To understand them and what they’re fighting for, it’s important to understand the system they’re challenging.

Our money system is underpinned by national central banks and treasuries that issue foundational “base” money. This includes the physical cash in our wallets and also reserves, the special forms of digital money that commercial banks hold in their central bank accounts, which are inaccessible to us.

These commercial banks then boost the money supply by issuing a second layer of money on top of the central bank money layer, through a process called credit creation of money (sometimes called “fractional reserve banking”) to create commercial bank money, which we see as bank deposits in our bank accounts.

The details are subtle and complex ― especially at the international level ― but the interaction of these players issuing money and taking it out of circulation makes the money supply expand and contract as if it were breathing. Monetary reform groups target different elements of this. Here are five of them.

1. Government Money Warriors

Stephanie Kelton, professor of public policy and economics at Stony Brook University, is one of the leading lights of modern monetary theory.

We say that the sun rises, but in reality the sun stays fixed and the illusion of sunrise is created by the Earth turning. Modern monetary theory argues that a similar delusion occurs in our thinking about government money ― we often claim that a federal government “raises money” through taxation and then spends it, but actually it is government institutions that originally issue money by spending it into existence and then withdrawing it from circulation by demanding it back in taxation. If the government issues money, then why would it have to raise money by asking for it back?

The idea that a federal government can run out of money like an ordinary household or business is an illusion, argue advocates of modern monetary theory. A government can only run out of money if it either does not issue its own sovereign currency (like the European nations, which have opted for the euro) or if an artificial political limit has been placed on how much money it can issue. In the latter situation, governments must first recall money via tax (and other means) before reissuing it elsewhere.

This is why modern monetary theory advocates are incredulous about conservatives who want to block spending on education and health care by saying we don’t have the money to pay for it. “Governments with monopoly control over their currency can always pay for their policy priorities,” says Pavlina Tcherneva, an economics professor at the Levy Economics Institute at New York’s Bard College.

Under modern monetary theory, if there are unemployed people who want to work and material resources for them to work with, a federal government can issue new money without causing inflation because the increase in money supply will be met with an increase in production. “The goal is to use the public purse to serve the broad public interest without accelerating inflation,” said Stephanie Kelton, professor of public policy and economics at Stony Brook University and former senior adviser to Sen. Bernie Sanders (I-Vt.).

2. Bank Money Reformers

Bank money reformers want to target the powers of commercial banks to create money.

Other reformers target the commercial bank money system. They argue it creates economic instability, over-indebtedness and concentration of power in the hands of banks ― the very banks that led us into the 2008 financial crisis.

Bank money reform groups include the American Monetary Institute, Positive Money, and the International Movement for Monetary Reform.

Commercial banks create new money when they issue loans. The moderate wing of the bank reform movement argues that, because the government grants them this privilege, banks should be subject to greater democratic scrutiny over their lending. The hard-line wing believes bank creation of money should be banned altogether.

The movement to curtail bank money is politically more diverse than modern monetary theory; it’s been supported by certain libertarians, including the late economist Murray Rothbard, neoclassical economists such as Irving Fisher, as well as left-wing proponents, such as the U.K.’s Green Party, which believes bank money-creation leads to environmental crises and corporate domination.

Their prescriptions are not uniform: Positive Money, a research and campaigning organization in Britain, calls for the power to create money to be granted exclusively to a democratic, accountable and transparent public body, creating a “sovereign money” system in which we might all have our own accounts at the central bank. This is distinguished from full-reserve banking, which would require your bank to have the reserves to fully back your account.

3. Cryptocurrency Crusaders

The Bitcoin logo on display at the Consensus 2018 blockchain technology conference in New York City on May 16.

Cryptocurrency crusaders not only reject both national and bank money systems, but also reject the entire concept of credit money (money that is “created from nothing” through law or social agreement), calling for it to be replaced with “commodity money” (money that is “created from something” through production). They have inherited the baton from “goldbugs,” who called for gold to be money.

The movement, which began with Bitcoin, argues that the best money system is one that’s outside of human politics. This comes from a philosophical tradition that says systems should be governed by the boundaries of God, physics or math, rather than laws set by politicians. With gold, for example, these natural boundaries would be geology: how much gold can be found and extracted. In Bitcoin’s case, the boundary comes from the fact that the digital system sets a hard limit on how much digital money can be issued and then forces participants to “mine” it as if it were a commodity.

Because Bitcoin hard-liners believe true money is a limited-supply good that must be extracted through production, they claim that fiat money ― created by banks or countries ― is artificial or deceitful money under the control of corrupt powers. There’s a puritanical edge to these cryptocurrency crusaders, who mistrust human institutions and trust in an abstract ‘godlike’ order of mathematics and markets.

While theories like MMT hinge on collective human political institutions, crypto crusaders see politics as foolish. This distrustful attitude shows: The movement sometimes seems as much at war with itself as with the fiat money system, with bitter in-fights between supporters of different crypto-tokens.

They are, however, the richest of all monetary reformers, with many crypto users having ironically become millionaires in the fiat currency they claim to dislike so much.

4. The Localists

A note worth 10 Brixton pounds, an alternative currency in London, is illustrated with an image of David Bowie.

