http://www.community-exchange.org/
Has been trending here in Finland under the term "time bank".

Actually, we already have the technology to calculate the worth of anything measured and denominated in time. It's a calculation and book-keeping scheme which is called activity based costing. Of course, as it is used today, it is used in currency. But one can simply change this currency for time.

The second thing needed is the depreciation system of tools and machinery, what we of course have already. We need to adjust that in the way that depreciation is not calculated over time any more, but over usage. When a machine cost 125 hours, because this was the work time invested directly and indirectly on producing it, and you can use it 1,000,000 times before its calculated breakdown, and you will use it say 5 times till the item you use it on is completed, you need to add a fraction of 125 hours / 1,000,000 * 5 to the cost for the production of the item, in this case 2.25 seconds. This looks irrelevant, but you will do it with the use of every tool and machine used on the product till it reaches the customer, and that will add up significantly.

That may sound complicated, but it the algorithems and schematics are nothing very new to book-keepers, and actually the method of activity based costing was created with exactly this goal in mind.

The revolutionary element is on a different plane: There are no markups regarding qualification and profit. Its only the time measured. What cannot be measured, cannot be added to set the price. The reasoning behind it is as simple as demolitionist: That the lifetime of each person is worth exactly the same, regardless if he or she is a medical doctor in New York or a street sweeper in Bangladesh. Those who do not think that the life of every person is worth the same will not like that approach very much. They will try to add some method to factor in modifiers to adjust what is measured with arbitrarily set values to reflect the worth of people because of their qualification, experience, age, sex, provinence, religion or the region the production takes place. Those who think that profit is the right of the capital owner, will not be happy either. They will try to simply add a percentage to the time measured, and with this destroy the whole meaning of the concept.

One of those two "modifications", and nothing will change, and we have the same system we have today, only with a different name.

As of today, there are around 250 local currency systems in the world which are known beyond their area of local relevance (or mostly irrelevance). There are nearly as many different systems these currencies are based on, how they are generated, and how they are used.
How many of those currencies are relevant? (used almost exclusively by it's corresponding communities or used at least for the 50% of the trade)

That one is easy. A price in this system is not set, but measured. If you want to sell a chair, you measure how much time you need to build it and how much time to you need to work to pay for the tools (you fraction this part up to account for all the things you can build with it) and the material to build it. That time is added up and the price is set.
And that's exactly what your government is supposed to do also, to measure the prices, and not to allow to fix the prices. Why do you think the USA government and European Commission (government) forced big companies to pay such heavy penalties?
November 12, 2008 - LG Display, Sharp, and Chunghwa Picture Tubes agreed to plead guilty to criminal charges for participating in a liquid crystal display price-fixing conspiracy and pay $585 million in fines - http://news.cnet.com/8301-1001_3-10095219-92.html
November 12, 2008 - Saint-Gobain SA, Asahi Glass Co., and a Nippon Sheet Glass Co. unit were fined a record 1.38 billion euros ($1.7 billion) by the European Union over claims the companies fixed the price of car windows. - http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azyZD.v2yaqk
(very interresting they are exactly in the same day, by the way, just now I noticed)
They pay penalties because the governments was measuring the price of those goods. The governments detected how much the prices were inflated artificially and they put a fine accordingly.
However, by a "strange coincidence", the governments in USA, UK, Spain, France and Italy somehow "forgot" to measure the prices of houses and they also didn't design enough safety nets in order to protect the people from speculation of real estate (such a safety net can be public housing). And that's how they got a real estate market bubble, ending in a crisis.
On the other hand, socialist measures in countries like Sweden, Finland, Denmark, Holland, Germany etc. prevented speculation and they had no crisis.

