Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Wisenthal and I'm Tracy Alloway. So, Tracy, one of the big themes and economics this year has been this idea of sort of you know, you see it at the national level, of sort of local reliance. Are the President talks about buying American and how that's a value. But it's kind of interesting because this idea of like buying local or buying American, it's a it's an idea that sort of transcends traditional sort of a political viewpoints. Yeah, that's right, So everyone wants well, it feels like everyone kind of wants to look inward right now, at least economically. And when we think about that, I guess on a global basis, a lot of people tend to get outraged, you know, the end of globalization, less free trade. But it's funny because when you look at it on a smaller basis, the idea of buy local is kind of a cugly concept, right, Yeah, it seems like buying local is one of those things that economists who teach or academic economists say, oh, it's a bad idea, and free trade is what's most wealth maximizing, and it really shouldn't matter where you get it from as long as the cheapest and best quality. But it feels like people always have this sort of intuition about it and and some level of another, whether it's sort of more protectionist, more right wing, whether it's more left wing, sort of buy from the local farmer. There's a lot of people seem to have some sort of moral intuition relating to buying local that sort of conflicts a little bit with what the you know, the proper economics literature would say. Yeah, it's a really funny tension in economics, isn't it. Why Why are we talking about this? I'm glad you asked, because today we're going to um combine this topic of buying local with another favorite topic of the Odd Lots podcast, which is sort of alternative currencies and the nature of money and stuff like that, because we're going to be talking about something called birk Shares, like Berkshire exactly right. It's um the local currency, or it's a local currency that was launched in the Berkshires, which is a sort of well known region in western Massachusetts, and it's a local currency for a specific region. In a specific state. It's super local exactly right, a hyper local currency. It's been around a little over ten years, I think. And today on the show we have Ellis Maggio I'm just gonna call her. She's sort of like the Federal Reserve chair of the Janet yelling of Berkshares. So there's this currency, birk Shares. She's the ecutive director of it. She's also at the Center for New Economics, and she's going to join us and we're going to talk about what she and others have learned in launching the sort of how it works this own regional currency. All right, I guess we'll have to ask her about the elusive wage growth in the Berkshires as well. Let's get right to it. Elis, thank you very much for joining us, Thanks for having me. So let's just answer the first obvious question for people are what are Berkshires. Well, you've described it pretty well. Berkshairs are a local currency that are only used in the Berkshire region of Massachusetts, and their paper currency. They have really beautiful design by John isaacs Um that features local heroes on the front and local artwork on the back. So we celebrate people who are associated with the Berkshire Is in some way who have done important things, including Norman Rockwell and Herman Melville and W. E. B. Du Bois, but also a Stockbridge Mohican and Robin van And who started the first c s A in the country. Now I want to talk about the economics and all that and the monetary policy of Berkshares, but before I do, I don't want to forget another question, because it's something we overlook a lot. It's interesting that you immediately talked about the designs on the money, because when people talk about money from a sort of economic or monetary policy standpoint, but no one really ever talks about the designs on money. But it's always there. Every country has always put a lot of pride into honoring people on their money money, and no country has ever just had like a sort of blank token that doesn't represent anything. Part of what makes the currency work is sort of this sort of uh uh, this sort of mythical way, you know, we we imprint on it important symbols. Yeah, it's it's a symbol and it's something that you have in your hand every day, so why not make it mean something, um that you care about and so we tried to. We took very good care to make sure that berk shares were beautiful and it would be something that people could take pride in using and also just be intrigued by and attracted to. And so I think that we were. I'm really glad that they are so beautiful because it makes it so much easier to talk about. And UM, I think it's something that we've always done, but I think it's also in a longer tradition of um of local currencies in this country. We've actually had local currencies before, and UM, there were That's why we have such things as bank notes. That's why we know them as bank notes, because banks used to issue their own currencies and they often had symbols on them of the local industry or locally significant people. UM. So we're kind of touching on a long history here. So I'm going to ask the basic question then, UM, walk us through exactly what the thinking was behind launching this beautifully designed currency and how exactly it works, because I mean, I know there's a long history of local currencies in the US, but there aren't that many around nowadays, right. UM, Well, we'll start with how it works, so you can go to any of sixteen branches of four different banks in this area all the way from Sheffield and Great Barrington, Massachusetts up to North Adams and Williams Williamstown, Massachusetts, which is from the south to the north of of Berkshire County UM and you can walk into one of these banks. They're all community banks, so they're pretty small and they're focused on this area, and you can change your dollar into berkshares. Sos will get you in Berkshire and then you can take that Berkshire and spend it in the local economy. There are four hundred participating businesses throughout the region, so you can spend your work shares with any of those businesses as if they were dollars, which means that if you're the one who goes to the bank to get birk shares, then you are getting a five percent discount when