In the pretty Sussex town of Lewes, 10 miles inland from the southern English coast, an interesting experiment is taking place.
At first glance, Lewes seems to be a picture-postcard of the past, with hilly streets and quirky shops, a cobbled humpbacked bridge, a Victorian brewery and a population prone to parading around in historical costumes as a celebration of centuries-old villains and martyrs. But behind the scenes the hometown of 18th-century reformer Thomas Paine is living up to his tradition of social radicalism.
Two years ago Lewes joined a growing international movement of “transition towns” in countries as diverse as the US, Japan, Australia and Italy where residents believe that the best way to preserve the values of their communities and combat climate change is to favour local produce and business over the standardised offerings of the global economy. And, last September, it went one step further by introducing its own currency.
This is a less eccentric move than it seems. Precedents for alternative currency schemes in the modern world began to crop up as far back as the 1930s when two businessmen, Werner Zimmermann and Paul Enz, set up the Wirtschaftsring-Genossenschaft (WIR) scheme in Switzerland to provide credit to local small- and medium-sized businesses in the midst of the Great Depression. No notes were ever issued but the system remains active today and serves as inspiration.
In the US there are now at least 12 local currency schemes, created not to overcome financial hardship – though that might prove a side benefit in the current economic climate – but to emphasise traditional small-town American values and those linked with the contemporary transition town movement, with neighbours supporting one another against a hostile outside world.
The largest is the Berkshares programme, launched three years ago in the rural Berkshires region of southern Massachusetts. Issued in denominations of one to 50, at a 5 per cent discount to the dollar, and administered by a not-for-profit company, the money is now widely accepted, even for large purchases and wage payments, with nearly $2m worth circulating among businesses and private individuals. According to Susan Witt, who sits on the board that oversees the scheme, it has also become a powerful social force. “It reformed the way many Berkshires business owners and residents think about their local economy and helped educate the community on why shopping locally matters,” she says. “Our youth prefer to spend their free time on Main Street rather than at the mall. They experience and contribute to the vibrancy of our downtown.”
In the UK the small, south-west English town of Totnes, known for its market, green credentials and arty, bohemian vibe, preceded Lewes with the launch of its own pound in 2007. But the latter town is more than twice the size of the former and an important regional economic centre. Its proximity to London also thrusts the idea of an alternative economy under the capital’s nose and Brixton, a neighbourhood in the south of the city inhabited by a mix of young professionals and low-income families, has just announced plans to introduce its own scheme in September.
Walking into any of the diverse independent stores lining Lewes’ high street, one immediately senses the fierce loyalty residents have to their traders. May’s General Store, resplendent in cream woodwork and hand-painted maroon signage, is one of the shops authorised to issue Lewes pounds at an exchange rate of one to one sterling. Inside there is barely room to move among an eclectic mix of well-groomed mothers, young hippy types, middle-aged businessmen and pensioners browsing shelves laden with everything from whole-foods to ethnic textiles, clothing to fine bone china. It’s the sort of shop that seems to have disappeared from other UK towns and its owner, Sue May, presides over proceedings with a brisk, school-marmish authority, dispensing home-baked bread pudding to regulars while giving the low-down on Lewes’ alternative currency project.
“The pound is a way of keeping money in the local economy and carbon footprints down by encouraging shoppers to spend in their own neighbourhood,” she says. “It gives people the choice of doing something positive to support their community.”
But the benefits go even further since it has also boosted Lewes’ stock among anyone looking to live in a place with a clear identity and a strong community spirit. (It helps that Lewes is also only a 55-minute rail journey from London and a 20-minute drive from the beach.)
As elsewhere, property prices have declined in recent months but less than in many similar towns and local agents report that business is picking up at these new, lower levels, reflecting the fact that demand still outstrips supply for the right sort of property. Topping the desirability list are elegant, brick-built Georgian family houses high on the top of the high street overlooking the river Ouse and the brewery, which can command prices of more than £2m. In new developments, such as The Nurseries, on the outskirts of town, eco-friendly townhouses designed for young families meanwhile sell for around £450,000.
“We get families moving here from London and Brighton who very much want to live in a strong, vibrant community. They want not only nice properties but a feel-good factor,” says Angela Ramsey, who manages the Oakley estate agency, another independent business in town. “There are a lot of professional people who move out here with sophisticated tastes but who are looking for a return to core values. And once people move here they tend not to leave again.”
Oliver Dudok van Heel, a volunteer with Transition Town Lewes and one of the architects of the Lewes pound programme, argues that the currency’s effect on individual emotional well-being has been even more important than its economic and environmental one. A sense of taking personal responsibility for the health of a community is deeply satisfying, he explains. And “a relationship develops between resident and trader that is absent in a supermarket; people talk to each other about their lives and we’ve seen the level of trust grow enormously within the community.”
The scheme, which has put about 25,000 Lewes pounds into circulation, is scheduled to run until August, at which point the town authority, which has been holding all the sterling that residents have exchanged, would convert it back. But it’s been such a success that there are now plans to extend it indefinitely and to issue notes of larger denominations, answering early criticism that a system based on £1 notes could never be a serious business tool.
Other teething problems have also been overcome. The first 3,000 notes, handsomely printed with pictures of Paine, were snapped up within days of issue but many were hoarded by collectors or speculators who sold them on Ebay for up to £35 each. Eventually more notes were issued to solve the liquidity problem – although van Heel is quick to point out that there was no inflationary effect. “As you have to exchange one pound sterling for every Lewes pound, there’s no overall increase in the number of notes in circulation. That’s why we chose to back our currency with ‘fiat’ money, that is, the legal currency of the realm,” he says.
Sherman Robinson, a consultant to the scheme and an economics professor at nearby Sussex University, notes that it was never designed to grow into a fully functioning financial system. The point, he says, is to create a symbol and raise public awareness. “Legal tender is made acceptable by law [but] the Lewes pound is not, so each act of acceptance by a customer or business is an act of trust, of buying into the deal,” he explains. “People in the transition town group lay much emphasis on self-sufficiency, with a sense of returning to past values.”
Abigail Petit, owner of Gossypium in Lewes, agrees. She produces and sells funky clothes and home furnishings made in fair-trade cotton from an Indian co-operative yet designed by the daughter of a local textile manufacturer. In fact, Petit is convinced that such attitudes – and a commitment to seemingly crazy ideas like an alternative currency – are what make small towns like Lewes and their businesses successful. “A brand like ours could never have started – and thrived – anywhere else,” she says. “We are all interconnected here [and] people are very loyal.”
And, according to May, that extends to everyone in town, not just its soya-latte-drinking, peasant-blouse-wearing, upper-middle-class residents. “We’ve got a shop on each [low-income] housing estate which takes Lewes pounds and people are using them,” she says. “The other thing about recreating the personal trust between trader and client is that shopkeepers are willing to give credit – not something you’d ever see in a chain store.”
I make way for Ella Jones, a regular at May’s who’s in to pick up a favourite lime chutney she used to get from the supermarket nearby. She came to Lewes from Australia to visit her sister but has since decided to stay. “The town just prioritises strands that I think are vital to quality of life,” she says. “I’ve always cared about issues like the environment but the economics always seemed detached. Using an alternative currency brings it home that we can make a difference to where we live by our own economic clout. It’s giving people power to influence their immediate environment.”
