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THE DOLLAR THAT DOES NOT WANT TO BE MONEY
In early 1994 only about ten LET systems were trading in the United States and their total membership was small. There were, however, over 150 Time Dollar systems operating with anything from a few dozen to several thousand members spread out across some thirty states. Were they filling much the same economic need? Since the cover of their inventor's book refers to Time Dollars as a new currency, one might be forgiven for thinking so, particularly as Ralph Nader's Foreword says that 'citizen action must rest on a new economic base: one that makes it possible for people to meet their own needs while working to rebuild community and revitalize democracy at a grassroots level.'
But while they have similarities, the two systems differ in many important respects and Dr. Edgar Cahn, a campaigning lawyer who began developing the Time Dollar idea in hospital recovering from a major heart attack, would be appalled if his creation ever became as acceptable as national currency, a situation which would be every LETS enthusiast's dream. "Money is ideal for strangers because you can get things with it regardless of whether you know the person you are dealing with or not. Its use preserves a degree of anonymity and does not build community and trust" Cahn says. For him, the fact that Time Dollars can only be spent in a limited number of ways is a positive advantage since he wants them to empower people to meet social needs which can no longer be afforded in most modern economies. "Real money is all-purpose: you can buy anything with it" he says. "Time Dollars can only buy things of special value such as companionship, love and caring. Maybe we don't really want the things we value most to be up for grabs to the highest bidder." Revitalising a community economically is no part of his brief.
Time Dollars are earned by providing care for other people and can only be spent on buying similar care for oneself or for one's relatives and friends. The largest system is in Miami where volunteers' services include light housekeeping for the sick or elderly, deciphering Social Security rules, companionship, respite support for carers, lifts to doctors, the church or the supermarket, letter writing, reading to the blind, pet care, baby sitting, English and Spanish classes, sewing classes and adult day care. Whichever service volunteers provide, all earn the same rate, one Time Dollar per hour and, as with LETS, records are kept on a computer in the co-ordinator's office. Unlike LETS, however, the co-ordinator matches volunteers with clients, rather than having the latter hunt through a directory for a volunteer who seems right.
Many volunteers are elderly people who, on one level at any rate, rationalise their participation with the thought that by providing help now they are earning the right to call upon other members should they ever need care in the future. However, many programmes find it difficult to get volunteers to report their hours and since only 15% of Time Dollars are ever spent and no-one is refused care because of a shortfall in their account, Cahn believes the real reason people join is to be of service to others. "People must request help but it doesn't matter if they haven't the Time Dollars to pay for it. You lose your volunteers if you don't keep them assigned" he says.
It is because the volunteers primarily want to give, rather than to earn, which makes it so important that Time Dollars should not be seen as money and should have no monetary equivalent, that they should not be bought and sold. "Yet the fact that they receive something for their efforts is important, too, because it validates their contribution" Cahn says. "A teenager here in Washington DC who was earning Time Dollars doing yard work for elderly neighbours told me that the Time Dollars meant a lot to him because if he wasn't getting something his buddies would think he was a chump. Earning something he could give away gave him status. Time Dollars are a hybrid of the psychological rewards of volunteering and of payment. They are a form of money which is not a commodity."
As such, they permit people to do things which they would never do for cash. "A retired bank president would never mow a sick person's yard for money, but he'll do it for Time Dollars" Cahn says. "Market wages incorporate status hierarchies. Ask yourself if you would ask your mother to accept market wages to go next door to clean up a neighbour's house. Then ask yourself if you would have the same reservations about asking her to go over and help a sick neighbour by cleaning up and accepting Time Dollars so that Granny, living across town, could be picked up and taken in to the doctor. Price is not the issue. It is status. To accept money for such a task implies one has accepted the market status defined by the wage."
Cahn lists other ways in which Time Dollars differ from national currency and yet are much superior to it if one is trying to build community. "Money is frictionless and 'efficient' yet what an economist calls inefficiency and friction are sometimes the glue that holds society together. Unlike the national currency, Time Dollars are issued and spent locally. What we are doing by recording them on our computer is acting as the community's memory in a way which wouldn't have been necessary a generation or two ago when people were less mobile. Real money knows no loyalty to community or even country. A dollar put into a poor community can exit in hours to a cigarette manufacturer or a Japanese electronics firm. It is estimated that of every dollar the Federal Government puts into an Indian reservation, 75 cents flows out within 48 hours. Moreover, the supply of real money is limited. The supply of Time Dollars is not - it only depends on the willingness of people in an area to help each other."
