A 1960s winter photo of my grandparents in the Sierra Foothills captures an open landscape of widely spaced trees and open meadows. Today that same photo reveals thickets of overgrown trees and yellow grass. This landscape transition is certainly not desirable, so it begs the question: what are the overarching factors that have led to this drastic change?
Over the last two centuries, a profound shift in how money circulates in the economy has played a central role in turning rural landscapes into untended wildernesses. In 1820, 93% of US residents lived in rural areas and most trade was accomplished through barter. By 1920 the percentage of rural dwellers had fallen to 50% of the population and paper currency had become more common than the barter system. Fast forward to today, when only 14% of the population live in rural areas and 94% of all monetary exchanges are made electronically, less than 6% with cash.
Electronic transactions are easy, allow us access to goods from all over the globe, and claim to be more secure and less prone to theft than cash. But what is the impact of this shift to an almost entirely digital economy on the rural landscape?
The use of digital currency severely impoverishes rural communities, most obviously through the extraction of credit and debit card processing fees. These fees range from 2 to 5%, with smaller businesses paying the higher fees. While the percentages are tiny, the effect is significant, because the fees immediately flow out of the local economy into the vaults of multi-national banking corporations.
More importantly, the electronic economy has also virtually ended currency recirculation in rural communities. In cash economies, each dollar recirculates an average of seven times in the community where it is spent. This means that $100 in cash spent locally actually contributes $700 to that economy. In contrast, $100 spent using debit, credit or other electronic forms of payment circulates once and incurs fees, contributing only around $95 to the local economy. Using electronic currency also increases the likelihood that you will shop with national and international chains rather than independent local merchants, sending your dollars to another state or country.
The transition from barter to cash to electronic currency has also contributed significantly to the exodus of young people from rural to urban areas. It has led to an age of hyper-consumerism, where success is largely measured by ownership of non-essential goods. Driven by low rural wages and high land values, young rural residents are flocking to urban areas in search of higher paying jobs. This shift to not only a smaller population, but a higher percentage of retirees and dot com workers, has left the rural landscape untended and increasingly more vulnerable to disasters such as catastrophic wildfire.
In the end, all the physical resources to build every aspect of our society comes from rural areas. If we continue the trend of rural impoverishment and desertification we are destined for a future where urbanites with no connection to place control the rural resources. The results of this shift are already apparent in the incredible rise of catastrophic fire over the last two decades.
Electronic transactions may seem convenient, is one of the factors quickly turning the rural landscape into an inhospitable wilderness. The time is now to make your dollars count by choosing cash whenever possible. In the near term your own wallet will benefit as your cash recirculates locally. Over the long haul, a transition back to cash and barter can reinvigorate rural economies and give us the power to be the stewards our rural landscapes so desperately need. The future starts now.
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