Organic Trade: Global Food Politics and Local Economic Democracy

Organic trade?I have come here to learn about organic trade; to meet some of the people who are making this movement happen; and to share with you some of the general ideas I have about making a better world. My talk is in three parts. I begin with some reflections on what organic trade might mean. The expression appears to contain a contradiction, in that ‘organic’ implies ‘natural’ and trade entails buying and selling with money which many people think of as extremely unnatural. So, from the beginning, an attempt to reconcile opposites seems to be built into the project. This will be my main theme — the need to combine ‘natural economy’ with the market, the rural and the urban, production and consumption, global and local, money and democracy. The second part refers to a paper that the organizers have kindly included in the conference reader, ‘The political economy of food in an unequal world’. I apologize for the length and style of this paper which I wrote for a more academic audience. But its subject, the centrality of food in any serious attempt to redress world development problems was brought home at Cancun. I argue that the motor of development is exchange between rural and urban areas, at first within a nation or region, but now also at the level of the world market. Today I will present a summary of this argument. Third, I will look at some of the options for building local economic democracy, focusing in particular on exchange circuits formed by money issued by the people themselves; and I will ask if these have potential relevance for international trade. I don’t pretend that these three parts yet add up to a seamless whole, but I do take the aim of integrating disparate parts into a working whole to be intrinsic to any ‘organic’ movement or indeed ‘organization’.

Humanity is caught between our past as cultivators of the land and a city-based machine revolution that is just two centuries old. The machine revolution has been powered by a system of making money with money that we call ‘capitalism’, especially when we want to disparage it. But for 5,000 years before, Eurasia was dominated by agrarian civilizations whose elites ruled rural masses from urban enclaves and countryside mansions. All the main variants of such civilizations — Roman, Chinese, Arab, Hindu, medieval Christian, Ottoman — conceived of money and markets as potentially disruptive of a system based on property in land and the military force needed to keep it. In 1800 only about 1 in 40 people lived in towns around the world and the rest worked the land. Almost all the available energy came from plants and animals or from human beings fed by plants and animals. Society was founded on food and its engine was agriculture. Water-borne trade was an essential part of agrarian civilization and occasionally it spawned powerful maritime city-states. But the military aristocracies abominated trade and sought to extinguish its social power whenever it became a threat.

Aristotle, tutor to Alexander the Great, used the word ‘economy’ to express the intellectual ascendancy of the military agrarian complex. He located economic order in ‘household management’, by which he meant the drive to self-sufficiency of Great Houses in the countryside, with their slaves, livestock, granaries, vineyards and olive groves. He identified trade with profit-making, an individualistic anti-social attitude which should be kept at the margins of society proper and never allowed to undermine its natural order. Even in 19th century Britain, Jane Austen could use the word ‘economist’ to refer to a female domestic manager in this sense. Aristotle’s followers, medieval scholastics such as Thomas Aquinas, elaborated a theory of ‘natural economy’ whereby, according to God’s plan, the bulk of people laboured in agriculture to put food on the table.

In order to keep landed property safe from contamination by trade, money and markets were often left to be run by despised ethnic minorities, like the Jews in medieval Europe or the Chinese in colonial Asia, who were excluded from land ownership and political influence. Yet still the courts found themselves indebted to the merchants and bankers who paid for their wars and luxuries. A German proverb said “City air makes you free” and, over time, Europe’s urban economy (for which a number of labels exist — commerce, the middle classes, civil society, the bourgeoisie, early capitalism, the mercantile system — began to assert itself against the political power of landed property. They launched democratic revolutions, found in political economy intellectual justification for giving the market priority over the land and finally played what looked like the winning card — the industrial revolution. But machine production centralized the economy in rapidly growing cities whose workers and gangs now posed another kind of political threat. So the capitalists jumped into bed with their traditional enemies, the landed aristocracy, and between them they gave us the social form we all live by today — ‘state capitalism’, combining the old regime’s main instrument of rule with big money’s control of the market.