you spend them. And then it's on the other end if you wanted to take your berk shares back to the bank, you could, you would only gets per berkeshare, So it's a disincentive for leaving the system and an incentive for starting to use berkshares. And I think there's an example on your website that makes it very clear. But let's say I know I want to go out and have a nice dinner that's cost gonna cost me a hundred dollars. I buy a hundred dollars worth of berk shares and go out and buy the hundred dollar dinner. The participating businesses commit to accepting them at a one to one exchange rate, and then they take they can then re cycle them back into normal US dollars. But in a sense, it's a way for them to give a five percent discount to people who have, you know, committed to shopping and eating and doing business locally. Yeah, it is UM, And then if they wanted to, they could keep spending their berkshares. That's actually the ideal situation where they would take the hundred birk shares that you spent with them, and they would turn around to their suppliers and spend some birk shares with them, so that it keeps the money circulating in this area with other local suppliers. And it's already been shown that UM local locally owned businesses actually choose to spend their money with other locally owned businesses much more than any kind of chain or corporate UM box store would. So this is kind of reinforcing that um what what people call the local multiplier effect and making it even stronger. Already, if if you're just dealing with dollars, you're one dollar that you bend in a locally owned retail store is going to circulate four times more in a locally local economy, spend your one dollar spent in a chain store. So already, with dollars you you can make a big difference spending locally. But with birk shares, we try to go to the next level and also build in a whole educational and symbolic element to it. So we kind of touched on this in the intro. But the idea here is to amplify that local multiplier effect and get more money circulating around your particular region. But do you ever get like, it sounds really great, you're boosting local businesses, But do you ever get people say in the in the next stay over complaining about the local currency and the fact that they you know, can't get in on it, or it's limiting business in some way. Oh I don't think so, um, because we don't really limit birk shares to state lines. UM. Our banks right now are all in Massachusetts, UM, but we have businesses over in New York State, in Columbia County, UM, and a little bit into UM maybe into Vermont but probably not that much, but a little bit into Connecticut. So we kind of wanted to be more organic UM and follow the lines of the Berkshire economy, and with the Berkshire economy doesn't follow necessarily UM state lines. So if you have business with somebody across the state, across the line in New York State, UM, and they want to take berkshares from you, then that's fine with us. We don't get involved. We think that you should just do what makes sense for your business, all right. I want to really get into the nitty gritty about the mechanics of this. So one of one question I have is how do you guarantee that there is always the money to redeem your berkshares for cents on the dollar? I mean, what is the institutional setup you have in place to guarantee that the amount of money available for redemption is always perfectly matched with the amount of burk shares out in circulation. So ten years ago, when we started burk Shares. We actually we turned to the bank branch managers to help us figure out those mechanics because we're not community bankers, but we really wanted to work with our community banks and we didn't want to create a local currency that cut them out of the picture because they are just as important as the locally owned businesses in our local economy. So we turned to them. And we actually have a long history of the Schumacher Center for New Economics UM has kind of fostered local economy projects UM local currencies in this region, and there have been experiments here over the course of the last thirty five plus years UM, and that's kind of what led up to berk Shares as they are now. But when we started burk Shares, we turned to those branch managers and we said, how would it work for you? What would be the best system, and they came up with a system we have, which is that Berkshares Incorporated has a checking account with each different branch that has birk shares for exchange available for exchange, and UM, when you go with your dollars to get your hundred birk shares, those go into that checking account owned by birk Shares, Inc. And they sit there and they're backing the hundred berkshares that come out and UM that happens at any of the branches that are involved, and we just keep an eye on those balances because we own all of them. So we get regular checking account statements every month UM, and we have online banking and we can check those accounts and make sure that none of them fall too low or anything. But generally they serve as the UM. They basically are allowing for liquidity so that you could go back and get your change of berkshares back into dollars at any of those branches. So Joe joked that you were kind of like the Janet Yellen for berk shares. Is that true? Like, to what extent does this currency mimic an actual currency like the US dollar? And I know it's pegged at the moment um to a hundred. Have you ever, for instance, considered deep hagging it. No, it's a good question, UM, we have so kind of the way that berkshares differs from a national currency is is exactly the way we want to differ. We want to be a local, place based, nonprofit issuer of currency UM with an open membership and democratic governance. So anybody who lives here can become a member of berk Shares for birk Shares or twenty five dollars a year. Those membership dues will give you are right to vote at the annual meeting, and you could run for the board or you could vote for the board. So the Board of Directors has chosen from among residents of the Berkshires. By residents of the Berkshires, the Board of Directors then gets to make decisions about the currency. Of course, the federal Reserve and the national national currency is meant to be in some respect governed by the people of the United States, but it's definitely far beyond