Now, when you talk about measuring the price in a system, you are talking exactly about the control of speculation. But I guess that somehow you didn't realized that.
And you say you studied economy? Well, for me that's just another proof that what they teach in schools and universities about economy is mostly nonsense. I have never seen an economist capable to talk about reducing working hours for example. Comparing to 1-2 centuries ago, people work less - 40 hrs / week instead of 80 hours / week. We have even more technology than in 1946 (when the United States government had inaugurated the 40-hour work week for all federal employees - link), therefore the working hours can be reduced even further. In Germany you say the working hours were reduced but the news is that they should have been reduced anyways, even without the emergence of the economic crisis. It's just a natural process: you have more technology --> you work faster and more efficient --> you can work less hours / week.
Yet, most likely, you won't find any economist capable to talk about such a basic concept.
Because there is a huge difference between learning economy and understanding economy. Learning means just memorizing a lot of facts and numbers. But understanding means (a lot of) thinking, analyzing, comparing, and also critical thinking.
Yes, you know more facts about money than others while in fact you might understand much less about money than those people.

Most local currencies are based on the belief, that profit is evil, and mark up has only the goal to generate profit. They are based on the principle of fair trade, not profit.
That's another sample of primitive thinking. Exactly like the belief that money are evil. A decent profit can't be bad. But it has to be decent, not huge. If you don't make profit from the work, then at least the community should make profit from it (bigger taxes). But it's idiotic to keep the people poor or at the limit of subsistence because of such a belief.

It is difficult to violate rules, when there are only a few hundred or few thousand people actually trying to comply to them.
But it's also difficult to violate rules when there are billions of people who are honestly trying to comply to them. As you can see, the problem is with "trying" and with "honesty", not with "using money" or with "having private property"

It is crucial to understand that local currencies are local. The mechanisms they work on are quite different from the mechanisms fiat money works on or national currencies work on.
Local currencies are also money. They don't live without money, they just replaced one currency with another. If those small communities would just measure the prices (not allow speculation) then they won't have to change the currency.
They can keep their economies functional, using $US or Euro or w/e, simply by maintaining the mechanisms that make the economy functional. And those mechanisms have nothing to do with eliminating money or with changing their currency.

The second one is used on time based money. You need to work for the money, it is not simply sold or issued. You get 2 hours, when you have worked 2 hours.
Say you work two times faster than me, and you can make 2 cups of tea in 1 hour and I can make only 1 cup of tea in 1 hour. And then, if you need 2 cups of tea, why you should waste one extra hour just because I'm slow or lazy and I make them slower than you? You will have to work two hours, create 4 cups of tea, and you will be payed with two hours and you will buy the same amount of cups that I can buy (2 cups). While in the same time, I produced half of what you did and I can buy the same amount with you. Therefore you lost an extra hour just in the name of egalitarianism.
Something is wrong (primitive) with this payment in hours, isn't it?

So the amount of money in circulation is limited by the work hours of the community using it. While it still can be hoarded, there is simply not enough of it around to be actually hoarded without it being severely hurt.
That will happen exactly the same in a country where the speculation is not allowed or where at least the people are protected against speculation. You can hoard money but only by working more hours, which is: you waste your time (severely hurt) just to pile up money you don't really need.

Diminishing worth can be set on top of that.
If you work extra hours (say 16 hours instead of 8 hours per day), then the pile of money you gather won't have any effect of diminishing worth. The money will still have the same worth since you produced some goods with those extra hours worked. Therefore the extra money can buy the extra worth created. You just need to think and to use logic in order to understand money and economy.

The first, very popular in Europe, is that of diminishing worth. Let's say your local currency is named Taler and you can buy one Taler for 1 Dollar when issued. This Taler now looses its worth with lets say 5% per month. So one month after it has been issued it is worth only 95 cents, 6 months after its issue only 70 cents. Hoarding money would be quite contraproductive.
Hoarding money can be counterproductive only if you make those money without doing any work for that (without creating goods in order to get those money - with your physical or intellectual work or with management skills). If you steal those money then of course hoarding is counterproductive since there are no extra goods to buy with those extra money. And someone can steal in many forms, while one of most used methods to steal is speculation (price fixing).

