With 10% Unemployment, Depression-Era Time Banks Offer an Alternative Way to Earn

During the last two great depressions in the U.S., hundreds of thousands (possibly millions) of people organized to meet their basic needs when the mainstream economy and centralized monetary system failed them. Unemployed poor folks got together to create time dollar stores and cooperative mills, farms, health care systems, foundries, repair and recycling facilities, distribution warehouses, and a myriad of other service exchanges.

Many of these were based on the hour as a unit of account, and often everyone’s hour was equal and could either be exchanged for another hour of service or its equivalent in goods.

Modern forms of time exchange, called Timebanks and LETS (Local Employment Trading Systems), have been around since the 1980s. Now, with one in ten Americans unemployed (likely twice that, given recording problems), time exchanges are making a comeback.

Timebanks USA, a system of over 120 timebanks in the U.S. and a few other countries, was developed by activist lawyer Edgar Cahn as a way to help the underprivileged and underserved help each other through an organized system of reciprocity. In the following interview, Cahn explains the basic principles behind timebanks:

 

Official Timebanks purchase software that provides a ready-made, standardized directory and accounting system of individuals, and sometimes nonprofits or government agencies, that are willing to provide services to their communities and receive help in return.

Timebank coordinators help create matches between people who need things and others who can help meet those needs, and they keep track of completed transactions in the system. No money is involved, and everyone’s hour is equal, which is one of the features that enabled Timebanks to receive an official IRS income tax exemption declaration so that people on disability, social security, unemployment, and other government benefits can participate without penalty.

The egalitarian nature of the system ensures that people will be able to purchase the services that they need without toiling endlessly to meet high prices in the market economy. People can also trade goods with the stipulation that their price be based on the amount of time involved in producing the goods and not their market value. Timebanks’ most successful application has been to provide a means for at-risk youth who have gone to court to do service for their community.

LETS systems also operate without money (except for fixed costs like gas or paper copies), but the value of time or goods may be linked to market value. Every community determines its own rules, so every LETS is a little different. LETS are now mostly online accounting and directory systems just like Timebanks, but they have also taken the form of paper ledgers, checkbooks, paper currencies, and time-based stores.

When one person provides service or goods to another, the giver receives credit in her account and the receiver gets a debit to his account so the system is always in balance. People manage their own accounts and make payment over the internet by logging into their personal account. Businesses, nonprofits, and government may also have accounts if they are involved in reciprocal community exchange. Some systems have account balance limits, others don’t or merely flag high or low balances and then contact members to help them figure out how to spend or earn their credits.

Many communities have created  similar time exchange projects, going by names like Fourth Corner Exchange, Village Networks, Richmond Hours, and Austin Time Exchange.

Probably the largest time exchange in the world is the Fureai Kippu in Japan. Fureai Kippu (“Caring Relationship Tickets”) was created in 1995 to help families who had migrated to other parts of Japan care for elder family members from whom they'd been separated. Seniors can help each other and earn the hour credits, family members can earn credits and transfer them to their parents who live elsewhere, or users may keep credits for when they become sick or elderly themselves.