Alternative economic systems
Community based economic systems empower communities
Alternative economic systems are people-powered and tailored to meet the specific needs of the communities they serve. They rely on trust, community participation, and effective management to succeed. Here are some examples:
Mutual credit systems
Mutual credit systems are an umbrella term for different ways to for members of a system to exchange goods and services without the need for traditional currency or banks. These systems operate on the principle of mutual trust and reciprocity, enabling members to trade goods and services within the community. Each system manages and records the exchange using their currency. Timebanking and LETS are well known ways to exchange currencies see below for details about these.
Local exchange transaction systems (LETS)
LETS are community-based networks that facilitate the exchange of goods and services without using traditional money. Instead, they use alternative forms of value, such as credits, tokens or time or even just a ledger, to measure and record transactions. These systems can vary widely in structure and implementation, but their core principle remains the same: fostering a collaborative economy for the benefit of the community.
Savings Pools
Savings pool are a community-based financial system where a group of people come together to create a collective fund. This fund provides a safety net for its members and offers an alternative pathway to financial security, often not available through traditional banking systems.
Timebanking
Timebanks operate on the principle of time as a currency, where hours of helping another person is recorded in the timebank as time-credits and can then be spend getting help from other member. This system promotes equality by valuing everyone’s time equally, regardless of the nature of the service provided. This system has been adapted in many different ways. There are about 30 in New Zealand and hundreds around the world.
Local currencies
Local currencies complement conventional money by boosting regional economies, supporting local businesses, and fostering community cohesion. They keep money local, encourage sustainable practices, and empower individuals, promoting economic resilience. These currencies also help those outside the regular banking system. Thousands exist worldwide, demonstrating their positive impact.
Cryptocurrencies
Cryptocurrencies are decentralized, blockchain-based, and often outside government control. They can be used for a variety of applications, including investment, and have the potential to disrupt the existing banking system. However, they are also being adopted by mainstream institutions and governments. It is expected that in the next few years, some cryptocurrencies will develop with a community-focused ethos of mutual credit while simplifying real-world transactions.
