Currency and Solidarity Finance

This section contains resources about initiatives that apply solidarity principles to finance and exchange activities.

Alternative Currency and Exchange

An alternative currency is a currency system representing an alternative to using the dominant national (or multinational) currency system.  Alternative currencies may be launched with the printing of “scrip” that looks and is used similar to fiat money, or they may arise naturally as people use a certain commodity as currency.  Complementary currencies are alternative currencies intended to be used in tandem with — rather than instead of — fiat money, usually with the express goal of providing for unmet needs or encouraging a certain character of economic exchange: examples of complementary currencies range from airline “frequent flyer miles” to the BerkShares currency in western Massachusetts.  Many alternative and complementary currencies serve a certain town or region and are thus called local currencies.

local exchange trading system (LETS or LETSystem) is a nonprofit community enterprise that records transactions so that members can exchange goods and services using interest-free, local credit.  LETSystems stress values of cooperation, self-regulation, empowerment: LETS networks are controlled by their users, and anyone may “issue” the currency.

Time banks are similar to these forms of alternative currency and exchange, but use units of time as currency.  The time that someone spends providing a service to another community member — usually expressed as a “time dollar” or “time credit” — can be spent to receive other services.  Because time, rather than conventional valuations of labor, determines value in a time banking system, an hour of a doctor’s time is equal to an hour of a babysitter’s time.  In this way, time banking recognizes and respects the unique assets of every member of the community, encourages cooperation and reciprocity, and builds social capital and community wealth.

Alternative Finance and Credit

Credit unions are financial cooperatives which provide credit and other financial services to their members.  Although credit unions offer many of the same services as banks, they differ from other financial institutions in that they are owned and democratically controlled by their members.  Community development credit unions (CDCUs) are specifically chartered to serve low-income and minority communities, which are often not fully served by banks or other credit unions.

CDCUs are a type of community development finance institution (CDFI), which is a financial institution that provides credit and financial services to underserved populations.  Other types of CDFIs include community development banks, community development loan funds, community development venture capital funds, microenterprise development loan funds, and community development corporations.

Alternative Consumption and Budgeting

Ethical consumerism is a system of purchasing in which buyers actively select or avoid products based on a perceived morally or ethically weighted attribute of a product. Consumers may direct their purchasing power towards goods and services that are local, organic, produced under fair working conditions, or ecologically and socially sustainable.  This often results in the purchase of more expensive goods.

In participatory budgeting projects, community members determine budget priorities for themselves, rather than leaving decisions up to elected officials.  While this method is still relatively unknown in the United States, it has been used successfully elsewhere. Porto Alegre, Brazil was chosen as the site of the first World Social Forum in part because of its participatory budgeting initiatives.

Participative pricing models allow consumers some choice in what they pay for goods and services. Sliding-scale pricing categorizes consumers (homeless, student, fully employed, etc.) and suggests prices based on these categorizations. Other models may provide a suggested price but allow consumers to decide what they can afford.