Lisa Kiefer interviews Wilson Riles, community activist and former Oakland city council member from 1979 to 1992, and the brains behind Oakland's alternative digital currency called ACORN (Alternative Currency for Oakland Residents & Neighbors).
TRANSCRIPT
Speaker 1:Method to the madness is next. You are listening to method to the madness, a biweekly public affairs show on k a l ex Berkeley celebrating bay area innovators. I'm Lisa keeper and today I'm interviewing Wilson Riles,
Speaker 2:founder of Acorns, the alternative currency for Oakland residents and neighbors. [00:00:30] [inaudible] welcome to the program, Wilson. Thank you. Good to be here. Yeah. Wilson nine
Speaker 1:understand that you have been working on a project to bring alternative currencies to Oakland. I think a lot of people don't understand alternative currencies and bitcoin and all that stuff and so today I'd really like to let you explain to us, help us [00:01:00] understand what you're doing in Oakland and as also part of the larger picture of alternative currencies.
Speaker 3:Sure. I'll be glad to do it. It's something that I've been working on for quite awhile. I think that it's important to heal some of the micro economic structural problems within Oakland, not only in Oakland but there definitely in Oakland. Then I come at it. Do you mean by that? What is that micro problems? Well, you know, I come at it from the point of view of having served on the Oakland City Council for 13 [00:01:30] years. And in that you do get some view of what's going on in a lot of different ways in Oakland and including in terms of employment and commerce and Economics and what's going on in terms of particular neighborhoods and people.
Speaker 1:And what kind of time span are you talking about studying?
Speaker 3:Well, you know, I've, I've, uh, read a lot about the history of Oakland over a long period of time. And you know, I experienced it, uh, since I've been here, which is about 1973. [00:02:00] So that's quite a bit of time. And from the point of view of the city council, you get some sense of the flow of sales, taxes, property taxes and economics and streets fees and who they go to and what happens with the money. And one of the things that became very clear is that because of the way Oakland formed itself, particularly after World War II, a great deal of the hiring in Oakland and the business climate, business income [00:02:30] leaks out of Oakland to a greater degree than it does other community. Uh, even though there are a lot of corporations and businesses here and the prospect for them as it is generally for businesses in the bay area is very good because of the Pacific Rim trade, because of the silicon valley, because of the ports.
Speaker 3:Oakland is the fifth largest port in the United States, one of the first containerized ports on the west coast. It has an advantage [00:03:00] for export traffic, which is the agricultural goods out of the, the Sacramento Valley for flow out through the port of Oakland. But even though it is in some ways a very strange way seen as a department of the city, it's also its own separate entity with its own fiduciary responsibility for all of the income that's gained at the port, including leasing land to all the companies that are out there. And 90% or more of the people who work in those companies, [00:03:30] and we're talking about 30 40,000 jobs are in Oakland residents and aren't likely to be Oakland residents. So the business is generated here because of the port, but when those folks get paid their salary, they go outside of Oakland to spend it generating a stronger economy for the region.
Speaker 3:There's nothing wrong with that except that Oakland has so many of those kind of mechanisms going on and its economy that Oakland remains as one of the council [00:04:00] members called it the hole in the donut. We remain poor, highly unemployed, and all of the Plethora of problems that come from that, which are an additional cost for us. The kids that come to class in the schools without the preparation because their parents have been unemployed or are unemployed parents who for various reasons are either caught up in some kind of domestic crisis because of poverty or single family parents who [00:04:30] don't have the time to really spend with their kids that more middle class affluent families do. So they bring that deficit into the school district and it costs more to address that deficit and the dollars aren't there in the school district because the economic base isn't there to support the school.
Speaker 3:Tell me what the alternative currency marketplace will do for this. Right. I begin to look at how to plug this hole, particularly have so much commuters coming in, holding the jobs [00:05:00] and then taking the money out. So I, I looked at what other cities have done and one of the mechanisms that they've found that holds the resources in the community and circulates it in the community is currency, is alternative. Currency is a currency that can only be spent in the community. So it's earned in the community and then spent back in the community. And so it circulates in the community and it is that circulation which has demonstrated its ability [00:05:30] to increase the affluence of all of those who participate in the system. What models did you look at to come up with this in Oakland? So there've been a number of communities in California.