Cahn and his wife Jean were the co-founders of Antioch Law School in Washington which trained - and radicalised - its students by having them work under supervision on cases for the poor. "It was founded on the quaint idea that law and justice should have something to do with each other" Cahn comments wryly. But recovering after his heart attack in 1980, he found the tables were turned. "I'd always been the doer, the person who made things happen, and now here I was, lying in bed, and people were doing things for me. I was an object, a taker and I didn't like it. I'd been reading about other people - single mothers, the elderly, minority teenagers and the unemployed - that society puts on the scrapheap and then regards as takers draining its resources. And I thought 'Those other people don't like being takers any more than I do. There's got to be a way to enable them to meet some of society's needs.'"
As Cahn sees it, these needs arise because the informal, non-market economy has broken down over the years as households bought for cash more and more of the things they had previously provided for themselves. "McDonalds' now provides the meals, Nintendo and video tapes the entertainment, insurance companies and the police the protection, Medicare and Medicaid the nursing care and so on. Unfortunately, these suppliers can generally provide only 70% of what's needed - the police cannot be effective without community help, for example, nor can the schools educate children properly without parental support. But with both partners working to provide the money for these services, parents seldom have the time to fill these gaps. It's not that nobody has the time, but the available hours have been dumped on the elderly and the unemployed. The fact is that very few families, and certainly not the nation as a whole, can afford all the services they need if they have to be bought from specialists at market rates. To give you an example - supposing I gave up brushing my teeth myself and called in a dental hygienist to do the job for me. Whatever do you think that would cost? In the market economy one cannot even buy an hour of one's own time with one's take-home pay from an hour of work."
After Edgar had recovered, the Cahns moved to England for several months so that Jean could complete a course. This gave Edgar, whose doctorate is in English Literature, the chance to develop his ideas at the London School of Economics. He remembers some lively discussions on the relationship between economic efficiency and equity. "My argument was that you can only say something is efficient in relation to your objectives" he says. "The superior efficiency of the market economy turns out either to be illusory or to have hidden costs. It only functions as well as it does because it assumes continued uncompensated contributions and support from the very non-market institutions it is undermining." In 1986, the Suntory Toyota International Centre for Economics at the LSE published his ideas under the title: Service Credits: A New Currency for the Welfare State as part of a series of pamphlets.
That same year, back in the US with their ideas formed and three pilot projects under way, the Cahns persuaded the Robert Wood Johnson Foundation to give $1.2m to fund Time Dollar programmes for three years in Missouri, Washington DC, Miami, San Francisco, Boston and Brooklyn. Five of these six schemes are still running, the sole closure caused by the commercial takeover of the voluntary hospital where one was based. "If you pay a full-time manager and two part-time assistants it costs $50-$60,000 a year to run a typical system. This works out at about $1.25 per hour of care given, much cheaper than anything which can be provided in any other way. In fact, there are very real economic savings because people can be discharged from hospital sooner if they've got someone to look after them at home."
Since Time Dollars and LETS have different objectives, one primarily social, one more heavily economic, there is no conflict or incompatibility between them and many communities ought to seek to establish both, particularly as those becoming involved in each will tend to differ. At the very least, LETS groups can learn from Cahn's ideas on the conflict between community and national currency and seek to ensure that, in their enthusiasm to make their local unit as useful and as versatile as possible, they do not re-introduce too many of the bad features of the monetary system from which they are trying to break away.
Jean Cahn died of cancer in 1991 and, since then, Edgar has been working up to 80 hours a week with students and volunteers based at his house in Washington to spread the Time Dollar idea as a memorial to her. When I met him, he was working on ways in which Time Dollars could be used on public authority housing estates to develop tenant management systems, help families under stress, assist tenant-operated enterprises and reduce vacancy rates and building deterioration. "Too often what we call growth in the Gross Domestic Product is simply a transfer of functions from the household economy to the market economy. Every time we put a grandmother in a nursing home, that is a contribution to GDP. Every time we enable her to continue to live at home, it is not" he told me.
"Although there is a widespread understanding that the disintegration of the family is the source of most social problems, no-one asks how we can rebuild the non-market economy. This has led to a simplistic fixation on entry into the job market as the panacea for eradicating poverty. Yet the non-market economy is the only economy we control; the other, the market economy, is irreversibly embedded in the new global economy. We lack a viable strategy to deal with poverty because we are concentrating on the wrong economy."
2002 Update by Caroline Whyte
Over the past six years the Time Dollar system has evolved considerably. Edgar Cahn says that "there is now an acute awareness of the currency's value as a way of dealing with social problems. Many new programmes have emerged; some of these have been neighbor-to-neighbor programmes, but there are also an increasing amount of programmes which are more specialised and deal with a specific social justice movement."