This historic compromise needed an ideology and it found one in nationalism. Nature, native and nation are all from the same Latin root, meaning ‘to be born’. With the French revolution spawning popular insurrections and British machine industry destroying traditional crafts everywhere, there was clearly widespread support for keeping change in check, by returning in spirit to an idealized version of the agricultural way of life. The nation-state provided a vehicle for this social and cultural reaction: urban intellectuals located the nation’s soul in the timeless customs of a peasantry living close to nature; and they harnessed that soul to the demand for a state capable of expressing the cultural unity of a people living together in their own territory. If the pace of modern change was too great or seemed to be imposed from outside, retreat into national insularity stopped the world for a while, allowing for the possibility of rejoining it on more favourable terms later. In the twentieth century, thanks to two world wars and an anti-colonial revolution, world society as a whole was reconstituted as a system of nation-states. But in the last three decades, transnational forces of various kinds, not least the rising tide of money flows, have begun to erode national self-sufficiency. So that the world is now split into three camps: those who would shore up the nation-state to resist globalization; advocates of regional federations like the European Union; and the globalizers, from the World Bank and Macdonalds to the World Social Forum..

At first I thought ‘organic’ was Greek for the Latin ‘natural’ — certainly the French equivalent, biologique, is just that. But, on closer inspection, it turns out not to be a synonym for ‘natural’, although it shares enough of the cultural baggage associated with the ‘nation’. The idea of an ‘organ’ is more interesting than simply the birth of life or genetics. It is an instrument, a way of getting something done. [2] Its prime connotation is ‘work’, as in ‘energy’. From there it is a body-part that does a particular job to keep the whole body going. And this is the prime referent of ‘organic’, affecting the organs of the body. But now, because of the rise of organic agriculture, it also means ‘free from synthetic fertilizers, pesticides or hormone injections’ and definitely excludes ‘genetically modified organisms’. The word’s poetry reflects its metaphoric extensions — ‘simple, healthy, close to nature’; ‘having the properties of living organisms’; ‘interconnected’; ‘constituting an integral part of a whole, fundamental’. And this is how ‘organic’ is linked to ‘organize’ — ‘to put together in an orderly, functional, structured whole’.

One thing we do know is that money and markets as presently constituted do not lend order to the world in this organic sense. Indeed, many people feel that the world is running out of control, that we are exposed to ungovernable risks. It is quite reasonable that such feelings should find expression in a concern about our food. In a way, though, organic agriculture fills a niche in human culture that the nation-state once did and perhaps still does for many — a desire, conscious or not, to anchor a runaway world in the timeless values of a simpler life. The big question is where to channel the political effort to bring such a condition about. We have seen that the economy was once located in the house and then in the city, before national monopolies became normal for a time. Humanity is now caught between the declining ability of nation-states to control their economies and a world market for which institutions capable of administering social justice in the interests of all participants do not yet exist. No wonder that, faced with their own economic vulnerability and escalating inequality everywhere, many people turn inwards to the possibility of restoring a measure of local control over their lives.

But agriculture is a contradictory basis for such a move in that, ever since its invention 10,000 years ago, it has been founded on producing the conditions under which we extract food from nature. Agriculture is perhaps best thought of as a system of food production in which the growth of plants and animals gradually came within the control of human beings. Human work was progressively substituted for natural processes of reproduction. By settling down in one place, human communities were obliged to protect animals and plants from threats to their well-being. The resulting pattern of irrigation, pest-scaring, breeding and weeding involved an intensification of labour inputs with diminishing returns. That is, people had to work harder for proportionately less reward. This logic of development through intensification of labour led to society becoming polarized between the powerful beneficiaries of this system and those who did most of the work, thereby reducing the bulk of the population to a life of coercion and servitude.

The machine revolution introduced the possibility of releasing us all from the drudgery of village life, even if its immediate consequence was to make matters even worse for many workers. Increased resort to mechanical converters of inanimate energy did reverse the direction of the agricultural regime. Now human beings were able to produce much more for less work; more abundant means have been generated with less back-breaking toil. It is hardly surprising that peasants worldwide have voted with their feet to join the life of greater freedom afforded by machine production in cities. At first, mechanization was almost exclusively an urban phenomenon and slow to penetrate agriculture. Only since the second world war have machines reorganized agriculture in some parts of the world. The pursuit of human freedom, the idea that society is set on a course of material improvement, the rise of modern subjectivity itself — all this is reinforced by the substitution of inanimate energy sources for human labour.