Speaker 3:Berkeley tried a currency that was based on hours on the exchange of hours, you would essentially provide some hours of work. And in order to do the hours exchange based on the U S tax system, you've got to rate the hours [00:06:00] of a doctor the same as the hours of a painter. So it's considered to be a bargaining. So they are valued the same. So that's a psychological understanding that a community needs to get over in order to use the hours system. Well, the hours program in Berkeley as in other places has worked very well where people are sophisticated enough and are willing to easily make that kind of transition in terms of their understanding [00:06:30] of the value of work so that a painter can go and give an hour one for it. The same as a doctor. The whole economic climate mitigates against us making these kinds of equality equitable. The Berkeley one, it's gone out of existence.
Speaker 3:So one of the problems with local currencies, they said generally they don't come out of the community, but they come out of the efforts of an individual person or a small group of people. [00:07:00] And they work very hard. They raise the money, they do all the things they need to do to get it up and running. And then when the founder moves on or the group kind of falls apart, the currency disappears because the community hasn't bought it and owned it. And so this is one of the issues that I wanted to look at very carefully in modeling the my own currency that I was looking at. Another aspect that I wanted to look at comes from example of the word goal in Austria. So during [00:07:30] the 1930s when we had the world wide depression, the mayor of a Warragul Austria recognize that there were two major manufacturing plants in town and they were going to be affected by this depression.
Speaker 3:And so folks who lived in, worked in the town wouldn't have a job and therefore they wouldn't be able to pay the taxes. The whole community would begin to fall apart. So he invented the word Schilling, got [00:08:00] the two businesses to accept the word gold Schilling and to pay their local employees in the work shilling and the city accepted the worker chilling as payment for their taxes. Within six months, the word go Austria was back up functioning and people were fully employed and they were being very successful. Go and spend that money in the town. They were able to go and spend that money in town. [inaudible] town. Exactly. [00:08:30] They got the buy in and retails and the buy in of the city. Unfortunately, most local currencies ended up just between the consumer and the business and that's the, the circulation that happens with the most local parents.
Speaker 3:Very few. In fact, I only know of the word though, as where the public sector actually got in to using the local currency. I mean you can talk about alternative currencies and then you also need to bring up the greenback where President Lincoln [00:09:00] basically was not able to get the buy in from the banks to finance the civil war. So he took the powers that the constitution gives the United States government and he created the green back, the government's own currency published by the government, and he financed the war with greenbacks and actually financed a lot of the intercontinental railroad and a number of other kinds of things on the basis of the greenback. Now eventually the banking conglomerates were able to to [00:09:30] stop the federal government from doing that and we ended up with a reenactment of the Federal Reserve and the ownership of the Federal Reserve of our currency and our currency flow and the United States in a lot of ways is on the unusual end of countries that only have one currency that functions where there is a monopoly on the currency.
Speaker 3:I mean it's not a legal monopoly on the currency, but the Federal Reserve basically because of [00:10:00] the way that they have been able to shape the system have have achieved a monopoly on the u s local currency except in, in these very small, they're ignoring bitcoin or at least they're letting bitcoin go forward. Why do you think they're letting bitcoin go? What is happening with Bitcoin is that maybe we should tell our listeners what bitcoin is. All right. So bitcoin in many ways, like the currency that I'm putting together is a digital currency. So it [00:10:30] flows around the Internet and it's possible to do what they call mining. And I've never used bitcoins. I don't know what's involved, but you can do some mining on your computer and come up with bitcoins and bitcoins then have value on the network where people who are participating using bitcoins and because it's an international currency and it's largely I think being used as a business to business currency.
Speaker 3:The businesses are interested in maintaining this ability [00:11:00] because the US dollar is facing a lot of different crisises and pressures around the world. Just more recently, the more significant issue is the brick companies, Britain, Russia, China, South Africa, uh, in India they decided to start their own development bank and they're not going to use u s dollars in setting up their own development bank. When Iran threatens to denominate they're [00:11:30] all oil, not in US dollars, but in other, some currencies. That's a threat. That's to the economic system. And so the economic system is so tied up around the u s dollars that people are looking for other alternatives. So there's a growing number of alternatives, not just bitcoins but others. So are you saying that Bitcoin is almost there? They're watching it because they may need it? Oh, absolutely. Some of the companies have been very clear that they needed, even though [00:12:00] it's got into a little bit of a taint because of some of the uses of Bitcoin, not because of what bitcoin itself was doing, but because some of the users were using it in order to hire, hit people and do drugs and other kinds of stuff.
