Grassroots Economics
= refers to distinct European and African-centric initiatives
Europe
URL = http://www.ub.edu/grassrootseconomics/
"Our project proposes a bottom-up approach to economic dynamics. It is dedicated to give theoretical value to non-academic intellectual models that guide economic practice and to explain their significance for understanding the large scale economy. Four Southern European countries –Portugal, Italy, Greece and Spain— have been strategically selected as research sites due to their relevance in the current European crisis."
(http://www.ub.edu/grassrootseconomics/?page_id=8
More Information
- research papers, http://www.ub.edu/grassrootseconomics/?page_id=1480
Kenya, Africa
= "Utilizing a set of economic and technological practices like Community Inclusion Currencies, Community Asset Vouchers and Food Forests, they facilitate exchanges of goods and services and incubate local projects and businesses, aiming at making them independent of scarce national currencies and volatile markets."
URL = www.grassrootseconomics.org
For more see our entry on Sarafu Networks.
0. Commons Economy Roadmap:
"Grassroots Economics, established in 2010 in Kenya, is a non-profit foundation dedicated to empowering marginalized communities of the world to build their own sustainable local economies, now spreading to other parts of Africa and other countries like the US and Colombia.
Utilizing a set of economic and technological practices like Community Inclusion Currencies, Community Asset Vouchers and Food Forests, they facilitate exchanges of goods and services and incubate local projects and businesses, aiming at making them independent of scarce national currencies and volatile markets.
Their vision is focused on enabling communities to develop their own prospering economies with the stability of their own currencies, fostering economic self-sufficiency and resilience, and to connect these local economies among each other through mutual credit networks in the perspective of the Collaborative Finance movement."
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1.
Will Ruddick:
"'Grassroots' is a term used to describe bottom-up and community-driven systems, noting that a single root of grass does little to hold the soil together, while grass roots woven together are incredibly strong. This exploration is grounded in the work of Grassroots Economics (GrE), a non-profit foundation based in Kenya since 2009, dedicated to nurturing prospering economies built by thriving communities in diverse settings including urban, rural, peri-urban, and refugee areas. Believing in the power of group resource coordination for well-being, GrE initiatives have extended across over 100 communities in Kenya, with growing impacts in other nations."
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2.
"The study of Resource Coordination in Ancient Cultures often centers around themes of colonization, power structures, and hierarchies, eclipsing interest in understanding the harmonious social dynamics that previously existed. Pioneers like Marcel Mauss (2016/1950) observed communities supporting each other without apparent reciprocity or monetary exchange, a phenomenon that he memorably labeled “gift economies.” The term has had the unfortunate effect of implying that these cultures were astonishingly altruistic and self-sacrificial, and somehow abnormal. Yet, as I have observed at GrE, through accounts from living elders, traditional cultures that thrive without money or markets have utilized myriad resource coordination and exchange systems such as calendars, ledgers, indirect reciprocity, accounting, debt systems and resource pooling.
I founded GrE without a deep understanding of these non-monetary systems, by following the path of Community and Complementary Currencies as described by Bernard Lietaer (2013). This inspiring field led me to believe that by redesigning or reinventing money, I could bring about systemic change to advance well-being. It was a worthwhile strategy, yet it sometimes felt strange to apply a complex jumble of modern economic concepts to social circumstances in Africa. The ideas didn’t have clear grounding.
I began introducing these concepts with local communities in 2010 by sharing information about projects like Worgl in Austria, Deli Dollars (now BerkShares) in Massachusetts, and Bancos Palmas in Brazil. All of these projects had developed some form of community money, a bearer instrument that could, under certain conditions (which we will expand on further), act as a medium of exchange.
Following this introduction by 2014, dozens of initial groups in Kenya developed their own common voucher denominated in national currency (Kenyan Shillings). Vouchers were divided among participants based on their capacity to offer goods or services to the community. The vouchers (denominated in Kenyan Shillings) represented commitments created by group members, redeemable as payment for their goods and services. Features like demurrage – the gradual expiration of the quantity of vouchers held by anyone and renewed into a community fund – helped discourage hoarding and encourage circulation. "
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Status
Dave Darby:
"The Sarafu Network is a mutual credit network that allows trading without conventional money, that includes 50,000 households across Kenya and did $3 million worth of trade last year – how’s that for a brief description?