There’s a whole history of alternative non-government money prior to cryptocurrency. These original alternative currency variants include mutual credit systems, timebanks (where time is used to measure how many credits you earn), local community currencies, such as the U.K.-based Brixton pound, and systems like the Swiss Wir, a currency used between businesses.

The tradition is also skeptical of large-scale government-bank money systems, but rather than calling for them to be replaced by a robotic algorithm, they believe small-scale communities should take control to issue money locally.

Unlike cryptocurrency advocates, they have no problem with money being “created out of nothing.” Rather they have a problem with who gets to do that and at what scale. They believe large-scale systems alienate people and dissolve close-knit communities.

A mutual credit system like Sardex in Sardinia, for example, does not reject the idea of money expanding and contracting, but it brings together an island community to decide on what terms that occurs.

While the other movements are outspoken, local complementary currency enthusiasts are often humble and below-the-radar, working for low pay to build resilient community structures.

“Local currencies change how money is issued,” says Duncan McCann of the New Economics Foundation, “how it circulates and what it can be spent on in order to re-localize economies, encourage environmental behaviour, and promote small businesses.”

The crypto-credit alliance looks to merge older, alternative currency systems with blockchain technology.

5. The Crypto-Credit Alliance: Mutual credit meets blockchain technology

This is the least-known or developed of the movements, but is perhaps the most exciting. Nascent initiatives, such as Trustlines, Holochain, Sikoba, Waba and Defterhane, seek to hybridize older alternative currency systems like mutual credit with the blockchain architectures that underpin cryptocurrencies. They share common ground with both modern monetary theorists, who also see commodity money as regressive, and cryptocurrency advocates, who wish to bypass the government.

Cryptocurrency unleashed a lot of creativity, but much has been wasted on toxic speculation. On the other hand, localist mutual credit movements have powerful ideas but often struggle to get heard or to spread. Crypto-credit innovators are exploring the creative possibilities of merging these two to solve flaws in both.

Originally published in the Huffington Post

The post These 5 Rebel Movements Want To Change How Money Works appeared first on P2P Foundation.

Stephanie Rearick and Leander Bindewald: If it wasn’t crystal clear just weeks ago, it is now: The economy as it stands is currently positioned in direct opposition to social and environmental objectives. For the sake of the wellbeing of our communities, our children, and our planet, it is imperative we change the voracious path of our consumption culture and consider how we might create opportunities for people to find meaningful work.

At the Mutual Aid Network, we have developed a new type of networked cooperative — one that, among other things, lets people find talented collaborators for personal, neighborhood-wide, or even city-wide projects. Here’s how we make it happen:

The first step is to bring people together around a common goal of any size and scope to form an individual “Mutual Aid Network.” The common goal can be anything — a group of friends aiming to redesign each person’s work life, a watershed restoration initiative, a city-wide energy efficiency and renewables program, a decentralized cooperatively-owned manufacturing initiative, a travel and culture exchange, or a meal program to ensure that everyone in a neighborhood has enough to eat. While each network is entirely autonomous, the underlying principles it follows are from drawn from commons governance and cooperative models.

To achieve the common goal, members pool and steward resources by combining any of the following tools — all tried and true in the patches of solidarity economy, big and small, over the course of generations:

• Shared resources or the commons: Participate in tool libraries, makerspaces, shared laundry facilities, and so forth.

• Timebanking and swapping: Exchange time credits — for example, an hour worth for a service, be it babysitting, cooking, cleaning, rides, light carpentry, gardening, art/music/language lessons, in exchange for a service. Contribute frequent flyer miles, meals, plots of land, buildings, equipment all to be acknowledged in community credits that are fair, transparent, and always mutually beneficial.

• Price-based mutual credit currencies, for business and highly professionalized service: Buy a $1,000 piece of equipment from a participating business for 1,000 points of interest-free credit, to be paid back by selling $1,000 worth of goods and services to the network. Taxed according to applicable laws.

• Savings pools and community investment: Contribute to a common pool of money to be allocated to collectively agreed causes or members with one-off financial needs, be they for a home, health care, or even burial expenses. Examples of this abound around the world and include the Mutual Aid Societies in the U.S., the original Building Societies in the U.K.

And then there is the “Humans United in Mutual Aid Networks,” formerly referred to as the Main Mutual Aid Network, which is one big global cooperative owned by all individual Mutual Aid Network sites. The members connect, share resources and best practices, and support new Mutual Aid Network sites all around the world by using the same approach and principles applied in the local sites.

Of course we don’t expect everyone to be solely working in the Mutual Aid Network context, but expect that more opportunities will build over time. Our strategy is to start with a number of pilot sites with different focus areas, strengths, and limitations, and have each one commit to supporting one another and help foster new sites. Eight pilot sites have signed up already, and at least eight more are in the works.

The economy of the 21st century is something we’ve been prototyping throughout human history. Now we can connect those ideas and practices that have proven to be sustainable over time and use technologies to connect, exchange, share, and learn collaboratively and effectively. Networks of networks can quickly connect to create a world where everyone has the opportunity to build the skills needed to make whole, happy communities. We are already doing it, across the world, independently and increasingly interdependently. Please join us. What you can do:

• Join an online orientation

• Join the Humans United in Mutual Aid Networks (formerly Main Mutual Aid Network) global co-op (U.S. based, global membership)

• Join the Humans United in Mutual Aid Networks work groups

• Explore creating a pilot site

• Participate in our Summit in Madison, Wisconsin, from Feb. 17-20

• Sign up for our e-mail list

All of those opportunities, plus more learning resources, can be found at: www.mutualaidnetwork.org

Here are some of our pilot projects:

Madison, Wisconsin

Allied Community Co-op is the first Mutual Aid Network pilot site. It’s where some of the organization’s fundamental ideas were born. Located in a food desert with little infrastructure (no school, grocery store, library, or neighborhood center), the Allied Co-op is working to bring a food buying club and a cooperatively-owned grocery store to the neighborhood.

