CHAPTER SEVEN

MENDOCINO SEED

Reproduced by permission of the artist.

California's North Coast is a beautiful region, frequented by tourists coming up from San Francisco and calendar photographers from across the country. This stretch of coastlands, in between ocean waves and mountain crags, is home to quite a mix of individuals. Dot-com millionaires buy weekend or summer homes on lots adjoining those owned by thirty-year locals. Ageing veterans of hippie communes practising sustainable living share this strip of land with store owners selling to tourists goods imported from further than the tourists themselves have travelled. It is a community of bed-and-breakfast inns, of artists and visionaries, of vineyards and vacant lots. Its very landscape inspires creativity. Its rugged individualistic nature has not, however, guaranteed prosperity.

When friends began telling her that they were moving away because they couldn't afford to live there any more, Jennifer Kreger started talking with others about how they could help struggling individuals and businesses. On February 28, 1999, following a year and a half of planning, a non-profit organisation named Educational Explorations launched Mendocino SEED, short for Self-sufficient Ecological Economic Development.1 Based on the Ithaca HOURs model, it was accepted by 160 members at the kick-off, a number which has since grown to 300 according to its organisers.

Figure 15. Face of half SEED note from Mendocino, California, 1999.

As one of the most recently-started local currency programs in the United States, it seemed an opportunity to see how the latest ideas in the local currency community worked. On the other side of the mountains, another group of activists were planning to launch a similar currency in the next few months to circulate in the Ukiah area, providing a possible opportunity for a comparison of successes based upon factors such as geographic dispersion of members, the influence of the nature and type of businesses, both participating and not, and cultural elements. Many Mendocino residents cross the mountains to Ukiah for at least some of their commerce, where more large brand-name stores can be found. With the towns of Mendocino and Ukiah being only 45 miles apart, major regional effects on cultural elements and community factors would be held constant, allowing specific local differences to be studied.2

SEED's usefulness and activity has been very uneven throughout the Mendocino region. To declare its success overall is to make a very subjective measurement tabulating across numerous communities. This is not uncommon; every program has both stories of success and struggle. A set of anecdotes will not be enough since they may be self-selecting individuals with exceptional or unusual stories to tell. A set of statistics that summarise and compartmentalise data in search of simple numerical results may ignore important aspects that the researcher does not know to look for. Therefore, an examination of Mendocino, first from anecdotal observations and then numerically, is necessary before overall conclusions can be drawn.

Who Accepts SEED?

Certain members of the Mendocino community have found it easiest to use SEED in their daily lives because of their chosen lifestyles. One local biodynamic organic farm has been one of the earliest and largest supporters of the SEED program. One of the farmers told me, "A conventional farm, even a large organic farm relies a lot on outside inputs and would have a hard time probably utilising SEED unless they're quite ingenious."3 These Mendocino farmers, by comparison, are displaying their ingenuity by making their own compost, saving seed from one year's crops to plant the next year, bicycling everywhere, and focusing on self-sufficiency, coincidentally structuring their expenses to require little federal currency. As a result, they've been able to accept 100% SEED for their produce, unlike many individuals who accept payment only partly in SEED out of a need for federal currency to meet their many extra-regional expenses.

One location that accepted payment only partially in SEED was Corners of the Mouth, a natural food store in the town of Mendocino. Susan Hofberg, one of the co-ordinators of SEED and an employee at Corners, told me, "We find it difficult to spend SEED. . . . there aren't enough other businesses to spend the SEED at, and it's hard for a business to go out and get a massage, or to use child care."4 (emphasis hers) Stocking organic and natural foods made Corners a valuable and often-frequented member of the SEED community but also necessitated that it purchase many of its products from outside the Mendocino region to stock the variety of goods its customers want. Being unable to pay many of its suppliers in SEED, they ran into a problem that former SEED organiser Gary Pace alluded to when he talked with me about the effectiveness of SEED. "They basically were getting more than they could deal with, so they would have to limit the amount they would take on certain days or certain periods of time."5 This result is to be expected, explained Larry Sheehy, a member of the core group working on Ukiah HOURs. "From time to time, co-ops and natural food stores and farmers markets tend to be the main places where local currencies are traded, so they naturally accumulate the most."6 When I visited in July 2000, Corners was accepting a quarter SEED per individual per day up to three SEED daily to avoid a serious build-up of SEED. A sensible business decision, this limit was damaging to SEED's reputation and value. One small shopkeeper told me he had ceased to accept SEED because, "The only place that I was spending it was Corners of the Mouth and half the time, they were overloaded and they can't take it any more."7 When surveying Mendocino residents in January and February 2001, I was told by several of them that even Corners, the bastion of SEED acceptance that it had been, had ceased to accept SEED.