This leads to the third system: it is local. The users of this money generally know each other and talk to each other. If hoarding is not accepted, those who do it will be seen and talked to, and in the worst case expelled: no one would accept the local currency from them anymore.
In a functional system you can only hoard money if you waste your time working extra. Then your neighbors won't have to talk you out of the community, they will just have to laugh to see you wasting time with such an idiotic obsession.

Again, the main protection is its local use. The source of counterfeited money will be quickly found out.
Therefore the solution is in the fact that the people involve into solving such a community issue, doing the job of the police. And then, the solution is not in using a local currency, but the solution is in the people, who involve to solve issues.

Secondly, most local currency systems exchange their bills quite often, normally each year when the work with the diminishing worth principle. Thirdly, for professional criminals counterfeiting local currency is not very interesting, since the possible profit is not very exciting.
In a functional economy, everyone can get a decent job and is payed well, and the people can create their own food as a last resort, the people have a decent life, and they will not accept to work to make a bigger house for you and they won't waste their time to clean your house, unless you pay them extremely well.
But our current slavery based system, which the plutocracy calls "capitalist" do not offer to the people such a decent life. Then there are enough desperate people happy to clean your house for very little money if you want to pay them.
You talk about taking about red pill, while in fact you were indoctrinated to believe that we live in capitalism. And on top of that, you were indoctrinated by other "gurus" (like Fresco) to believe that capitalism and money are evil by definition and that there is a magic solution, like blaming the instrument instead of the criminal who is making damage with the instrument.

Lastly, most local currency systems simply accept this risk without going long ways to prevent it, out of the reasons listed above. The possible damage being done by that to the local currency and its users is marginal at best.
Yes, because they are too few, comparing to the rest of the population. Of course the criminals will steal from the majority of the population, not from a minority.
In a functional economy (with safety nets and speculation free), no matter how much money a thief is stealing, he can't damage the community. There is police and secret services to catch the criminal, and when they fail, there is insurance to compensate the loses.

As for stealing it: What do you think what happens when you call out that your stack of local money has been stolen, and an unknown guy turns up to buy his apples and potatoes with local currency know one has a clue of, how he could get it? Or if a neighbor of that guy turns up with lots of local currency simply out of line of what he could have? Stealing is a danger and possible, but the risk is much higher and the profits much lower compared to stealing other valuables.
A functional society will steadily reduce the need of using money. The government will sell (or rent) to the people the basic necessities of life and it will accept to be payed in work. A thief can steal your money or the result of your work but not your actual work.
The key is not in eliminating money or into changing the currency. But the key is on building safety nets and then the system will eliminate the need to use money.

Actually, we already have the technology to calculate the worth of anything measured and denominated in time. It's a calculation and book-keeping scheme which is called activity based costing. Of course, as it is used today, it is used in currency. But one can simply change this currency for time.
Yes, that's how the governments control speculation and price fixing (when they want to do it). They know how to measure the cost a product. They can measure it directly in money, there is no need to measure it in hours of work. That's how they managed to calculate how much penalty LG and Saint Gobain had to pay.

gonzo, just out of curiosity: Are you paid by someone to tackle any anti-money, anti-property, anti-capitalism topics here? I personally know a company which is actually offering agents for such as their business model. That's a honest question.
No, honestly, I am not payed for anything like that. But the people who hate capitalism without even understanding what capitalism is, they won't be capable to improve the system or to make a better system. Idiots like Lenin, Stalin, Castro, etc had no idea about economy, they just hated capitalism and they created dysfunctional systems hurting so many people. They haven't tried to build a better system (communism in their case) but instead they just terrorized the people in the name of the communism. And in the end, they just helped the plutocracy. Because their people were extremely happy to get rid of the "communism" and to get back into the welcoming hands of the exploiters. The plutocracy are brainwashing people like you, making them to believe that we are living in capitalism. Once you can't make the difference between a system and the label applied to the system, you have serious issues understanding economy, and then, most likely, you will only help the plutocracy, like all the others who proposed alternatives to capitalism. Or, at best, you won't find a real alternative system that works, so you will be inoffensive.
The point is not to eliminate the money, but the point is to eliminate the need to use money.
If you think that the people who do not agree with anti-money philosophy are payed by obscure entities or have dirty aims, then you have quite a paranoic philosophy

