A local currency?

The Eugene skinner is both a local currency and a complementary currency. That is, it is money that is intended for use only in a geographically limited area, and it is meant to be used alongside the national currency, rather than as a replacement. There are dozens of local currencies like it in use around the world today.

Some local currencies, such as Ithaca Hours or Corvallis Hours, are are created by setting up a network of users and then giving each member of the network the same amount of currency. You can think of this as setting up a ledger for recording IOUs, but instead of starting every balance at zero, everyone starts off with an arbitrary number such as ten. And instead of changing numbers in the ledger, you swap pieces of paper to keep track of who owes and who is owed.

 Other local currencies, like the Baltimore B-note or the Eugene skinner, are national-currency based. In Baltimore, you exchange ten US dollars for eleven B-notes. In Eugene, you exchange nine US dollars for ten skinners. The exchange happens at the same rate in the other direction. You can redeem your ten skinners for nine dollars at any time. With both of these currencies, there is a small incentive to exchange for them and use them, and a small disincentive to exchange them instead of spending them.

Local currencies in some communities are exchanged for the national currency at a one for one rate.

Why have a local currency?

There may be almost as many answers to that question as there are local currencies.

Local currencies have been created to deal with local shortages of cash, to escape a monetary or banking system that people thought was immoral, or as part of a program to alleviate poverty. 

The most frequent argument for a local currency is related to the notion of encouraging local trade, the belief that it's better to keep money circulating close to home than to trade with people far away. If you trade locally, you have made a local person more wealthy, increasing the likelihood that they will engage in more trade with your neighbors and with you. As a matter of national policy, this idea of keeping trade local is called mercantilism, and it leads to protectionist trade barriers that artificially shelter domestic businesses and workers.

Mercantilism is a failed model for creating the rules of international trade, but that does not invalidate the insight that dollars spent locally stimulate local trade.

In 2007, the British town of Totnes began to circulate the Totnes Pound, a complementary currency that could be exchanged 1:1 for the British Pound. This local currency is part of a self-declared initiative to make Totnes a "transition town," making the transition from an oil-based energy economy to a more sustainable one. The objectives of the Totnes currency are:

  • To build resilience in the local economy by keeping money circulating in the community and building new relationships
  • To get people thinking and talking about how they spend their money
  • To encourage more local trade and thus reduce food and trade miles
  • To encourage tourists to use local businesses

Over 400 other cities in Britain and around the world have followed the Totnes model in creating their own transition initiatives, both with and without local currencies as part of the policy effort.

Why Have This Local Currency?

Reason One of Four

Bruce Holland Rogers is launching the Eugene skinner for four reasons, and the economic rationale is the one that he considers to be the weakest. But here it is:

Having only a local currency would be a bad idea for a community. By most measures, the greater the number of potential traders who will accept your money, the better your money is.

Having some money that can only circulate locally, however, may have three positive economic outcomes:

First, it may marginally increase local trade as users of the currency buy locally what they might at one time have sourced from outside of Eugene.

Second, it may stimulate discovery. As traders who hold skinners look for partners to trade with, they may discover businesses that they had not known about.

Third, it may raise awareness of the benefits of local commerce while also reminding users of their intentions to spend locally. The banknotes of the skinner are taller than a US dollar, so if you have both currencies in your billfold, the size and colors of the skinners may remind you of your intentions to keep some of your buying power here in Eugene, whether you actually use the skinners for your next purchase or not.

Why Have This Local Currency?
Reason Two of Four

It's beyond the scope of a one-person initiative to make Eugene a "transition town," but introducing a local currency is a way to encourage Eugenians to consider the full costs of trade with distant trading partners if local alternatives are possible, including the carbon costs.

(Yes, we have noticed the irony of using petroleum-based polymer plastics to make a banknote that aims to reduce petroleum-based energy. But we're not anti-plastic. We think making plastics out of hydrocarbons is a better use of this limited resource than burning.)

Why Have This Local Currency?
Reason Three of Four

Money is an expression of identity. Banknotes have long been used as a medium for saying, "This is who we are as a people," or for governments to say, "This is how we want you to think of yourselves as a people."

​Eugene skinners are an expression of who we are, at least in the way that one Eugenian sees us. Bruce, the backer of the skinner, showed some tie-dye fabrics to our designer, Thomas Stebbins, and asked him to start with that color palette. The scrub jay and osprey remind us of our wild neighbors. Bridges are something of a cliche in banknote design, but the skinners celebrate two of our many pedestrian bridges and the human-powered lifestyle that is possible here. Even the Latin motto, "Urbs abnormalis moneat," is a version of a wish often spoken aloud, to keep our city weird.

We're the sort of place where a car horn is hardly ever heard, and where it is tooted, it's probably not in anger. Eugenians have the full range of human moods, but this is a community of surprising good will. So if you look carefully at the microprint on the Sk3 note, you'll see that the skinner isn't just complementary. It's also complimentary.

The banknotes of the skinner are a first attempt at saying, through the medium of money, "This is who we are."

Why Have This Local Currency?
Reason Four of Four

It's art.

For some, that's no reason at all.

For others, that's all the reason needed.

You know who you are.