The Gallery Bookshop on Main and Kaston in Mendocino doesn't accept SEED. Even though every locally-produced book and card they stock gets sold easily, this represents a very low volume of their sales. The only way they could spend SEED income to avoid having a backlog would be to have the employees take it as a part of their salary. This bookshop is really an example of one of the challenges that Mendocino faces in getting the SEED program to be accepted in local businesses. Catering to a tourist community, they are very reliant on outside money coming in, and a lot of the products that they carry are purchased from outside as well. They're not seeking to be a self-sustaining community but to provide the sort of cultured experience that tourists enjoy. The impact of the tourist trade in Mendocino would give any local currency a challenge in getting itself off the ground.

Other businesses which were not reliant upon tourism also encountered the problem of finding outlets for their income. The proprietor of the Mendocino Market, a local deli, told me, "We had been accepting SEED before, but not anymore. It really slows us down and it doesn't seem that people want to accept SEED from us."8 Similarly, an employee of the Mendocino Pharmacy informed me that they had stopped accepting SEED because they had accumulated several hundred dollars worth and lacked the ability to get rid of it. They were waiting to see its progress before considering returning to the program.

Figure 16. Reverse of quarter SEED note from Mendocino, California, 1999.

Struggles and Challenges

Education has been a difficult task for the SEED organisers. Despite great publicity as to the existence of SEED, many community members lack a basic understanding of its workings and relevance in their lives, having not chosen to spend the time to learn about it. One resident told me, "I don't use it as a person because I don't understand it. It's hard to get a grasp on what its value is."9 The potential value to a local currency is a hard message at times to convey. A co-ordinator of one of SEED's sister programs in Washington state shared that nobody discusses "the fundamental consequences of having the kind of economy we have" or "the idea that we could have different types of economies than we have. It never occurs to people that there are other paths we could go down."10 Kreger told me that the SEED co-ordinators are aware that many persons lack current incentive to join, both because they may be working several part-time jobs to pay their living expenses and because most community members are already involved in other activist groups and movements.

What we're trying to do now is to show that we understand that it's not that convenient to do the work to keep SEED circulating, and that we're not even going to pretend that it's convenient or easy or immediate, but that it's worth doing anyway and that it's actually essential to do anyway because it's part of the other movements people are already working on.11

If SEED's success becomes viewed as an element to assist in the success of other projects, its value to community members will increase and their likelihood of involvement will rise. Kreger's assessment of the usefulness of local currencies is disputed by British monetary theorist Michael Rowbotham. He writes, "These schemes take a considerable amount of effort and commitment to organize and run . . . These exchange schemes are valuable, but alone they can do little but marginally improve the situation for a few."12 The value of a local currency, even for the few, is lost on some Mendocino residents, who have found that a currency that could be accepted only locally, far from inspiring them to support one another, felt like a restriction. One representative comment was the following:

I have so much to fuss with - everyone does in their lives - including brushing your teeth and all the other things you've got to do that to sit down and try to understand a new form of money that cannot be used outside the community? There's not too much motivation there.13

The effort involved outweighs the perceived benefit in the eyes of many community members. As this woman went on to explain, the unavailability of certain essentials such as medical specialists in Mendocino require residents to travel outside of the community for these necessities of life. Not being able to pay for these things with SEED decreases its attractiveness in their eyes. If any local currency is to become a valuable force in shaping its community economy, it will need to overcome hurdles like these.

Another sticky point with Mendocino's success has been that, as local farmer Sita Francia commented, "The denominations don't work very well for people doing business, because it's not equivalent to the U.S. currency."14 With a SEED equal to ten dollars, a half SEED corresponds easily to five dollars, but doing the math for quarter SEED and eighth SEED notes gets messy if a customer is paying partly in SEED and partly in federal currency. The power of the dominant federal currency to shape mental measuring sticks in the minds of its users is apparently strong enough that some local currencies, seeing the difficulty of transacting in fractional notes like SEED and Ithaca HOURs, have chosen to print bills of value equivalent to the federal one dollar, five dollar, and ten dollar bills, rather than mess with quarter HOURs and eighth HOURs.

Figure 17. Face of eighth SEED note from Mendocino, California, 1999

Like other currencies, SEED has had a difficult time in part because its leadership team is composed entirely of volunteers who, for the most part, are employed at least full-time elsewhere. Francia commented on the difficulty of outreach that resulted from this: "A lot of businesses that I've approached have never been approached because there's no paid staff and there's no particular person who's dedicating themself to be that contact for businesses."15 Attracting new members and making sure that they're not having difficulties with the currency once they join takes time. Telling me why SEED was struggling, co-ordinator Zo Abell stated, "Basically we found out that Paul Glover did this full time. Coast people need that follow up, and we just don't have the energy to do those follow-ups."16 This has especially hurt SEED's ability to involve businesses. Hofberg commented on the need for SEED to coach businesses, since they traditionally have had harder times spending SEED.

