Making Money: New Currency Brings Hope to Debt-Stricken City
Can a new currency help a debt-stricken community get back on its feet? A Hamburg-based theater group is hoping to do just that in the German city of Oberhausen. Locals will be able to earn "coals" through voluntary work and exchange them for goods and services.
All around Europe, governments are cutting back on spending in reaction to the euro crisis. But in one small city in Germany, locals are bucking the trend. Fed up with austerity, they are planning to spend more, not less, money -- and they are making it themselves.
The city of Oberhausen, in the German state of North Rhine-Westphalia, is broke. With debts of 1.83 billion ($2.4 billion) the future of the city, best known internationally as the home town of Paul the psychic octopus, is uncertain. But now a Hamburg theater group has come up with a radical solution to reverse the city's ailing fortunes.
This Friday, at a premiere organized in the town, performers of the Hamburg "Geheimagentur" ("Secret Agency") theater group will launch a new currency for the inhabitants of Oberhausen as part of a performance called "Schwarzbank" ("black bank"). The new money is named the Kohle, literally the German word for coal, but also slang for money and a reference to the city's location in the mining heartland of Germany.
For two weeks, locals will be able to use "coals" to pay for goods and services in over 50 businesses which have agreed to take part in the project. Those wishing to spend the newly issued "coals" can choose from a range of goods and services, including specially developed confectionary treats, tattoos, a new hairstyle, cinema tickets, tours of the town and tickets for a football match.
Residents who want to earn "coals" can do so by engaging in activities which may be considered useful to the community. "We will finance 'unpaid' hours of work," says one member of the group, whose policy is not to have its members identified by name. "People can suggest to us things that they do in their free time, or things that they've always wanted to do but never got the chance." Participants will receive 20 "coals" in return for every act that benefits the community. It's a fair price, considering that most of the goods and services on offer only cost five "coals."
According to organizers of the "Schwarzbank," the aim is not to replace the euro. Instead, the "coal" is intended to complement the existing currency and create a sense of community. "Poverty makes people lonely," says one performer. "It makes one unable to take part in society." The groups hopes that the new currency will promote a "stronger group dynamic."
Money as Performance
But what has theater got to do with money? According to the Geheimagentur group, a lot. "Money is always about performance," explains one member of the group, explaining that money only has a value because people assign significance to a bundle of paper notes. "Every time we spend euros, dollars or yen, we reinforce that belief."
The Geheimagentur has already embraced the theme of money in the past. In 2005, it founded the "Bank of Burning Money" in Frankfurt, Germany's financial center. As part of that project, passers-by received a 5 note on condition that they burn it publicly.
The "Schwarzbank" will operate on completely different principles, however. Instead of burning money, locals will be encouraged to spend as much of it as possible.
But in order to make a new currency work, businesses must agree to accept it. To that end, the performance artists and theatre staff have been going door-to-door to promote the project. Since November of last year, they have been asking local businesses if they are willing to offer goods and services in exchange for "coals." Some 50 businesses that have already confirmed their participation, and more are showing interest every day.
The Geheimagentur group was inspired by a Brazilian model: Residents of Conjunto Palmeira, a former slum in the city of Fortaleza in northeastern Brazil, have been using their own local currency, the "palma," for the last 12 years. The bills, which are issued by a community bank called Banco Palmas, can be used to buy products in participating stores.
Three members of Geheimagentur visited Conjunto Palmeira in January to get an idea of how the system worked. "The slum has become a thriving district," raves one performer from the Hamburg group. Like the "Schwarzbank," this project has its roots in theater. The main office of the community bank is located in a former theater, where money is kept stored in a cloakroom and the bank counters are on the theater stage.
Tough Times Encourage Innovation
As it happens, such community currencies have a long history. They took off during the turbulent times of the Great Depression when communities decided to fight back against soaring inflation and mass unemployment. In 1932, the mayor of Wörgl, a small town in Austria made the bold decision to print a local currency. Despite the fact that unemployment dropped dramatically and investment in the town increased, the currency lasted only 16 months after the Austrian bank complained that it was undermining its power. But the enormous success encouraged many communities around the world to try something similar.
In the last few years -- perhaps as a result of the global financial crisis -- local currencies have been making a comeback. In Massachusetts' Berkshire County, locals have been using "BerkShares" since 2006. The bills feature important local personalities and at present, more than 500 businesses accept them. Those behind the scheme have plans to allow electronic transfers and even to stock ATMs with BerkShares in the future. There are also a number of similar schemes across Germany.
In Oberhausen, residents hope that the "coals" will bring new energy to the town. The initial project will run until the end of March, and a second event on March 31 will take stock of what the currency has achieved. Local businesses, which have joined together in a network, are already planning follow-up activities.
But one thing remains a secret: what the currency, which will be issued in one, five and 10 "coal" notes, will actually look like. That will be revealed at the premiere on Friday night.
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