The Social Justice Center, a multi-stakeholder nonprofit building in Madison’s affluent East Side, is a convening partner in exploring Madison’s second Mutual Aid Network pilot, which will be an inter-city partnership connecting Allied Co-op and many other local stakeholders in a network of resource-sharing and exchange initiative designed to create more equitable distribution of existing resources across the city.

Lansing, Michigan

The Mid-Michigan bioregion is home to a number of both for-profit and nonprofit cooperative enterprises, including the Mid-Michigan Time Bank, the Lansing Maker’s Network, and the Mid-Michigan Renewable Energy Cooperative. By leveraging time, tools, and talents, these groups will form the backbone of the Mid-Michigan Mutual Aid Network to help the region find new ways to build a sustainable new economy.

“Mutual Aid Networks provide a platform for communities to build from the ground up through identifying strengths and resources that are present globally which can be put into action through local location-specific projects,” says Marshall Clabueaux, a renewable energy activist and social entrepreneur.

Providence, Rhode Island

In the Providence Bay Area, the Fertile Underground Natural Cooperative is working to get a catering truck on the road. This truck will take food from farms and supermarkets and offer the raw, natural ingredients for free, while selling the prepared food. The goal of this project is to reach places that have limited access to fresh food and provide cooking demonstrations using seasonal produce.

Waterville, Kansas

Wellness Weaver, a timebank, has collaborated with partners around the US to connect people who want to create a FUNctional Health and Wellness Workers Cooperative — a wellness-oriented Mutual Aid Network.

“The value of the Mutual Aid Network is to bring the wisdom and expertise of those that have used time banking formally as a way to help develop and support the best functioning Wellness Oriented Mutual Aid Network,” says Helen Stucky Weaver, retired nurse and founder of Wellness Weavers.

St. Louis, Missouri

Solidarity Economy St. Louis is currently working to incubate African-American cooperative businesses, co-host a local conference around the theme of “Health, Wealth, and Disrupting Capitalism,” develop a time bank youth court program, engage in community organizing efforts to create a neighborhood food hub in the food desert of North St. Louis, and promote community development of vacant land.

“Being part of the Mutual Aid Network allows us to connect to and co-create a global movement of people who are working to build just and sustainable economies,” says Julia Ho, founder of Solidarity Economy St. Louis. “The only way for us to truly achieve mutual aid in our own communities is by extending mutual aid to others.”

Bergnek, South Africa

Bergnek Community Projects is a community development initiative that was started to empower and uplift women and youth through sustainable business ventures. The program provides access to food, clean water, and reproductive health care for women and girls in school. The long-term aim of the group is to build a community health care center.

Hull, United Kingdom

This Mutual Aid Network aims to create a chain reaction that goes back into communities. It meshes a thriving timebank with 600 members and the Hull Coin initiative, the City of Culture’s 2017 nomination, which is currently mobilizing 4,000 volunteers.

“When I started the TimeBank back in 2010, I saw it as the solution to everything,” says Kate Macdonald. “I realized in time that it is ‘one’ solution and that to have a viable parallel economy, we need different options which have strengths to use in different circumstances. When I heard Stephanie speak about Mutual Aid Networks a couple of years ago, I realized this had been what I had been looking for. What is often missed is a mechanism to join things up.”

Lehigh Valley, Pennsylvania

The Mutual Aid Network of the Lehigh Valley addresses the social determinants of health of communities’ most vulnerable members, including formerly incarcerated people, juveniles aging out of the foster care system, homeless populations, individuals recovering from addiction, and newly settled refugees. This project address tackles these issues by tackling social isolation, one of the key factors that contributes to poor life and health outcomes.

These eight initiatives demonstrate that building a solidarity economy that serves every human being on the planet is possible.

A previous version of this article appeared in the July 2016 issue of STIR magazine

Header photo courtesy of the Mutual Aid Network.

The post The Mutual Aid Network Takes a Ground-Up Approach to Create a Collaborative Economy appeared first on P2P Foundation.

Aaron Fernando: The staff at the nonprofit organization HullCoin has done something very unusual in the city of Hull in northeast United Kingdom. Residents of Hull can earn HullCoins, which can be used at various places around the city. It’s an innovative model. But how exactly does it work? To learn more about the group’s approach, we spoke with the two founding members of HullCoin, Dave Shepherdson and Lisa Bovill. Here’s what we learned.

Aaron Fernando: It seems like both of you have had significant experience in civil service before this the start of this project. Can you talk a little about that, and if that influenced you to start HullCoin?  

Lisa Bovill: I worked for the local authority for 20 years. I delivered and managed advice services — so that’s civil rights advice. I was also in charge for developing anti-poverty strategies for the city and as part of that, strategies to combat financial exclusion. So working with those who couldn’t get access to mainstream financial products and were penalized as a result.