Will Ruddick: Yeah, actually we’re up to 52,000, and last month we had 4200 new users registered."
(https://www.lowimpact.org/posts/how-chamas-mutual-credit-changing-africa)
2024 Update
"They currently have over 80,000 participating small businesses, with thousands joining each week." [4]
CER Report
CER:
"Grassroots Economics has made a significant economic impact, particularly in Kenya, where its community currency programs have been most active.
So far, Grassroots Economics has accumulated over 50.000 beneficiaries who are using the community currency for a variety of essential and non-essential goods and services. Their community currency relies on the Celo blockchain.
In the words of Shalia Agha of Grassroots Economics, the currencies have impacted both rural and urban communities nationwide by providing them with a line of credit that is redeemed by their community, with over $3mln being traded using Sarafu (meaning “currency” in Swahili), a network platform based on Celo Distributed Ledger protocols."
Characteristics
The Commons Orientation of the Project
CER:
"In this section we examine the project’s closeness to those that we consider the fundamental values of the Commons space.
Ownership, Governance and Funding
What’s the configuration of the ownership and governance structures of the project, especially in relation to the main sources of funding received to date?
Grassroots Economics various operations are realized through a non profit Foundation, so they don't have a traditional ownership structure and they went through a multitude of organizational transformations in the last decade. Here you can read about its history in this sense.
The governance is still centralized in the hands of a central team, coordinating the programs and cultivating relationships with the communities using their tooling, but decentralizing such operations is something that will surely be considered as soon as it’s feasible to do so.
In terms of funding, they didn’t receive investments but mostly donations, and they now are engaging with protocol-based monetization strategies as you can read in sections 2 and 2.2.
Workforce, Leadership and Inclusion
How does the project ensure diversity and inclusion across various dimensions such as background, ethnicity, and gender, both in the general workforce and in leadership roles?
The Grassroots Economics team is mostly composed of Kenyan locals, with a good gender balance, and as such it’s not only obviously inclusive but also radically different from the average fintech or blockchain project.
Decentralization and Distributedness
To what extent is the organization or system decentralized or distributed, and how does this approach fit with the specific needs and context in which it operates?
Grassroots Economics' approach to community development through community currencies inherently embraces principles of decentralization and distribution; by creating community currencies, Grassroots Economics decentralizes economic power, placing it in the hands of local communities.
Grassroots Economics promotes the creation of locally run Sarafu Network nodes, which in turn serve to empower local communities. They are also working on a MOOC (Massive Online Open Course), to teach interested parties how to set up a node, from technical know-how to legal framework and community building.
This all lends itself to a high degree of decentralization and distribution, making the project more resilient and less dependent on the activity of the foundation itself.
Nontraditional Economics
How extensively does the project implement and test economic models based on non-monetary transactions like mutual credit, barter systems, or resource-sharing networks (CoFi)? How does it operate differently from traditional corporations or non profits?
Grassroots Economics is one of the main active organizations practicing CoFi (Collaborative Finance) techniques on the ground. Through the use of community currencies, they seek to empower local communities in alternative means. These currencies operate alongside national currencies, enabling residents to exchange goods and services even in the absence of conventional money, thereby strengthening local economies, enhancing economic resilience, and reducing dependency on external economic systems.
Grassroots Economics’ approach favors the creation of circular economies inside communities, emphasizing sustainable development and participatory governance.
Socio-Political Impact and Challenge to the Status Quo
What impact does the project have on existing socio-economic structures, and in what ways does it challenge or seek to alter the current political and economic paradigms?
By facilitating the circulation of locally created currencies, Grassroots Economics empowers communities to unlock untapped economic potential, enabling trade and exchange even in the absence of national currency; this in turn promotes alternative ways to fund the underfunded, avoiding overreliance on donations and angel investors.
Also, Grassroots Economics' model promotes a shift towards more localized, circular economies, reducing dependency on external markets and fostering sustainable development practices. In doing so, they not only provide a practical tool for economic empowerment but also advocate for a broader reimagining of economic relationships, highlighting the potential for communities to assert greater control over their economic destinies.
This is a menace to all the powerful centralizers of our times: Big State, Big Tech and Big Banks, as through Grassroots Economics millions of communities will be able to fund and organize more and more portions of their lives without being dependent on such extractive and violent oligopolies."
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