Tanzania for instance is listed as one of the poorest countries in the world, because in the rural areas money is simply not used. Without money use, you cannot feed money tracking statistics.
But in the same time, they live at a subsistence level and they are not capable to develop industry, to create infrastructure, to research for new technology, etc. I really don't believe that's a model to be followed.

Please skip your next wall of text and spent the time reading on the net on time based currencies. Then come again, that you can contribute to this thread on an educated level.
Sorry, but it's quite pathetic to try to talk from above when you have no arguments. It's strange for you to be paid like me if you work 5 times faster and more efficient than me. Therefore paying in time is quite a primitive and inefficient model.
The fact that the alternate currency is used just as a hobby shows that it's quite impractical (useless).


But I won't react in this thread on your let's say very creative imagination why an alternative currency is primitive, stupid, useless and won't work anyways.
You don't have to react to my arguments. The best thing you can do is to analyze them and then to convince yourself what the reality is.
But the more you claim things that have no support in reality, the more you show you are not trying to understand how things work, and the more you waste your time designing systems with no practical value.
For me is not important to argue with you, but to find the common sense arguments against a point of view that doesn't make sense, like yours.
Next time when I will meet people like you, I will have the arguments prepared, and I won't have to waste my time to find the best arguments.
That's why I'm doing all this, there are no obscure plutocrats or other dark forces paying me to do it.

Danial, a local based currency actually does not serve the purpose money usually is used for, not only because it is not officially recognized in most cases, but also because you can't pay taxes, fees, insurances, mortgages, utiities, etc with it. Money is a means to make trading of goods and services easier and to store wealth, its core function is to document debt. The most important function of a local currency is community creation, as shown so well in Mike's video, based on the assumption, that a close-nit community where people know, trust and help each other, is better than today's anonymity in neighbourhoods. The payment function of a local currency is just a lever which shall help to reach the true goal of a better community.

So, a local currency is not something to an end in itself, that won't work, it is but a tool to support a community. How this local currency will support the community which is meant to use it is solely dependent on this very community. That's the main reason, why they are so many different local currency systems: Each community is different than the other, it has different problems, different people, different goals, different resources to work with. Consequently, the local currency supporting this particular community will be different as well.

I even know of people who try to establish a local currency to generate profit for themselves. They expect the community for instance to pay him for clearance services or the printed bills or minted coinage which he produces and issues. While this can work for some time, when this person is very charismatic, it never lasts.

@stefano_tacchi
Yes you are perfectly right. But please notice that, in that example, I will have to lower the price in order to sell my cups. I also have to survive. And then, I am getting paid (the customers pay me) per hour with half of the payment you get. For two hours of work I am paid for the value of 2 cups that i have to sell, while you are paid for the value of the 4 cups you sell. You get more for two hours of work than I.
Which is absolutely normal. But that shows that I can't be paid with the same amount/hour while working at half your speed - that's against the very nature of things.
Now, imagine we work for the same company/cooperative/agent. It's quite difficult for the company to pay me with the same value as you are payed, since I work at half of your speed. The payment must be the result of time multiplied with productivity of the worker.
wage = time * productivity
In a fair system without speculation, the wages the workers get in money should reflect exactly that formula.

It's nothing wrong to try a system based on paying with time. You can put it to the test, imagine all kind of situations and try to see how it works in all those situations. And then you will have to improve the system, adjusting it in order to make it work find. A primitive idea can be polished and transformed into a brilliant idea. Therefore you have to work with an initial idea in order to make it valuable.
But it's not ok to come with a raw idea, to promote it as a final solution, and to refuse to talk about issues and possible issues, to refuse to test it in various scenarios. And that's how Rabert acts - he acts like issues do not exist simply because he chooses to ignore them. People like him come with half-baked ideas, promoting them like the solution, and they claim those ideas will work, refusing to put the idea to the test. Instead of searching for the solution, he promotes a raw idea as the final solution.

