Grassroots Economics

The people of Ithaca, NY, are printing their own currency and building community and autonomy

One of the articles in Business On A Small Planet (IC#41)
Originally published in Summer 1995 on page 30
Copyright (c)1995, 1997 by Context Institute

Many communities are giving up waiting on large corporations or government to invest or provide jobs, and are instead building on their own strengths and resources.

The people of Ithaca have done so by issuing their own paper currency, called Ithaca HOURS. Residents list the goods or services they have to offer in a large catalog – and then use the HOURS they earn to purchase goods and services from others. For some, this barter system provides a crucial margin of financial support. For others, it’s a great way to meet people and build a sense of community. All find their spending habits redirected locally.

Here in Ithaca, New York, we’ve begun to gain control of the social and environmental effects of commerce by issuing over $50,000 of our own local paper money, to over 950 participants, since 1991. Thousands of purchases and many new friendships have been made with this cash, and about $500,000 of local trade has been added to the Grassroots National Product.

We printed our own money because we watched Federal dollars come to town, shake a few hands, then leave to buy rainforest lumber and to fight wars. Ithaca HOURS, by contrast, stay in our region to help us hire each other. While dollars make us increasingly dependent on multinational corporations and bankers, HOURS reinforce community trade and expand commerce that is more responsive to our concern for ecology and social justice.

Here’s how it works. The Ithaca HOUR is Ithaca’s $10 bill, because $10 per hour is the average of wages/salaries in Tompkins County. These HOUR notes, in four denominations, buy plumbing, carpentry, electrical work, roofing, nursing, chiropractic care, child care, car and bike repair, food, eyeglasses, firewood, gifts, and thousands of other goods and services. Our credit union accepts them for mortgage and loan fees. People pay rent with HOURS. The best restaurants in town take them, as do movie theaters, bowling alleys, health clubs, two large locally-owned grocery stores, and 30 farmers’ market vendors. Anyone may use HOURS, and hundreds have done so.

Ithaca’s new HOURly minimum wage, enforced by general consent, lifts the lowest pay up without knocking down higher wages. For example, several of Ithaca’s organic farmers are paying the highest farm labor wages in the Western Hemisphere: $10 of spending power per hour. These farmers benefit by the HOUR’s loyalty to local agriculture. On the other hand, dentists, massage therapists and lawyers charging more than the $10 average per hour are permitted to collect several HOURS hourly, although we hear increasingly of professional services provided for our equitable wage.

Everyone who agrees to accept HOURS is paid two HOURS (worth $20) for being listed in our newsletter Ithaca Money. Every eight months they may apply to be paid an additional two HOURS, as reward for continuing participation. This is how we gradually and carefully increase the per capita supply of our money.

Ithaca’s printed currency honors local features we respect, like native flowers, powerful waterfalls, crafts, farms, and our children. The multi-colored HOURS – some printed on locally-made watermarked cattail (marsh reed) paper, all with serial numbers – are harder to counterfeit than US dollars.

We regard Ithaca HOURS as real money, backed by real people, real time, real skills and tools. Dollars, by contrast, are funny money, backed no longer by gold or silver but by less than nothing: $4.8 trillion of national debt.

Ithaca Money’s 1,200 listings, rivaling the Yellow Pages, are a portrait of our community’s capability, bringing into the marketplace time and skills not employed by the conventional market. Residents are proud of income earned by doing work they enjoy.

At the same time Ithaca’s locally-owned stores, which help keep wealth local, make sales and get spending power they otherwise would not have. And over $4,000 of local currency has been donated to 22 community organizations so far by our wide-open governing body.

As we discover new ways to provide for each other, we replace dependence on imports. Yet our greater self-reliance, rather than isolating Ithaca, gives us more potential to reach outward with ecological export industry. We can provide the capital for new businesses with loans of our own cash. HOUR loans are made without interest charges.

We encounter each other as fellow Ithacans, rather than as winners and losers scrambling for dollars. As we do so, we help relieve the social desperation which has led to compulsive shopping, wasted resources, and homelessness and hunger. We’re making a community while making a living.

Paul Glover, who created the HOUR system, is a community economist and ecological urban designer with a degree in city management. For contact information, see Toolbox below.

