Time banking as a local success
Nadia’s example of timerepublic.com is a good example of an attempt to do timebanking on scale. I am a member there for over a year, but nothing much happens there, and I have no incentive to do something there either. It’s two aspects of the collective credit problem: first, because I can’t be sure I could spend again the time credits I earn there, second, because a currency needs proper management and I have no proper reason to trust them (they occasionally hand out “free time credits” for various activities like offering more services, and that obviously makes me suspicious as it’s debasing the currency and everyone’s savings …).
My guess for the reason why time banks work on local scale is that the incentives then come from the social aspects instead, and Nadia’s article illustrates it quite nicely. So the local time banks are the success of time banking, it indeed works and helps on local / social scales. It’s just that time banks (and all other mutual credit LETS currencies) are more community practice than trade mechanism. Their advantage is of course that they are more flexible than bartering, as they can offset current against past and future trades – so one inspiration I draw from this is that network bartering with Makerfox could be used to connect local currencies and time banks, it does not have to replace them. In each trade, the trade balance of each currency system would be zero (true barter), while credit relations between members within one system could change (mutual credit). It’s easy to do with Makerfox by offering and ordering the different currencies as products.
End note: I recently stumbled on a nice quote about alternative currencies from 2013 by economist Yanis Varoufakis, now having the tough job of Greek finance minister. It seems to complement the view above. I transcribed it from the video, and linked the video at the respective position below:
"You mentioned the question about parallel currencies and to what extent these could be helpful in the context of the crisis. […] While a parallel currency per se would be a complete and utter flop, there are ways of introducing Euro parallel [?] currencies. So, […] if Greece were to introduce the Drachma in parallel to the Euro […]. Gresham’s Law says something very simple, that the bad money drives out the good. […] It is a very simple idea: Why would would you want to get paid in Drachmas, if you knew that the Drachma was created in order to be divided? So unless the state imposes the new parallel currency as the currency in which taxes are paid, it simply won’t catch on. It would simply flop.
But: There are ways of introducing, as I said, proxy parallel currencies, and I’ve made such suggestions. One of the things that the state could do is, it could issue tax credits. This would be pieces of paper which, say, could be cashed in next year. You buy one for […] 100 Euros today, and [it] can be cashed in next year with your tax return, and it extinguishes 120 […] Euros of taxes that you owe the state. And if these are made transferrable and electronic, and transferrable over mobile phones, as in Kenya, you can have a very good Euro parallel currency that is not controlled by the ECB. And that would give lots of degrees of freedom to a progressive government.
Communal practices: civil society finds ways around problems. I remember, back in Australia in the 1991 recession, there was a village up on the Blue Mountains that developed its own currency. And it was based on IOUs between people. So, I would paint your house, and I would get, you know, three credits for that, and then […] I could use it in order to buy groceries from the local store. The local store then would pass it on to somebody who would supply them with agricultural-- … . And it actually worked very well.
The problem with these practices of course is that they rely on trust and they are highly localized and they create a degree of parochialism, because these people from these villages, they can neither accept newcomers nor […] go to the big cities or travel and use those […] spontaneously emerged currencies. So they are an excellent device for short term localized protection against a collapsing economic system, but it can’t be the basis or the foundation." (Yanis Varoufakis, portion of “Confessions of an Erratic Marxist”, 2013-05-14)
With that quote in mind, I’m curious to see all the ideas Greece will come up with to solve its financial misery 