Speaker 3:It's got a little taint on it, but the businesses are very, well [inaudible] a lot of the same ways. But you know, the businesses, particularly international businesses particularly at, uh, I [00:12:30] think at, at a level where the, the new businesses that are breaking out are finding this a very useful, uh, means of exchange. But the government is moving forward to develop regulations around the control of bitcoins. And there are some government regulations around alternative currencies. You can't use them in order to avoid taxes, to pay taxes, you can't use them to pay tax. That is one of the ways that the monopoly is held onto [00:13:00] by the Federal Reserve and its relationship to the United States government. It declares that Texas can only be paid in the Federal Reserve notes in the U s dollar. And so they will remain of some value. So it's, it's a complimentary currency. It's not an, uh, an alternative currency in the sense that we're trying to replace the u s dollar.
Speaker 3:We're trying to give people another way of being able to express themselves monetarily that doesn't involve debt, [00:13:30] doesn't involve the amassing of capital, it doesn't involve inflation. It doesn't involve a lot of those things because we've shaped our currency so that it takes those kinds of things in account and it maximizes circulation within the community, local community. So let's get back to Oakland. What are you calling your currency and is it happening right now? We are within months of it happening and we've been working on it for awhile, for four years. So it's a complicated [00:14:00] thing and it's a new thing. And like you say, most people don't even understand [inaudible] what are you calling it? We're calling it the acorn. So for a lot of reasons, what we want to do is to Harken back to the people who lived on this particular piece of land the longest and in harmonious relationship with the land.
Speaker 3:Our intent is to increase the sustainability of the folks who [00:14:30] live in this community. And so that's why we're hearkening back to the Aloni, uh, who were the first people in Oakland on the land and the Acorn, the nut of the oak tree was essential to their diet, into their sustenance. So they use the acorn in the products of the oak tree all the time and almost everything that they did. The other reason is because we have alliterated it as alternative currency for [00:15:00] Oakland residents and neighbors. So it's also kind of fits there and you know, and it's kind of a nice picture of an acorn
Speaker 2:if you're just tuning in, you're listening to method to the madness by weekly public affairs show on k a l x Berkeley. Celebrating Bay area innovators. Today I'm interviewing Wilson riles. Wilson has come up with an alternative currency idea called ACORNS, alternative [00:15:30] currency for Oakland residents and neighbors for years working on this. And you said you were promotes from starting. What is left to do and how will you roll it out and also like what challenges have you had and
Speaker 3:it's left to do is uh, we've designated a startup board. We've drafted our articles of incorporation [00:16:00] and our bylaws. So these are the things in order to become a legal entity that can contract with other entities and hire people and move forward. We have now concretized that we have developed, um, a contract with a card vendors. So this is someone who takes the debit card technology, produces the plastic cards with the magnetic strip on the back of them, and then sets up the electronic transfers [00:16:30] of the resources off of that card to wherever it's going. I would have my own acorn card, right? Yeah. I wouldn't use it for any other purpose. Right. You would have, you would have your own acorn card. That card would carry though both u s dollars and acorns. There's enough space on the electronic strip on the back of what they call pockets where activity can take place for the acorn.
Speaker 3:And then also activity for the [00:17:00] u s dollar can take place on there. How would I get this card? So you would come to either a designated merchant who has agreed to distribute the cards. You would come to the merchant or you would come to a facility that we'll be setting up our first one. We'll be downtown in a City Hall Plaza, no Oakland in Oakland. And you would essentially purchase the card. You would pay something in the neighborhood about $15 for the card and you would [00:17:30] get $30 of acorns for that first purchase. So and, and acorns are transferable one to one. So you would be paying $15 to get $30 at the stores that would accept the acorns. And we've already started identifying stores that would be willing accept acorns. We know that some of them are going, they have to provide food resources for people.
