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Mon Valley communities test “time credits”, a new form of currency
- peter_l_downs 6y agoThe article refutes the headline — nothing New about this except the ledger? When I was very young my parents joined a New Parents group. Members traded favors (“can you watch my kid for a few hours”) for little pieces of paper denominated in half hours. The shopping neighborhood nearby had “NeighborhoodDollars” that you could buy at a discount to face value and use at any of the shops. Local currencies are great and help bring people together, I highly recommend talking to people who live near you!
- cma 6y agoPaul Krugman has written on them long ago. I think there were things like runs on the bank and people hoarding babysitter hours, stalling out the system, and all kinds of emergent problems.
- maxwell 6y agoInteresting, I ducked around a bit and couldn't find anything from Krugman on time banking. Like bitcoin, time can't be inflated/deflated.
- cortesoft 6y agoThis is the famous Krugman article: https://slate.com/business/1998/08/baby-sitting-the-economy.html https://slate.com/business/1998/08/baby-sitting-the-economy....
- floatrock 6y ago2014-era Planet Money also covered it: https://www.npr.org/transcripts/291485828 https://www.npr.org/transcripts/291485828
- owenversteeg 6y agoThat is a great simple explanation of the economy, thank you!
- snarf21 6y agoThis is pretty cool. It reminds me a little of a concept I have been working on which is part currency and part UBI experiment. (shameless plug) It is called The Good Loop (thegoodloop.org). It works by Charities creating tasks that reward some number of credits. Volunteers perform the tasks and earn credits. Merchants accept credits for goods and services. Merchants then donate the credits to the Charity of their choice. It is a closed looped system to encourage and reward volunteerism.
- luckylion 6y agoCan the merchants claim it as a donation on their taxes? At least in Germany, you can't "pre-donate", i.e. work to a charity and claim it as a donation. You'll have to agree on a price and the charity has to be able to compensate you and after everything is done, you can choose to not take their money. I'm not sure whether the third party in the transaction changes anything.
- snarf21 6y agoI'll add that to the list. I'm currently still in the building phase but tax implications will be something to consider.
- chris_st 6y agoWe had a baby-sitting-club kind of thing with its own currency, nice middle/upper-middle-class neighborhood, and some people just couldn't seem to get around to 'earning' credits by babysitting other people's kids... So there was forgery. Of course, in such a small community, it was immediately obvious who had done it, so people stopped being available to babysit their kids.
- antasvara 6y agoI've always found this concept interesting, and more generally the idea of community-based currencies. Time-based currency has a history [1] of attempted implementations, many of which don't leverage the community aspect here. A large part of why I find these ideas interesting is related to the legal system used by the Romani [2],where failure to comply with the rules set forward results in exile. Because of their reliance on community, members are incentivized to follow the rules because exile would be incredibly detrimental to an individual's livelihood. I feel as though time credits work on a similar principle: that your efforts will be recognized in your community, but a lack of good faith will result in those time credits being worthless. [1] https://en.m.wikipedia.org/wiki/Time-based_currency https://en.m.wikipedia.org/wiki/Time-based_currency [2] https://slatestarcodex.com/2017/11/13/book-review-legal-systems-very-different-from-ours/ https://slatestarcodex.com/2017/11/13/book-review-legal-syst...
- martindale 6y agoIt's not a new idea [0], but I admit that I was excited about this referring to digital communities. Nonetheless, it's a cool way of separating one's self from the Government monopoly on money. [0]: https://en.wikipedia.org/wiki/Time-based_currency https://en.wikipedia.org/wiki/Time-based_currency
- eru 6y agoI found the story of the Birmingham buttonmakers producing coins (https://www.goodreads.com/book/show/3392302-good-money https://www.goodreads.com/book/show/3392302-good-money) to be a cool way of separating one's self from a Government monopoly on money.
- sukilot 6y agoIt's less efficient than regular money and government would never allow it to grow to rival.
- eru 6y agoHave a look at https://www.alt-m.org/2015/07/29/there-was-no-place-like-canada/ https://www.alt-m.org/2015/07/29/there-was-no-place-like-can... for one example of less government involvement in money.
