It is an unspoken rule in the Berkshires: Buy local whenever possible.
That principle is at the center of an economic experiment in Western Massachusetts that is putting the power of local, decentralized currency to the test. A currency known as BerkShares has been around for more than 15 years in the form of pastel-colored paper bills, and now its creators are testing a digital version that allows customers to pay for things through an app.
Think Venmo; only the BerkShares app relies on in-store QR codes. And users pay their tabs with BerkShares using a virtual wallet. (One BerkShare is equivalent to one US dollar.)
The currency program, which has around 140,000 paper bills in circulation and is backed by reserves in local banks, is intended to keep money in the local economy. Some 300 businesses in the region accept the paper currency, around 70 of which are participating in the digital pilot, and the hope is that they recirculate the BerkShares they receive from customers by using them to pay other local businesses in their supply chain.
“We don’t suggest that local currency is the panacea that solves all the issues,” said Jared Spears, director of communications at the Schumacher Center for New Economics, which founded the currency. “But it sparks a broader community conversation where people are asking, ‘Where do our products come from? What do we make in the area? What do our businesses rely on from outside the area that we might not need to rely so heavily on?’”
The idea for the digital expansion took shape at the outset of the pandemic, when people were hesitant to use cash. In theory, Spears said the app could become popular because it eliminates transaction fees, which he calls “an unspoken cost” that can eat away at a business’s bottom line. Plus, he said, those fees represent money leaving the local economy.
Steffen Root, owner at the Great Barrington bicycle shop Berkshires Bike and Board, said digital BerkShares payments represent a very small portion of the shop’s sales. But the currency serves its purpose. Every BerkShare the shop earns is used to purchase paper products and other necessities from local vendors.
“I still have to pay my vendors who are in California and pay my electric bill or my gas bill, but we spend those BerkShares how they’re intended to be used,” said Root. “Instead of me going to buy that thing on Amazon, I’m going to spend the extra five minutes and go a little bit out of my way to find it locally, because I know it’s going to support my town and keep people employed.”
The “buy local” attitude is a popular one in the Berkshires — a region teeming with food co-ops and mom-and-pop shops — and perhaps explains why the currency has stuck around for so long. (There were several other local currencies with limited circulation in the area before BerkShares took hold.) Still, the program doesn’t come close to outpacing US dollars spent there.
Spears, for one, believes the currency is more valuable now than ever.
“All of the recent headlines — supply chain issues, climate change, war — cause people to really step back from business as usual and think about community resiliency, and what it would actually mean for communities to have more self-reliance in a very turbulent time,” he said. “BerkShares is one piece of that broader puzzle.”