Community Currencies

"Community currencies are more social tools than economics tools. They are explicitly about community in itself, not as a by-product of market activity." - John Rogers

The different quotes by John Rogers are taken from http://www.ourculture.info/wiki.cgi?CommunityCurrency

Typology of Community Currencies

"CCs may be seen as a spectrum from time-based currencies (everyone's hour of labour is valued the same) to 'market mimicing' currencies where people negotiate price and create local marketplaces.

Time-based currencies seek to re-grow communities and community spirit battered by the winds of globalisation and the externalities of the global economy." (http://www.ourculture.info/wiki.cgi?CommunityCurrency)

Discussion

John Rogers on the strategy behind Community Currencies:

"The biggest picture we can imagine is one of Four Economies. At the bottom, underpinning everything else, the Natural Economy - planet earth with its ecosystems. Just above, the Caring or Core Economy - the unpaid work of human families and communities bringing up children, learning skills etc. Above that, the Market Economy - all the activities of businesses producing goods and services, the work of governments and the public sector, any paid work At the top, the Casino Economy - hedge funds, futures markets, currency speculation, making money out of money etc.

Money enters the picture as the primary tool that allows the Market and Casino Economies to operate. The Market and Casino Economies constantly encroach on the Natural and Core Economies by attempting to monetise them. For instance, when natural resources are 'priced' according to extraction 'costs' to the businesses engaged in these exercises. Economists describe the costs that are not 'internalised' or paid for by these businesses directly as 'externalities' which are effectively dumped on communities and environments which are expected to internalise them ie deal with them as best they can. Governments attempt to offset the worst aspects of these externalities by charging taxes to businesses and consumers to clean up environments, provide health services etc. It is never enough. Another example would be when childcare or elderly health care is carried out by businesses, therefore monetised, then these services enter the Market Economy and the relationships change from those experienced in the Core Economy.

Money is usually scarce because the market requires this to promote competition and so the costs of buying money itself (the medium of exchange) from banks are kept high, to discourage the bad habits of over-issuance by governments.

So, CCs enter the picture as a way of saying that communities and environments can be protected, enhanced and treasured by valuing the work required to do this with different measuring tools. CCs are as abundant as the willingness of people to provide work in exchange for them." (http://www.ourculture.info/wiki.cgi?CommunityCurrency)

John Rogers on why Community Currencies are not working well

"Many LETS have failed, achieving average participation rates of 120 members with a few thousand credits exchanged a year. The biggest known LETS was I think the Australian Blue Mountains LETS with about 2000 members but that was a rare exception to the norm. Most of them struggle (d) along on volunteer effort, some have experimented with funding and development workers but the story remains essentially the same - high promise, low delivery.

Four years ago I got involved in the UK time banking movement. I joined the board of Time Banks UK. Here the same story was repeated. High hopes, lots of rhetoric, some time banks doing very well and then collapsing when funding ran out, a few struggling along without funding. Lots of well meaning effort without a strategic sense of how to improve practice and 'sustainability'. I kept on pointing out the need to pay attention to feedback from the field and to look at the sustainability question seriously.

We set up the Wales Institute for Community Currencies in 2003 with the specific aim of learning from 20 years of experiments with both LETS and time banks with no ideological commitment to any particular model, except in the short term to promote a new form of time banking as a tool for community development in the ex coalfields areas of South Wales, based on community development aims.

This is what we have learned.

The person to person 'mutual credit' model of both LETS and conventional Time Dollars/Time Banks is a limited model that will continue to produce frustration, burnout and limited effects in practice. Why?

Take person to person first. Setting up a structure to encourage exchanges between individuals, encouraging them to offer their time and skills to each other will build community but very slowly, one exchange at a time. In LETS people find it frustrating because they list all their skills in a directory and then sit and wait for the phone to ring and it doesn't. So they go out to social events and meet people and then a few more exchanges may happen. In a time bank people wait for the broker to set up exchanges for them. It will happen eventually, but it will only benefit a relatively few people after much effort and investment of time and money (where funding is involved). The mutual credit mechanism is also problematical. The theory has always been that those 'in commitment' (to use LETS jargon) have some kind of moral obligation to pay off a negative balance to the system or club or community. In practice people leave LETS with both debits and credits and they are written off. Some systems may well have crashed because people lost belief in the purchasing power of their credits. Time banks do not seem to worry so much about this aspect as the primary aim is social rather than economic but it could cause problems if they grew bigger." (http://www.ourculture.info/wiki.cgi?CommunityCurrency)

John Rogers alternative approach

"Development worker (agency) or local volunteer asks Community A what they wish to achieve over the next 12 months. Together they list a set of simple goals. Run the community centre, plant trees, do litter picks etc. They then analyse existing volunteer capacity to do these jobs. (We call it a 'baseline audit'). Say there are 5000 hours available at the moment. We ask how much capacity we need to achieve the above goals. Say we need to double capacity to 10,000 hours. We now know we need to be able to 'underwrite' or guarantee 10,000 hours of labour or effort. The job of the time bank is now to make sure that 10,000 hours of rewards or services are available for people to redeem their time credits when they have gained them from community service.

We are discovering that this approach works particularly well with young people attending youth centres. By offering motivating rewards such as trips and driving lessons (funded by Lottery, local businesses etc.) young people change their attitude to community work and volunteering and youth workers report a complete change in the working atmosphere. It also works with adult learners to encourage them into adult learning activities and it works to encourage people to run community centres.

The Holy Grail here is scale. How many people could potentially benefit from such an approach whilst keeping funding costs to a minimum?

One answer we have found to this is to start talking to local authorities about undercapacity in leisure and arts centres so that an hour of swimming or cinema at the local centre can also be contributed to the central pot to underwrite community participation." (http://www.ourculture.info/wiki.cgi?CommunityCurrency)