Community-Based Currency

People use Ithaca HOURS for everything from goat cheese to tax consulting. Here are just a few of their stories.

Thomas found work by calling those who had listed a need for computer help. And when he read that Ithaca Rape Crisis received an HOUR grant, he did computer programming for them. His HOURS were spent for food, credit union membership, and dressmaking for his wife.

"Our goal is to have money with value not tied to the dollar and not subject to the whims of the global market."

Judy has earned many HOURS selling Jim’s hand-painted T-shirts, and spends them right away.

"Ithaca has so much expertise in so many areas. … We’re like puzzle pieces that need to be put into a picture."

Elson, who retired in 1972, earns HOURS doing heating and air conditioning consulting.

"This HOUR system takes me back 20 years and makes me feel constructive again. My wife and I spend HOURS at the Farmers’ Market, where we browse and chat with old friends. I was very pleased last winter to hire two girls with HOURS to shovel heavy snow. They used the HOURS for rent."

Bill, works for The Alternatives Federal Credit Union. "

Because Ithaca HOURS can be part of the purchase of a house, they can help people who do not have enough dollars buy a home."

Marty has earned HOURS from mortgage payments, massage, and hand-painted silk scarves.

"The first thing I ever bought with HOURS was goat cheese. Richard at the Farmers’ Market had never accepted any, and I had never spent any. Since the note says an HOUR, he described an hour of his work. People gathered around as he explained how he made goat cheese."

Nancy has done tax returns and investment planning for HOURS and trades.

"There’s a lot of anger about how work by women is undervalued. An HOUR being an hour’s work is a nice way around that."

Jim has swapped plumbing for drywalling.

"With the Ithaca Money list we can depend on each other as a community, rather than on faceless corporations beyond our control. Trading creates a tremendous feeling of good will and self-esteem amongst all involved."

Sara grows organic strawberries and knits angora hats. She’s just received a large loan of HOURS from a carpenter friend who has earned a lot of them. Needing money before berry sales begin, she’ll use HOURS for child care and to hire farm labor.

Steve sells notecards and T-shirts for HOURS, most spent for meals and employees.

"Local currency makes local self-sufficiency more possible. It helps protect our local environment and resource base so that economic activity doesn’t damage the ecological base of the region."

Craig & Stephanie sell water filters, biodegradable soaps, and unbleached cotton clothing. Their HOURS have gone to restaurant meals, advertising, and construction of display racks. Craig says,

"When we have a community that is cash poor, like Ithaca, barter allows people to spend money and live a better quality of life."


Grassroots Economics Resources

Here are some resources to get you started on local currency and other aspects of community economics.

Hometown Money Starter Kit
Ithaca Money

Explains step-by-step start up and maintenance of a local currency barter system. Includes forms, laws, articles, procedures, and samples of Ithaca’s HOURS. They’ve sent the Kit to over 300 communities in 45 states.

LANDSMAN Community Services
1660 Embleton Cres.
Courtenay, BC V9N 6N8, Canada

Start-up information for LETS (Local Economic Trading System), a computer barter system trading Green Dollars, invented by Michael Linton.

New Money for Healthy Communities

Tom Greco
Box 42663, Tucson, AZ. 85733 (
$15.95 plus $2.00 shipping

The first book about the main benefits and types of local currency.

E. F. Schumacher Society

Box 76 R.D. 3,
Great Barrington, MA. 01230

Initiated Berkshares and store notes, promotes "small is beautiful" economics with its newsletter, and maintains a library.

Interest and Inflation Free Money
Margrit Kennedy
Seva International
New Society Publishers
4527 Springfield Ave.
Philadelphia, PA 19143
$14.95 (paper) plus shipping

Creating an exchange medium that works for everybody and protects the Earth.

Time Dollar Network

Box 42160, Washington, DC. 20015

National clearinghouse for information about service credit/time dollar programs invented by Edgar Cahn, including a directory and organizing assistance.

Economic Renewal Program

Rocky Mountain Institute
1739 Snowmass Creek Rd
Snowmass, CO 81654-9199
tel: 970/927-3807
fax 970/927-4510

Offers written materials, trainings, and consultation to help communities discover sustainable development solutions for themselves.

Do NOT follow this link or you will be banned from the site!