December 3, 2009, 2:57 pm
Will Better-Looking Money Improve the Economy?
By Lisa Agustin
With the economic recovery taking longer than expected, is it time for politicians to step aside and give designers a shot at it? Over the summer, creative strategy consultant Richard Smith sponsored the Dollar ReDe$ign Project, suggesting that rebranding the US Dollar would boost consumer confidence and, as a result, jumpstart the economy. (Check out the winning entry by Kyle R. Thompson.) But is an image makeover really enough? After all, it’s less about what the currency looks like and more about what it’s worth.
Better-looking money needs to be part of a well-thought out commerce-based model. Consider the Brixton Pound out of the UK (pictured above) or the BerkShares, created for the Berkshire region of Massachusetts. Both are examples of local currencies created to stimulate local economic development. How it works in a nutshell: National currency is exchanged for local currency at designated exchange locations. The consumer can then use the local money at businesses that have agreed to accept it. Depending on the specific model, there are pre-arranged benefits, like exclusive offers or discounts to users of the local currency. For example, the BerkShares model has a five-percent discount that is part of the exchange rate (ninety-five cents per BerkShare). An example of how it works:
One day, you decide to go out for a nice dinner. You go to the bank to purchase BerkShares to spend at a local restaurant. You go in with 95 federal dollars and exchange them for 100 BerkShares. You go to dinner, and the total cost comes to $100. The restaurant accepts BerkShares in full, so you pay entirely in BerkShares. Therefore, you’ve spent 95 federal dollars and received a $100 meal – a five percent discount for you. The owner of the restaurant now has 100 BerkShares. They decide that they need to deposit them for federal dollars and return them to the bank. When they bring them to the bank, the banker deposits the 100 BerkShares you spent on dinner and gives the restaurant $95 federal dollars, the same 95 dollars that you had originally exchanged for BerkShares. The end result? You receive a five percent discount because of the initial exchange, but the same $95 you originally traded for BerkShares all goes to the business where you spent those BerkShares.
Yes, there’s some cool-looking money involved, and yes, it does something for instilling local pride. But more important, these models demonstrate that design can play a role in solving real problems (like a sluggish economy), and providing tangible benefits to those involved.
Mint.com offers a nice pictorial history of the U.S. Dollar at http://www.mint.com/blog/trends/a-pictorial-history-of-us-currency/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MyMint+(Mint+Personal+Finance+Blog)&utm_content=Google+Reader
Posted by Lisa Agustin on December 18, 2009 at 11:26 am