Issues & Analyses: Becoming Human – Imagining Beyond The Violence Of The Market

Alain Badiou describes money as speaking an “insane language” that structures the violence of competition. Money reduces everything to its exchange value—how much it costs to buy or sell a thing or being. It enacts a general equivalency between shoes and cars, trees and oil, human labor and water. Under market capitalism anything can be had: we are promised that we can go anywhere in the world, have anything we want, do anything we please, have power and control—as long as we make the rational, self-interested choices necessary to accumulate money. Money enters us into a world of unlimited desire, pitting individuals and communities in an ongoing competition over scarce resources.

Other forms of exchange always and already exist alongside market exchange, as remedies to the violence of capitalism, and as part of logics and languages towards the making of other worlds—including mutual aid, gifting, and barter networks. And, currencies too, do not have to be left entirely to the determinations of an objectifying market. Though not a panacea for inequality or the power of capital, local or complementary currencies can steer and direct exchanges towards shared well-being. They can work to build relationships between individuals and communities, strengthen local businesses and economies, and keep value flowing locally. They bring some measure of concern and care directly into the act of market exchange.

BerkShares, is one such local currency that some of this readership may know and some likely use. BerkShares can be exchanged for and used in the same way as federally backed dollars, but are only spent and circulated through participating individuals, local businesses and local organizations. With BerkShares, there is a built-in ethics of the local that positions and prioritizes the value of community within the act of exchange itself. Coming into its 15^th year, BerkShares have shown significant staying power, and are poised to proliferate further and expand their use.  As the article by Felix Carroll, reprinted from the Berkshire Eagle explains below, BerkShares are going digital, enabling easier access and use for individuals and businesses.

How can we support, expand, and build on this model in the region? What other forms of exchange might be put to use to help replace the alienation and violence of the market with collective care for one another?

This week we reprint, with permission of the author, What’s in Your (Online) Wallet? On Their 15th Anniversary, Berkshares Will Go Digital, by Felix Carroll.  It originally appeared in the Berkshire Eagle on September 23, 2021.

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What’s In Your (Online) Wallet? On Their 15th Anniversary, Berkshares Will Go Digital

By Felix Carroll

As cash continues to lose its kingship in an increasingly digital age, the nonprofit group behind the local currency known as BerkShares has announced plans for a payment platform using a mobile app. Soon, anyone with a bank account and a smartphone or tablet will be able to download the app and obtain BerkShares to spend locally.

“We’ve seen the need to take BerkShares digital for the past few years, and particularly with COVID, when we saw a huge drop-off in cash transactions, that really encouraged us to take it more seriously,” said Rachel Moriarty, program administrator for BerkShares Inc.

The BerkShares app, which will operate much like PayPal’s popular Venmo mobile cashless payment service, is in its testing phase. Moriarty said it will be available as a free download for iOS and Android users by December, in time for the holidays. Like its cash equivalent, which was introduced 15 years ago, digital BerkShares will be backed by U.S. dollars.

BerkShares first was launched by the Egremont-based Schumacher Center for a New Economics in 2006 to foster regional self-reliance, and a greater kinship between residents and local businesses. About 400 businesses in the region accept BerkShares, and about 140,000 BerkShares are in circulation, Moriarty said.

Those physical banknotes, which bear portraits of local luminaries like Herman Melville, Robyn Van En, Norman Rockwell and W.E.B. Du Bois, can be obtained in exchange for federal currency at Pittsfield Cooperative Bank, and participating branches of Lee Bank and Salisbury Bank.  But, with digital BerkShares, a bank visit won’t be necessary. Users of digital BerkShares will download the BerkShares app to their smartphones or tablets and then digitally connect the app to their bank account. It could be Salisbury Bank, Lee Bank or any bank, whether it’s affiliated with BerkShares or not.

When users obtain the digital BerkShares, the money, in U.S. dollars, will be withdrawn from their personal bank account and deposited into one of two holding accounts (Salisbury Bank or Lee Bank), at which point digital BerkShares will be minted to the users’ app account and made available for use. Meanwhile, the U.S. dollar reserves will sit on deposit at the community banks. Currently, the physical BerkShares program requires merchants to have an account at the participating banks if they want to cash out.

“This change allows for businesses that hold their accounts at other local banks to now participate,” Moriarty said. “And so that opens up a huge amount of possibilities for us because businesses in North County, where, say, bank branches weren’t present prior to this, can participate.”

Payment can proceed in one of two ways. Participating merchants can post a static QR code and have the customer scan the code and enter in the amount due, or the merchant can produce a unique QR code for the transaction and have the customer scan it to complete the transaction. Customers can show their device to the merchant to confirm that payment was completed. The digital platform will give local merchants an advantage of not having to pay transaction costs associated with credit cards, said Fennie Wang, the founder of Humanity Cash, a technology company that is building digital BerkShares.

Unlike physical BerkShares, which are obtained in exchange for U.S. dollars at a rate of 95 cents per BerkShare, digital BerkShares can be obtained and exchanged back to federal currency at a one-to-one cost ratio using the app.

Merchants will not incur any fees on customer purchases in BerkShares, nor will they pay or incur fees when they recirculate their BerkShares. But, if a business wants to cash out to U.S. dollars, it will pay a 1.5 percent redemption fee. Moriarty notes that the fee is competitive with credit card processing fees, which are in the range of 3 to 5 percent, as well as Venmo, which charges a 1.9 percent transaction fee plus 10 cents. Included in the rollout, local donors have funded 60,000 free digital BerkShares to be distributed into the accounts of businesses and consumers who download the app.

The app will not be just a payment instrument, Wang said. It will include a local news feed, and updated suggestions on events and deals from participating BerkShares businesses and organizations. The digital platform will enable BerkShares Inc. to address two matters it considers crucial to its goal in administering a sustainable local currency, Moriarty said.

For one, the digital platform will make it far simpler to obtain BerkShares.

Secondly, it will enable BerkShares Inc. to trace the flow of its digital currency and thereby determine the extent to which it circulates through the local economy — from, say, retail shopper to merchant, merchant to grocery store, grocery store to farmer, and so on.

In an era of globalization, BerkShare Inc.’s goal is to educate people in the importance of keeping money flowing through the local economy.

“It brings a human face to money, to economy, to community,” Moriarty said. “We want people to think of themselves as empowered, conscious consumers — and not just spending money because that’s how the world works.”

Felix Carroll can be reached at fcarroll@berkshireeagle.com or 413-496-6391.

Felix Carroll is a general assignment reporter for the Berkshire Eagle.