Time Dollars

Click here to go to time banking links and resources.

Right up there in the vanguard of a money revolution which extends the creators of money from governments and banks to people themselves, is time dollars. It has been described by Ralph Nader as a sort of bank where people can deposit care and giving and withdraw it when they need it.

Invented in Washington DC by Professor Edgar Cahn, a former legal advisor to Robert Kennedy, to address the inadequacy of government programmes dealing with social problems, (www.timedollar.org/news) time dollars have spread to Britain as Fair Shares and are well entrenched in the Japanese health care system.

Time dollars turns time into buying power and, unlike LETS (local exchange trading systems, or green dollars) there is no emphasis on the credits being spent. In fact, commonly only 15% ever get spent. If you become a participant of a Time dollar project, you earn credits for the time you spend helping other people. One hour of service earns you one credit - a service credit or a Time Dollar. With that credit, you can 'buy' an hour of a particular service that you need. If you don't need all the credits you earn, you can save them up, donate them to someone you know or give them back to the Time Bank so that the people who run the project can make sure the participants with the severest needs get all the help they require.

Students can sometimes use their earnings to purchase second hand computers. David Boyle, author of Funny Money, reports that time dollars have been used as a mortgage payment on a house from Habitat for Humanity, the US low-cost charity. An organisation in New England provides a $40 bag of groceries for $14 plus two hours of time dollars and in Pittsburg, a shop run by aid to Families with Dependent Children provides toys, nappies and second-hand clothes in return for time dollars.

Time Dollars recognises that many people don't like the idea of accepting charity but like to feel useful and able to offer something back. Time Dollars provides the opportunity for this through working on a basis of reciprocity - everyone has something to offer, and neither age nor mobility need exclude anyone.

This kind of exchange is not new - it has traditionally occurred amongst families and friends. The Fair Shares website says All Fair Shares does is to provide a new structure for neighbourliness, one that turns good deeds into real purchasing power.

The big advantage of time dollars is that Cahn managed to get a tax-exempt ruling for it from the Inland Revenue Service, after arguing they do not actually represent money. This has probably been a major factor in the rapid proliferation of the schemes.

Another advantage is that time dollars provide recognition for service that
would ordinarily be done by volunteers. It allows participants, women, the elderly, teenagers, and the unemployed, to redefine themselves as producers and contributors rather than recipients of charity.

The Japanese Health Care Currency - a special time dollars

Good ideas are seldom restricted to one time and one place, so it is not surprising that shortly after Edgar Cahn had developed Time Dollars in USA after a conversation at the London School of Economics, Mr Hotta developed a similar concept independently in Japan. His scheme is now probably the biggest time dollar scheme in the world, the Japanese Health Care Currency, or Hureai Kippu, which evolved when it became apparent that the growing elderly population could not be adequately cared for with government revenue.

In his scheme, someone works for an hour helping an old person with shopping or housework. If they work outside the hours of 9 to 5 they get one and a half hours credited to them, if they do body care they get two hours. Then they can either keep their time dollars themselves to use later or donate them to their elderly parents on the other side of the island. Bernard Lietaer, who has undertaken a study of the complex provincial and national systems operating in Japan, says:

'What was most fascinating to me about this complementary currency service is that people prefer the service paid in the health care currency to the same service paid in Yen because it is more caring. While a professional paid in Yen gives only a standard service, the little old lady I am helping represents my mother, so I am inclined to give a bit extra. That difference in quality is something which economists cannot see, but is extraordinarily important.'

The implications for developed economies are clear. The ageing populations, together with growing demands on limited health care budgets all point to the fact that precious national dollars are not needed for simple labour based expenditures. Time dollars can be created in abundance.