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Thinking small to be big: the approach of community currencies

Categories : Cash connects people
November 10, 2016
Tags : Alternative modes/methods of payment, Banknote/Note, Innovation, Public good, Trust
Cash is a modern tool that has evolved over time. Today, it could turn out to be the solution to current societal problems, including economic stagnation: simply think small for the benefit of the bigger picture.
Communication Team / Equipo de Comunicación

Laurence Raineau, Sociologist at the University of Paris Sorbonne, analyses money and its influence on societal transformations in her study L’argent, miroir de la société”, (Communications 2/2012 (n° 91), p. 243-259).

Ever since the Gold Standard was dropped in 1971, money has gained independence from the precious metal and has evolved into a renewed payment tool, free of the finite relationship it had with nature (gold).

From scriptural money, to immaterial payments to cash de-benchmarking, money as we know it today has become something completely different from what it was in 1971. Today trust in cash is no longer linked to something material; it is solely based in one’s community, its values and in the future.

Because of money’s “dematerialization”, it can theoretically be reproduced to infinity. In reality, the deterrent to such practices are social constraints and, consequently, the responsibility of a government vis-à-vis to its citizens.

But despite its “immateriality”, cash is a modern representation of humans’ relationship to today’s society: it’s a central tool for social exchanges (physical, psychological and social) between members of a community.

The multiplication of financial crises has pushed some to question the limits of today’s monetary system, cash being often criticized as archaic or obsolete. On the contrary, cash’s evolution into a tool that refers to only itself and nothing else, proves that it has been capable of evolving with the times to respond to societal needs.

It might not be necessary to look very far for a viable solution to today’s economic challenges. In fact, the solution might be in cash itself, just in another role: a complimentary tool to an already established currency.

Community (or local) currencies are already gaining ground in many societies and have shown that they are capable of boosting local economies while creating new ties between members of a given community. There is a parallel between the growth of community currencies and that of local energy production; both offer an alternative to a centralized system and both aim at developing local communities. These alternative monies empower citizens and respond to needs that can’t or haven’t been met by traditional currencies – and they are all limited to a locally defined perimeter. Alternative currencies also create new financial circuits within the local economy while instilling new social and economic trends. In the end, thinking small could quite possibly turn out to be the solution to be big again: a gradual evolutionary path to strengthen a stagnant system.

To read the full research paper [in French only], please click here

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