Lewisburg Dollars


You have heard of bitcoin, surely.  The electronic currency is shaking up ideas of central banking, national authority, and the ways that self-organizing economic systems can evolve and survive on the Internet.

But, who says the creativity, solidarity, and self-emergence is limited to the digital world?  In the era of globalization and networks, the local can re-emerge.  Why not Lewisburg Dollars?

We know that local economies circulate wealth more through multiplier effects.  In other words, earning your wage from a local employer, depositing it in a local bank, buying what you need from local merchants who in turn invest in local banks and so on…

Several studies have shown the power of local multipliers.  Local dollars can add as much as three times as much additional local spending compared to chains.

 

 

One way to encourage such local self-reliance and virtuous cycle is through “local dollars.”  The idea is to make locally spent dollarspurchase more.

One of the longest-running of these is Ithaca HOURS, started in 1991.  Essentially, participating businesses can offer to pay employees portion of their wages in “Hours.”  Each HOUR is worth $10.  Local businesses can opt in and accept HOURS as payment, or even offer a discount, such that an Hour buys 10% more.

There is evidence this trend is spreading throughout the USA.

Why not some Lewisburg dollars?  It would encourage local consumers and producers to exchange more.  Making the local economy more vital could help ease the brain drain PA suffers (young people leave more then they are imported).  Bucknell could add a boost by allowing students to take a portion of their meal plan dollars and convert them to Lewisburg dollars;  it could offer to pay student workers a portion of their wages in Lewisburg dollars which would have a greater purchase power at locally owned businesses including barbers, yogurt shops, restaurants, clothing retailers, outdoor gear retailers, spas, and so on.  Greek organizations could purchase food for their kitchens from local suppliers using them.

Live local, buy local, be local.

 

Featured image is Berkshares.  Photo credit.

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6 thoughts on “Lewisburg Dollars

  1. But is it even legal? By doing so, local people may be exempted from the taxation system. But is it really that good for local development? I think Lewisburg may not be the best place to have such act, as we have Bucknell here. There is still certain large amount of population come and go. But other small towns may be suitable.

  2. Is it legal? I assume so given how many are running. Between credit card systems, bitcoin, gift cards, and other kinds of “credit” systems that rely on record-keeping and a generalized legitimacy, huge amounts of vlaue are stored and exchanged outside of formal use of US legal currency.

    I think it is illegal to try to make an official currency that competes with the US dollar, but these are quasi-currencies that no one expects to be able to walk up to a bank and exchange for US currency.

  3. Is it good? Well, look at the chart I put up. Dollars spent at local retailers lead to $0.48 in secondary spending. That means when I spend a dollar at Mercado Burrito, I am essentially indirectly investing another 48% in the local economy compared to 13.6% for a dollar spent at McDonald’s.

    Why is that good? Well, if I am a local business, then that means there is more local economic activity that can boost income (and hence, possibly demand) for what I produce. As a local taxpayer, it means that the same tax rate for schools, parks, police, transportation, culture, etc produces more public goods. As a local consumer, it can lead to more robust growth that leads to more options for me.

    So, what is not to like?

    Even when a Wal-Mart or other big chain offers lower prices at the register, the profits are vacuumed up from the local area, sent to the corporate HQ, and eventually paid out either in growing that chain in OTHER places or in dividends or stock buybacks for investors.

  4. I think this is a really interesting idea. I assume that smaller towns may often have trouble sustaining a high level of economic activity, and this seems like this would really incentivize local spending. If Lewisburg dollars were part of Bucknell students’ meal plans and were only accepted at non-chain local stores, I would happily eat at Siam Cafe once a week, if not more often (I recommend the Massaman curry…it’s amazing!). I guess the only question I have is that could only local, non-chain stores opt into this? Or could large Lewisburg chains, such as Walmart and McDonalds, opt in as well?

    • No, only locally-owned businesses.

      If you had a “local chain” that might pose some issues. Like, if there is a restaurant that is successful here and in Williamsport and Sunbury. However, I think some limits on size and residence of owners could handle that. Weiss is pretty local; so is Cole’s hardware, I think.

  5. The multiplier effect is definitely real and a really interesting concept. I do agree that a Lewisburg Dollar would benefit the local economy and boost the profit levels of Ard’s Farm, Mercado Burrito, Pronto and other small players against McDonalds, Wendys, Subway and Walmart.

    My question is about scale. What happens when (and if) Pronto opens up more stores in Pennsylvania if it performs well on the Lewisburg Dollar. Will it still accept those Dollars in Lewisburg and reject anything but the U.S. Dollar elsewhere (say Williamsport or further away)? I’m all for supporting the local economy because the multiplier effect can transform an antiquated town into a modernized economy, but what happens when the small get bigger. Won’t they have to adopt normative business routines? I suppose it is a redundant argument, and would require a seriously new way of understanding the economy, but worth a thought or two.

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