It would be great if there were someone to go around to each and every business and say, "How much SEED have you gotten this week or this month?" and "Are you having difficulty spending it?" and "How can we help you find ways to spend it?" . . . I think that would make the whole thing work better.17

When I visited Mendocino, they were looking for grants to fund a full-time co-ordinator for the program to handle member and community relations. In the nine months following, they appear not to have been successful in that attempt. But perhaps even with the challenges they have faced, they have had some marked success. To understand that, I questioned not only the leaders but the community members who enrolled in the SEED program.

The Archangel Gabriel Plan18

The most accurate and powerful way to know the effect of the Ithaca HOURs model in practice would be to understand the thoughts and decisions of every individual in a community with such a program, both users and non-users of that local currency. Ideally we would be able to know both the effects on real wealth and job creation of circulating a second currency and how the decisions of others to accept local currency affected the purchasing decisions of the person under study, and what magnitude that decision variable played in determining his choices.19 In addition, we would seek to record all sorts of intangibles attributed to local currency, such as self-reliance, discovery and development of new talents, valuation of income equality, community cohesiveness, co-operation, and increased individual control over local resources.20 To know fully accurately everyone's mindset, avoiding bias in the design, wording, ordering, or presentation of questions that could accurately assess this would require the successful computerised monitoring, recording, and analysis of human brain patterns. This would be unjustifiably invasive under current ethical and privacy standards, and expensive
almost beyond measure even were the technology to exist. Therefore, we must consider what elements would be even possible to record.

If we scale our project down to record solely financial aspects, the project becomes more manageable. To state with certainty the direct economic effect of a local currency, one would hope for a data set encompassing every transaction involving members of a community. It would have recorded cash flow transactions for money coming in to the community from outside sources, the transactions that took place within the community, and the money flowing out of the community. It would need to include all federal currency, cheque, credit card, local currency, barter and volunteer transactions to be a fully complete accounting of the movement of wealth within and around the community. This would be an intense effort but not necessarily beyond the scope of human capability, especially with the current trend toward computerisation of cash registers. With several years of data prior to and several years following the currency's commencement, one might be able to see trends in consumption patterns and income levels, and what alterations the currency has potentially brought about within the community.

Since there are multiple ways in which such a program can alter spending habits, it would be ideal to consider and compare the results from choosing either of two time points as the commencement of the currency: the date currency is distributed and the approximate date when planning for the currency begins. Not only may spending habits and income levels change when the currency is actually first distributed for use in transactions, but they may be affected when members of the community first begin to plan and design the implementation, since the solicitation of interest and involvement of individuals and businesses might begin to foster a psychological "shop local" impulse. Merely recording the value of purchases made with a local currency instead of federal currency is a terrible proxy for the actual question which needs asking: are these transactions serving as conscientious decisions to support locally-based businesses? One farmer shared how SEED's existence helped her do business without exchanging SEED:

For me, local currency has initiated direct trade quite a bit. . . . I've just started the process of getting boots made by local shoemakers, and they've said, "Yes, we would accept SEED, but we'd love to do a direct trade for produce."21

It is both possible to use local currency occasionally in place of federal currency, barter, or other methods without changing spending habits, and equally possible to complete transactions in federal currency or barter that were brought about by local currency. As Hofberg commented, "How much [SEED] is used: that's not hard, but did it do us any good to take in SEED as opposed to dollars? How can we measure that? We can't see that."22 Though analysing transactions data using both of these two start dates does not eliminate the possibility of inaccurately assigning transactions value to aspects of a local currency's implementation, it could permit one to model better the true effect of a local currency upon purchasing behaviour.

By considering both these start points with evaluation of long-term success, one could also potentially determine the optimal length of time between the commencement of planning and the public kick-off, the point at which the increase in fatigue and loss of interest on the part of the co-ordinators is just equal to the increase in excitement and enthusiasm on the part of those being recruited to join the cause, so as to have the greatest momentum propelling the program towards a hoped successful implementation. This interaction effect does have a demonstrated effect upon success; several years after a group in Ukiah, Calif. began planning a currency, they put their project on hold as a result of a serious case of burnout.

With transactions data, one would analyse the ratio of local currency to federal currency in circulation, both looking at money stock and trading velocity. Just a few of the other questions to be answered include: whether jobs are created by local currency; types of transactions that become more local in nature and by what percentage; whether local currency encourages local production or eliminates middlemen and resellers; and the size and type of typical local currency transactions to determine if local currency tends to create a separate transactions market of its own apart from the market dominated by federal currency. Undoubtedly numerous others could be listed but are not for reasons explained below.

