Rebel of the Week: Nicholas Barry, Inventor of Davis Dollars, a Local Currency for Davis CaliforniaJune 6th, 2012
Our upcoming animated film, Silver Circle, is about economic and political rebels that create their own commodity-based currency in defiance of the central banking system by minting silver coins and using them as money instead of reserve notes that the central bank can endlessly print. That’s why we were excited to hear about a city in California where residents are adopting their own local currency, just like the rebels in the film.
In Davis, California, a city of 65,000 people, locals are taking to “Davis Dollars” as a way to keep their money local:
Launched in 2010, Davis Dollars are the brainchild of Nicholas Barry, a UC Davis economics graduate who wanted to stimulate the local economy, encourage community development, and keep the city’s money local. Barry says, “From an economics point of view, we thought it sounded like it made a lot of sense as far as keeping spending local. Davis Dollars also is a way for community members to get to know each other.” He also told a local news outlet: “Spend one dollar at a big box store and only about 6 to 10 cents of that stays local. And if you spend that money at a local mom and pop shop, about 60 cents stay local … And if you spend one Davis Dollar locally, 100 cents of that stay local.
Barry and commentators may not even be aware that the alternative currency does something even more significant than localize money and economic activity– it localizes economic power, which should be localized, distributed throughout the actors in a market, and not centrally consolidated in the hands of a special few. Dumping the dollar for local currency puts individuals, businesses, families, and communities in charge of deciding what they want to use for money. It’s a rejection of a money system controlled by a few special interests in big finance.
Now before getting too excited, it should be noted that Davis Dollars are pegged to Federal Reserve US Dollars for their value at a ratio of one to one, which does make acquiring and using them simple enough for Davis residents, but it also leaves some power in the hands of Ben Bernanke et al. to set the value of Davis’ local currency. But before getting to disappointed either, remember that holding and using Davis Dollars instead of Federal Reserve Notes still diminishes demand for FRNs (albeit infinitesimally), giving Bernanke just a little less breathing room to keep printing with impunity and hastening the US Dollar’s inevitable and welcome decline.
Again, the effect is extremely negligible given the size and influence of one small town, but the symbolism and principle here is still important. The cool thing is that many of these Davis residents who use Davis Dollars may not even understand macro-economics, monetary policy, or the importance of sound money, but like all economic actors, they are naturally doing what is in their best interest. Adam Smith’s invisible hand is at work here. Like the rebels in our upcoming film, Davis residents are at least partially rejecting the global monetary system and replacing it with a local one. In the meantime, they are learning invaluable lessons in localism and alternative currency use that will serve them well once the monetary system does come crashing down and they will already have in place the local monetary “infrastructure” to emerge more quickly from the ensuing economic chaos.
Our hats are off to Nicholas Barry and the residents of Davis, California who are using his local alternative currency, the Davis Dollar. You’re rebels in our book!
And don’t forget to visit our official website to learn more about the Silver Circle Movie:http://SilverCircleMovie.com