our reach to make very many decisions about our currency or about monetary policy. So we're trying to create another system, another layer that isn't going to ever replace the dollar, but that's going to be a currency where we have a lot more say at the local level, and we can create a currency that will respond to local conditions uh in a more agile way and basically fill in gaps in the local economy and use local knowledge to do that. So that's what the structure birk Shares looks like. And so I work with the Board of Directors of berk Shares and the board of directors is elected by UM, the members of the organization. And so I guess that's kind of how it works structurally. And then what else? What was there your other part of your question? I was asking, have you ever considered depegging it, you know, in times of economic crises or something. Yeah, well, that is what we're kind of. We're trying to create another level of like what you guys were saying earlier, resilience at the local level, so that UM we have a tool. We think of Birkshares as a tool for community self reliance and that way, the Board of Directors could, working with our partner banks and businesses, make a decision to change the exchange rate. And we actually have done that. We started off with ninety cents to the dollar to the burkeshare UM and now it's to the birchtry. That was a big deal to change it. But the Board of Directors decided to do that UM based on feedback we got. And so we could in the long run decide to unpeg from the dollar if we wanted to, and UM that would actually be going more in the direction of those local currencies we were talking about before, because um, those local currencies weren't really tied to other currencies. They were kind of based on They were issued based on productive loans that the banks would make too local businesses. So the amount of money going out into the local community from the bank would be based on the need for that that capital by local businesses, and the basically would be backed by the future production of those local businesses. So the money they were issuing was backed by future production of goods and services in the local economy. And if we were to move in that direction, which we actually aspire to do, um, then we would be moving towards the currency that was not backed so much by the dollar, but backed by production of goods and services in the local local economy. Here, that's cool, all right, Here's a here's a cynical question. There's a fot So at one point there was a ten cent spread between the amount data costs to buy them and the amount at a cost to redeem them. Has anyone ever tried to game it by, say, you know, offering offering establishments for their berk shares or nine cents or anything like that an attempt to profit or arbitrage away that that bid ask spread Joe, You're always looking for the arbitrage everyone, you know, everyone was thinking it. Who's listening to this? So we do UM so we have agreements with our banks about the way that the exchange takes place. So the banks all know that the UM the exchange rate iss per Berke share, and that's kind of baked in and we when we changed that, we had to do it in secret, so it had to be an overnight shift where we created all new publicity materials and everything, and we trained the bank tellers and everything had to happen in secret so that people couldn't um try to profit off of that. Um So it is a big that would be a big, a big deal to change the exchange rate and it was UM but so far nobody can really do that because the bank tellers know that at the bank the exchange rates per Berke share. What people do on their own is not our business. Like you, I've gone to Europe and people have traded me euros for Berk shares and it's definitely been in my favor and I was happy to do that. Um So, whatever that that's kind of nobody really knows. It's basically up to the value that you place on the birk share. UM I have a similar question, I guess, but um like, has anyone ever tried to counterfeit Berkshire's Do you get the same sorts of issues that we see in national currencies. Well, actually, we have had. We're kind of proud to say that we had one attempt at counterfeit because we think that's the highest form of flattery. We don't want it to happen again. But it is really hard to counterfeit birk shares because they are UM. They're printed on extremely high quality currency paper with high quality printing done by Excelsior Printing in North Adams and UM with very intricate design. So it would be very hard to successfully counterfeit a Berkshire. And we have, uh, we've trained the cashiers at some of the bigger establishments that take berkshares to check for real birk shares, and it's it's pretty easy to spot a fake one, and we've only had happen once one Bill And it's such a small community really that it would be it would be pretty silly to try to counterfeit of Berkshire, because if you got caught, your name would be mud. So it's been around, you launched it in two thousand and six. So what are the big lessons you've learned? What are some of the takeaways that you've seen in terms of how this affects the local economy. If they if say there are two competing family restaurants and one excepts birk shares and the other one doesn't, do you notice do they notice a difference in their um, you know, how they do business wise? Like, what are some of the you know, the big results and takeaways you've seen from this project. Well, I think that the educational value is um not to be understated, because um, we just it gets people thinking about the local economy and local businesses in a way that we don't really do very often normally, because we just kind of look for the most convenient way, or we look for the um the cheapest solution to what we need, and we don't always take into account the more human aspect and the effects on our environment of our spending choices. So birkshires are a tool that can be in everybody's wallet and that are very kind of flashy and they've been a great way to get conversations going. And so we've built out, just in the last year, we've built out, or the last two years, we've built out an educational program for young people that helps them write business plans. We brought in mentors for that program. UM and Birkshires are kind of like the the the little tool that gets people in the door and kind of flips the