- bryanrasmussen 6y agoOf course time is money, the benefit for some people though is that their time is then credited at a fairer rate of exchange than the normal employment way of crediting time, at the same time that it allows them to monetize things that would otherwise be difficult to monetize. However for someone like me whose time is credited more than most by the employment system it seems like it would be a losing proposition to do things for time credits instead of money.
- bryanlarsen 6y agoIn a functional time credit system, you should be able to play a critical role -- you should be able to consume products & services in the system in exchange for dollars in order to be allow those in the system to pay for essentials that they cannot buy with time credits.
- WilTimSon 6y agoYes, but that whole system is essentially built on the trust that everyone gets their fair share for giving time. Saying "for someone like me" runs completely counter to their ideas. Personally, it wouldn't be beneficial to me either but the catch is that this system essentially dictates you just have to give up some benefit to you in order to gain a benefit for the community. However, I really don't know how viable this scheme would be on a bigger level. Eventually, this hopeful and admirable attempt faces the problems outlined in the article: landlords don't want time credits, banks don't want them, the government doesn't want them. So it's a risk of giving up your privilege of earning well that might leave you with nothing eventually.
- peter_d_sherman 6y ago>"Churchill resident Cynthia Underwood delivers groceries to a home in Swissvale, just outside Pittsburgh. As part of a program run by Neighbors Helping Neighbors and involveMINT, the Rankin native earns "time credits" for her service."
- docdeek 6y agoThere’s a local currency in use here in my city [0] and it seems to have a lot more support than the approx. 10 local businesses accepting the Time Credits mentioned in the article. I see the stickers in the windows of shops that accept the local currency (it’s pegged 1:1 to the euro) but I’ve never actually bought any myself. Seems to have a following if the list of stores accepting it is anything to go by [1] 0: http://www.lagonette.org http://www.lagonette.org 1: http://www.lagonette.org/la-liste-des-partenaires/ http://www.lagonette.org/la-liste-des-partenaires/
- throwawayiionqz 6y agoHow is VAT paid? The government is clearly not accepting the local currency. So VAT must be paid in euro for purchases in the local currency? I am wondering how this eventually works out, especially the day when selling your local currency into euros is not anymore possible or pegged 1:1, while VAT must still be paid in euro.
- vladvasiliu 6y agoI'm not familiar with this, but according to his links it seems there's a fixed exchange rate of 1 € = 1 G. I think it's not exactly a "different currency" it's more like chips in a casino.
- docdeek 6y agoI didn’t know - and I hadn’t considered it, to be honest - but a dig on the website suggests that the government treats it as something akin to bartering or donation of services. As a result, it is exempt from VAT (TVA in French). http://www.lagonette.org/une-monnaie-locale-et-complementaire/ http://www.lagonette.org/une-monnaie-locale-et-complementair... "Les échanges de services non-monétaires, promus par les réseaux de monnaies complémentaires (banque de temps, réseau d’échanges réciproques de savoirs, SEL – Système d’échanges Locaux, etc.) relèvent d’une activité ponctuelle, d’un coup de main. Ils n’entrent pas dans le cadre d’une profession et sont exonérées de TVA et d’impôts.
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- hkt 6y agoTime credits are not a new form of currency, they were used extensively in early co-operative communities such a the one started by Robert Owen in the 1820s. Sorry to cite a book, but this has some details: https://www.routledge.com/A-Global-History-of-Co-operative-Business/Patmore-Balnave/p/book/9781138191495 https://www.routledge.com/A-Global-History-of-Co-operative-B... There are lots of examples of co-operatives that use a currency of their own, the more idealistic ones did time based currencies because it was a proxy for equal pay for equal work. Communities tended to adopt their own to keep money circulating locally.
- transfire 6y agoLove how the article ignores the obvious question -- are we in a depression?
- tantalor 6y agoTo the comments saying "this is not new", the article uses the sense of the word not as "not existing before" but as "already existing but seen, experienced, or acquired recently or now for the first time" e.g., "her new bike". https://www.google.com/search?q=define+new https://www.google.com/search?q=define+new This is new for this community. It could be new for your community too.