At the same time, most local authorities across the U.K. were experiencing funding problems themselves — reductions in the amount they got from central government — which meant that they could do less to help people to manage their finances and less to  combat poverty.

That was really where this whole thing started, and we were looking for creative solutions. We looked at technology and emerging technologies as having potential to help us with that.

I notice many similarities between HullCoin and things like time banks and loyalty reward programs. Could you talk a little bit about the things that influenced you, and what types of programs were you looking at when you developed the concept for HullCoin?

Bovill: We do have a local time bank, and we work closely with the time bank. It’s similar in that we are looking at non-monetary value systems. But we are different in lots of ways: It’s not just an hour for an hour. We are looking for a reward system that isn’t based on time, it’s based on social outcomes. HullCoin has a value, in terms of being able to redeem it for goods or services in a way that a time credit doesn’t have. What we want to do is interact with the time bank in a way that allows us to exchange those non-monetary value systems with each other and to create something like a varied secondary economy.

Shepherdson: When we were looking at mutual credit systems and local currencies — there are a lot of local currencies in the U.K. — the predominant ones are the Bristol Pound and the Brixton Pound — what we saw was that there were mutual credit systems (such as time banks) which are user-to-user exchanges, but local currencies were all effectively pegged to fiat currency. Like Lisa said, we were looking around the anti-poverty strategy in the city and we wanted something that would be generated into existence through social outcomes.

We looked at Bitcoin and blockchain technology as a decentralized clearing house which gave us regulatory freedom. It was 2014 when we started looking at this. In the U.K. certainly, a lot of what was going on with Bitcoin and blockchain was still cottage industry. I mean, kids were still mining cryptocurrency in their bedrooms.

How does an individual HullCoin unit get issued? Is it backed by anything?

Bovill: We will work with a number of grassroots and local organizations that will be given an amount of the currency and then they will be allowed to set their own rules around how they issue it. With some guidelines — quite broad guidelines from us — so it will really be up to those people. We’re not planning to regulate this or be really hands-on in terms of about how you issue or what you issue for. It’s up to those organizations who work with the city to make those decisions.

Shepherdson: And it’s not back by any commodity. It’s backed by the community itself.

When one organization issues HullCoin, will it be the same type of HullCoin as when another organization does? And those can basically cross paths?

Shepherdson: Yeah, absolutely. The only thing that will differentiate between different HullCoins is that into each HullCoin, we insert software which documents evidence of positive social outcomes generated by the coin into the coin itself. An issuing organization — whether that be a charity, a local authority, the NHS, the university, schools, prisons, everybody who signed up for it will be able to insert positive social outcomes and that stays within their own transaction histories.

The person who generates the coin who has done the positive social outcome — that can be for self-improvement or volunteering, or it could be mentoring, or could be caring for relatives — that positive story stays with them on their wallet, on their app. It sits on there and any business or retailer that accepts HullCoin as a form of discount also receives a time-stamped copy of that positive social outcome.

What you get collectively, then, is distributed ledger of all the positive social outcomes that have taken place — in this instance Hull is the city — but essentially, could be spread across numerous geographies or within any context, really.

That’s really interesting. That leads to one of my questions that deals with why you used cryptocurrencies. I was looking your tweets and I came across a question you asked that I wanted to pose back to you: “Why would you create a local currency using blockchain over traditional digital payment systems.”

Shepherdson: We did a full appraisal of all the different systems and which we could use, including blockchain. Because we’d developed links with Feathercoin, we were able to obtain the skills to develop the distributed ledger (blockchain) infrastructure very, very cheaply.

What I think mutual credit systems — and any currency systems — have trouble with, is that at scale they become incredibly inefficient and it becomes more expensive the more successful that that you are.

One the things with local currencies: with paper, the more that you issue, the more your running costs and maintenance costs stack up. While we obviously have server costs around the surrounding tech, the actual payment infrastructure is incredibly efficient. Not only that — it’s incredibly secure at the same time.

We’re a social technology company which specializes in distributed ledger technology. The application of HullCoin in this first instance… This is something that could be genuinely valuable and is complementary to the economy as a whole, but provides that platform for the adoption of the technology.

If we’re able to achieve successful public penetration of [blockchain] technology, then other applications potential the blockchain technology become extremely attractive. If you think of Bitcoin as being the world’s first-ever programmable money then it has become a no-brainer to use the model we’ve landed on — and the fact that we’ve been able to develop the infrastructure and everything at a fraction of the cost of what the industry rates are.

I’ve noticed that there’s often a disconnect between the local currency folk and the digital technology folk — not just crypto enthusiasts but with FinTech and mobile payments generally. Do you encounter this disconnect at all?

Bovill: I think the reason is that one is all about grassroots and people and the other is digital — and therefore automated and not people-centered. But we have come from a background of services that engage with people, so we want to see technology that’s put into the hands of communities in a way that they never thought that the technology would.

But also, I think that it’s difficult when you have a more traditional model that’s trying to achieve something, and then technology comes along and enables you to do it in a different way but you’ve already got an established model. So then you have to switch to a different model, and it’s difficult to accomplish that.

Shepherdson: Now, I don’t know the inner workings of a chip and pin machine. All I need is confidence. As long as I have confidence when I use my contactless payment, I get a reassurance.