switch to get them thinking about these things. And so I think that the we always need to remember that that it's not just a monetary tool, but that it's a it's an educational tool, so we have to think of ourselves as educators. And then I think beyond that, it's a way of kind of seeing our region and giving ourselves an identity that has to do with the economy. And to think about a regional economy is something that Jane Jacobs called for UM and that Schumacher talked about. But it's not in our general economics text books necessarily, it's not in the mainstream UM way of thinking, and UM I think it's kind of necessary now. So it has sparked really good conversations at our regional Economic Development UM organizations, and I think that's really valuable. And then it's the other aspect of it is that it's something that everybody could have in their pockets. So it's not like it's not something that only the people that know about economics can have their hands on. It's something that middle schoolers can look at and use, it's something that retirees can use. It's people who of all different types who can then have a say in the local economy so that we're not leaving it up to the experts. We're kind of all becoming economists. So that's the thing that really gets me most excited about Berkshires, And I think it's something that we kind of need because we don't want to just leave it up to the the experts because it's not necessarily working for all of us. So to take it back and kind of have our hands on it and have a say is really important at this point. And I think that to the Buddhist economics, yeah conversation. As you were saying that, I was thinking about exactly that a recent a recent episode on Buddhist economics and the sort of other values that we don't traditionally talk about in economics conversations, but that I think as we were saying the beginning, people have some sort of intuitive, intuitive sense that they're important. Yeah, the idea that morals have a place in economics is I think a really important concept, but it's not something that's that's generally talked about. So I think that thinking about how, um, how the economy is not something that just happens to us. It's something that we should be shaping in the way that aligns with our values. And if our values are two, take care of each other, take care of ourselves and um have livelihoods that are really fulfilling, and trying to find ways that more people can have those livelihoods, and then we need to take control because really, and that's kind of goes back to just the most basic understanding of borkshares is that they're a way of spending your money with locally owned businesses. And the key there is locally owned, So who owns the business and who's benefiting from the wealth of that business or the money that you're spending with that business. Real quickly, do you have a public figure on the number of berkshire is currently in circulation? Yeah, we have because we have all those bank accounts, um the checking accounts that serve as exchange accounts. UM, we can tell exactly how many Birkshares are out there, and there are about a hundred and forty thousand birk Shares out of the banks UM in a region of about a hundred and thirty thousand people. So everyone, everyone, at least on average, everyone has about one at least one. But that's kind of We've only just recently reached into the northern part of Berkshire County because for a long time all of the participating banks were in southern Berkshire County, which is a region of about people. All Right, Alias Maggio from the Schumacher Center of New Economics and the executive director of Berkshares, really really appreciate you coming on. Fascinating conversation. Thanks so much for having me, Tracy. I really enjoyed that conversation because I love especially that last answer about sort of taking these abstract concepts that we have in economics and markets and then doing a project or an experiment that actually makes it real and tangible and sort of d abstracts it, so to speak. Yeah, and I liked her point of about shaping the economy towards our values as well, because you do often get the sense that the economy is just something that exists and we have no control over it. But that said, like, there are a couple things here that kind of not concern me, but I wonder about, Like one is, what would happen if everyone started their own local currencies, and like to how granular does monetary policy actually have to be? Like, I know, we talked about the Eurozone a lot, and the idea that a one size fits all currency doesn't necessarily work for a place like Greece, But like if Greece got the drachma, would you have to have then a separate currency for Athens and a separate currency for like Micanos. I just wonder, like where do you stop? Well, one thing that sort of intrigues me about this experiment is that these sort of questions of free trade are obviously very divisive. And what seems nice about Burke shares is that it's totally voluntary. If you value this idea of buying local and you want to explicitly support local businesses, you can, but of course nobody is compelled to, and anyone can use normal dollars, and so as long as people trust that the currency will hold its value and that you know it's not going to collapse, or that you know it'll be roughly equally exchangeable with real dollars. Then I think it sort of provides a nice way of some people expressing their values towards one thing without you know, hurting the people who don't really care about that. Yeah, you're exactly right. People can use it the way they kind of want to. It's a nice option to have. Uh So, I wonder, um, do you think there's a market to be made and speculating on the future direction of shares? If you had a mole inside the board of directors for the next time they reprice Berk shares, you could probably make a lot of money. But I would I would probably feel guilty about doing that, to be honest. Yeah, I would not encourage any anyone to pursue that. Right, We do not recommend that path, all right, No insider trading on a small regional currencies in western Massachusetts. Place. Um. That was it for this edition of the Odd Lots podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway, and I'm Joe. Why isn't thal You can follow me on Twitter at the Stalwart, and you can follow Berkshires on Twitter at Berkshire's