The last half-century has seen a radical improvement in the global food supply, largely by adding machines to the long-established practice s of human intervention in natural processes. Machines today run on oil, but that wasn’t enough for the petro-chemical industry. The Green Revolution came out of Rockefeller-funded research into ways of making Third World agriculture dependent on oil as fertilizer. Now the bio-chemicals corporations are patenting GMOs in order to tie farmers to their brand of pesticide and seeds. The ecological threat of a hi-tech agriculture driven by financial considerations has been well-advertised. Beyond that, the aggressive privatization strategies of the leading corporations undermine one of the key planks of the cultural commons — our right to borrow the means of growing food from each other. The fact that many still go hungry, despite the increased supply of food, is a result of the organization of distribution, not of the machine revolution in agriculture as such. Somehow the benefits of mechanization have to be diffused without the abuses.

Faced with what often seems a runaway world, where remote forces threaten to overwhelm our fragile claims to identity, the idea that natural things are good for us finds fertile ground, especially when it comes to food. Of course, after 10,000 years of domestication, the idea of something being natural is highly relative. An appeal to nature was already incorporated into nationalism as a sort of reaction to the speed of modern change. The current wave of resistance to GMOs has echoes of this rejection of machine civilization. Nevertheless, organic agriculture can legitimately aim to reduce the excesses and risks of hi-tech production and, as the existence of this federation shows, it may also support a grassroots democratic politics that is ‘organic’ in the sense of trying to integrate the parts of our common livelihood at several levels of society from the local to the global, extending the goal of self-sufficiency beyond and below the nation-state.

Global food politics

A recent New York Times OpEd piece claimed that the failure of the Cancun talks gave an enormous boost to terrorism just for the sake of lining the pockets of some US cotton-growers. The author said that Third World producers were being excluded by American and European subsidies to agriculture from selling to the West. This echoes the World Bank’s emphasis on exports to the rich countries as the solution to underdevelopment. But what matters more to poor farmers is being priced out of their own home markets by the dumping of cheap subsidized food there. This is the problem of development: how to get exchange going between producers and consumers in the city and countryside when cheap imports from abroad can so easily undercut this trade.

According to classical thinkers, development starts, if at all, in a rural world dominated by agriculture. The economy becomes more differentiated with the growth of cities and commerce activates exchange between the two. So why is it so difficult today to bring commerce and division of labour to the poor countries of our world? After all, in the 20th century, even the most backward regions experienced massive urban growth. Why would it take nothing less than a world revolution, according to the Caribbean economist, Arthur Lewis, for poor countries to be able to build up their home market through local rural-urban exchange?

We stand poised, as I have said, between agrarian civilization and the machine revolution. For 5,000 years, the Eurasian land mass was dominated by urban elites ruling agricultural societies. In the last 200 years, the human population has increased six times and the rate of growth of energy production has been double that of the population. Many human beings work less hard, eat better and live longer today as a result. Whereas about 97% of the world’s people lived under rural conditions in 1800, half of humanity lives in cities today. This hectic disengagement from the soil as the chief object of work and source of life was made possible by machines, converters of inanimate energy for useful purposes. In the process, humanity has come together as a single social network, mainly as markets on which everyone’s livelihood now depends in some degree. Increased human connection has gone hand in hand with escalating inequality, as we all know. The unequal institutions of agrarian civilization are still with us. Consider what happened to all the wealth siphoned off as taxes by western states since the second world war, the largest concentrations of money in history. It went on subsidizing food supplies and armaments, the priorities of the bully through the ages, certainly not those of the urban consumers who paid the taxes. No, we have never been modern. We are just primitives who stumbled recently into a machine revolution and cannot figure out how to get beyond the inequality of a society built on agriculture. This is why agriculture must lie at the core of any attempt to bring about general economic development and world peace.