Demographic data would yield another number of interesting factors, especially if numerous local currency communities could be assimilated into one study. One vector of elements I would especially like to define and analyse is the "Hippie Indices," a series of measures of the past political activism and current commitment to alternative lifestyles of community members as it affects their likelihood of joining or even organising a local currency, and their level of involvement after joining.23 An Isolationist Index would similarly determine the community's quotient of individuals that sought self-sufficiency out of paranoia, distrust, or simply ill will toward the federal government, the global monetary system, one's neighbours, and others; some correlation would be expected with the Hippie Indices, but members in this group could also be extremely conservative, even politically reactionary. The mere population or population density of a region, its geographic terrain, and economic isolationism and self-sufficiency from neighbouring regions by custom or distance would also yield potential modelling relationships for consideration. With advances in computers, this data could be analysed in quite a multitude of cross-relationships, not only against each other but with the transactions data as well.

Regrettably, the collection of this data set or one similar, useful as it would be, is nearly impossible apart from divine intervention, or at least a sizeable grant funding multi-year study by a team of researchers, and therefore must be left as a future step for the community of activists and scholars involved in local currency. The development and design of the ultimate questions to be asked by such a study shall thus be left to others. Limited by money and time, the challenge for this project has been to find information that maximised usefulness while still being relatively easy to obtain and trustworthy.

Surveying the Members

Not living in Mendocino, I chose to survey members by mail. Their mailing addresses were not readily available for a number of reasons. SEED MONEY, the newsletter which serves as the primary directory by which members can locate each other and arrange to do business, lists only telephone numbers in accordance with local custom. Many individuals in Mendocino live "off the grid," a term which initially referred to generating one's own electricity but has come to describe a general interest in withdrawal from the dominant society and community. Being easily locatable is not a primary concern of theirs; protecting their privacy is. Even home addresses would generally be useless; nearly everyone has a post office box in town instead of home delivery due to the rural and isolated nature of much of the area. The SEED co-ordinators, respecting the wishes of their members, would not give out their mailing list but insisted I obtain permission from each member individually. Thus, in order to mail this survey, I compiled a list of the names and phone numbers of every person listed in either or both of the Summer 2000 and Winter 2000 issues of SEED MONEY. I attempted to call every person, and explained my purpose and intentions with a standardised script.

A slightly holistic survey approach was used. Recognising that surveys only ask the questions that interviewers think they want to ask, and do not normally provide room for the thoughts and ideas that may come most readily to the interviewees, I was prepared and willing to possibly obtain some of those thoughts and ideas in the initial phone calls. Though it was left to SEED members to initiate any conversation beyond the simple request for a mailing address, any additional comments they gave were received with a few questions or even dialogue about the status of the project. Attempting to avoid biasing them prior to receiving their surveys, I remained reserved in my comments but worked to be candid as well when asked about the success with other individuals or communities under the premise that honesty on my part would foster reciprocal honesty in their dialogue and surveys.

Bias may have been introduced in several areas. Some persons had various questions which I did not address with every person, giving them greater information about my project. In other instances, I obtained the address from someone other than the desired recipient, giving the ultimate respondents less information before the standard cover letter and survey form arrived in their mailbox. No attempt was made to record or gauge the level of notice and information given to individuals to see if this affected the likelihood of response. Such data would be best left for another study; the purpose of these telephone calls was to collect mailing addresses and obtain permission to mail surveys.

The script which I used for initial communication was slightly modified over the course of the phone calls, incorporating answers to some questions asked by several different individuals in hopes of anticipating future concerns. The cover letter enclosed with the survey included all the information from my standard telephone scripts, so even those respondents with whom I did not initially speak to obtain their addresses were not left uninformed.24 No question asked explicitly for the respondent to evaluate the success of the program, but merely to detail their level of usage and desire for involvement, so it can be said with reasonable confidence that the conversations I held with SEED members did not greatly bias the survey results except to increase the likelihood of responses, possibly encouraging the giving of greater detail and information. Methodological perfection is indeed desirable from one perspective, but the deviations from complete standardisation in the administration of this survey were justified if they assisted the quest for accurate and useful information more than they may have hindered it.