If we are going to create a better community and economic system, then we can come with all the fancy ideas, that's not a problem. But then we have to talk about all the issues in the system (and there are many, not just two or three) and to adapt our ideas in order to make them work, and we have to find what is at the root of a functional system, what is the essence of making a system work.

I do agree to live in a community where everyone is payed with the same amount / hour - let's say $10 / hour (for the same productivity). But then we also have to make sure the prices of basic necessities are also the same for everyone. If you can find a decently cheap rent, then I should also be able to find a decently cheap rent. And then there is another issue: In general, the people who are in higher positions (managers, people who give orders) they feel they are somehow superior and that they deserve more. If they are not happy, they might try to steal from the community wealth, or they might not be interested to drive the activity with maximum competence. It's something that has to do with domination instinct but also culture and traditions. I'm not sure what it is the best solution but it is an issue and it must be addressed seriously.
We must make sure that everyone can get a job. We must make sure everyone can get the kind of job where they can be really productive. We can simplify jobs so creating goods will only imply checking automated production facilities and assembling things. Open Source Hardware is a good step forward to achieve that.
Once the speculation is eliminated, the price of goods will depend only on the availability of resources (and most of them are plenty), on the efficiency of the technology we use, and on our competence. With the current technology, we can provide goods at very cheap, and we can reduce the working hours - maybe it's enough to work only 4 hours per day. But we have to eliminate speculation and to make sure we work efficient in order to achieve that.

I believe that the most important focus of the community must be on increasing the freedom and autonomy of it's members. Once there is enough abundance and the people feel really free, they might be happy to be paid the same, no matter their status. They will simply feel rewarded by the fact that they have the job they really enjoy, so they won't need extra money just for doing a highly specialized job. Also, the management positions can be assigned by rotation - today you are the manager and I am the worker, and tomorrow I am the manager and you are the worker. That kind of rotation can reduce the feeling of not being paid enough for your skill or status.
In my view, the purpose of a human life is to find the community where you belong. Say we have public housing, it must be flexible enough to allow people who edit Wikipedia to live closer to others who edit Wikipedia, if that's what they want. You live in a government owned building but you don't want to live near junkies - then you will live in an area where you agree to pay more for maintenance of the building and of the roads/infrastructure around the building where you live. The people like you will come into that area too. The extra amount you pay will go to repaint the buildings more often, to maintain nice gardens in front of the buildings, and so on - junkies won't bother to pay extra for such things. Therefore, the system must allow and even encourage the people to find and create the communities where they belong. Then the communities must have the opportunity to improve their freedom and their autonomy. Until one day, eventually, each community can colonize it's own planet if that's what they want.


It's simply stupid to assume that human activity is all about having a job. Having an activity is much more than having a job. Activity is about creating things. We have to stop being creatures and we must become creators.
There are many people who assume the meaning of life is waking up in the morning going to job, and coming home and so on, for all their lives and for thousands of generations from now on.
Jobs must evolve, they must be made easier, faster and more efficient. And then we can simply work less. And then we have more time to learn, to study, to explore, to discover, to understand, to create spacecrafts and explore and colonize the space and so on.

About all your other answers, I am convinced that we can implement security measures with the current currency as you describe, but that the institutions and organizations that should do it are very far from doing so.
Well, considering that life in Sweden, Finland, Denmark, Holland is much better than other countries, I think we can agree that at least in some countries, they are not so far from doing so. But yes, the vast majority of the world is far from doing so.
And then, the solution is for us to create our own community where we implement those security measures.
All this conversation (and especially the other thread) is about the question "what is the solution?". While some claim that there are magic solutions (eliminating money and property), in reality the solution is in those security measures - they are the safety nets that keep the system functional.