So it’s all built upon confidence. What we’ve developed in the last 12 months — the UX on this— it actually resonates with all the communities that were working within Hull and beyond. If you look at what was developed, there’s no mention of blockchain technology. That does not sell to the public. We benefit from the infrastructure internally. All we’ve got to do is build confidence with it.

Once people have done something and they go back to their accounts on the system and see that they have been credited with a balance, they feel that they have been paid. It feels like money. That’s the psychology of money. So we replicate the psychology of money within the system; the technology in terms of blockchain and Bitcoin, from the user side of things is completely irrelevant.

How do you see a local currency scaling? And is it a relevant question for a local currency to scale?

Shepherdson: I think a local currency can scale. I think local communities should own their own currencies.

Bovill: It can be local, but use the same model.

Shepherdson: You can basically share the platform. The way that we’ve designed the whole current platform is that you can take the front and down you can share the back-end and you can have your own customizable set of coins which are specific to your geography or your interests.

It doesn’t just have to be around a local area. You could have one which is specific to a college, education, or health. It’s interoperable in a number of ways and you can white label the same platform and it’s extremely efficient and cheaper to do so rather than developing anything from scratch.

Is there anything unique about the city of Hull it lends itself to success of a program like this? And in the best case scenario what do you hope to achieve with HullCoin?

Bovill: I don’t think there’s anything so unique about the city of Hull apart from the fact that it is a Northern city and every time there’s economic downturn, it’s just battered because the primary economy gets battered. There’s a disproportionate effect on the local citizens.

We were trying to — in our strategies — to prevent that. We were trying to think about some way to create economic resilience for cities like Hull and Northern cities like Hull.

Shepherdson: 90 percent of all of the world’s croutons are made in Hull. [Laughter]

I suppose Hull’s always had a bit of a rebellious streak to some historical extent. I like to think in some ways we plug into that. It is mostly beaten down. But again, when there’s issues like the things that we were looking to address that’s where innovation sometimes comes from— necessity, really.

If we can provide a mechanism which gives people an opportunity to contribute to their economy and their community and also helps themselves and it gains traction — if that achieves success and credibility then our work here is done.

Bovill: In terms ultimate aim, with the local currency, it is about trying to operate a key component in create a secondary economy. A secondary economy which matches unmet need with what would otherwise be wasted resources.

Shepherdson: And also, we have an interest and aspiration to linking with the universal basic income model of welfare. The current model of welfare that we have in the U.K. really is, I don’t think, fit for purpose. And it certainly isn’t fit for purpose in what I think we would determine is a post-automation economy.

You’re going to have to look at “what is value?” In a much broader economic sense then what is currently considered by Western governments. Hopefully what we’ve developed with HullCoin — both within its economic modeling and its blend of technology and application — is fit for purpose for the future model of welfare which reflects the changing economic activities people will be undertaking. You can have a corporate and a communal contribution to your economy, which is somewhat different from what it is now.

And you’re planning on doing an ICO (initial coin offering) as well?

Shepherdson: That’s aligned with our aspirations of creating a parallel currency. We’re working with the number of academics and some people within the blockchain sphere on putting together a draft whitepaper and we’re going to make an assessment whether that draft is fit for purpose, and then we’ll make an assessment whether or not we’ll do an initial token sale on a parallel currency.

The potential is certainly there and I think unlike what a lot of other blockchain crypto startups are doing, we’ve actually got an MVP (minimum viable product). We’ve got a track record, we’re close to market and if we get the economic modeling right we will be able to launch the cryptocurrency.

Image of Dave Shepherdson and Lisa Bovill courtesy of HullCoin

Photo by cactusmelba

The post The English City With Its Own Cryptocurrency: Q&A With the Founders of HullCoin appeared first on P2P Foundation.

A year later, the Kumpula exchange rink, renamed the Helsinki Timebank, began to attract more citizens who wanted to participate in this satisfying alternative economy known as timebanking. The main principle of timebanking is that everyone’s time, work and needs are of equal worth. One hour of babysitting is equal to one hour of helping an elderly neighbor or providing accounting services. It is fair to say that this essential principle of timebanking stands in stark contrast to the premises of the current money system and capitalist markets, which value everyone’s time and effort in highly unequal ways. Timebanking provides an alternative by helping people meet important personal and household needs in more socially satisfying, equal ways.

By 2014 some 3,000 members had registered with the Helsinki Timebank, and more than one-third had participated in at least one exchange. To date, some 19,000 total hours have been exchanged through the Helsinki Timebank, which includes internal work to maintain and develop the timebank. Worldwide there are thousands of timebanks that enable individuals and diverse types of organizations to exchange services, and sometimes goods, according to timebanking’s principles. The Timebank is a part of the Community Exchange System (www.ces.org.za), which lets people exchange goods and services without money or markets. (The network hosts timebanks and local currencies, facilitating “intertrading” among them.)

Timebanks are often seen as irrelevant to the “real economy” because they are not dealing with “economic issues” or markets. They tend to be described as self-help tools, as solvers of certain social problems, as charities, and as a new form of volunteering. They are seen as platforms for people to develop skills and exchange nonprofessional services while strengthening their sense of community connection. Yet in meeting real needs without money while building what economists call “social capital,” timebanks deserve to be taken every bit as seriously as markets.

