Monday, November 1, 2010

The art of finance

Money. Cash, moolah, dough, readies, greenbacks, dosh. Whatever you call it, you can't get away from it. Most of us like to have it, of course, but we also know that it's a dangerous drug. "Money," as the saying goes, "is the root of all evil."

With the financial crisis and executive greed currently giving money a particularly bad name, we were interested to hear of a recent experiment in Amsterdam in the Netherlands which is seeking to provide a new and more positive way of thinking about the value of money. It's called the Bijlmer Euro, named after a much maligned quarter of the city called de Bijlmer which is home to many of Amsterdam's many immigrant communities and a good proportion of its less successful examles of high rise urban planning.

The Bijlmer Euro is a local currency, which for those of you that have not come across them before, are specially designed notes or other form of exchange certificate that are used within a specific locality to enhance local social and economic systems.

Local currencies like the Bijlmer Euro operate as exchange tools giving people the opportunity to buy and sell goods and services among a particular community without resorting to the usual pounds, euros or dollars. Why would communities want to do this? Well there are a whole lot of reasons, which vary depending on the local currency concerned. But some of the more common reasons are that they are help stimulate the local economy (because they can only be used locally), they can encourage people to ‘buy local’ and get to know local providers, or they can be part of an attempt to reduce reliance on existing financial systems and actors such as banks and credit card providers.

There are thousands of local currencies out there, including in our own home town of Toronto, where the Toronto Dollar operates around the St Laurence Market community. But what makes the Bijlmer Euro so interesting is that the whole project was designed by an artist, namely Christian Nold, who is mainly known for his 'emotional cartographies' project which saw him using lie detector technology and Google Earth to create user-generated emotion-based maps of neighbourhoods and towns. Interesting stuff. So while in Amsterdam recently, we spoke to Nold about the Bijlmer Euro and what he's hoping to achieve.

Probably the most interesting aspect of the whole project is that Nold has designed it so that you can actually see how the money is circulating in the local economy. The Bijlmer Euro notes are regular Euros with a special chip (recycled from used public transport tickets) overlaid on them which means that everytime a note is used, the transaction is tracked. In this way it is possible to trace the networks of exchange that are taking place among the participants. You can see a live visualization on the project website. This, Nold says, is especially important for an area like de Bijlmer which is most commonly presented as a 'problem area'. So his central objective was to help people see the Bijlmer also as a thriving economic network. "People described it to me as the Dutch Bronx" he says, "but with this you can replace that with a vision that gets you a little bit closer to the NASDAQ."

Of course, to get people involved in the whole project, it needed more tangible aspects that this. So users of the notes get discounts at local stores,and shop keepers get to make new connections with residents and hopefully stop leakage of economic value from the local economy. There are also some fun touches included such as the ability to put electronic messages on the notes for people to read, and a bright yellow, bicycle-powered 'mobile bank' (as shown above) where you can get the notes and input your messages. Even these though have a deeper purpose, as Nold explains:
"Money is an economic tool, but I think it is also very much a social tool. Banknotes are this weird thing that doesn’t really belong to us, but is really a social medium that moves between people. I think that having messages on them is a funny way of reclaiming the money in some way and making it personal."
Looking at it this way, you can see how there's more to money than meets the eye. Talking to Nold - whose personal explanation for the project takes in everything from the financial meltdown, baffled economists, the Falun Gong, transition towns, the end of capitalism, and the Iranian 'Green Revolution' - makes you look at the spare change in your pocket in ways that you really haven't considered before. However, whether the residents in de Bijlmer have seen this as anything more than a fun way to save a few cents remains to be seen. But Nold certainly thinks that a number of people have gotten sufficiently excited about the initiative that it may now go into a new phase now that the initial experiment is over. As he says:

"At the start of the project lots of people were telling us this is impossible, this is totally illegal, you can’t do it. But it’s possible, it’s doable and we’ve just done it. We have almost 2000 notes in circulation... I’m not sure it’s having huge mass appeal – we’re not getting tens of thousands of people using it – but we’re certainly getting a committed group of people who are seeing the value of it. The next really big step is the continuity of it."
And that really is where we'll see if this turns out to be anything more than an interesting experiment. Having now discovered who's spending what and where, Nold has been turning his thoughts to the large employers in the neighbourhood, especially the major banks, many of whom have their headquarters nearby, and whose staff have been using the Bijlmer Euros. Perhaps they can be persuaded to have a rethink about the social and economic value of money in the communities that border their offices.

We think it would be a fascinating development to have a major financial player involved in supporting a alternative currency like this in Amsterdam. And if they don't get involved, it looks like Nold will be taking things in new directions. He's already planning a book about the project to serve as a model for others, and is even plotting to set up an alternative financial organization to support low cost overseas remittances."We want to become a bank," he says boldly, "to see if we can get rid of Western Union." Finance, it seems, is the new art.


  1. Fascinating piece - I was talking to someone the other day about Nicholas Kaldor's advocacy for a global currency, this seems to be th opposite!

  2. In a way the two are related Lanterne. The more currencies go transnational (as with the Euro), the more people seek some local connection with alternative currencies. So a global currency would probably actually give more impetus to the local currency movement

  3. I think you're probably right - they can perhaps happily co-exist. I am just back from a trip to Detroit which is a city that might be ripe for the local currency treatment - it seems that conventional financial architecture is irrelevant for the inhabitants of an inner city who have been abandoned by the powers that be. Hence, the emergence of small scale farming ventures on vacant plots - the only supermarket downtown is the low end Aldi chain, so locals are having to take matters into their own hands.


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