In comparison to the survey of local currency program co-ordinators, the possibility of a timing bias is much greater with a survey of individual currency users within one community. Developments in the SEED program either for the better or for worse would be likely reflected in attitudes and comments on surveys filled out and returned at a later time. To minimise that bias, all surveys were sent out within a three day period between 25 January and 27 January 2001. The only opportunity for a timing-related bias to show up in the surveys would have originated from the time that was allowed to pass between initial telephone contact and the mailing of the survey. Addresses were gathered over a period of approximately one month since there were 235 potential contacts and one telephone caller who, for lack of a salary or hourly wage, tended to spend no more than three hours per day on the phone.25

Out of 235 individuals, eight were new to the Winter directory listing and fourteen were solely in the Summer listing. Six changed their listing from the Summer directory to the Winter one, either by adding to or deleting from the goods or services they offered. Twenty-two listings were disconnected and eight were wrong numbers. Two persons declined to receive surveys, two persons were away on travel, and twelve individuals requested that their survey information be collected in tandem with other SEED members in their household. This left a potential survey population of 19 households.26

I was unable to establish contact with 66 persons, either leaving messages on answering machines that went unanswered, receiving no answer or a busy signal every time their phone number was attempted, or having no phone number with which to contact them. I successfully obtained permission to survey 123 of those households, 65% of the potential population. Three of these were sent by electronic mail and 119 by postal mail; one person opted to fill it out over the phone. I received 77 responses by postal mail and none of the three electronically-distributed surveys.

Recording and Reporting the Results

Return envelopes were marked with unique identification codes to allow the recording of which individuals had responded and which had not for the purpose of sending a follow-up letter to non-respondents. These codes were not transferred over to the surveys; rather, privacy was preserved at all times by separating the surveys from their envelopes upon receipt and later recording the identification codes before disposing of the envelopes. On 13 February 2001, just over two weeks after mailing out the surveys, I sent follow-up letters to the addresses from which surveys had yet to be returned.27 These letters reminded members of the value and confidential nature of their response, and provided several methods for contacting me should they have misplaced their survey. Three surveys were requested and resent as a result of this mailing, of which two were received, keeping in line with the overall response proportion of 63%.

Some individuals wrote personally-identifiable data on their surveys, normally by penning a quick comment in the margins and signing their name. When their comments have proved informative and some comments from the surveys have been included below in the discussion, confidentiality at all times has been maintained.

Seven individuals did not consider the surveys relevant to themselves in any form, not having used SEED in quite some time or no longer considering themselves active membership. They returned blank surveys with apologetic explanations hand-written on the surveys. One representative comment read, "As you've probably heard by now, SEED hasn't taken root in this community, mainly, I think due to the reticence of stores to accept it. That may be due to the depressed economy or the presence of tourists." The aggregated responses were quite informative in a number of dimensions, though the problems they make apparent may have quite difficult solutions.


Table 3. Summary Results of Mendocino SEED User Survey.

Changes (n=69)
Yes
Yes %
No
No%
Want to sell but cannot
8
12
61
88
Want to buy but cannot
33
48
36
52
Want to be more active
50
72
19
28
 
Reasons for joining (n=73)
Yes
Yes %
No
No%
Provide goods and services
28
38
45
62
Obtain goods and services unable to do for self
21
29
52
71
Obtain goods and services unable to afford
12
16
61
84
Acquire new skills
0
0
73
100
Compensate for unemployment
2
3
71
97
Use skills ignored by job market
3
4
70
96
Promote own business
18
25
55
75
Safeguard against economic disaster
18
25
55
75
Ecological beliefs
35
48
38
52
Boost the local economy
61
84
12
16
Promote a more equal society
50
68
23
32
Change in lifestyle
6
8
67
92
Meet new people
9
12
64
88
Learn how money works
5
7
68
93
Other
22
30
51
70
 
SEED Transactions Data (n=62)
Mean
Median
Mode
Range
SEED earned in past 12 months
14.0
0
0 (n=46)
[0, 457]
Excluding top 3 users
3.4
"
"
[0, 30]
SEED spent in past 12 months
11.9
1
0 (n=27)
[0, 215]
Excluding top 3 users
5.2
"
"
[0, 50]
Average transactions per month
1.6
0
0 (n=41)
[0, 60]
Excluding top 3 users
0.7
"
"
[0, 14]
         
Demographics
Mean
Median
Mode
Range
Years living on North Coast (n=65)
18.4
17
30 (n=6)
[1.75, 51.5]
Months using SEED (n=57)
21.8
24
24 (n=50)
[6, 24]
Income for past 12 months, both SEED and dollars (n=48)
61275
12500
0 (n=17)
[0, 1,400,000]

 

The words of Count Galeazzo Ciano have been quoted in many circumstances and are worth considering here, because the situation with SEED is quite damaging to his aphorism, "As always, victory finds a hundred fathers but defeat is always an orphan."28 Defeat is the most informative, if least pleasant, experience in life. Victory rarely has definitive explanations; everything merely fit into place, both the necessary elements and the unnecessary ones, the latter of which likely outnumber the former. Defeat, by comparison, can make quite clear some of the necessary elements or signs of success by their absence upon reflection. While victory may find many men seeking to take credit for it, the failure thus far of SEED to become a commonly-used local currency has spawned much reflection and many answers as to why it is not working. Rather than being an orphan, SEED's struggles can be credited in part to each of many factors, as an analysis of the survey results shows.