Developing Currency into a Commons

Since its founding, Helsinki Timebank has striven to be a platform of deliberation. It is managed by a core group, open to all members, which discusses how to develop the timebank and meet ongoing challenges. All larger and substantial decisions are made in consultation with all Timebank members, or by voting. For instance, the decision to convert the local exchange rink into Helsinki Timebank in 2010 and to name its local currency “Tovi” (Finnish for “a moment”) was made through a membership vote.

When a large cosmetic firm with its own exchange rink wanted to join Helsinki Timebank, it provoked spirited discussion about what kinds of services and relations should be supported and how to define the Timebank’s boundaries. Inspired by the example of the Solidarity Economy movement, members in May 2013 drafted the Helsinki Timebank’s ABC, a statement of its values and working principles. The ABC defines the Timebank as a platform for “reciprocity, We-spirit, ecological sustainability, economic justice, and local and participatory culture,” among other principles that guide participants in deciding what types of organizations may join Helsinki Timebank.

When a local food cooperative wanted to join Helsinki Timebank, it was a perfect fit – and an ingenious way to blend the local market with the credit currency. The cooperative makes locally produced food available to people with time-credits – and in return it gains access to the community and resources for which time-credits can be exchanged.

Another example of commoning can be found in the “Time Heals Network,” which grew out of Helsinki Timebank.¹  This peer-to-peer network offers emotional support to people when their lives take a turn for the worse; the services are credited to the providers in time-credits. Peer supporters themselves may have acquired their expertise through formal education, employment or life experiences. The system is based on reciprocity – sometimes one helps someone else, sometimes one receives help. The network also uses the timebank to help people meet concrete needs like housekeeping and childcare.

The time currency in itself, the Tovi, is not a commodity, but a token in a “credit commons” that allows people to exchange services, earning and spending credits. The process of defining the principles and rules of the credit currency is itself a process of commoning, a term used by historian Peter Linebaugh in discussing medieval English commons. In this sense, Helsinki Timebank’s time credits function as a pedagogical tool that helps people learn about cooperation and organization. Strangers are able to meet each other and develop new ways of relating to each other. Thanks to a timebank, the valuable human skills that people have – even among people outside of the labor market, such as the elderly and disabled – can be made visible and put to good use. Timebanks help people reproduce ordinary life without the mediation of markets. A timebank as such is a platform for commoning.²

One major act of commoning at Helsinki Timebank was the development of an internal taxation mechanism. When the provider of a service receives time-credits, a percentage of the time-credits earned are automatically transferred to the account of an ethical economic actor of choice in the Helsinki Timebank; this could be a food cooperative, another local CSA, or the Time Heals Network, for example. The time-tax function lets Timebank members strengthen actors and organizations that exemplify the values listed in the ABC. It also supports work that is important to timebank members, and strengthens and develops the community. In a larger context the time-tax and time-credit can be seen as ways that Helsinki Timebank supports solidarity economy-building and the commons in Finland.

Facing the Challenge of State Policy

At the end of 2013, Finland tax authorities came out with new taxation guidelines that required taxing skilled work services received through timebanks according to their market value (in euros). Helsinki Timebank contested this decision, arguing that it destroys the essential principle of equality at the heart of timebanking. It called for an exemption from euro taxation so that the actual potential of timebanking in Finland – including also the benefits of the (internal) time-tax – could be assessed. The dialogue was opened between Helsinki Timebank and the City of Helsinki in 2014 and is still continuing.

The struggle that Helsinki Timebank now faces is to maintain its autonomy as a deliberative commons guided by strong ethical values while securing formal legal recognition and respect in Finnish society. One initiative seeks to find ways for the City of Helsinki to recognize the Timebank’s internal time-tax and incorporate it into the local economy. If successful, the time-tax could be used to support many different forms of coproduction (between timebankers and the city). It could also be used to start up all kinds of autonomous creative projects as commons, creating services or goods that are deemed important by both the city and timebank members. Importantly, this could open up new forms of power transfer and sharing within the city – a commonification of the public sector!³

An interesting future question is whether timebanking could be used as a tool for ethical entrepreneurs to share common resources and gain relative autonomy from markets. This would help the new economy strengthen commons and reduce dependence on highly capitalized markets and competition. Unfortunately, in Finland, this road is now blocked by rigid taxation guidelines that prevent the exchange of professional services via timebanks. It would appear that the guidelines are intended to prevent timebanking from growing and challenging the dominance of both market and state, and the capitalistic order itself.

Patterns of Commoning, edited by Silke Helfrich and David Bollier, is being serialized in the P2P Foundation blog. Visit the Patterns of Commoning and Commons Strategies Group websites for more resources.

About the authors

Jukka Peltokoski (Finland) is a political researcher and pedagogue, an activist in the precarity movement, a commoner in Commons.

Niklas Toivakainen (Finland) is an active member of Helsinki Timebank, and a member of Commons.fi and the Finnish Solidarity economy collective.

Tero Toivanen (Finland) is a doctoral student in World Politics at the University of Helsinki.

Ruby van der Wekken (Finland) is an active member of Helsinki Timebank, and a member of Commons.fi and the Finnish Solidarity Economy collective.

Photo by pni

The post Patterns of Commoning: Helsinki Timebank: Currency as a Commons appeared first on P2P Foundation.