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Wisenthal and I'm Tracy Alloway. So, Tracy, one of the big themes and economics this year has been this idea of sort of you know, you see it at the national level, of sort of local reliance. Are the President talks about buying American and how that's a value. But it's kind of interesting because this idea of like buying local or buying American, it's a it's an idea that sort of transcends traditional sort of a political viewpoints. Yeah, that's right, So everyone wants well, it feels like everyone kind of wants to look inward right now, at least economically. And when we think about that, I guess on a global basis, a lot of people tend to get outraged, you know, the end of globalization, less free trade. But it's funny because when you look at it on a smaller basis, the idea of buy local is kind of a cugly concept, right, Yeah, it seems like buying local is one of those things that economists who teach or academic economists say, oh, it's a bad idea, and free trade is what's most wealth maximizing, and it really shouldn't matter where you get it from as long as the cheapest and best quality. But it feels like people always have this sort of intuition about it and and some level of another, whether it's sort of more protectionist, more right wing, whether it's more left wing, sort of buy from the local farmer. There's a lot of people seem to have some sort of moral intuition relating to buying local that sort of conflicts a little bit with what the you know, the proper economics literature would say. Yeah, it's a really funny tension in economics, isn't it. Why Why are we talking about this? I'm glad you asked, because today we're going to um combine this topic of buying local with another favorite topic of the Odd Lots podcast, which is sort of alternative currencies and the nature of money and stuff like that, because we're going to be talking about something called birk Shares, like Berkshire exactly right. It's um the local currency, or it's a local currency that was launched in the Berkshires, which is a sort of well known region in western Massachusetts, and it's a local currency for a specific region. In a specific state. It's super local exactly right, a hyper local currency. It's been around a little over ten years, I think. And today on the show we have Ellis Maggio I'm just gonna call her. She's sort of like the Federal Reserve chair of the Janet yelling of Berkshares. So there's this currency, birk Shares. She's the ecutive director of it. She's also at the Center for New Economics, and she's going to join us and we're going to talk about what she and others have learned in launching the sort of how it works this own regional currency. All right, I guess we'll have to ask her about the elusive wage growth in the Berkshires as well. Let's get right to it. Elis, thank you very much for joining us, Thanks for having me. So let's just answer the first obvious question for people are what are Berkshires. Well, you've described it pretty well. Berkshairs are a local currency that are only used in the Berkshire region of Massachusetts, and their paper currency. They have really beautiful design by John isaacs Um that features local heroes on the front and local artwork on the back. So we celebrate people who are associated with the Berkshire Is in some way who have done important things, including Norman Rockwell and Herman Melville and W. E. B. Du Bois, but also a Stockbridge Mohican and Robin van And who started the first c s A in the country. Now I want to talk about the economics and all that and the monetary policy of Berkshares, but before I do, I don't want to forget another question, because it's something we overlook a lot. It's interesting that you immediately talked about the designs on the money, because when people talk about money from a sort of economic or monetary policy standpoint, but no one really ever talks about the designs on money. But it's always there. Every country has always put a lot of pride into honoring people on their money money, and no country has ever just had like a sort of blank token that doesn't represent anything. Part of what makes the currency work is sort of this sort of uh uh, this sort of mythical way, you know, we we imprint on it important symbols. Yeah, it's it's a symbol and it's something that you have in your hand every day, so why not make it mean something, um that you care about and so we tried to. We took very good care to make sure that berk shares were beautiful and it would be something that people could take pride in using and also just be intrigued by and attracted to. And so I think that we were. I'm really glad that they are so beautiful because it makes it so much easier to talk about. And UM, I think it's something that we've always done, but I think it's also in a longer tradition of um of local currencies in this country. We've actually had local currencies before, and UM, there were That's why we have such things as bank notes. That's why we know them as bank notes, because banks used to issue their own currencies and they often had symbols on them of the local industry or locally significant people. UM. So we're kind of touching on a long history here. So I'm going to ask the basic question then, UM, walk us through exactly what the thinking was behind launching this beautifully designed currency and how exactly it works, because I mean, I know there's a long history of local currencies in the US, but there aren't that many around nowadays, right. UM, Well, we'll start with how it works, so you can go to any of sixteen branches of four different banks in this area all the way from Sheffield and Great Barrington, Massachusetts up to North Adams and Williams Williamstown, Massachusetts, which is from the south to the north of of Berkshire County UM and you can walk into one of these banks. They're all community banks, so they're pretty small and they're focused on this area, and you can change your dollar into berkshares. Sos will get you in Berkshire and then you can take that Berkshire and spend it in the local economy. There are four hundred participating businesses throughout the region, so you can spend your work shares with any of those businesses as if they were dollars, which means that if you're the one who goes to the bank to get birk shares, then you are getting a five percent discount when