Sir James Steuart’s brand of economics is called ‘mercantilism’ because he assumed that national commercial interests come before free trade as such. Steuart observed in the mid-18th century that national economies prospered under a regime of high food prices. These stimulate the bulk of producers, the farmers, to realize a portion of their output as commodities. They need a market of local consumers, protected from cheap imports, and the money they earn will be spent on the products of local industries, provided that they too have some respite from foreign competition, so that they can afford the relatively high costs imposed by local food prices and by their own inexperience. When the infant commodity-producing sectors grew stronger, they could be exposed to the downward spiral of prices and costs that Adam Smith favoured. Then the cry would legitimately be for low food prices, reducing the cost of local wage labour and enhancing the competitiveness of some firms in world markets. This transition is very hard to achieve; but it begins with high agricultural prices.

Classical liberalism downplayed the protectionist role of states, preferring a system of free trade that encouraged each country to specialize according to its comparative advantage. For a century after the victory of the free trade movement, Europe — and especially Britain — was fed by the temperate lands of new settlement. But the second world war interrupted Atlantic sea lanes and devastated the granaries of the East. Starvation was commonplace during and after the war. When the Western Europeans began to form an economic and political union, regional food security came first on the agenda. The Common Agricultural Policy has notoriously absorbed the bulk of the European budget ever since. Subsidized food surpluses were augmented by the coming at last of the machine revolution to agriculture — not just mechanization, but pesticides and genetic engineering, culminating in the notorious GMOs. What had still been largely a peasant activity in 1945 now became a hi-tech industry combining large amounts of capital with a dwindling, but highly productive labour force.

Whether sold or donated, cheap food from the West has repeatedly frustrated the development of commercial agriculture in poor countries by pricing local farmers out of the market. Third world urbanization since the second world war now offers an opportunity for local commercial food producers. All that is needed is a temporary regime of high agricultural prices for a classical rural-urban exchange to occur. But food is already available from overseas at giveaway prices. The governments are weak and dependent on foreign creditors, so they have no chance to play the benevolent far-sighted role envisaged by Steuart. They cannot protect their own farmers because Western farmers are so heavily protected by their own tax-rich states. All of this was made obvious at the World Trade Organization meeting in Cancun. There is a great lie at the heart of modern politics. We live in self-proclaimed democracies where all are equally free; and we are committed to these principles on a universal basis. Yet we must justify granting some people inferior rights; otherwise functional economic inequalities would be threatened. This double-think is enshrined at the heart of the modern nation-state. Nationalism is racism without the pretension to being as systematic or global. As a result, western farmers and agriculture more generally carry a political weight far beyond their contemporary economic importance. This prevents a global solution to food markets.

World markets for food constitute the main obstacle to the development of poor countries. The farmers of these countries need some measure of protection so that a regime of higher producer prices might be established, without substantially increasing costs to consumers and non-agricultural producers. Clearly world markets have to be radically reorganized in the interests of the poor. Ideally the subsidies made to western farmers by tax-rich states should be diverted to the governments of poor countries for similar purposes. Why ever would the world’s powers do that? Another deflation like the 1930s might concentrate minds. Then fear of violence and mass emigration from poor countries might persuade the rich that something drastic had to be done to improve their economies back home. If international movement were made a human right, the rich countries could no longer rely on the power of their states to keep the others out.

Humanity’s inability to solve the problem of development is due to a nationalism that divides us into so many competing tribes. This is now being eroded by globalization. Territorial states will persist as building blocks of world society; but their powers ought to flow upwards into global and regional federations and downwards to local and more diffuse associations. Nor is it good enough to denigrate capitalism as such. The production of cheap commodities by profit-making firms is intrinsic to economic progress. The markets, transport and communication systems on which we depend cannot function without them. The classical liberal revolutions against the old regime were fueled by the bourgeoisie and some capitalists will play a similar role in future. If all those excluded from the digital revolution are to join, existing firms will be needed to develop the required infrastructure. We cannot afford to be anti-capitalist any more than we can do without states at present. Even less should we turn against market s and money in blind imitation of the natural theology of the middle ages.