- eru 6y agoThis is an old hat. Have a look at eg http://www.tauschkreise.at/?page_id=46 http://www.tauschkreise.at/?page_id=46 for some activities in the German speaking parts of the world. (Use Google Translate as needed.0
- Ericson2314 6y agoI wish NYC had its own currency that municipal taxes were in part payed in.
- jefftk 6y agoWhy?
- Ericson2314 6y agoBasically it would give the city more power relative to the state and federal government. Basically I think this would be the best way to turn back the changes best described in the book "Fear City: New York's Fiscal Crisis and the Rise of Austerity Politics". Economic reason: Some of cost disease of social services like the ones that were cut relates to the subsidizing of suburban America, and I think local currency with reduced purchasing power in the suburbs would help avoid that. Political reason: The structure of American governance gives non-urban areas disproportionate power, due to a variety of mechanisms. Yet cities are more inherently more productive and the engine of the economy. Granting a major city the power of semi-autonomous monetary and fiscal policy will give it more power to counter balance this. For similar reasons I think EU should go back to local currencies, but rather than getting rid of the euro could have both.
- olodus 6y agoBah, humbug. Time credit system? The currency is only related to time (time someone puts into doing something the community values, that is). My new "actual" time credit currency goes all the way and pegs itself totally 1:1 to time. Sadly, it turns out the inflation is horrible. Mother nature clearly hasn't studied economics the way she keeps creating new seconds all the time.
- lifeisstillgood 6y agoIf you can loan me 8 hours for sleep I would be grateful :-)
- Bombthecat 6y agoIn one sci fi book, there was money per kj of work. I find this idea interesting. Since the brain uses around 20 percent...
- biolurker1 6y agoHardly new concept it's called barter
- frankdenbow 6y agoIt doesn't have to be a new concept to be necessary. Why do people on hacker news constantly have to miss the point? Most ideas are revised versions of things that have been done for centuries. The cult of "new" is ridiculous.
- biolurker1 6y agoit's in the title. "a NEW form of currency"
- frankdenbow 6y agoExactly, you cant even read past the title to pull out the most important part (hint: the definition of the word "new" isnt the most critical thing to talk about)
- biolurker1 6y agoArgue as you want, the title is wrong. This is a 1+1=2 forum.
- deleted 6y ago[deleted]
- jkhdigital 6y agoCalling this a currency is generous... it’s more of a token that externalizes the normally intrinsic reward for acting charitably. It’s like the stickers that I give my 6 year-old son for doing his chores.
- the_other 6y agoWhy is this not money? Surely if people can trade these “tokens” for goods or other services, then they’re money?
- baq 6y agocan't pay taxes with it == not money
- the_other 6y agoMoney you can pay taxes with is the specialised kind of money: “state money”. You limit yourself in some ways if you consider state money to be the only money. It ties you to your state: which is OK when you agree with your state, but sucks when you don’t. It ties you to the state’s economy (the problem these novel/local currencies attempt to solve). It ties you into statecraft, international relations, and the horror show that is global currency exchange. It invites the state into every transaction you make. It invokes your state’s monopoly on violence, with every transaction you make. All these have their uses, but they are also a burden sometimes.
- Spivak 6y agoBut it's also a store value when you can spend those credits a local businesses. If your kid could turn in his stickers for toys or pizza then it would be an apt comparison. I really like this idea of businesses accepting different types of currencies to encourage specific types of work like charity, volunteering, good grades for kids.
- baq 6y agoyou can give dollar bills instead of stickers as a reward, would that change your perspective?
- jefftk 6y agoIn the early 2010s I participated in a time bank, run along similar lines: http://timetradecircle.org/ http://timetradecircle.org/ (Cambridge MA) It didn't work very well. People with valuable skills were generally not willing to offer them, and instead people would offer to do only fun things. So you would see lots of unmatched requests for things that required specific skills (legal, taxes, plumbing, computers) or difficult work (carrying heavy things, babysitting), and lots of offers for amateur interior decorating advice etc. Additionally, everyone who signed up started with 10 hours in the bank, effectively printing money, which made it even more unbalanced.