Kevin Stark: It’s easy to group all enterprises that promote “sharing” into a single category. New technology has made it much easier for people to share almost everything — cars, houses, work spaces, just to name a few. There’s really no shortage of ways that people can pool resources. But there’s a huge difference in the goals between for-profit sharing economy companies like Uber and Airbnb and nonprofit groups like tool libraries, time banks, and makerspaces. Juliet Schor, professor at the sociology department at Boston College, explores this tension between for-profit and nonprofit sharing groups. Schor has carefully outlined her findings in her prolific writings on the subject.

In one paper, she interviewed dozens of young people that were using for-profit sharing companies to determine their motivations for using the service. For starters, she argues that for-profit companies like Uber and Airbnb are contributing to inequality in America (also a subject that Schor has written about). But what else is different? Are users motivated by different things? Class or demographic distinctions? How has the economy shaped modern sharing organizations and vice versa? Here’s an excerpt from our conversation:

Kevin Stark: One argument for the for-profit sharing companies like Uber is that they provide a frictionless way for people to find work.

Juliet Schor: The on ramp to earn on one of these platforms is easy compared to other kinds of jobs. Our interviewees report that they can get on these platforms even if they have criminal records, which bar them from other types of employment. The other side of it, however, is that just being accepted to earn on these platforms, doesn’t mean that you will get work. TaskRabbit has a very high hourly rate; we have people earning $100-$150 an hour, but you may not be able to get work.

We don’t have the data from the company, but my sense is it is operating like a winner-take-all model. Certain people on the platform are doing well, they have great ratings and they’ve done lots of tasks. They get hired a lot. On Airbnb, you can list your place but we find that your race and education level are related to whether you can get people to book it. People who live in areas with higher rates of non-whites, for examples, are less likely to get bookings. They get lower reviews and lower prices.

You argue that Uber et-al are contributing toward inequality. Who is being crowded out?

This conclusion is not the product of a full economic analysis. It’s from our research which looks at the dynamics at the individual level and extrapolates to what might be happening at the full economy level. In the past, many people would not have been taking up the type of work that they are on platforms. The platforms were originally marketed as cool, technologically advanced, ecologically helpful — they had a discourse of common good.

Many were launched during the recession and attracted a young, highly-educated, white group of people as customers, and more importantly, as earners. What I’ve argued happened is that the platform de-stigmatized blue collar and pink collar work for these people. We are finding people with graduate degrees who are cleaning houses on TaskRabbit or students who are bicycle couriers. They are doing … work that traditionally has been done by people who didn’t have college degrees. Some of them talk about these status questions. This is a very highly educated, relatively privileged group of people, in comparison to the labor force that has done this type of work in the past.

Do you think that that’s derived from the incentive for the companies to make money or how they are designed, or a reflection of our society and access?

The larger context is the economy. The growth of inequality in this country started as more of an 80 percent and 20 percent phenomenon. My story is about inequality within the bottom 80 percent. What’s happening is that when you have problems of wage stagnation or high debt for young people, education debt, lack of economic opportunity, lack of good full time jobs with upper mobility, then these college educated young people, are facing less opportunity relative to comparable people in the past. That puts them in a situation where they are trying to get more opportunity, to better their situation.

The companies come along and offer them something that makes sense to them, that’s not too at odds with their status identities. So, to answer your question, it’s really both. I do think the larger economic trend of the shrinking middle class, declining mobility, wage stagnation, growing under and unemployment, all those well-known trends are important for understanding how these platforms came into the market. They came in during the depths of the recession. It is very favorable for companies that want to hire people. They will get more highly qualified people without having to pay the extra money. It is a cascade affect in bad economic times. Everyone gets pushed down, but it is like a ladder. The ones at the bottom get slammed. It goes in the other direction. When things improve and the labor market gets tight, people can move up.

There are the for-profits that we’ve talked about, but also the nonprofits — seed banks, time-banks, makerspaces. What’s the distinction?

In our research, we started by studying nonprofit sharing initiatives, such as a time bank, a maker space, a food swap, and what we call open-learning, free online educational resources. The nonprofits generally start with an idea about creating an alternative kind of exchange or market or set of social practices. We found that people participate or sign up for these spaces because they are ideologically aligned with them.

With the time bank, for example, they think it’s a great idea that everyone’s time is valued equally and that, they can barter services. But many of the people don’t need bartered services, so they treat the time bank like it’s volunteering. They give stuff to people, but they don’t necessarily cash in their balance. In practice, they don’t like the idea that what they are offering is only worth as much as other people. Some of them are solo practitioners of massage therapy or yoga teachers or whatever. The time bank has a $10-15 an hour economy for generally available skills like driving or walking a dog. But a yoga teacher or a massage teacher is more likely to charge $75 or $80. The time bank didn’t work out so well because there were divergent valuations and the idea that everyone’s time being equal is such a big jump from the market where there’s a large inequality in how people’s time is valued. There was also class prejudice, where people would reject those with poor grammar or a bad website. On the one hand, people know they are going to an amateur market, but on the other they want something more professional.

One of your organizing lines seems to be built around the idea of public benefit, and you write that sharing platforms can also function in the “public good.” What about at the scale of Uber or Airbnb?

