
community members to barter services and goods amongst themselves.
is a way in which communities recognize the talents and gifts
of all community members, while caring for each other physically,
mentally, and economically. And LETS requires no money at
all. This is how LETS works:
- Maria provides child care for her friend Anne. Maria's
contribution is recorded into the local LETSystem. She receives
2 credit hours for 2 hours of child care. Anne, on the other
hand, has 2 credit hours taken off of her account.
- While Anne's children are being cared for, Anne spends
the afternoon making jam. The LETSystem has calculated that
every 2 jars of jam is worth 1 credit hour, taking into
account picking the fruit, washing and stemming it, the
cost of the jars and lids, and making the jam.
- Maria's other neighbour Meena buys 4 bottles of jam. She
has 2 credit hours taken off of her LETS account for this
'purchase.' Anne has 2 credit hours added to her account
for her contribution.
- Several weeks later, Maria's car breaks down. Maria calls
Meena and asks her to fix her car. Luckily it's not a big
problem so it only takes Meena 2 hours to fix the car. The
LETS account keeper takes 2 hours off of Maria's account
and adds 2 credit hours to Meena's.
Through the LETSystem all three neighbours receive something
and all give something - with no monetary transaction. In
a LETSystem of several hundred members the range of services
offered is extensive. LETS creates money but not for the sake
of creating money; LETS money is only created through activity
and healthy productivity.
Women's World Banking was founded after the First World Conference
on Women in Mexico City in 1975. Women's World Banking provides
access to capital for low-income women entrepreneurs. Through
its affiliates located in 35 countries around the world, Women's
World Banking increases women's capacity to take care of themselves.
For example, Francesca who lives in Nairobi, Kenya runs
a fruit and vegetable stand. She inherited the stand from
her mother. Francesca has contracts to provide fruit and vegetables
to several Nairobi restaurants. She knows the restaurants
would also buy juice from her if she could provide it. But
Francesca doesn't have a juice machine. She cannot go to the
main bank to get a loan because although she is a successful
business woman, she has no capital. Because women generally
don't inherit land which would give them collateral, many
Kenyan women are faced with similar obstacles. When they need
loans, their only option are the 'loan sharks' who roam the
marketplaces looking for people in desperate circumstances.
But there is a way that Francesca can get a loan without having
to go to the loan shark and that is through the Kenyan Women's
Finance Trust, an affiliate of Women's World Banking. Through
the Kenyan Women's Finance Trust, Francesca is able to access
a loan without collateral. Soon she is making juice and with
the profits from the juice she is able to pay back her loan.1
Typically one thinks of trade unions as unions of paid employees
of a certain company or in a specific trade. However, in some
countries women are coming together and developing a different
kind of trade union.
Perhaps the most well-known of informal trade unions is SEWA,
the Self-Employed Women's Organization founded by Ela Bhatt
in Gujarat, India in 1972. Since its founding SEWA has worked
for "Full Employment and Self-Reliance" of poor women in India.
SEWA's original members were self-employed as block-printers,
vegetable vendors, or head loaders, carrying loads of clothes
between the wholesale and retail markets. Because 93% of the
female labour force in India is self-employed, many are not
able to receive benefits or even guaranteed employment. Rather
than being simply a trade union, SEWA has developed into a
movement and has spawned projects such as childcare, literacy
classes, and Video SEWA which teaches women video skills and
encourages them to produce films on topics of interest to
In the central African country of Chad, MUFESI (Mutuelle des
Femmes du Secteur Informal) is made up of more than 1000 women,
each of whom has a trade. Some women make cake, others weave
mats, others do crocheting. For a small fee, women can join
the union and have access to all the goods that other members
produce for reduced prices. Union members are encouraged to
buy from each other. They also take part in joint activities
such as a sausage-making training session and a soap-making
workshop. And they are able to access loans at low interest
rates to expand their businesses. At each meeting of the small
sub-groups of MUFESI, each woman contributes a small amount
of money which is put into an emergency fund. When one of
the members has a particular need (sickness, childbirth, or
other), the group joins together and helps pay for hospital
or travel expenses. As well, at each meeting the women create
loans by pooling together their own funds. Each woman pays
a set amount into the fund and the women take turns receiving
the entire fund. In this way once a year or so they will receive
a larger sum of money that they can use to expand their businesses,
while spreading the payment out over the year. (For another
example of this see Beatrice's story.) Through MUFESI, self-employed
women have access to the benefits of a larger trade union.
has its origins in rural villages in the country of Bangladesh;
its name means 'village bank.' Grameen was founded by Bangladeshi
economist Muhammad Yunus, an economics professor at Chittagong
University, following a 1974 field trip to a number of rural
villages. Professor Yunus realized that the poor were being
kept in their positions due to high interest rates on money
they borrowed to make a living. For example, vegetable sellers
borrowed money at the beginning of each day to buy vegetables
to sell. By the time they paid back the loan shark with the
day's profits, they had almost nothing left for themselves.
