The Economic

 

“A local economy reinforces people’s identification and bond with the community and the location.” (Pascal van Wanroy, Stichting Andergeld)

 

This section describes the economic workings of the temporary settlement. The Nest! links the economic to the physical as well as to the social aspects of urban construction and urban planning through a local exchange system based on the introduction of a Local Currency. How the Local Currency is backed and linked to Euro is described in Chapter 7. How developing a collective scheme for privately commissioned housing can support the transition of the temporary settlement into the newly developed neighborhood is described in chapter 8.

Opportunities for market forces to get engaged in the Nest! are outlined by introducing new products on the housing market as well as describing interesting investment opportunities.

 

The focus in this section is on economic tools and processes, that enhance economic empowerment and development for participating groups as well as for the temporary settlement as a whole. The way the Local Economy System and its elements are designed furthermore supports the main objective of the Nest! the enhancement of social cohesion and holistic community development .

Civic participation as well as social bonding are integral outcomes of the economic processes described in this section.

 

 

Chapter 7:          The Local Economy

This chapter outlines a Local Economy model designed for the temporary settlement as a way to optimize use of local resources as well as a way to enhance cooperation and social cohesion by economic means. It looks at ways how economic value can be created by cooperation, as well as how cooperation can be created by economic structures. By mapping and tapping into local skills and assets, local resources can be optimally mobilized. By working together financially, people can make use of their collective economic power, and various new opportunities arise. By keeping local resources inside the local community, capital can be built up locally.

Economic Empowerment through Localisation

Key element is the introduction of a Local Currency linked to the Euro system and backed by hard economic value: housing. The major economic factors in the temporary settlement are housing (the temporary housing as well as the customized privately commissioned housing described in the next chapter) and the creation of close to home services. Work and services in the temporary settlement are paid in Local Currency, which is accepted as equivalent to “hard currency”, since it can be used to pay for rent, which composes a major part of everybody’s regular monthly budget.

 

Euro enters the local economy through services and goods obtained by people outside of the temporary settlement. This can take the form of paying for services like childcare, eldercare, gardening or janitor services, or it can take the form of exchanging Euro for Local Currency, in order to pay for services and goods on site like food and drinks at the community pub or during events, or for a course in the Neighborhood Academy or a purchase at the Mother Center Second-hand Store.

 

At the end of the project, when the temporary settlement is dissolved and the housing resold, the Local Currency can be exchanged back to Euro.

 

The different aspects of the local economy ( housing, saving, the currency fund, the matching of demand and supply of services) are self managed by different divisions of a Local Economy Organization (LEO), an umbrella organization consisting of different branches, each having its own legal and organizational structure.

The branch dealing with the housing is organized as a cooperative, in which all residents of the temporary settlement as well as those wishing to invest in the project can have shares. Because of the co-operative structure with the settlers as members (as opposed to a privately owned housing company), the settlers gradually become the owners of the Co-op with every bit of the bank loan that is repaid. Indirectly, they become owners of their own houses and thus of the capital that represents.

 

The Local Currency enables a broader range of work to be valued and paid for than in mainstream economy. In this way everybody living in the temporary settlement can contribute to the local economy.

Everybody has some skill or talent to contribute, thus enhancing their own economic benefit as well as the benefit of the whole community.

 

Various saving schemes introduced in the temporary settlement allow for individual and collective economic empowerment, thus further enhancing the building of local capital, both economically as well as socially.

 

The ten success elements of the Nest! economy

The economic productivity of the Local Economy introduced in the Nest! is based on the following elements.

 

1.      People are brought together for exchange and economic activities via housing.

2.      Income is generated by opening up new markets both in the area of housing as well as in the area of services.

3.      Skills and contributions, that normally do not enter the market are valued and made exchangeable through a local currency.

4.      Service niches are created that are not serviced by the formal economy.

5.      Accessing, linking and marketing local skills and talents is supported by an intermediate organization.

6.      Community building is linked with economic empowerment.

7.      Groups that normally only consume are stimulated to save and invest.

8.      Economic power is enhanced through cooperative enterprises and collective savings schemes.

9.      Resources are kept inside the community.

10.  The informal is linked to the formal.

 

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