- agentdrtran 6y agothis is exactly what happened to an online time bank service I remember.
- pyronik19 6y agoIt's almost like supply and demand is a thing and the only mechanism for overcoming it is the jackboot. Karl Marx has entered the chat.
- sumtechguy 6y agoMarx did not account for exactly the sort of behavior as described. The jackboot enters to enforce equality in that system very quickly because people will abuse it. I have seen people fight each other over mcdonands toys. Greed/Sloth knows no bounds, your particular monetary systems has to account for that. Most dont.
- jefftk 6y agoLooking back, apparently I wrote about this at the time: https://www.jefftk.com/p/the-value-of-an-hour https://www.jefftk.com/p/the-value-of-an-hour Which reminds me of the excellent 1977 Sweeney and Sweeney econ paper about the Capital Hill Babysitting Coop: http://www.eecs.harvard.edu/cs286r/courses/fall09/papers/coop.pdf http://www.eecs.harvard.edu/cs286r/courses/fall09/papers/coo...
- sukilot 6y agoAnother article on same topic, without the misleading title: https://news.ycombinator.com/item?id=24105860 https://news.ycombinator.com/item?id=24105860
- gmoore 6y agoIt turned out bad in https://www.imdb.com/title/tt1637688/?ref_=nv_sr_srsg_0 https://www.imdb.com/title/tt1637688/?ref_=nv_sr_srsg_0
- megiddo 6y ago"The idea grew especially popular during the Great Depression, when market failures dried up the supply of cash in circulation." I mean, if you define an executive order seizing money as a "market failure", sure. Or conversely, FDR didn't know what he was doing and Gresham's law always applies.
- monocasa 6y agoThey're talking about the banks folding, and the subsequent inability to change money, which happened years before FDR was elected.
- chaz6 6y agoWhilst I cannot debate the merits, I like the idea of a currency that helps reduce the amount of hoarding, since the whole point of currency is to be exchanged and keep an economy working.
- savanaly 6y agoIntroductory economics usually frames the purpose of money as being threefold: 1. Medium of exchange; this is what you're referring to as "the whole point of currency". But don't forget about: 2. Unit of account; Something that allows you to compare "apples to oranges" so to speak, a common denominator. 3. Store of value; Some people choose to consume what's due to them up front, others choose to "hoard" for later (nothing wrong with that, IMO), most spread their consumption evenly over their life more or less. If we were all trading chicken eggs and babysitting hours amongst ourselves this would be a lot harder.
- smabie 6y agoThe world as a whole (except maybe like Japan) doesn't seem to have the problem of hoarding money. Low and negative interest rates have forced everyone to deploy capital and maintain comparatively little in risk free short-term sovereign notes. It's apparent that maybe we should have hoarded a little bit, as individuals and institutions everywhere are reeling from the damage covid has wrought on the world economy.
- umvi 6y agoReminds me of the movie: https://en.wikipedia.org/wiki/In_Time https://en.wikipedia.org/wiki/In_Time > Instead of using paper money, a new economic system uses time as currency
- zackmorris 6y agoYa I was thinking that too. We've been watching The Last Kingdom and Vikings (set around 800 AD), and the main thing that's changed today vs then is that they had little mechanization or automation, so everything was made by hand. A suit of armor required so much time to make that it took a lifetime to acquire one. Contrast that with today, where we can buy computers for $1000 that took millions of worker-hours to design and build. So in away, our $15 is worth something like $15,000 to them. Or more precisely, their day's work on the farm would produce 1/1000 of today's wages, maybe 30 cents or something comparable. Enough to buy some eggs or beer if they were lucky. What gets me though is that most of us have a quality of life higher than royalty enjoyed then. Yet most of us spend our entire lives underemployed, doing work of little importance, still making someone else rich. The sacrifice of our daily life should cost us 1/1000 what it did then, but it still costs us the same. What good is more buying power if you hate your job, today is the worst day of your life, and tomorrow will be even worse? But hey, at least you have a flat screen. I think that's why the concept of barter can feel attractive, because if everyone has a relatively comparable work output, then an hour spent doing something we enjoy (say baking or whatnot) can be exchanged for something we might find miserable but someone else might enjoy (like giving a massage). Whereas with cash, an hour baking might be worth $7, but an hour massage is worth $60. The divergence between the free market value of something, and its toll in human suffering, is the primary cause of most conflict in the world today IMHO. That gap is why some of us are punished so much more for the work we do, and why so many of us don't get to do the work we'd like to do. We all just run the rat race and compete with the joneses until we're put out to pasture. I've found no solution to this yet in my own life, so I'm curious to hear others' experiences.