Faced with what often seems a runaway world, where remote forces threaten to overwhelm our fragile claims to identity, the idea that natural things are good for us finds fertile ground, especially when it comes to food. Of course, after 10,000 years of domestication, the idea of something being natural is highly relative. The appeal to nature was already incorporated into nationalism as a sort of reaction to the speed of modern change. The current wave of resistance to GMOs has echoes of this rejection of machine civilization. Nevertheless, my arguments find echoes in the movement to promote organic agriculture. It can provide a measure of local protection from global producers; it is often small-scale and more compatible with existing peasant practice; it avoids the excesses and risks of hi-tech production; and, as the existence of an international association shows, it may support a grassroots democratic politics. We have seen the emergence of a new coalition of poorer countries at Cancun; but if global economic inequality is to be tackled seriously, it will take a broad-based mobilization of popular democratic interests everywhere. There are several precedents for such an international movement in the history of struggles against inequality — the abolition of slavery, the anti-colonial revolution and the anti-apartheid movement, to name only the most successful examples. If the world’s middle classes embrace organic food out of concern for their own health and security, poor farmers will gain an important ally in their struggle for economic equality at the global level.

Only a world revolution can begin to address the common interests of producers and consumers, urban and rural areas, rich and poor. But would-be revolutionaries first have to decide which is the greater enemy of human progress, the persisting legacy of agrarian civilization or a capitalism built on machines. State capitalism is a hybrid of both. To target one element while turning a blind eye to the other is a recipe for political failure in the long run. State socialism in the twentieth century tried to outlaw markets, with ruinous consequences. Now the neo-liberals, in the name of universal private property and free trade, promote the interests of the strong over the weak by emasculating the latter’s states. If we want a more democratic and equal world, we need a more comprehensive view of the problems facing humanity as a whole.

Towards economic democracy

It is vital to have a global vision, but we all come from somewhere in particular and have smaller problems to solve. Now I want to look at a type of initiative that aims to build economic democracy from the bottom up, exchange circuits organized through community currencies of which the most widespread form is called LETS. [3] The idea of LETS from the beginning has been to foster exchange within local communities. Conventional money is issued by an authority in limited supply to assure that it is generally accepted as valuable in itself, no matter who has it. Such money comes and goes, in and out and through communities. Money issued by people goes round and round, within the community of its users, because it has no value beyond the ongoing exchange relationships that it supports. It stays in the community. These different forms of money sustain widely different types of economy. In one case, economic behaviour is essentially competitive, in the other essentially collaborative. One money encourages people to act exclusively, the other inclusively.

Community currencies are thus a form of money issued by people themselves with no mediation of central authorities. Any group or network may constitute itself as a community of exchange with its own unit of account, thereby bringing a form of direct democracy to economic life. This movement to reform the character of money is very relevant to organic agriculture, especially since its goals are broadly similar — to integrate production and consumption in more accountable ways; to help people take responsibility for their own economic actions; to avoid the reckless inequality that is built into capitalist markets and national money. Above all, the two share the ‘organic’ principle in its extended sense of putting things together within functional wholes; and both privilege the local at present, although virtual association at distance is a growing possibility for each.

Because we are stranded between national and world society, we hear a lot about ‘communities’ these days. If the state is society centralized as a single agent, ‘community’ is society conceived of as people sharing any common purpose. By definition, society is singular in the first instance and plural in the second. To invoke ‘community’ may amount to no more than a vague sense of shared belonging. There are communities of place, political communities, communities of interest and imagined communities. The nation-state succeeded brilliantly by unifying all these attributes of community and making itself the sole representative of society. It is hard to avoid unconsciously repeating this recipe whenever we try to do something different. The model lies deep within each of us. The same applies to new forms of money. We are beset on all sides by the innumerable claims of community. Most of these are just ideas and ideas are cheap and plentiful. What communities do really matters and, when they do something concrete, they force their members to allocate scarce time to some practical ends rather than others.

