Forum Post: Opting Out of Wall Street and Building Sustainable, Resilient Communities: Remaking Finance, Part III
Posted 10 months ago on May 8, 2013, 6:37 p.m. EST by LeoYo
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Opting Out of Wall Street and Building Sustainable, Resilient Communities: Remaking Finance, Part III
Wednesday, 08 May 2013 00:00 By Margaret Flowers and Kevin Zeese, Truthout | News Analysis
This article is the continuation of a series on remaking our financial system so that it serves and protects people instead of the "too big to fail or jail" banks, collectively called big finance. More and more people see that the current financial system rewards those who hoard their money and invest in risky or damaging ventures such as derivatives and other forms of speculation and are asking: how do we opt out of Wall Street now? They do not want to be part of big finance practices that keep money out of the economy and place us all in danger of losing our bank deposits if an investment goes badly. Almost all Americans experience the predatory practices that have put the population in debt in order to meet basic needs for housing, education and health care.
This article points to steps you can take in your community now to escape this corrupt system. Previous articles looked at longer-term changes that require government action, such as public banks. In this article, we focus on communities taking action to create alternative currencies and ways they can be integrated into a financial system that connects people with each other, builds dignity and community, and reduces dependence on big finance.
On Clearing the FOG, we spoke with three people who are actively engaged in building alternative economies. Edgar Cahn, author of No More Throw-Away People: The Co-Production Imperative, is founder of the concept of time dollars. Paul Glover created the first local currency based on hours, or labor, in Ithaca, New York. Glover has written many books, including Hometown Money: How to Enrich Your Community with Local Currency. And Jeff Dicken directs Baltimore Green Currency, a local currency backed by federal dollars that has a larger social mission.
All three guests have a vision of a new type of economy that is based on the ideas that all people have talents that contribute to the greater society and that we are mutually interdependent. They see local currencies as a way to build local supply chains and new businesses and services that create sustainable and resilient communities by keeping money circulating in their communities. Local living economies will provide necessary protection when the next economic crash occurs.
Time Dollars Bridge the Two Economies
To fully understand the importance of time dollars, we must first recognize that there are two simultaneous economies: the market economy, in which money is exchanged to purchase goods and services and the non-market economy, which includes all of the activities within families, neighborhoods and communities, in which money is not exchanged. Both economies have a purpose and are necessary for a thriving and healthy society.
Normally, we only study and hear about the market economy. But the needs of a society cannot be met purely within a market economy. The market is based on scarcity: the less there is of something, the more valuable it is. And the market doesn't value family, community and democracy, the things that are needed to create a society in which most of us would want to live. The non-market economy is not included in current economic measures like the Gross Domestic Product (GDP).
At the heart of the concept of time dollars is a restructuring of the operating system on which the economy is based into one that values the non-market economy equally with the market economy. Cahn states that the old operating system (the market economy) "used to work fairly well, but it was subsidized by labor exacted from the subordination of women, the exploitation of minorities, racism, and the exploitation of immigrants." That system has been "bled dry," so it is time to replace it with a system that restores and reinvigorates family, neighborhood and community. Cahn developed the idea for time dollars when he was hospitalized. He was being cared for, but he was not in a position to give anything back and he did not like feeling useless. It was in the 1980s, during a recession with high unemployment and many unmet needs, and the thought occurred to him that others might not like feeling useless either. Most people don't like receiving services without being able to give something in return.
The time dollar system restores dignity and connects people to each other. People identify for themselves what they have to give and what they need. And every person has something to give. It can be running errands, fixing things, providing companionship or services or teaching someone. People earn time dollars for the work they do, and they can use those to purchase the services they need. Time dollars place value on the unpaid work that is done in families and communities. They redefine what we value as work and recognize the value of every person.
A fundamental component of time banks is the idea of co-production, which includes social justice as an integral element. The market economy creates externalities for which it is often not held responsible. The obvious externalities are those due to environmental harm. The market economy also creates social externalities or harm to the non-market economy, to one's ability to do the work that is necessary for family and community. Time dollars are a bridge between the two economies. And co-production means that individuals and communities must be enlisted as co-producers of the outcome and must have access to social infrastructure as well as physical infrastructure. Cahn summarizes, "If you care about justice, democracy and sustainability, you must enlist the community." Co-production is based on five core principles. First is that people of all ages have something to give that is real and that those gifts should be recorded and valued. Second, what is commonly called volunteering should be honored as work. Third is reciprocity, that we give help and receive help. Reciprocity creates the awareness that we need each other and develops a "pay it forward" mentality. Fourth is social capital, which means we must invest in ways to bring people together and embed them in a support group in order to have lasting results. And fifth is respect, that everyone's voice is equal and that there must be ways to know when something is not working.
The time dollar system has evolved into an international movement of time banks in 37 countries. There are 300 time banks in the United States and they have handled millions of time dollars. One program in New York has logged 196,000 hours. Research shows that only 10 percent of participants regularly report their hours and only 25 percent report with some frequency, so the total amount of hours is much higher. The software that helps a community keep track of the time dollars and services, called Community Weaver, is open source and available for free on the Time Bank web site.
When Cahn first discussed the idea of time banks, he was discouraged from going forward for many reasons. There were concerns about the legality and taxation and the effect it would have on society. It is now clear that these concerns were unfounded and that time dollars are a success. They do make a difference in communities. People express trust and hope, and they learn good things about each other, even in places that have a reputation for being dangerous neighborhoods.