you spend them. And then it's on the other end if you wanted to take your berk shares back to the bank, you could, you would only gets per berkeshare, So it's a disincentive for leaving the system and an incentive for starting to use berkshares. And I think there's an example on your website that makes it very clear. But let's say I know I want to go out and have a nice dinner that's cost gonna cost me a hundred dollars. I buy a hundred dollars worth of berk shares and go out and buy the hundred dollar dinner. The participating businesses commit to accepting them at a one to one exchange rate, and then they take they can then re cycle them back into normal US dollars. But in a sense, it's a way for them to give a five percent discount to people who have, you know, committed to shopping and eating and doing business locally. Yeah, it is UM, And then if they wanted to, they could keep spending their berkshares. That's actually the ideal situation where they would take the hundred birk shares that you spent with them, and they would turn around to their suppliers and spend some birk shares with them, so that it keeps the money circulating in this area with other local suppliers. And it's already been shown that UM local locally owned businesses actually choose to spend their money with other locally owned businesses much more than any kind of chain or corporate UM box store would. So this is kind of reinforcing that um what what people call the local multiplier effect and making it even stronger. Already, if if you're just dealing with dollars, you're one dollar that you bend in a locally owned retail store is going to circulate four times more in a locally local economy, spend your one dollar spent in a chain store. So already, with dollars you you can make a big difference spending locally. But with birk shares, we try to go to the next level and also build in a whole educational and symbolic element to it. So we kind of touched on this in the intro. But the idea here is to amplify that local multiplier effect and get more money circulating around your particular region. But do you ever get like, it sounds really great, you're boosting local businesses, But do you ever get people say in the in the next stay over complaining about the local currency and the fact that they you know, can't get in on it, or it's limiting business in some way. Oh I don't think so, um, because we don't really limit birk shares to state lines. UM. Our banks right now are all in Massachusetts, UM, but we have businesses over in New York State, in Columbia County, UM, and a little bit into UM maybe into Vermont but probably not that much, but a little bit into Connecticut. So we kind of wanted to be more organic UM and follow the lines of the Berkshire economy, and with the Berkshire economy doesn't follow necessarily UM state lines. So if you have business with somebody across the state, across the line in New York State, UM, and they want to take berkshares from you, then that's fine with us. We don't get involved. We think that you should just do what makes sense for your business, all right. I want to really get into the nitty gritty about the mechanics of this. So one of one question I have is how do you guarantee that there is always the money to redeem your berkshares for cents on the dollar? I mean, what is the institutional setup you have in place to guarantee that the amount of money available for redemption is always perfectly matched with the amount of burk shares out in circulation. So ten years ago, when we started burk Shares. We actually we turned to the bank branch managers to help us figure out those mechanics because we're not community bankers, but we really wanted to work with our community banks and we didn't want to create a local currency that cut them out of the picture because they are just as important as the locally owned businesses in our local economy. So we turned to them. And we actually have a long history of the Schumacher Center for New Economics UM has kind of fostered local economy projects UM local currencies in this region, and there have been experiments here over the course of the last thirty five plus years UM, and that's kind of what led up to berk Shares as they are now. But when we started burk Shares, we turned to those branch managers and we said, how would it work for you? What would be the best system, and they came up with a system we have, which is that Berkshares Incorporated has a checking account with each different branch that has birk shares for exchange available for exchange, and UM, when you go with your dollars to get your hundred birk shares, those go into that checking account owned by birk Shares, Inc. And they sit there and they're backing the hundred berkshares that come out and UM that happens at any of the branches that are involved, and we just keep an eye on those balances because we own all of them. So we get regular checking account statements every month UM, and we have online banking and we can check those accounts and make sure that none of them fall too low or anything. But generally they serve as the UM. They basically are allowing for liquidity so that you could go back and get your change of berkshares back into dollars at any of those branches. So Joe joked that you were kind of like the Janet Yellen for berk shares. Is that true? Like, to what extent does this currency mimic an actual currency like the US dollar? And I know it's pegged at the moment um to a hundred. Have you ever, for instance, considered deep hagging it. No, it's a good question, UM, we have so kind of the way that berkshares differs from a national currency is is exactly the way we want to differ. We want to be a local, place based, nonprofit issuer of currency UM with an open membership and democratic governance. So anybody who lives here can become a member of berk Shares for birk Shares or twenty five dollars a year. Those membership dues will give you are right to vote at the annual meeting, and you could run for the board or you could vote for the board. So the Board of Directors has chosen from among residents of the Berkshires. By residents of the Berkshires, the Board of Directors then gets to make decisions about the currency. Of course, the federal Reserve and the national national currency is meant to be in some respect governed by the people of the United States, but it's definitely far beyond