I envisage a world of countless communities, making associations among themselves for a variety of purposes, but always with the aim of promoting the common good of their members. It is vital that the political and cultural purposes of humanity should also be reflected in their economic organization. So how might the individual and collective purposes of ordinary people endowed with the right of free association be reflected in their money instruments? We live in an age of dinosaurs, states and corporations waxing fat on conventional money, and we cannot expect a meteorite to wipe them out soon. Community currencies, the little furry mammals of our world, as yet live only in the cracks left by the dinosaurs, so that we are talking about a “mice in the basement” strategy that at best constitutes an experimental ground for evolutionary success some time in the future. Moreover, the vast majority of these experiments have been local so far, leaving their application to international trade unproven. But we have hardly had time yet to find out how virtual communities form through the internet might benefit from the principles embodied in something like LETS.

There are many problems with making community currencies work. Their principles are simple and general enough, but inserting them into societies made up of existing people and institutions is always complicated. National monopolies of money still have a grip on our minds and behaviour. The organization of money as capital has grown in strength through the last several centuries. Beyond that, the conventional money form has an institutional logic that has been around for thousands of years, ever since agricultural societies invented cities and states. Shifting popular attitudes to money is difficult. A conflict is building up between large corporations who aggressively assert their own private property rights at the expense of those who would defend the cultural commons. Money, long the main source of exclusive private property, should also be seen as a part of the commons to which we all have the right of open access. The movement from national to corporate power in a context of digital revolution thus opens up a space for people to fight back through organizing exchange and money themselves.

The idea of people making their own money when liquidity fails is an old one. There are numerous historical antecedents for community currencies. These include instruments of credit in the pre-industrial states of Africa, Asia and the Islamic world, such as the hawala system; utopian communities in the 19th century; the Social Credit movement in North America during the Great Depression; and European experiments, such as Gesell’s stamp scrip in the same period. The non-western cases reveal institutions of considerable durability, whereas the modern western examples have generally been short-lived. How can today’s community currencies emulate the strengths and avoid the weaknesses of these antecedents?

Any network can constitute itself as a LETS community by nominating a currency and recording all transactions through a central register. The totality of transactions at any time sums to zero, since the circuit is closed. Anyone can get an account which starts at zero — I buy, I sell, giving rise to a negative or positive balance in my account at different times; when I buy, I make a commitment to the network that I am good for the money I have just issued. The loss of individual members with negative balances does not directly affect the ability of the others to trade, as it does when the supply from a single issuer dries up. The currency itself is simply a virtual measure. It has no commodity value, therefore no price (interest), no reason to become scarce nor to be hoarded. Recent developments, especially in the use of information technologies, have made community currencies a fast, cheap and effective means of carrying out normal commerce. Smart cards registering transactions in up to fifteen currencies, linking businesses and non-profit organizations as well as individuals, allow these circuits to become partially integrated into the market economy, opening the way for the banks to handle LETS business (although none has yet done so).

Community currencies vary in the degree of their integration into the national economy. Other sources of variation include: the monetary measure (whether based on the national currency or on hours of work, for example); the degree of reliance on free labour or government grants; digital or material records of payment; involvement of businesses or exchange of services between individuals only; local or virtual association; forms of leadership and participation; and so on. Many LETS associations are reluctant to band together in case their autonomy is compromised. They form boards and committees, are insular and clubby, often only for the poor. Such institutions are usually time-consuming and dogmatic, with a bias against business and for public grants. Their aim appears to be to get away into a separate world of their own, however small. I favour integration into the national and ultimately the world economy. But this is the stuff of schism in the movement. It is fatal for community currencies to think of each circuit as a stand-alone project. In future, many such currencies, reflecting diverse associations and interests, will collaborate and compete for the public’s loyalty. And food-based currencies would have particular advantages in such a context.

Let us assume that a number of city consumers would like to buy locally grown organic produce and a number of farmers in the countryside nearby who would like to satisfy that demand. There might be an organic food market in a suburb at weekends or some shops and supermarkets might be persuaded to sell the produce, even if it is more expensive. City-dwellers could spend time on organic farms and pay for their keep with work. All of this is unpredictable and costly to organize. A community food currency would supplement normal cash transactions, but in many cases, given unavoidable costs in national currency, prices would be calculated as some proportion of the two. Thus farmers could pay for seasonal labour, transport, warehousing etc partly or wholly in the food currency. Distribution outlets could likewise charge a combination of the two, varying the proportion according to times of peak and slow demand. Consumers could offer not only farm labour in return, but their own specialist services to be exchanged within the circuit between themselves, not necessarily for food.

