The success of any currency is largely determined by the cultural dynamics and values within a society.

By Richard Colman, JD

What is a complementary currency?  A basic definition for Complementary Currency Systems is:  appropriately-designed social and economic networks which encourage cooperation and reciprocation, self-reliance and mutual aid, local production, micro-small enterprise development, socio-economic solidarity and economic justice for the meeting of needs, cultural revitalization, socio-economic solidarity and rural reconstruction.  Whew, what does all of that mean?  In layman's terms, Complementary Currency can be best understood as bartering, but it is not bartering.  Bartering involves a simple exchange between two people, while CCs create a unit of exchange that can be used among many people.  For example, time units (currency) or service units (currency) can be created for many to receive and give services.  One performs a service now in exchange for another service at a future date.  The opportunities for service are expansive (elder care, property maintenance, creative expression, and so on) and can be used over one's lifetime. 

Complementary currencies make a great deal of sense.  They enable exchanges between people that might otherwise be impossible.  However, they seem to require something over and above primary trading currencies.  They seem to require a certain attitude on the parts of the people using them.  It leads one to ponder the question "why do some countries integrate the applications and the philosophies of complementary currencies more easily than others?"

Complementary currencies are currently employed in a host of countries.  Yet, from almost every measure, Japan has most successfully integrated complementary currency systems throughout their country.  In contrast, the success of complementary currencies in such countries as the United States and Brazil has been much more limited to specific cities.  All things considered, this appears to have a strong cultural component. 

Effective time based currencies seems to have three necessary components: first, a social need that is not being filled by international trading currencies, second, an efficient and inexpensive transportation system to allow people to physically get to the point of trade and third, cooperation among the interested parties.  At best, there is only limited success when one of these three elements is missing.

The United States and Brazil have needs in and around specific cities that are not easily be met by the national currency.  They could be ideal for using time based complementary currencies.  In local situations, the transportation hurdle (how to get to a location) to perform the service in lieu of a national currency is easily overcome by walking or public transportation.  However, broader uses have proven difficult.  On a national scale, it is much harder because the ability to travel from one place to another is confined.  Far flung transportation systems have made it far more difficult for any given time based complementary currency to gain traction.  This has limited their successes, confining them to specific geographic regions.  Unless the country's land mass is tiny, this problem will exist and interfere with large scale applications.  The implications of this barrier may explain part of the reason for the local successes in the United States, such as in Ithaca, New York. 
 
For contrast, we can look to Japan.  In a report dated February 16, 2006, Toshiharu Kato notes that some 800 communities in Japan now issue time based complementary currencies.  According to Mr. Kato, the original sponsor and leading protagonist in Japan's complementary currency movement, this represents about 16% of those who do so throughout the World-despite Japan's comparatively small geographic size.  The feat is particularly remarkable considering that Japan represents only 2% of the World's population.  Yet, Japan's penetration represents the largest use in history of complementary currency in any economy.  What makes it even more miraculous is that it has occurred in the second largest economy and the movement only started in 1999.

Kato ignited this movement in an attempt to solve Japan's rapidly growing aging population's need for nursing care. 

With this realm, the system works like this: a person gives care to someone other than a family member.  In the process, he or she accumulates time credits which are subsequently banked electronically.  These banked hours can be used by a designated person at a later date.  There is no interest component at this time.  This system has worked wonderfully to provide care and company for Japan's aging population.

Why have these currencies been so successful in Japan?  Personally, I believe Japan has been so successful because they have trained their population at a very early age to consider the needs of the whole society for many generations.  Much of this behavior is explained by the Japanese word called "Wa." 

I have done some direct research on this notion by looking at blogs and other descriptors.  As near as I can tell, "Wa" is similar to the Hebrew word "shalom," Hawaii's "aloha" or the Italian word, "ciao."  These words are very hard to translate into English but we seem to get close with such words as "harmony," "cooperation" and "peaceful coexistence."  In Japan, it also means "ancient Japan"—its meaning also describing Japanese society working in harmony.  There is nostalgia and honor and duty and necessity associated with "Wa" engendering a culture of cooperation.  I take this to discern that "Wa" means that Japanese society is predisposed towards the cooperation required to make complementary currencies a success.  We see this cultural code in many places throughout Japanese society.  For example, Japanese school children help clean their schools.  To quote the National Clearinghouse for US-Japan studies web-site: "[High school students] sweep the classrooms and the hallways, empty trash cans, clean restrooms, clean chalkboards and chalk erasers, and pick up trash from the school grounds."  (spice.stanford.edu/digests/Japan/digest9)

In the November 18, 2004 Japanese Times, Alice Gordenker describes the moral education required by the Ministry of Education national curriculum.  It requires school children to "promote the moral development of children through daily activities (such as cleaning the school and caring for pets and plants on the premises) and special activities (clubs, student council, field trips and volunteering."  These activities are standard at Japanese schools, as are pep talks and posters encouraging "good manners and hard effort."

In a blog dated August 31, 2005, Mr. Joi Ito describes his neighborhood as having an unstated policy of helping each other in a sort of mutual aid society.  For example, when a neighbor died, he assisted with the funeral and that all of this was expected until it was complete.  That type of training is rare in the United Sates. 

Considering Japan's success with complementary currencies, perhaps it would behoove us to consider the virtues of some Japanese style moral education as we consider the possibilities of complementary currencies as part of what we need for facing known and unknown challenges.