Speaker 3:Cause that's one of the things people spend a lot of money on. Constant base [00:18:00] restaurants for sure. We also want to deal with other forms of businesses, calling businesses and so forth. We also want to deal with nonprofits so that folks could donate money to nonprofits and get service after them. And when someone donates to nonprofits using the Acorn, they get the same tax write off as if they had donated a with US dollars. Because if the federal government can tell us we have to pay taxes with the acorns that we spend, [00:18:30] we also get the tax break. The other part of the tax law for making a contribution to a nonprofit. Right? So we are including the nonprofit industry also within our gambit of who would use the acorns. So once you purchase that card, that card is uploadable, which means that you can then either through electronic transfer or a mailing a check, send money to your dollar account [00:19:00] and then have it transferred over into acorns.
Speaker 3:So you can make that trans. By managing your accounts, you can manage your accounts all digitally smart card. When you go into a merchant, you want to purchase a meal that you bought or something, you would just swipe it in the same devices. In your studies, what have you seen as a benefit to local communities by using these alternative currencies? I think one of the greatest benefit has been to the business community, [00:19:30] particularly the small business community, particularly the locally owned the business community. So you see where these currencies have been used most and all of them up to now have been printed dollar bills, so you could Ithaca, New York, the Berkshire's have also kind of printed dollars. In fact, when the $5 note has WB Dubois on it, who's one of my heroes because he grew up in that area, so there are a lot of local heroes.
Speaker 3:That's one of the things about printed [00:20:00] money that you won't have, but the local businesses have been able to find the financing they need through this kind of circulation shared economy where they couldn't find it from a regular small bank. Small banks don't make loans the way they used to. They're not focused anymore, particularly on the small business person. In terms of the availability of loans and others there. It has been some improvement within the last year or so in terms of the availability of funds, [00:20:30] but that's never going to be I think a primary business of the small banks the way they used to be. So once we have our acorn up and running, when someone gives us US dollars in order to get acorns, we then develop a pool U s dollars. We're going to then make those u s dollars available to participating merchants at no interest.
Speaker 3:So you're going to become a funder, you know, we won't be under the banking finance laws, we [00:21:00] won't be under the fractional reserve banking, we won't be creating all of this new money. We'll be taking our own money and loaning it out directly interest zero interest just for the cost of managing and processing the loan. So in that way we are taking that interest element out of our local currency or at least reducing it to as minimum as we can. So again, it's about circulation and we're going to be constantly [00:21:30] finding as many ways as we can for that merchant. Then when they do accept the acorns to find ways to use the acorn either by making a contribution to a local nonprofit by paying fully or partially their employees in local currency by paying some of the fees, not taxes, but some of the fees of the city business, license fees, parking fees, other kinds of fees that city levies on small business, so you've got the city of Oakland, they're [00:22:00] going to accept acorns.
Speaker 3:We've been dealing with the council to a certain extent with the staff and you know the council finds it hard to put their head into anything for very long no matter what it is. That's one of the reasons why it's taken four years. We started this concept by working with a city municipal identification card. There was a effort that was sweeping the country and to some extent it's still as I started in new haven, Connecticut then went to San Francisco and then we did [00:22:30] our adaption of for having it in Oakland, recognizing that a lot of the immigrant population was not fully participating in the Logan community even though they were in the local community for a long, long periods of time for generations to some extent still undocumented, but they were making powerful contributions to the community, but they couldn't open bank accounts because they didn't have the proper id to open bank accounts.
Speaker 3:If they reported a crime to the police department and the police asked them for an [00:23:00] ID, they wouldn't have one. They ended up getting swept into the ice immigration system because of it. Their ability to participate in the community was restricted by not having a publicly recognized id. So the first effort was to try to fashion an ID that would work and both new haven and San Francisco got challenged on what they did. Once someone signed up for a city id, [00:23:30] the city would have a record that they had signed up for the city Id. Those records became public information and folks who were anti-immigrant went after that information in order to attack the immigrants. And that was a serious problem. San Francisco ended up spinning a half billion dollars for a laser card printing machine in order to give folks the card once they qualified, but then not keep the [00:24:00] data in the machine so that it wasn't accessible.