our reach to make very many decisions about our currency or about monetary policy. So we're trying to create another system, another layer that isn't going to ever replace the dollar, but that's going to be a currency where we have a lot more say at the local level, and we can create a currency that will respond to local conditions uh in a more agile way and basically fill in gaps in the local economy and use local knowledge to do that. So that's what the structure birk Shares looks like. And so I work with the Board of Directors of berk Shares and the board of directors is elected by UM, the members of the organization. And so I guess that's kind of how it works structurally. And then what else? What was there your other part of your question? I was asking, have you ever considered depegging it, you know, in times of economic crises or something. Yeah, well, that is what we're kind of. We're trying to create another level of like what you guys were saying earlier, resilience at the local level, so that UM we have a tool. We think of Birkshares as a tool for community self reliance and that way, the Board of Directors could, working with our partner banks and businesses, make a decision to change the exchange rate. And we actually have done that. We started off with ninety cents to the dollar to the burkeshare UM and now it's to the birchtry. That was a big deal to change it. But the Board of Directors decided to do that UM based on feedback we got. And so we could in the long run decide to unpeg from the dollar if we wanted to, and UM that would actually be going more in the direction of those local currencies we were talking about before, because um, those local currencies weren't really tied to other currencies. They were kind of based on They were issued based on productive loans that the banks would make too local businesses. So the amount of money going out into the local community from the bank would be based on the need for that that capital by local businesses, and the basically would be backed by the future production of those local businesses. So the money they were issuing was backed by future production of goods and services in the local economy. And if we were to move in that direction, which we actually aspire to do, um, then we would be moving towards the currency that was not backed so much by the dollar, but backed by production of goods and services in the local local economy. Here, that's cool, all right, Here's a here's a cynical question. There's a fot So at one point there was a ten cent spread between the amount data costs to buy them and the amount at a cost to redeem them. Has anyone ever tried to game it by, say, you know, offering offering establishments for their berk shares or nine cents or anything like that an attempt to profit or arbitrage away that that bid ask spread Joe, You're always looking for the arbitrage everyone, you know, everyone was thinking it. Who's listening to this? So we do UM so we have agreements with our banks about the way that the exchange takes place. So the banks all know that the UM the exchange rate iss per Berke share, and that's kind of baked in and we when we changed that, we had to do it in secret, so it had to be an overnight shift where we created all new publicity materials and everything, and we trained the bank tellers and everything had to happen in secret so that people couldn't um try to profit off of that. Um So it is a big that would be a big, a big deal to change the exchange rate and it was UM but so far nobody can really do that because the bank tellers know that at the bank the exchange rates per Berke share. What people do on their own is not our business. Like you, I've gone to Europe and people have traded me euros for Berk shares and it's definitely been in my favor and I was happy to do that. Um So, whatever that that's kind of nobody really knows. It's basically up to the value that you place on the birk share. UM I have a similar question, I guess, but um like, has anyone ever tried to counterfeit Berkshire's Do you get the same sorts of issues that we see in national currencies. Well, actually, we have had. We're kind of proud to say that we had one attempt at counterfeit because we think that's the highest form of flattery. We don't want it to happen again. But it is really hard to counterfeit birk shares because they are UM. They're printed on extremely high quality currency paper with high quality printing done by Excelsior Printing in North Adams and UM with very intricate design. So it would be very hard to successfully counterfeit a Berkshire. And we have, uh, we've trained the cashiers at some of the bigger establishments that take berkshares to check for real birk shares, and it's it's pretty easy to spot a fake one, and we've only had happen once one Bill And it's such a small community really that it would be it would be pretty silly to try to counterfeit of Berkshire, because if you got caught, your name would be mud. So it's been around, you launched it in two thousand and six. So what are the big lessons you've learned? What are some of the takeaways that you've seen in terms of how this affects the local economy. If they if say there are two competing family restaurants and one excepts birk shares and the other one doesn't, do you notice do they notice a difference in their um, you know, how they do business wise? Like, what are some of the you know, the big results and takeaways you've seen from this project. Well, I think that the educational value is um not to be understated, because um, we just it gets people thinking about the local economy and local businesses in a way that we don't really do very often normally, because we just kind of look for the most convenient way, or we look for the um the cheapest solution to what we need, and we don't always take into account the more human aspect and the effects on our environment of our spending choices. So birkshires are a tool that can be in everybody's wallet and that are very kind of flashy and they've been a great way to get conversations going. And so we've built out, just in the last year, we've built out, or the last two years, we've built out an educational program for young people that helps them write business plans. We brought in mentors for that program. UM and Birkshires are kind of like the the the little tool that gets people in the door and kind of flips the