New group eyes local money, among other ideas, to boost Ojai’s economy
By Cole Bettles, intern
Ojai likes to think of itself as standing apart from the rest of the world. Soon, that list of distinctions could include our own money.
The Ojai Economy Group, recently formed to consider this idea, among others, to stimulate the local economy, admits that creating an additional monetary system is not simple.
But here is the basic idea: in theory, a local bank would sell 100 Ojai bucks for, let’s say, $105. Then the Ojai dollars could be spent at local, participating merchants and upon a purchase, customers will receive a discount set by the retailer.
Next, the retailer could exchange the Ojai bucks back to U.S. dollars. The surplus of the federal currency, at the local bank, would be pumped back into the community, specifically to charitable organizations.
The Ojai Economy Group is projecting that this buck will stimulate economic growth within the community. The stimulus package, like a pebble dropped in the middle of a lake, has little to no effect on small companies and communities that lie far from the epicenter.
Since Ojai is made up of small businesses, members of the community, such as the Ojai Economy Group, are philosophizing and concocting ways to battle the recession from the bottom up; call it the “Trickle Up Theory.” The notion of a new currency is getting mixed reviews.
“Sounds like communism to me,” said an Ojai merchant, who described the idea with abhorrence and consequently requested to remain anonymous.
“This is a terrific idea. Ojai needs to understand the importance of spending money in their own community,” said another anonymous store owner, who happened to be located directly next door to the anti-communist merchant.
After interviewing more than 30 Ojai stores, it was apparent that there is a dynamic array of views regarding adapting this innovative yet ancient system. Passing from store to store was like switching back and forth from MSNBC and Fox News. The store owners, like the members of the community, want more information before they commit to participating.
The Ojai Economy Group is hosting an event from Sept. 25 to 27, and they will discuss the Ojai buck. For more information, visit their web site, ojaieconomy.com.
Creating a new currency is an extremely intricate process. “I would normally say creating a new currency provides a temporary solution to a long-term problem, but that’s because I have mostly studied creating currencies in small countries,” said Pierre Weill, an economics professor at UCLA.
The idea raised a number of questions that the professor had to research and confer with colleagues before providing a solid analysis. After evaluating the idea, he said, “I think this is great. If I own a restaurant, I have two kinds of customers: locals and visitors. The locals are obviously educated about the area and the visitors are not. By providing a discount to your local costumers, you can provide a competitive service, while maintaining the higher price for your visitors.”
In Great Barrington, Mass., citizens created BerkShares, a supplementary currency. “There are currently 2.4 million BerkShares in circulation and at any given point, there are $150,000 that remain in circulation,” said Susan Witt, co-founder of BerkShares. More than 400 businesses formally accept the currency and about 200 merchants informally accept it.
“The currency has created great discussion, but it really isn’t a political issue. You will find Democrats and Republicans supporting the BerkShare,” said Witt. But in Ojai, there was a positive correlation between a person’s political identity and their attitude toward the Ojai buck. “In December, during the financial meltdown, we found a lot of small businesses willing to adapt the BerkShare. During times of economic difficulties, small business get creative,” said Witt. She juxtaposed the dollar to fast food and continued to say, “We call the BerkShares a slow money. Instead of doing everything on the computer, you go down to meet the people at the bank, meet the local citizens selling the item, you have personal conversations.”
There are no legal ramifications to adopting an additional currency. In the United States, during the early 1800s, each bank issued its own currency. To this day, it is a fundamental right to issue an additional currency. Weill said, “Local currencies proved to be an effective way to battle the Great Depression.” Even though we are only experiencing effects from a recession, history shows that creating an Ojai buck could allow Ojai’s economic activity to thrive.