A lot of the nonprofits, the scale wouldn’t work. They are designed to be local. Some are for face-to-face services, like a time bank. On the other hand, there could be an app that just gives you local options, as, on Uber it just gives you all the cars around you. You could do something like that with a timebank. But you would have to allow for local conditions. Here’s another point about nonprofit efforts that have been made for general labor service platforms, like Loconomics, which aims to be a general labor platform or a pilot program in the U.K. where a municipality launched a labor services platform.

The idea was that people who needed stuff done could hire people with spare time — a kind of nonprofit TaskRabbit. There are two issues: If you have imbalance in the market — which we do, with a weak labor market, it will be hard for the platform to work. TaskRabbit can do it because they have an algorithm that privileges certain people. But a nonprofit doesn’t want to function that way. You don’t want an algorithm where a few people get tasks. The other thing is that with general labor service platform you can’t tailor to the specific needs of types of labor. The one-size-fits all market does not work very well.

Your critique of Andrew Yarrow’s “Thrift” — that he didn’t dig deep enough to understand what the thrift movement meant to its participants. What’s motivating users of Uber and Airbnb, and is that different from, say, a tool lending library user?

With the nonprofits, people are motivated by several common good claims. One is ecological. People think that these are lower-footprint way of doing things. The second is social, either to have social connection or in cases like a time bank, a critique of inequality. That’s important to people. Then there is the critique of the big impersonal corporation, and a preference for the local and the face-to-face and the personalized. There’s almost an aesthetic dimension to that. That’s been important for a lot of people in both types of platforms. You also see this on some of the for-profit platforms, for example, with choosing Airbnb rather than a hotel chain.

That’s a major motivation we’ve found. With the food swap, there is a critique of the industrial food system. With the for-profits, the number one motive is money, although, these other things also come into play. On Airbnb people think that it is reducing eco-footprints because fewer hotels are being built (they don’t think about how people are traveling more because of Airbnb). And there’s another aspect for the people who are earners on the platforms, which is that they don’t want nine-to-five jobs and want a certain amount of autonomy or flexibility. Maybe they have other careers or obligations. They aren’t nine-to-five people. This is another set of motives around autonomy and flexibility.

Header photo by Yoel J Gonzalez via Unsplash

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We’re thrilled to present not only our first ever impact report, but also the first piece of research examining the social impact potential of a business-to-business time currency.

In this research, we set out to examine the ways in which Echo can contribute to community connectivity and, ultimately, community prosperity. We think we do this by fostering local and social relationships, and by providing communities with a mechanism to share possibly untapped knowledge, skills and resources to build capacity. Finally, we think that the hard-wired equality of our currency serves as a catalyst for and facilitator of these benefits; one hour = one Echo, no matter what’s being offered.

Undertaking this research has been a valuable process in terms of the direct and detailed engagement with our members and the lessons we’ve learned, and we’d like to say a huge thank you to the hundreds of Echo members who took part, providing us with your valuable thoughts and feedback.

You can read our findings in full by downloading the report.

Download executive summary
Download full report

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by: Time Bank Hull and East Riding

Click here for event registration and more information

COME HELP BUILD A NEIGHBOURLY NEW GLOBAL ECONOMY! We have what we need, let’s connect, collaborate and make it happen! We can do it!

Communities around the world are piloting MANs designed to meet life’s economic needs – food justice, work redesign, sustainable energy, community justice, housing and transportation access, travel and culture exchange, etc etc. Local MANs are connecting in a global cooperative, the Main MAN, in order to support each other’s success and build a network of networks that can engage the 100% in a neighbourly
global economy. We’re hosting a summit in Hull, United Kingdom to learn from each other and take our work and connections forward.

What to expect: New learning, nuts and bolts action for local communities, access to ongoing technical assistance, training in using MAN tools for your own projects plus mutual support among projects around the world, deepening knowledge, building relationships. And fun, music, art, and nature. Join us prior to the summit for Hull’s Freedom Festival 2-4th September. Then on the 5th, the summit will start with an overview of the Mutual Aid Network, go on to visioning #thesocietywewant on the 6th in partnership with the Webb Memorial Trust, deepening to exploring the tools including tech and then focussing in on the Hull pilot at the end of the week with a day outdoor camp and evening celebration to finish. Click here for draft schedule.

Where possible we will offer homestays, feed you delicious food, and schedule plenty of time for enjoyment. You will leave with concrete actionable ideas for how to work with people in your own community to build your dream economy.
For more information see http://www.mutualaidnetwork.org/man-up-summit-uk-sept-2016/

Registration Fees Explained: Sliding Scale – Day Tickets and Full Week:

Wherever possible, we are using MAN tools (eg sharing, gift, timebanking) to create this week of events. However there are some real monetary costs we need to cover so we would be very grateful if you be as generous as possible in your registration amount. Of course we want everyone to be able to attend and participate. If these suggested donations put an undue burden on you financially, you are allowed to select a lower fee. We ask you to make an honest evaluation of what is within your means for attending the conference. If you are able to contribute more it will help us greatly both with the cost of programming, travel and food. Any excess will be put into the Mutual Aid Network which you can all be part of! There is also a ticket option for time exchange. We need lots of helpers to help with cooking, accommodation hosts, food contributions and bicycles. Is there anything else you can offer? Let us know and we’ll be in touch! Thank you in advance.

When: Monday, 5 September 2016 at 09:30 – Saturday, 10 September 2016 at 22:00 Add to Calendar

Where: Hull – Hull, United Kingdom – View Map

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