First, membership in SEED has not shown much growth since its kick-off. Greater than 75% of respondents joined at its inception, with the next largest group, about 11%, joining at its one-year anniversary. Only one respondent had joined in the past year. This by itself is indicative of a system in decline, as it does not count the number of persons who previously were members and have left the group in the past year, and shows that, rather than growing like a snowball rolling down the hillside, SEED may be melting in the hot sun.

SEED has not been used for many transactions during its second year of operation. As of November 2000, 1400 SEED had been placed into circulation. However in the past year, three quarters of respondents had not earned a single SEED, and nearly half had not spent any. Three respondents were responsible for the bulk of SEED usage, earning 757 SEED, or 77% of the 982.5 SEED reported as income, and spending 485 SEED, or 58% of the 830 SEED reported as spent during that period. Most likely, these are businesses as opposed to individuals; their mean reported total income is over $350,000. Temporarily excluding them from the economic picture reduces the mean number of SEED earned from 14 to 3.4, a precipitous 76% decrease, and similarly reduces mean SEED spent from 11.9 to 5.2, a 57% decrease.29

This may suggest that spending patterns have not been greatly changed by the introduction of SEED and confirms some of the anecdotal complaints of large businesses. The average individual has spent more than he has earned, and a few commonly-
frequented stores have earned much more than they have spent. Being unable to redeem their currency elsewhere, they've been forced to curtail or restrict their acceptance of SEED from their previous levels. If most individuals have spent more than they earned, they are net debtors in SEED terms, and have received more value than they have contributed, and those few businesses have in essence subsidised the program temporarily by their willingness to accumulate a small stock of local currency. One of these respondents had 242 more SEED in income than spending, making for a subsidy of $2420 in one year alone. Though this is less than 1% of total annual revenue, its impact on profitability may be substantial.

The 15% discrepancy between SEED earned and spent by respondents, which changes sign and rises to a 30% difference when excluding the three aforementioned responses, is troublesome. Others may argue the 15% difference is proof of a sampling bias since every expenditure by one person must generate an equivalent income elsewhere. Alternatively, they may claim that the 30% difference is clearly unrepresentative out of no greater proof than a desire to show that the distribution of three SEED per member was not a mere transfer of value letting some members purchase without earning at the expense of others who accepted SEED that, contrary to their expectations, they will not be able to spend. Both of these ideas allege bias, against which precautions have been taken, and against which more likely explanations can be offered for these discrepancies.
Instead of survey bias, I would question the accuracy of the numbers given on the returned surveys. Though to question every reported number would be to render useless the concept of surveying individuals, to recognise possible areas of misreporting, either intentional or not, is crucial to interpreting a survey's results. Two possible reasons for respondents to report different levels of income than of spending would be a desire to dodge income reporting requirements and the extent to which their transactions are memorable. The first should be unlikely, since total confidentiality was promised; to some individuals' pointed questions, assurance was given that the Internal Revenue Service would not be permitted access to their numbers. As for the second, one could postulate that purchasing with SEED would not be as memorable as earning SEED, so individual reporting accuracy would be higher for income than spending. In attempts to recollect the amount of SEED spent, they may have overestimated from falsely tabulating times they intended to use SEED but were unsuccessful, or times when their purchasing decisions were based upon the other party's willingness to accept SEED but all or the majority of the purchase price was not paid in SEED. It seems less likely that one would underreport purchases made with SEED. If the survey had asked about income and expenses over the past two years rather than one, one possible check would have been to ask what quantity of SEED respondents currently possessed. Since their starting balance would have been known as a standard sum handed out by SEED co-ordinators at the time of their joining, it would have been possible to calculate whether the reported change in quantity of SEED possessed was equal to the difference in the reported transaction levels.

At least one community has devised a way to combat the concern that members will take advantage of the cash infusion they receive and not reciprocate by offering useful services. Valley Trade Connection, located in Massachusetts' Pioneer Valley, does not give its members local currency in exchange for their $20 annual membership fee. Rather, it tells potential members the following:

When you join, you can receive V$10 to V$50 (Valley Dollars) if you send us a gift certificate (typeset or handwritten) redeemable for $10 to $50 of your products and services. Your certificate will be kept in a safe and may be purchased by members with surplus Valley Dollars, or by you, if you leave the area or cease trading.30

A small stash of Valley Dollars thus can be obtained at no cost to the member so long as he remains active with the program. This requirement of a promise to provide value in-kind to the system before leaving ensures that members who join are not as likely to become leeches. If the member spends all his Valley Dollars and then leaves the community, he has to repurchase his gift certificate, thus compensating the system for the value he took from it. Had Mendocino adopted this, two things are likely: first, fewer persons would become members when required to make a commitment like this, and second, those who were might feel a greater impetus to remain active members.

