The Color of Money


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.

Now in Ithaca for that 100 a year you get covered for 12 categories of everyday emergencies anywhere in the world: broken bones, emergency stitches, and burns. That co-op is an example of how a national health plan could be affordable, non-profit, democratic, and transparent. Every payment that we make to members and every denial of a payment request are listed on the website.

How many other local currency systems are there in the US, and are any of them faring as well as Ithaca's?

There's a very good website maintained by the The E. F. Schumacher Society called They have the best available current count, although more are starting all the time. Probably about 100 local currencies have begun in the US, but only a handful have been sustained. The main reason Ithaca HOURS became so huge while so many others faded is that we had the advantage of a full-time networker, with a capital N: me. I was constantly promoting, facilitating and troubleshooting circulation of the money, constantly inviting businesses in. I was the go-to person on the street keeping people excited and united.

How has the recession recast these issues?

As soon as there's a downturn economically people pay more attention to responsible local markets where people are directly taking control. When large governmental and corporate systems fail us, we're less likely to rely on distant legislatures and remote boardrooms. When times are good there's this inclination to enjoy the joyride, to just go shopping, with little attention to where the money comes from or to how the machine works. I think what we do with local currency is put a spotlight on this stuff, and reassure people that they can take control.

Is this the kind of thing that can only work in small, liberal towns like Ithaca? 

In a large city, each neighborhood could have its own currency. You could have currency for different sectors such as health care, transit, housing, and sweat equity credits. I do dream big: poverty to me is not a lack of dollars, it's a lack of networks. Where you have networks of people you have the foundation of trust, which itself is the foundation of money. Every city has professional, religious, agricultural, and educational networks that can be brought together in various combinations to back regional money. I've been giving talks around Philadelphia, and there are a couple neighborhoods now that are about ready to begin.

As for adapting this system to the national-scale, I actually did draft a plan for a national, HOUR-denominated currency, and figured out how to promote it and develop its credibility. It would serve particularly well were there hyper-inflation. When China quits buying our worthless treasury bonds, and has a big enough middle class and enough shopping malls, they won't need us anymore. We will be cast aside and become just another third world nation without sufficient domestic resources. These are long-range considerations requiring us to experiment in regional financial systems.

You are clearly involved in a lot of community efforts. How do you find the energy and motivation?

I prefer to be characterized as a community organizer, I'm proud of it, notwithstanding what Sarah Palin said! I'm often referred to as an activist, and although that's accurate, it suggests someone who's got too much nervous energy to sit down--true, but being regarded as an organizer gives it more dignity. Cities have systems, just as our bodies have systems, and I'm fascinated by the thorough rebuilding of our cities toward balance with nature. I'm motivated particularly by building cities as beautiful as our children are. That to me is the outstanding measure of our success, a national project more majestic, and more fun, than going to war, or even going shopping.