Just after the recession of the 1990s, Paul Glover finished college and returned to his hometown of Ithaca, New York, with one goal in mind: to prove that the environment and the economy could work together. To promote a new way of using money, Glover invented a new paper currency--the Ithaca HOURS. The new bills were imprinted with pictures of waterfalls, lizards, and children, and hundreds of vendors began accepting them in exchange for food, services, and even medical care.
Today, Glover, who teaches urban studies at Temple University in Philadelphia, is involved in a variety of grassroots initiatives: the Philadelphia Orchard Project, a publication called Green Jobs Philly, and the Philadelphia Fund for Ecological Living, to name a few. The Atlantic spoke to him about how he implemented one of his first ideas in Ithaca, and about his far-reaching vision for local currency.
What inspired you to start a local currency in Ithaca?
I wanted people in the region to be able to craft and offer goods and services to the regional market. This helps reduce the great distances at which goods, and even services, are often provided. I wanted people to have more control over money, and thus more control over what money does. I wanted for us to be able to make interest-free loans with our own paper money--which we have, up to $30,000 so far). We've been able to make grants, so far to over 100 community organizations, and to weave local connections that enable us to be more sustainable and self-reliant.
How did you launch the currency and inspire people to start using it?
Without having any background in issuing money, or having any familiarity with any antecedents in private money issue, I began by designing the money, making Xerox samples of it, and waving it at people saying, "This is going to be money, let's trade it with each other! Sign up here!" I just handed them my clipboard. I found a bunch of pioneers willing to try it out, and then launched the money with a local currency newspaper that came out every other month. It ran for eight years, featuring success stories and describing the benefits--immediate, local, long-term, and global.
It was essential to constantly reinforce this message. Otherwise we were just trading pieces of paper with pictures of children, waterfalls, and trolley cars. And that we were doing something more important: we were weaving a regional economy that helped us meet our needs according to our values.
Can you summarize how the Ithaca local currency works in layman's terms? For example, can you only print a certain amount to match the demand? Is one HOUR equivalent to one U.S. dollar? What sorts of things can people buy with it?
Your question reflects my belief that the average person understands economics better than we assume they do. We are trained to be intimidated by the idea, but it's just basic common sense. Those were the kinds of questions I myself asked. It started with asking "How do we do this?" and then taking it from there. It was all just good guessing.
The amount that you print is irrelevant; you can fill a garage or a briefcase with your own paper money. Its credibility is determined by the rate and manner of issuance. The pioneer enrollees each received four Ithaca HOURS. One Ithaca HOUR equals an hour of basic labor, or 10 dollars. So each person got 40 dollars worth of local currency, just for agreeing to try it out. The first edition of the newspaper had a coupon in the back inviting everyone to join the fun.
What was the initial response, and when did it start becoming successful?
In nearly no time at all, we had 400 people. From there it just grew and grew and grew until thousands of people were willing to trade this money with each other. At one point we had over 500 businesses, including the medical center, the public library, banks, movie theatres, bowling alleys, bars, pubs, restaurants, dozens of local farmers, all kinds of healers, and landlords. You could even buy land with Ithaca HOURS. The transit system is now accepting HOURS for part of the monthly pass.
It got to the point where the only thing you couldn't buy with HOURS was health insurance. So in 1997 I started an insurance a co-op. I did not believe--and I think my belief has been born out in recent events--that the insurance companies would ever allow a national single-payer plan in this country like in most of Europe. That meant that those of us who were uninsured would be left out forever. I said well, if everyone would put in 100 dollars each per year we could build assets, and then gradually open the throttle allowing us to cover more and more needs--even build our own member-owned health infrastructure.