Speaker 3:Oakland could not afford to buy a half million dollar machine. So that's where we moved into putting a a magnetic strip on the back of our ID card or city id card. And in presenting the city id card with the magnetic strip, we also presented the idea that this card ought to be useful for more than just the undocumented than it ought to be useful for almost everybody [00:24:30] in the community. And one of the ways of doing that was by adding the local currency to it because people already have debit cards and credit cards and everything. So you got the approval for this. So we have the approval. And so the council has agreed that the next phase of the ID card is to add the local currency that we're developing separately. But that can be run both on our separate cart. And on the city id you're talking about four months?
Speaker 3:No, no. So four months is just to get our [00:25:00] card out. It's just a blanket basic card has no photo on the front of it. Like the ID does the ID card rolled out last February. Okay. So when will it merge? Right. So we're, we are now starting the discussion of figuring out how to emerge from everything that we have investigated. There is no technical problem. We just need to work out the corporate, their entity to our entity corporate agreements that need to be be worked out. So what have been some [00:25:30] of your major challenges are what's remaining as a challenge to get this off and running? Well, the primary challenge is we have to overcome a big education hill. People have to start to kind of understand what's happening with their own currency, why things are in the situation that they are in. A lot of communities and then once they see that, then there is a problem and then there that there's an alternative and they begin to compare.
Speaker 3:What would [00:26:00] it be like to be able to use a currency like this? How are you doing that? Are you involved in an education? We did a, we did a number of public meetings where we invited people to come in. Bernard Latier has a, is a international economists whose specialty is local currencies, so he started local currencies in many countries around the world and he came here in one of our education sessions was to have him talk. [00:26:30] He's a very clear that if you look at the history of currencies in the world, a lot of the more successful civilizations in the world have had more than one currency, one currency that was based on circulation, local circulation, and another kind of a currency that was usually controlled by the king or the ruler of some kind that was about amassing capital and paying for armies and all other kinds of things that had very little benefit to the local community.
Speaker 3:[00:27:00] And so there's, there's been this dynamic going on. Egypt had a local currency that was based on the grain that was stored, so when the farmers would put the grains in the silo, they would be given a little receipt for the amount of grain that they stored and then they started using that, those receipts for currency when a lot of the communities in the Middle Ages were building cathedrals. If you look back at how those cathedrals got done in a lot of those small communities in Europe, they didn't get done because the king or the pope [00:27:30] or anyone made the money available. They got done because those communities created local currencies. It makes total sense that we're going to need redundant systems anyway. Oh, absolutely. Absolutely. We have urban agriculture going on within Oakland. This will enhance the urban agriculture. Well, what I'm curious about you, how you came to this idea of the currency.
Speaker 3:What's your background? It's definitely not economics. I was born in Flagstaff, Arizona. Spent a little time in Los Angeles, [00:28:00] but most of my life was in Sacramento and that was when my father was elected. Finally after spending much time in Sacramento, he worked for the Department of Education and then he was elected as state superintendent of public instruction. So I have a little taste of state politics. And then I went to Stanford University on a football scholarship intending to get a degree in mathematics, but ended up getting a degree in stead in psychology for a lot of reasons. Then with my degree in in psychology [00:28:30] and my father's and mother's interest in bettering the community, I then went into the peace corps, attempted to serve some time in west Africa. I decided that if I was going to make a difference there, I'd have to commit much more time than two years in the peace corps in order to really fit into the community, but that I could do some things here in this country.
Speaker 3:So I came back, got involved in a number of campaigns, Dellums campaign, Shirley Chisholm's [00:29:00] cancer, came back to Oakland. I came back to the bay area originally, Berkeley, then a and then Oakland, and then I eventually ran for the Oakland city council. So I've kind of developed this interest in this research that I've been doing on how cities function and how micro economies function and what might be possible to do. And it was through that that I have to none a reading some things about a local and complementary currencies. We'll Wilson, a lot of our listeners are probably gonna want to learn more about [00:29:30] acorn and about you. Do you have a website that you could send our listeners to? There is a Nazi Jami Facebook website and Nazi Jami means community of souls. Nazi is n a F S I not c space yacht, which is why a and you don't have to capitalize the y and then a space. And Jami is j a m [inaudible] for being on the program. Thank you. [00:30:00] You've been listening to method to the madness. If you have questions or comments about this show, go to the k eight
Speaker 2:hell x website. Find method to the madness and drop us a line. Tune in again in two weeks at the same time. Have a great weekend.
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