- njarboe 6y agoCheck out https://www.mrmoneymustache.com/ https://www.mrmoneymustache.com/ for one possible alternative that is working for a lot of people that live in the US. The FIRE movement is about working for a short amount of time and living frugally but well for the whole of your life. You have to give up keeping up with the Joneses and most people will think you are a bit weird, but many people feel that is a great trade.
- dbg31415 6y ago* Ithaca Hours - Wikipedia || https://en.wikipedia.org/wiki/Ithaca_Hours https://en.wikipedia.org/wiki/Ithaca_Hours > Date of introduction > November 1991
- evanwarfel 6y agoThere's a difference between re-defining one's local monetary system to use 'chunks of time' instead of money, and variably pricing select goods and services in terms of 'how much money you make in an hour.' The former scheme is hard because time, as the Ithaca HOURS currency experiment shows, isn't exactly fungible in the same way that money is. Being able to redeem 'an hour' assumes that all people can do the same level of work at all tasks. The latter, however, requires a different way of thinking about pricing. For instance, service providers might set their rates as multiples of one's hourly wage: a tennis teacher might charge 1x, a pro-tennis teacher might charge 3x, and a low-income psychotherapist might charge .85x... Such a scheme could work with a sufficient number of clients -- essentially one is sampling from the income distribution -- but the system is more equitable to income differences. From this point, one can think of more complex schemes, like a non-linear mapping function that can prevent high-income individuals for paying drastically more than others. Yes, one big issue is one of trust and verification of income... but if it were a culturally accepted practice, it could work. The other issue is the incentive to only target high-income people. Perhaps there could be a set of tax breaks for those whose distribution of client's incomes met some basic requirements.
- freeone3000 6y agoThe second one we've decided is called "dollars", and is the usual mechanism of exchange in a society.
- WealthVsSurvive 6y agoI see this and bitcoin as attempts at Balkanization, due to the failures of US conservative & neo-liberal economic policy since the early 70's onward. I see bitcoin as a Chinese state scam, a structured, self-funding via hardware manufacturing, attack on NATO policy that outgrew its britches and now serves as a global-warming-causing lunar-magic-gold reserve. Since there aren't any cheap new frontiers, you see things like "Time Credits." This means that undeserved communities are inventing their own tribal states because the larger state isn't meeting their needs. These generally aren't good things because more cohesive societies tend to exist longer.
- deleted 6y ago[deleted]
- diablerouge 6y agoI got here a touch late, but this seems inspired by or at least a descendant of the Cincinatti Time Store[0], which at the time (1827) was the most popular mercantile endeavor in Cincinatti. [0] https://en.m.wikipedia.org/wiki/Cincinnati_Time_Store https://en.m.wikipedia.org/wiki/Cincinnati_Time_Store
- smabie 6y agoAs always with these kinds of ideas, it can never work, in this case due to Gresham's law: bad money drives out good. No prostitutes or manual laborers (good money) are going to trade their time. Only aspiring actors, amateur artists, and etc (bad money) will be willing to participate in the market. You can't get around money, at least not as a large scale economic system.
- tuesdayrain 6y agoThat's a very interesting explanation for why most supporters of communism I see are artists, actors, or just generally unemployed.
- kdamica 6y agoReminds me of Berkshares, a local currency that launched in western Massachusetts while I still lived there. It's not a great idea since people have no real incentive to participate, but it's always interesting to see something like this play out. https://en.m.wikipedia.org/wiki/BerkShares https://en.m.wikipedia.org/wiki/BerkShares