Six survey respondents declared there were things they wanted to buy but could not, and also that they did not want to be more active, suggesting that they may have given up hope on achieving their wishes through SEED. They may be seen as frustrated consumers. One observation that appeared odd from an economic perspective was that eighteen persons held the opposite position from these six, wanting to be more active but having nothing they wanted to buy or sell. It is therefore unclear how they would become more active if they did not have any transactions in mind. This could indicate a sense of desire to help others in the community by circulating local currency, since it is reasonable to assume that they have nothing they seek to achieve for themselves. Chris McCormick of the Mendocino Environmental Center noted that there are a variety of reasons persons would prefer local trade:

It might just be that people get turned on by the fact that their food comes from a local farmer as opposed to somewhere in the Central Valley . . . So there are a lot of different values that you can look at that aren't necessarily appreciated when you just consume all the time.31

These persons were also somewhat more likely than other respondents to have joined to boost the local economy (94%) or promote a more equal society (78%), though any bold statement from a sample this small must be viewed with caution.

Reasons for joining were varied. Respondents were asked to mark all out of fifteen categories listed that applied, with one category being Other to allow for ones not thought of by the surveyor. The number of reasons marked ranged from one to fourteen, with four as the average number of responses marked. Though local currency promoters talk about opportunities for job creation as a result of their programs, finding employment did not seem to be a motivating factor for joining SEED. Only three individuals marked any of the three "find work" categories - Acquire New Skills, Compensate for Unemployment, and Use Skills Ignored by Job Market - as their reasons for joining. One of these three, Acquire New Skills, was not marked at all. Social and educational motivations were not much more common, with only fourteen respondents (19%) either joining to Meet New People, Learn How Money Works, or to seek a Change in Lifestyle. Local currency promoters talk about the increased community bonds and friendships arising from a regional currency; these elements may have resulted from using SEED but were apparently not primary motivating factors for many SEED users.

The two most-cited reasons for joining were to boost the local economy and to promote a more equal society, with ecological beliefs coming in a distant third and failing to gain assent from even half the respondents. In general, the reasons for joining which can be classified as more self-focused or business-oriented saw much less interest than those that were altruistic, showing that SEED members are quite different from the traditional economist's model of mankind as a self-interested being, either by not being self-interested or by having a very different definition of the factors that deserve consideration to promote one's best interest. Members may be joining as part of an overall activist nature, considering this just one more chance to make a statement against a dominant monetary system. Based on their level of activity, the strength and value of such a statement must be questioned.

Alternatively, membership in a local currency program may be a signalling mechanism by which individuals and businesses attempt to attract business from community-minded persons, much like others sponsor civic arts programs and Little League teams or join the local chamber of commerce. This declaration to accept local currency can have an effect on the allocation of consumer dollars without requiring the movement, or even creation, of a local currency. It is merely the threat of having to accept local currency to honour one's pledge which attaches any value to that declaration of local solidarity. Such a statement enhances the desirability of one's products to the conscientious consumer, but only relative to competitors. Should every competing merchant likewise agree to accept local currency, the differential value to any of them of that declaration becomes zero, and perhaps the net value even becomes negative if the allocation of consumer dollars remains the same but additional overhead costs are needed to process multiple currencies. Of course, even if every merchant in town has agreed to accept local currency, this does not necessarily mean their actions have zero value, because they may be in competition with firms outside the town which do not accept the currency.

Across the Mountains to Ukiah

My hopes to compare the success of Mendocino's program with the results in Ukiah were destroyed when in November 2000, the Ukiah HOURs core team announced that they were putting the program on hold indefinitely. Joan Kelley explained some of the reasons that had accumulated over the months. Co-ordinators were experiencing burnout, having not reached out to bring others into the inner circle. Businesses were reluctant to join, and nobody was putting enough time into getting them involved. Though they had designed a currency and built a database and website to catalogue and publicise members' services, they lacked a critical mass of interested community members. Unlike Mendocino, which began with 100 members, Ukiah's core team was holding out for 25 storefront businesses to sign on as a way of ensuring a foundation on which to rest the currency's value. They never got those 25 businesses. "Part of the success in Ithaca was that they started during a recession," she told me, whereas Ukiah residents weren't signing up because, "the economy was actually good and they didn't see the need. I think Ukiah has a sizeable community that's progressive-enough thinking that they might accept it but it still needs a lot of work. If it's not big enough, it just dies."32

Conversations with the Ukiah and Mendocino organisers often were vague about examples of the philosophy in action, remaining instead in theory. The local currency movement in Northern California currently is much more alive in theory than in practice, and even as organisers notice actions that will help the movement, they implicitly acknowledge the current limitations. Each talk of changing mindsets to favour local goods over cheaper imports tacitly admits that current consumer mentalities focus much more on price than origin of goods. For every discussion on working toward sustainability, there is an understood problem and hindrance caused by decisions away from focusing on sustainable living, both in consumption and production.

