Cooking the Books: Death of a currency (2025)

The Cooking the Books column from the October 2025 issue of the Socialist Standard

‘Local currency is retired to end a notable trend’ reported the Times (1 September) about the demise of the Lewes Pound, a local currency introduced 17 years ago in the Sussex town and copied in various other towns and cities in Britain.

We mentioned its launch at the time (Socialist Standard March 2009) and the extravagant claims made for the local currency by George Monbiot: ‘It by-passes greedy banks. It recharges local economies and gives local businesses an advantage over multinationals’ .

The aim was to encourage people to spend their money locally by using a currency that could only be spent and circulated in the town concerned. If people used the local currency to buy from a local shop, it was argued, it would stay in the town, but that if they used ordinary money to buy from a national supermarket the chances are that it would end up being spent elsewhere.

Local currencies didn’t replace ordinary money. In fact, they had to be backed pound for pound by an equivalent amount of ordinary money deposited in a bank. The Times refers to this in its report when it says that, now that the scheme is being wound up, ‘the backing money will be donated to four local charities’.

As we mentioned at the time:

‘The Lewes Pounds get into circulation by people buying them for ordinary pounds and are convertible back into pounds on demand. In answer to the question “What happens to the sterling pounds that are taken when people buy Lewes Pounds?” the organisers explain: “All Sterling pounds are held in a safe deposit box with a local bank, so that we can access them at any time should people wish to trade their Lewes Pounds back into Sterling”’.

So no by-passing of ‘greedy banks’. Nor any extra purchasing power introduced to boost the local economy. It was just one piece of paper being replaced by another of equal spending power. Since people wanting to use the local currency had to buy it, those doing this were likely to have been enthusiasts who would have bought things locally anyway using ordinary money; the same goes for those accepting it in change (which people couldn’t be obliged to do). It is unlikely, then, that local businesses benefited — except the scheme itself by selling Lewes Pounds to collectors. How multinationals lost out remains a mystery.

The scheme failed in the end due to the nationwide trend to pay by card rather than cash. In Brixton the organisers of the local currency there tried to get round this by introducing an electronic Brixton Pound  but this too was overtaken by smartphones with their electronic wallets, and the Brixton Pound too was wound up.

When the Brixton Pound was introduced in 2009 our South London branch commented in a leaflet distributed in the area:

‘What’s the point (apart from helping local shopkeepers)? What difference does it make what coloured pieces of paper we have to use to get the things we need to live? The real problem is that in present-day, capitalist society we have to use money at all to obtain these, and that the amount of money we have will always be rationed by what we get as wages or as benefits. That restricts and distorts our lives’ (Th£ Brixton Pound — What For?).

The sad fact is that all the enthusiasm, time and voluntary work that went into devising and running local currencies led nowhere. This particular ‘notable trend’ to do ‘something now’ to try make things better under capitalism made no difference whatsoever.