People would join other community currencies reflecting their various interests — one for music buffs, another for sports fans, yet another for the congregation of a church. Neighbourhoods could exchange highly localized services like gardening or baby-sitting. These associations would wax and wane in relation to their internal dynamics and their co-evolution with other circuits. Individuals could combine membership of several on one smart-card and switch their purchases between them, as we now do with credit cards. A community currency based on food and giving expression to organic values in the wider sense — the integration of production and consumption, city and countryside, protection from unknowable market forces — would soon be a popular staple of the alternative economy. We eat food regularly; food is an important symbol of other values; strengthening the home market for food has economic virtue; and so on.

How might such a food currency develop in the direction of international trade with the objective of supporting higher prices in developing countries? First, there is less incentive when using community currencies to buy cheap and sell dear, since the money itself is not scarce. Second, to combat adverse terms of trade based on average labour costs in rich and poor countries, a “fair trade” community could set up international exchange with values weighted to compensate for differential labour costs. Transnational corporations are unlikely to be attracted by this model, but a coalition of ethical consumers in the first world might be. Third, even if prices remain the same and are measured in YE$ currencies, at least the value generated by community trade does not leak out of the network. The technology for such trading systems is already available, but implementation must await recognition of their potential, perhaps by some of you here.

My arguments are not just theoretical. LETS ‘Q’ in Japan is an online global-local or ‘glocal’ network which already carries out some limited international trade. So far this has been restricted to exchange of information goods such as Japanese books and videos (including ‘mangas’) between participants at home and abroad, since they are expensive in London and Paris. There is a plan, unrealized as yet, for fair trade in organic bananas planted in Negros between Japan and the Philippines. Most of Japan’s bananas are grown and imported by Delmonte; and the Kyusyu co-operative wants to import organic bananas from Negros, even though the price is relatively high. A small town in Hokkaido called Shimokawa has organized a LETS network whose money is called the ‘Fore’ (from the forest, its main industry). Its leader runs an emu farm; he also imports arts and crafts from Mongolia and sells them in Fores to members of the network as part of a fair trade initiative. These are admittedly small beginnings. But gradually LETS principles are becoming more widely known and implemented.

The case for community currencies is unassailable. They add to purchasing power at no or low cost. The value generated in exchange stays in the community. The circuit gives definition to abstract notions of community through everyday economic transactions. Community currencies teach people a more responsible attitude to the wider meanings of economic life. Learning to manage credit and debt in a new way shows members that the money system they know is relative, not absolute. The rules of each circuit are customized by its members to reflect what they want from it. Community currencies are thus practical exercises in local economic democracy and a great source of political education, not just about money. They belong to a family of popular democratic forms that includes organic agriculture movements; and this holds out hope that the principles they embody separately may come together as part of a pluralistic but integrated drive for a more equal world.

[1] Senior Research Fellow, The Arkleton Institute for Rural Development Research, University of Aberdeen, Scotland. From January 2004, Senior Lecturer in Anthropology, Goldsmiths College, University of London Email: Website: (see while this is being refurbished).

[2] Most definitions are taken from The American Heritage Dictionary of the English Language, third edition, 1996, Houghton Mifflin, New York. It is the most recent new English dictionary (1970). The world uses American English, of course, not the Victorian version mummified in the Oxford English Dictionary (1880s).

[3] LETS is sometimes described as an acronym for Local Exchange and Trading Systems, but in the original version, invented by Michael Linton in British Columbia in 1982, LETS meant ‘Let’s do it’. I am grateful for all I have learned from Michael Linton and his associate Ernie Yacub whose work can be visited at The most direct way to learn how the system works is to try the online game, LETSPlay, at For a comprehensive review of community currencies, see Thomas Greco Money: creating and understanding alternatives to legal tender, Chelsea Green, Burlington VT, 2001. A good description of how various kinds of currencies work — fiat money, mutual credit, LETS, Ithaca hours etc — may be found at I thank Makoto Nishibe, originator of the LETS ‘Q’ virtual trading network in Japan, for the information on international trade using community currencies there.

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