Not only do persons not purchase a majority of their goods locally, they do not currently have the capacity to produce many necessities. Without such items as a lumber mill, strong agriculture and metal-working trades contained in the local economy, plans for sustainable living are but pipe dreams, inspired by the multitude of small daily transactions but not realistic for larger projects. Local currency can purchase goods and services to maintain homes, but cannot pay for the homes themselves. It can repair a bike or wash a car but cannot be used to buy that bike or car.

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Endnotes:

1 SEED is not limited to the town of Mendocino but rather is throughout the North Coast region including Albion, Fort Bragg, and several smaller communities. For simplicity the region will be referred to as Mendocino.

2 Maria L. La Ganga, "Cash-Poor Mendocino Is Going to SEED," Los Angeles Times, 1 March 1999, A1; SEED Money 3, Summer 2000. Available: SEED, P.O. Box 1533, Mendocino, Calif., 95460.

3 Sita Francia, interview by author, 16 July 2000, Boonville, Calif. (Tape recording).

4 Susan Hofberg, interview by author, 15 July 2000, Boonville, Calif. (Tape recording).

5 Gary Pace, interview by author, 15 July 2000, Boonville, Calif. (Tape recording).

6 Larry Sheehy, interview by author, 16 July 2000, Boonville, Calif. (Tape recording).

7 Alphonso, interview by author, 17 July 2000, Mendocino, Calif. (Tape recording).

8 Matthew Miksak, interview by author, 17 July 2000, Mendocino, Calif. (Transcript).

9 Sandra of Lemon Tree Folk Art, interview by author, 17 July 2000, Mendocino, Calif. (Tape recording).

10 Steve Ludwig, interview by author, 2 October 2000 [phone]. (Transcript).

11 Jennifer Kreger, interview by author, 17 July 2000, Mendocino, Calif. (Tape recording).

12 Michael Rowbotham, Confronting Tyranny: The Case for Monetary Reform and Economic Democracy, n.d. Available [Online]: <http://www.geocities.com/CapitolHill/Senate/7018/rowbotham-oursystem.html> [23 February 2001].

13 Sandra of Lemon Tree Folk Art.

14Francia.

15 Ibid.

16 Zo Abell, interview by author, 25 September 2000 [phone]. (Transcript).

17 Hofberg.

18 The term is from Professor Eric Helland, who uses it to denote the ideal data set one would ask for "if the Archangel Gabriel came down from the heavens and offered you whatever data you wanted."

19 I am using "person" in the legal sense, including any individual or business.

20 Paul Glover, Hometown Money: How to Enrich Your Community with Local Currency (Ithaca, N.Y.: Ithaca Money, 1995).

21 Francia.

22 Hofberg. She displays the makings of a good natural economist, recognising the underlying substitution effect.

23 For example, those scoring high on the Hippie Indices would have increased prior exposure to the ideas presented in a local currency program, lowering their educational start-up costs. It would be most intriguing to discover a minimum level of activism, either as a quantity of persons or a per capita ratio, and use this as a predictive factor for potential future local currency communities.

24 That cover letter may be found in Appendix Three.

25 There were 236 members listed in the Summer 2000 and Winter 2000 issues of SEED MONEY; though a member, I chose to excuse myself from the survey.

26 The number should be slightly smaller than this, since of the 66 listings not able to be contacted, several are likely to be business numbers of individuals in one household, like the twelve persons already mentioned.

27 A copy of that letter can be found in Appendix Three [pdf].

28 Count Galeazzo Ciano, quoted in Jim Poserina, SUCCESS - Jim's Favorite Famous Quote, Quip, Axiom, and Maxim Repository, 2001. Available [Online]: <http://www.jimpoz.com/quotes/success.asp> [1 April 2001].

29 Percentage changes are calculated from raw data, which may produce slightly different results than would be obtained from using the rounded figures which are reported here.

30 Valley Trade Connection, n.d. Available [Online]: <http://www.valleydollars.org/benefits.htm> [20 April 2001].

31 Chris McCormick, interview by author, 14 July 2000, Ukiah, Calif. (Tape recording).

32 Joan Kelley, interview by author, 9 January 2001 [phone]. (Transcript).