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For residents of Seattle, Washington, the opening this afternoon of the Potlatch Mutual Bank is only the formalization of an informal local economy that has been growing since 2010, when the US economy went into the second 'dip' of the recessionary/deflationary cycle from which it has still not fully recovered. For people outside the area, however, the practices which have created a vibrant, sustainable local economy require a little more explanation.

First of all, the word 'potlatch' is deeply rooted in the native culture of the Pacific Northwest coast. The potlatch is a spiritual ceremony in which people redistribute the wealth of the tribe and establish their standing in the community by giving away as much as possible. The potlatch stands Western culture on its head: instead of individual status depending on how much you have it depends on how much you give away.

In the Fall of 2010, a group of neighbors held a combination block party and yard sale which turned into a marathon discussion of how to organize to protect themselves and their families from growing joblessness and home foreclosure. At the party were Margaret Williams, a member of the Suquamish tribe and David Ellington, an economist who describes himself as a member of the 'post-autistic economics community'. Margaret was well versed in her tribe's traditions and David had written extensively about gift economies and altruistic economics. Their ideas and experiences came together in a serendipitous way and with the blessing of their neighbors they set about designing a system to support and sustain all the neighborhood residents.

Over time this evolved into the system which will now be available to all members of the new Potlatch Mutual Bank: Each member receives a fixed 'income' every month. Members are not allowed to use any of this 'money' for themselves. They must give it to at least three other community members. Although there are no specific rules against simply 'trading' the money back and forth, the community frowns on this practice. The most common use of the money is to simply divide it among people you respect and who you think deserve it. Many people also reserve a portion of the money to give in exchange for certain goods or services. Most people, for instance, have an arrangement with a grocer or farmer where they give a certain amount of their 'money' each month in exchange for the food they need. But those who are most respected and who receive the most support from the community generally have no specific arrangements for such exchanges. They are so generous with both their 'income' and what they are given by others that the rest of the community are happy to be able to provide whatever they need or want.

To give you an idea of how all this works in practice I have interviewed a number of people in the community. Here are three stories which illustrate the process. (I have changed the names and some of the circ***tances to avoid embarrassing anyone. Modesty is a big part of this new hybrid culture and no one likes to be pointed out either as especially generous or particularly stingy.)

'Jane' is a real leader of the community. Everyone knows her, and though not everyone loves her for her sometimes blunt speech, she is well-respected and many people have cause to be grateful for her help and support. She receives large amounts from the community each month. Most people give her at least a token amount because it is well known that she gives away everything she receives, focusing especially on those community members who are least able to provide for themselves.

'John' is a practical man and a very good mechanic. He gives about half of his monthly allotment to his widowed mother, gives another quarter to a local grocer for his food and the third quarter to the couple who holds the bank loan with which he is buying his house. He receives about twice his monthly allotment in gift money and in dollars from people whose cars he has worked on, or who want to be able to call on his services at some later time. Of this he spends or distributes a considerable amount on his own two cars and the rest he gives away to people who provide services or goods that he may need.

'Rod' is one of the community's 'problems'. He has no particular skills and is a difficult person to get along with. He failed to support the two children from his marriage and they are especially bitter against him. He has an arrangement with three other community members who each give them a third of their allotment in exchange for his giving them a third of his. Since he is known as a selfish, unlikeable person few in the community are willing to give him anything and so he has to live on his allotment. This provides him with the bare necessities. People often charge him more than they do others with a better reputation. He frequently complains of being poor and believes himself to be very unfairly treated. Since on the 'outside' he would not be able to support himself at all, however, he has to put up with his situation.

Many in Seattle are looking forward to being able to participate in what has become known as the 'Potlatch Experiment' and the bank is already making plans to expand to other cities.

Views: 13

Comment by Cynawynn on May 4, 2010 at 4:15am
What a fabulous concept! Bravo!
Comment by PJE on May 6, 2010 at 7:19pm
Sarah this is great! The potlatch stands Western culture on its head: instead of individual status depending on how much you have it depends on how much you give away.

I'd like to tell you a story. This last weekend I was sitting in a café with an old man who I know well and have known for many years, so there is no mistake in what I tell you here. He has given away a fortune (at least several million pounds and a private areoplane) and lives without money. It sounds like a tall story but I have seen the several million before he gave it away. He 'bought' my hot chocolate on a voucher with stamps which other people throw away because to all intents and purposes he lives without using money. for many years he has been known as a tramp (hobo). He is not, of course, but shares whatever comes to him freely, freely. His place has been a haven for many.
He can fix things and when I was young he used to fix my car or TV or whatever was broken, he is an engineer, he can fly, his computer was found in a skip (dump truck) and he mended it, it works fine. He is well over eighty and knows more about most things technical, political, scientific, spiritual and human than most people will ever know.
So, we were in the café and to touch base I asked 'Is it true that you are not using money still? Why do you do that?'
His answer was that he lived this way as an example or parable so other people can see that evryone can live differently,that there are real possibilities and choices we can make. Even the most fixed things, like using money, are not necessary.
When he tell me this, it doesn't seem special or unusual, it seems like the most normal and obvious thing in the world!
Thank you for this post
Best wishes
PJE

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