Local currency comes to Bainbridge
Published 12:00 pm Monday, October 11, 2004
Chuck Estin will be making money, without a business or a printing press.
Last month, Estin launched a local currency system, where through a system of mutual credit – debiting the buyer’s account and crediting the seller’s – money is “created” each time services or goods are delivered.
“(Local currency) shifts the role of money from being scarce to being plentiful for creating a continual flow…of goods and services,” Estin said. “It regulates the amount of currency based on the availability of goods and services.
“Rather than money being scarce, it becomes a measuring stick for transactions.”
Local currencies are used all over the world, with Ithaca, N.Y. the best known one in the U.S.
Estin launched Bainbridge Time Dollars on Sept. 15 and will be host the next new member sign-up Oct. 13 at the Winslow Cohousing Commons.
The unit of currency will be a “Time Dollar” equivalent to one hour of work, or roughly $10 U.S.
The actual price of goods and services are negotiated between the trading parties.
“Time Dollar” trading is tax-exempt, since it is considered by the IRS to be a part of the “gift economy.” BTD members will use a website to record trades and see a record of their account’s transactions. Balances will be visible to all – a check against any person going into “too much obligation.”
Estin’s system is benefiting from the experience of Francis Ayley who set up the successful North London LETS – Local Exchange Trading System – and is starting a similar system in Bellingham called the 4th Corner Exchange.
Ayley and friends set up North London LETS in 1991 with a group of 30. By 1999, there were 450 members with trades totaling over 500,000 pounds sterling – over $890,000 – in eight years.
“None of (the trades) would have happened in pounds,” Ayley said. “(Local currency) allows various goods and services to exchange that wouldn’t be able to otherwise.”
Ayley recalls an elderly woman getting faucets fixed, lightbulbs changed, minor building work done and a garden remodeled via LETS. She offered basket weaving, needlework and childcare.
“We ended up with a solid core of high-level traders, and they understood the system completely,” Ayley said. “Once we had this core group, we could broaden to those with enough goodwill, but without that core community to hold it together, it doesn’t work.”
Similarly, Estin is starting up his Time Dollars based on interest shown by some residents of Winslow Cohousing. The members already share a communal dining hall and take turns cooking and washing dishes.
“We already need this (local currency) in cohousing; that’s the beauty of it,” resident Odysseus Levy said. “For example, it’s hard to trade cooking duties. It’s easier to trade it for credits.”
Another resident, Rod Arakaki, also likes the community-building potential of Time Dollars, which could allow members to do more or buy more without paying more money, along with a certain social justice potential.
“There’s an element of equality in it that I like. That is, in the trades I’ve done so far within cohousing, one hour of technology consulting is just as valuable as one hour of rain gutter cleaning,” Arakaki said. “That seems right to me, and I intend to continue to do my trading on that basis.”
Arakaki theorizes that down the road, monthly cohousing dues could be paid partially in Time Dollars to make living there even more affordable.
Social trade
The North London LETS eventually included several businesses and the Islington city council, which printed a skills and services directory for LETS payment. Businesses joined to attract more customers.
Traders had no yearly trading requirement and could charge a combination of LETS and national currency as desired. A car mechanic might charge for the parts in pounds sterling, but labor in LETS.
A few got “off the grid” using LETS for all transactions: rent, farm produce and transportation – via a LETS taxi. In a year, others traded less than 50 pounds – about $89 – but went to LETS meetings for the social aspect.
Ayley says a minimum of 35 members is ideal to allow enough variety. In his circle, services included a mechanic, taxi rides, produce from organic farms, healing arts and a retired builder.
Estin is hopeful that BTD will expand based on the strong community ties that already exist on the island. His first goal will be building capacity for a broad variety of services and goods to promote member trading.
Sept. 15 marked a “soft launch” of the system to get trading started and work out the kinks in the process, which includes a web site developed by Levy that will keep track of trades
“What started with my personal commitment to the idea, has already spread to a larger group,” Estin said. “Actually implementing it will help people understand it better and be willing to take more responsibility… (helping) build the further trust needed to grow the diversity of available goods and services.”
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The Bainbridge Time Dollars trading group meets 7:30 p.m. the second Wednesday of each month at the Winslow Cohousing Commons, 353 Wallace Way. The next meeting is Oct. 13. An orientation session will explain and demonstrate how the Bainbridge Time Dollars system works, followed up by sign-ups for new members. Follow signs for visitor parking. Information: Chuck Estin, 842-4280 or cestin@earthlink.net.
More information on local currencies is available at www.timedollar.org and www.northlondonlets.ukf.net.
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Historically, local currencies flourished during economic crises. During the Depression, lack of money caused people to hoard money, compounding the monetary supply crisis. Scrip issued by local agencies, companies, cooperatives and individuals in the U.S. helped circulate money where there was none.
In Depression-era 1934, WIR Bank of Switzerland introduced WIR currency for Swiss transactions. Members paid Swiss francs into their WIR account and received a 5 percent bonus in WIR. The interest-free WIR could be spent at participating merchants and encouraged people to spend since no interest could be earned.
The WIR is still active today with electronic debit cards rolled out in 1999 that allow customers to make point-of-purchase payments in WIR or as a combination with Swiss francs. In 1993 annual WIR trading was equivalent to $1.5 billion U.S.
