[deck]The Corvallis HOURS Exchange aims to use its alternative currency to build community and invest in local businesses. But will locals buy into a currency that isn’t tied to greenbacks?[/deck]
Dylan Schwartz first discovered the instability of the U.S. dollar while researching The Great Depression for a project in high school.
“The problem was the intentional and willful manipulation of the nation’s money supply,” says Schwartz. “The most shocking thing to me was that at the time, we seemed to be setting up to repeat this same cycle.”
This realization attracted him to local currencies, leading him to discover the HOURS Exchange. Located in Corvallis, Oregon, the organization facilitates the distribution of a local currency separate from the dollar. Unlike other local currencies, HOURS are not backed by the dollar and cannot be converted easily into the national currency. But, if conversion is needed, each “one-HOUR” note is about ten dollars. Being able to provide a service to other members is the only way to gain membership, which often turns hobbies into sources of income for the members.
The HOURS Exchange founder, Christina Calkins, was first introduced to the idea of local currency while vacationing in Hawaii. She came across an islander who was part of a local currency network. He explained that all of the money invested in that currency remained on the island. Calkins was intrigued and decided to bring that concept from the island community to Corvallis.
“It inspired me,” Calkins says of the currency network she encountered in Hawaii. It was simple, but he put in in my hands of how it could be done, the nuts and bolts, and how to discourage counterfeiting. It seemed so basic an idea.”
Now, the HOURS Exchange is run by Cheryl Good, whose favorite parts of the program are supporting local businesses and developing relationships with other members. The HOURS Exchange offers an alternative to the standard US economic system that no one had questioned because, seemingly, it was the only option. However, local currencies provide aspects that enrich communities in ways the dollar cannot. Good explains that HOURS are guaranteed to stay local and to circulate many times within that specific economy.
To spend HOURS, a participant must have a conversation with the recipient, tell them what good or service is wanted, find out how much of the cost they are willing to accept in hours, and determine whether or not they want something in return. The unique characteristic of Corvallis’ local currency is the person-to-person communication that often blooms into lasting friendships.
To promote the growth of the HOURS Exchange and the relationships it builds, Good partnered with the Corvallis Independent Business Alliance, an organization founded in 2002 that promotes small local businesses. The partnership was natural as it follows the Hours Exchange requirement of limiting purchases to local goods or services.
The HOURS Exchange is also contemplating a partnership with the First Alternative Food Co-op in Corvallis in the hopes of circulating more HOURS notes. Like the dollar, anyone can use the HOURS currency regardless of membership. Being able to purchase locally-harvested eggs and vegetables at the co-op would provide members with more uses for the currency.
But such partnerships do have potential pitfalls. For example, if the co-op pays its employees partly in HOURS, employees might be inclined to turn around and spend those notes on groceries from the co-op rather than continuing the trading process. At that point, the HOURS would devolve from a local currency into an internal currency for the co-op, stifling business for some of HOURS’ original members. Good says such a change “would take away all the other possible little food trades that are going on.”
“If I can go to the co-op and buy eggs, I probably won’t call [an HOURS Exchange member] and buy eggs,” says Good. “It’s just a convenience thing.”
The HOURS Exchange wants to share and expand their wholesome image, but that image is hindering their growth due to the skepticism around investing in an entirely separate currency.
“I found that many people are completely confounded by the idea of any currency that isn’t a greenback,” says Calkins. “They have never thought there could be anything else, so it is hard for them to imagine. It gets discredited.”
Because of this uncertainty, Good has seen little growth in her membership. For the last six years, the network has been stuck at a membership plateau. HOURS Exchange has been floating around one hundred members and currently has the equivalent HOURS of a mere $1,800 in circulation. To battle its stunted member numbers, Good has network growth of the network her top priority. Last April at a committee meeting, board members set an annual goal of 300. Good’s ultimate goal is to reach 1 percent of the population. In Corvallis, that would be about 500 members.
“If 1 percent of the population is using local currency, you’ve kind of hit a critical mass,” Good says. “It’s really hard for people to buy local, so even committing only 1 percent of your income annually to be spent in HOURS is a big push for people.”
However, ten months later, no progress has been made towards her membership goal.
Dr. Loren Gatch, a political science professor at the University of Central Oklahoma who studies local currencies, has a theory on why the HOURS Exchange and other currencies like it have struggled with expansion.
“I think that complementary currencies are a good idea, but probably have limited impact,” Dr. Gatch says. “The HOURS model never worked very well, since it’s always difficult translating the value of HOURS-type currency into US dollars.”
Dr. Ed Collom, a professor of sociology at Southern Maine University, says that while local currencies are increasing in general popularity, membership plateau is common.
“It is clear that the movement is growing if you consider all forms,” says Dr. Collom. “The Corvallis one is based on the Ithaca Hour model, and those forms may be in decline. About 80 percent of them had stopped operating. However, time banks and discount scrip systems are definitely growing in the down economy.”
Schwartz believes local currency can shield wealth from the federal government, but many of the users are thinking on a smaller scale when investing in the HOURS Exchange. For Good, the exchange took her hobby of sewing and transformed it into a lucrative trade. Other members gain peace of mind knowing they are helping the Corvallis economy grow and providing a sense of community within the network. While an hours exchange model may not be in the cards just yet for Corvallis, the network can continue to nourish other valuable exchanges: those of ideas, communication, and friendship.