Professor Yunus and his colleagues began loaning out tiny
amounts of money at very low interest rates to people who
wouldn't normally qualify for bank loans. This is called microcredit.
The money was loaned in a public meeting so that all community
members knew the amount and the repayment schedule. By relying
on principles of trust and solidarity and openness instead
of secrecy, the Grameen system ensured that loans would be
repaid. The Grameen Bank revolutionizes traditional banking
since, as with Women's World Banking, it requires no collateral.
The Grameen Bank has become enormously popular; by July
2001 Grameen had 1,170 branches and had loaned a cumulative
total of more than 3 billion US dollars. It had also proven
a repayment rate between 90 and 100% over the years, exceeding
the success of any other banking system. Those who have benefited
most from the Grameen system have been women - approximately
95% of borrowers are female. Grameen has contributed to poverty
eradication by providing poor women access to loans to raise
animals, weave baskets, and engage in other activities making
them better able to provide for their families.
While credit unions function the same way as banks in many
ways, there is one significant difference. Because credit
unions are owned by the members, profits are shared with the
members. People who have accounts at credit unions actually
become shareholders in the credit union, not just customers.
They attend meetings, can be elected to the board of directors,
and can offer their opinions on how the credit union is managed.
All members have an equal voice, regardless of how much money
they have in the credit union. Credit unions operate on 7
basic principles which include:
Credit unions have been a big part of Manitoba's history. The
first credit union in Manitoba was a caisse populaire,
organized in 1937 by Father Benoit in the French farming community
of St. Malo during the Great Depression. Father Benoit was looking
for a way that community members could help each other out financially.
Credit union members still help each other out today and they
work to create healthy communities.
Me-Dian Credit Union in Winnipeg recently moved their main branch to the North End. It is rare that any kind of financial institution moves into the inner-city, rather than out of it. This is particularly true for neighbourhoods as economically marginalized as the North End. The neighbourhood has seen most of its banks and many of its important services move out of the area so it is significant that Me-Dian decided to relocate there.
- Voluntary and open membership
- Democratic member control
- Member economic participation
- Autonomy and independence
- Education, training and information
- Co-operation among co-operatives
- Concern for community
Today, there are 62 credit unions throughout Manitoba and
a total of 428,000 members. For more information on credit
unions within Manitoba visit Manitoba
Between 2007 and 2009 corporate globalization saw a widespread crisis. For the first time since World War 2 world trade declined at a much quicker rate than domestic trade, pushing the countries who rely most heavily on it to fall into recession. It is estimated that $15 trillion in bailouts and stimulus packages provided by governments were used to restore the ruined system. What do people do in response to failing globalization and it’s reliance on resources, particularly oil? In 2005 a permaculture teacher in Ireland, Rob Hopkins, worked with his students on a document outlining how communities might build resilience and reduce carbon emissions. Within a short period of time the document was downloaded thousands of times. The document has turned into a movement – transition towns. As one trasititioner states, “…the possibilities are endless. That’s the beauty of the movement: it’s a move towards something positive.” 2 As the Transition Network outlines:
A Transition Initiative (which could be a town, village, university or island etc) is a community-led response to the pressures of climate change, fossil fuel depletion and increasingly, economic contraction. There are thousands of initiatives around the world starting their journey to answer this crucial question:
"for all those aspects of life that this community needs in order to sustain itself and thrive, how do we significantly rebuild resilience (to mitigate the effects of Peak Oil and economic contraction) and drastically reduce carbon emissions (to mitigate the effects of Climate Change)?"3
Initiatives have included; garden-share projects which link people without a garden to people who have one but cannot cultivate it, a community owned energy company, a rejuvenation of local currencies, government funding to employ local people to do this work, community owned grocers and working groups looking at different themes that each town deem to be critical to them.
There are many different ways that people are creating alternative
money systems and finding better ways to care for themselves
and their neighbours. Have you created another system? Please
tell us about it. You can write to us at firstname.lastname@example.org
To trace the path of several $50 bills through your community,
visit Follow the Money.
Another great idea is Time Banks. For every hour you spend doing something for someone in your community, you earn one Time Dollar.