Perhaps a slight return to local and alternative currencies could help reform good old principles, such as real loyalty that will give life to governments truly committed to the welfare of their people.
I don't know.
Yes, I agree, it could help but only if we apply it honestly and if we try to learn from it. We will re-create the road to a functional economic system, and in the end, we will discover how the mechanism works and we will discover that the key to make a system work is into implementing those security measures and into engaging the people into community issues. Once we got the key, the system can work with or without money. We must make sure the people can get the basic necessities of life and we must make sure they can pay not only with money, but also with their work. So we do not have to eliminate money, but we have to eliminate the need to use money.
But it won't work if we just apply it fanatically, refusing to talk about issues, then we are not going to find the solutions.

It's not ok to claim that we just need a new system and once we implement it, the rest of the things will be solve almost on their own. Remember, that's how all politicians act, including, Lenin, Stalin, and Fidel Castro: They ask the people for their support, promising they will deliver the solutions AFTER they get into power. The politicians never try to implement solutions BEFORE coming into power. They can simply use donations, voluntary work and the people's support in order to implement solutions before coming into power, before going to elections. Therefore, the key is into engaging the people to build solutions.
So we are trained to look for solutions by searching new ideologies, new systems, new politicians who promise they will deliver what we need if we give them (absolute) power. Because that's how we are indoctrinated to believe that democracy works. We are trained to believe that democracy means only freedom to vote and freedom of speech. But we are trained to forget that the most important thing in democracy is the freedom to associate, and we can use that freedom to solve community problems, rendering politics almost redundant.

I don't believe Lenin or Castro were evil before they came into power. They simply hated capitalism. They associated the people in power with capitalism. They haven't tried to understand how can a capitalist system works. They haven't even tried to understand how can an economic system work, what kind of security measures it needs. Because all the systems need the same security measures, either capitalist or communist. They simply believed that once the capitalism and private property are removed, everything will be just fine - they believed in a magic solution. They had followers who believed in them and supported them. Then they got into power, overthrowing the old regimes, but they had no idea how to make the system work. They started to kill those who didn't agree with them, encouraged by their supporters. It's not only Fidel Castro's fault for killing his opponents, it' also his supporter's fault - he is not the only one who is guilty. They delivered a disastrous economic systems which hurt so many lives. He doesn't even understand what communism means. He thinks that once the people work as slaves for the government, the system is already communist and everything will work perfect!
And then, where is the root of the problem, why it went wrong? - one might ask
The problem is they haven't tried to understand how economy works, they haven't understand what security measures a system needs. They didn't engage the people to build solutions, from bottom-up. They and their supporters were the victims of the same mentality: that the people do not have to engage into building a functional system, and all the people have to do is to wait for the new system to deliver everything they need - once the "evil" is removed, everything will be just fine. That's where the root of their problems are. Yes, there are a lot of evil and corrupt politicians, but there is a far greater evil - the root of the problems is in everyone of us, in our indifference and complacency.

And as long as the people will wait for a new system to fix everything for them, they will never be capable to create sustainable communities, they will never be capable to create a future for themselves.
They will just replace a dysfunctional system with another dysfunctional system. Fidel Castro replaced a corrupt regime with his own corrupt regime. In his view, that's quite ok, because his corrupt regime is made by "revolutionary people" (our corruption is better than the old corruption). But it's the same story - people creating just another dysfunctional system.

@gonzo

1. Alternative currencies are never created by just one person, but by communities. They are based on trust and common agreement. There is a lot of discussion about and improvement of ideas, before they are implemented. Seems you didn't see that bit yet.

2. Altenative currency systems are an attempt to improve capitalism, not to get rid of it. An attempt to get rid of capitalism would, from my point of view necessarily, get rid of any kind of currency and money.

I would assume you would offer your time and goods to others in the local currency. If they hire you for your time, you get currency. If they buy your goods you get currency. That would just be my assumption, I don't know much about economics either.