switch to get them thinking about these things. And so I think that the we always need to remember that that it's not just a monetary tool, but that it's a it's an educational tool, so we have to think of ourselves as educators. And then I think beyond that, it's a way of kind of seeing our region and giving ourselves an identity that has to do with the economy. And to think about a regional economy is something that Jane Jacobs called for UM and that Schumacher talked about. But it's not in our general economics text books necessarily, it's not in the mainstream UM way of thinking, and UM I think it's kind of necessary now. So it has sparked really good conversations at our regional Economic Development UM organizations, and I think that's really valuable. And then it's the other aspect of it is that it's something that everybody could have in their pockets. So it's not like it's not something that only the people that know about economics can have their hands on. It's something that middle schoolers can look at and use, it's something that retirees can use. It's people who of all different types who can then have a say in the local economy so that we're not leaving it up to the experts. We're kind of all becoming economists. So that's the thing that really gets me most excited about Berkshires, And I think it's something that we kind of need because we don't want to just leave it up to the the experts because it's not necessarily working for all of us. So to take it back and kind of have our hands on it and have a say is really important at this point. And I think that to the Buddhist economics, yeah conversation. As you were saying that, I was thinking about exactly that a recent a recent episode on Buddhist economics and the sort of other values that we don't traditionally talk about in economics conversations, but that I think as we were saying the beginning, people have some sort of intuitive, intuitive sense that they're important. Yeah, the idea that morals have a place in economics is I think a really important concept, but it's not something that's that's generally talked about. So I think that thinking about how, um, how the economy is not something that just happens to us. It's something that we should be shaping in the way that aligns with our values. And if our values are two, take care of each other, take care of ourselves and um have livelihoods that are really fulfilling, and trying to find ways that more people can have those livelihoods, and then we need to take control because really, and that's kind of goes back to just the most basic understanding of borkshares is that they're a way of spending your money with locally owned businesses. And the key there is locally owned, So who owns the business and who's benefiting from the wealth of that business or the money that you're spending with that business. Real quickly, do you have a public figure on the number of berkshire is currently in circulation? Yeah, we have because we have all those bank accounts, um the checking accounts that serve as exchange accounts. UM, we can tell exactly how many Birkshares are out there, and there are about a hundred and forty thousand birk Shares out of the banks UM in a region of about a hundred and thirty thousand people. So everyone, everyone, at least on average, everyone has about one at least one. But that's kind of We've only just recently reached into the northern part of Berkshire County because for a long time all of the participating banks were in southern Berkshire County, which is a region of about people. All Right, Alias Maggio from the Schumacher Center of New Economics and the executive director of Berkshares, really really appreciate you coming on. Fascinating conversation. Thanks so much for having me, Tracy. I really enjoyed that conversation because I love especially that last answer about sort of taking these abstract concepts that we have in economics and markets and then doing a project or an experiment that actually makes it real and tangible and sort of d abstracts it, so to speak. Yeah, and I liked her point of about shaping the economy towards our values as well, because you do often get the sense that the economy is just something that exists and we have no control over it. But that said, like, there are a couple things here that kind of not concern me, but I wonder about, Like one is, what would happen if everyone started their own local currencies, and like to how granular does monetary policy actually have to be? Like, I know, we talked about the Eurozone a lot, and the idea that a one size fits all currency doesn't necessarily work for a place like Greece, But like if Greece got the drachma, would you have to have then a separate currency for Athens and a separate currency for like Micanos. I just wonder, like where do you stop? Well, one thing that sort of intrigues me about this experiment is that these sort of questions of free trade are obviously very divisive. And what seems nice about Burke shares is that it's totally voluntary. If you value this idea of buying local and you want to explicitly support local businesses, you can, but of course nobody is compelled to, and anyone can use normal dollars, and so as long as people trust that the currency will hold its value and that you know it's not going to collapse, or that you know it'll be roughly equally exchangeable with real dollars. Then I think it sort of provides a nice way of some people expressing their values towards one thing without you know, hurting the people who don't really care about that. Yeah, you're exactly right. People can use it the way they kind of want to. It's a nice option to have. Uh So, I wonder, um, do you think there's a market to be made and speculating on the future direction of shares? If you had a mole inside the board of directors for the next time they reprice Berk shares, you could probably make a lot of money. But I would I would probably feel guilty about doing that, to be honest. Yeah, I would not encourage any anyone to pursue that. Right, We do not recommend that path, all right, No insider trading on a small regional currencies in western Massachusetts. Place. Um. That was it for this edition of the Odd Lots podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway, and I'm Joe. Why isn't thal You can follow me on Twitter at the Stalwart, and you can follow Berkshires on Twitter at Berkshire's