One such programme enlists the help of children with conditions such as ADD, whom Cahn says "the system has written off". They are paid Time Dollars so that they can tutor younger children in computer skills. Cahn says many of these children have experienced a "remarkable turnaround" as a result of becoming able to perceive that they can contribute something to society. A similar programme involves women who have been jailed for drug abuse. They are paid Time Dollars on their release, for counselling teenaged girls on subjects such as HIV/AIDS. The women can then use Time Dollars to pay for their own treatment.
Another programme, the Youth Court system in Washington D.C., handles close to a third of the children admitted to the system. Young people are paid Time Dollars to serve on juries of their peers. The offenders, who have committed minor offences such as truancy, are sentenced to do community work. They also have to serve on the juries and are paid Time Dollars for doing so. Teenagers who go through this system have a lower rate of recidivism than other offenders.
In 2000 the Youth Court's Grand Jury publicised a major indictment of the D.C. justice system. As a result, two youth jurors were appointed to a commission which issued a report for the Mayor of D.C., detailing ways in which the juvenile justice system needed to be restructured. This report had a strong influence on the mayor and he put $2 million into restructuring, with another $2 million going into prevention. Young people in D.C. thus became involved with civic engagement and were able to introduce changes to the system.
Cahn says the Time Dollar system has "taken on many different colorations". Another program has involved day-laborors in the area outside DC. These workers have few rights and are paid low wages. They can earn Time Dollars by picketing outside the offices of employers and raising public awareness. They then spend the Time Dollars in community groups which give them support and advice.
A new enterprise which is being launched will pay young people Time Dollars to make videos abut seniors, with the seniors describing their lives and telling stories. The seniors will thus be able to create a lasting legacy. And yet another program, in El Paso, Texas, involves a clinic that serves 16,000 families. Patients with diabetes are paid Time Dollars when they change their nutritional vales so that they are eating a healthier diet. They can spend the dollars on getting support for paperwork and documentation (many of them are immigrants).
The idea of Time Dollars has spread to other countries such as Japan, China and South America. The fact that the IRS and British tax system have both made it clear the Time Dollars are tax-exempt has been a big help. Tony Blair has embraced the idea and provided funding for Time Dollar programs in the UK. In the US, grants from the Annie Casey Foundation and Ford Foundation have enabled the programme to be introduced in 14 cities.Independent Time Dollar-type programs have also been established in Australia, Brazil, India, Pakistan and Cuba. Since the system is not centralized, there is no formal way of keeping track of what programs are where, and each individual programme is somewhat different structurally from the others. Time Dollars in Japan
In 1999, the Time Dollar Network Japan Non Profit Organization was established. Masako Kubota, who is the CEO of the organisation, tells me that the system there is directly based on the system in the US. One difference, however, is that many Japanese communities have designed paper currencies and coins to use because the Time Dollar software is not available in Japanese. Some tokens are even made out of bamboo.
Ms Kubota says "there are 13 Time Dollar systems operating in small communities in Japan, with about 40 to 60 people in each one". She estimates that at least 160 communities in Japan have some kind of local currency, which could be Time Dollars, LETS or Ithaca Hours-type money. The Time Dollar communities tend to be within a small, walkable geographical area. The age range of people involved is quite broad - from young mothers to senior citizens - although there is less involvement of teenagers than in the US, because in Japan they tend to have less spare time. However, one programme has had elementary school students interviewing seniors and designing books that tell the story of the senior's lives. This has been a great success.
As with elsewhere, in Japan there has been a breakdown in traditional community structures and extended families often no longer live together. Ms Kubota advises anyone interested in establishing a Time Dollars system to focus on the mission - rebuilding community and encouraging reciprocity - rather than the currency itself. She says that "the process of people coming together to discuss problems is the most important thing".
Ms Kubota's website about Time Dollars in Japan, (in Japanese), is at www.timedollar.or.jp . She can be e-mailed at email@example.com. She would like to set up a discussion e-group, and eventually she would also like a network to be established whereby people from different systems can communicate with each other. She says she is invited to so many places in Japan to talk about Time Dollars that she can't possibly keep track of them all.
The Time Dollars website is at www.timedollars.org. It's about six months out of date (as of August 2002) but will be updated soon. Cahn says that by October 2002 there will be upgrades available of the Time Dollar software system which is available on the website. By December there should also be Time Dollar checkbooks available, with magnetic coating and a barcode reading. Information about Time Dollar-type schemes in the UK can be found at www.timebanks.co.uk
Cahn has published a book about Time Dollars, No More Throw-Away People. It can be ordered from the website for $17.95 plus postage. A video and manual are also available. The Time Dollar Institute is located at 5500 39th Street NW, Washington DC 20015.
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Other 2002 updates for Chapter 3
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