What Is Time Banking?

Time banking is a system of bartering various services for one another using
labor-time as a unit of account which was developed by various socialist
thinkers based on the labor theory of value. Labor-time units can be credited
to a person’s account in the time bank and redeemed for services from other
members of the time bank. Time banking can be considered a form
of community currency. However, because the labor-time units of account are
not generally accepted outside the membership of the time bank, nor for
general goods traded in the market other than specific labor services, it does
not constitute a form of money in an economic sense outside the inherently
limited context of the time bank itself.

KEY TAKEAWAYS

 Time banking is a bartering system for services, where people

exchange services for labor-time based credits, rather than money.
 The term “Time Banking” was coined and trademarked by American
lawyer Edgar Cahn, who advocated its use to supplement government
social services.
 Time banking is an intermediate system between a system of monetary
indirect exchange and a reciprocal gift economy with some of the pros
and cons of each.
Understanding Time Banking
In a time-banking environment, people receive labor-time credits when they
provide a service to another member of the time bank (and the member
receiving the service is debited an equal amount). Every hour of time is
generally valued the same, regardless of the service rendered. In theory, any
type of service can be exchanged for another. However, services traded often
revolve around simple, low market-value tasks, such as the care of the elderly,
social work, and home repair. 

Time banking originates from the ideas of various 19th

century socialist thinkers, including Pierre-Joseph Proudhon and Karl Marx,
who advocated various versions of labor-time based chartal currencies.
Rather than issuing paper notes, modern time banking utilizes electronic
recordkeeping of credits and debits for registered members. 

 
Time credits can theoretically be registered on paper, although computer
databases are generally used to keep records.

The term “Time Bank” was coined and trademarked in the 1980s by Edgar
Cahn, an American law professor and social justice advocate. Cahn promoted
Time Banking as a means for community self-help and to fill the gap in public
social services during a period when the Reagan administration was pushing
cuts to spending on social programs.
In his book No More Throw-Away People, Cahn outlined four core principles
for time banking, later adding a fifth. They are:

 We Are All Assets: Everyone has something to contribute

 Redefining Work: Rewards all work, including unpaid and care work
 Reciprocity: Helping each other build strong relationships and
community trust
 Social Networks: Belonging to a social network gives our lives more
meaning
 Respect: Respect is the basis for a healthy and loving community and
lies at the heart of democracy

Over the years, time banking has been adopted in various communities at
different times, usually for relatively short periods before eventually shutting
down. In some areas it has managed to persist for several years or longer on
a limited scale.

In 2018, there were around 120 time banks in the United States.
Example of Time Banking
Let’s look at an example of exchanging gardening and computer technical
support. Gerald is a keen horticulturist and Lucy is a whiz at fixing computers.
Eventually, their paths cross as Gerald needs help with his PC and Lucy
would like to grow some vegetables in her back yard and has no clue how to
do so.

Using time banking, Gerald helps Lucy with her garden and Lucy helps Gerald
with his computer. No money exchanges hands for the services rendered, so
the only costs that both absorb are for the materials used to complete the
jobs.

Overall, Gerald dedicated three hours to preparing Lucy's garden, while Lucy
spent two hours getting Gerald's computer in working order. That means that
Gerald emerged from the arrangement with one extra labor-time credit on
account in the time bank to use in the future.

Pros and Cons of Time Banking

Time banking uses modern technology to try to introduce the secondary
functions of money (as a unit of account, a store of value, and a means of
deferred payment) to formalize and regulate the practice of trading favors and
mutual or social obligations. It functions as a hybrid system between a true
monetary economy of indirect exchange and a reciprocal gift
economy characteristic of informal, pre-capitalist, and primitive economies. As
such, it can have some of the advantages and disadvantages of both types of
economic systems. 
The advocates of time banking, from the early socialist writers to present-day
proponents, emphasize its advantages in building (or restoring) community,
inclusion, volunteerism, and social assistance. It is promoted as helping to
foster community ties and encourage people who would not normally get
involved in traditional volunteering. It seeks to overcome the problems of the
social and economic alienation between producers and consumers that is
widely believed to characterize industrial capitalist economies and has often
formed the rationale for social unrest and revolutionary communism. It
formally and tangibly recognizes the economic value of labor services that are
not traditionally traded in the formal monetary economy (or would be
diminished by doing so) but that often form the basis of valuable social capital.
Above all, it has been championed for enabling people with low incomes to
access services that would be unaffordable to them in the traditional market
economy.

However the overhead costs, problems with managing the relative prices of

different services, and difficulty of maintaining participation in effective
competition with the larger money economy often spell problems for time
banking systems. The operations of the time bank itself must somehow be
financed, particularly those that require goods and services which cannot be
purchased with time bank-issued labor-time credits. This means both an initial
and ongoing requirement for some source of external funding in outside
money, which can become prohibitive. 

Pricing of labor-time units for various different services and types of labor is a
persistent problem for time banking. If the value of the credits is allowed to
float according to voluntary, mutual terms of exchange between participants
(or priced proportionate to market wages in the local currency) the time bank
becomes nothing more than a competing (inferior) form of currency, one
handicapped by its own self-imposed limits of acceptability. 

If the prices in labor-time-credits are set by the time bank, then the system will
eventually run up against the same knowledge, calculation, and incentive
problems faced by any centrally-planned economy, which will sharply limit its
scale and viability. Frank Fisher, an American economist who
taught economics at the Massachusetts Institute of Technology (MIT) from
1960 to 2004, predicted in the 1980s that this would distort market forces and
cripple the economy, using Soviet Russia as an example.

Lastly, if the value of labor-time credits is locked in at parity for all types of
services and labor, then the system will face an enormous adverse
selection problem. Those with the least valued labor-time (such as baby
sitters) will enthusiastically participate and those with the most highly valued
labor-time (such as physicians) will opt out and sell their services for money
instead.
Because the inherent limits of the nature of time banking impose these
overhead and pricing issues, the time banking system gives up much of the
economic advantage that a system of indirect monetary exchange makes
possible. Its acceptance will be limited and it will always depend on the
existence of a broader money-based economy using some other currency,
within which it has to function. Unless imposed by law on the population (as
advocated by early socialist proponents), time banking will tend to be confined
to relatively small communities or social networks, trading in a limited
selection of labor services.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Time-based currency
From Wikipedia, the free encyclopedia

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In economics, a time-based currency is an alternative currency or exchange

system where the unit of account is the person-hour or some other time unit. Some
time-based currencies value everyone's contributions equally: one hour equals one
service credit. In these systems, one person volunteers to work for an hour for
another person; thus, they are credited with one hour, which they can redeem for an
hour of service from another volunteer. Others use time units that might be fractions
of an hour (e.g. minutes, ten minutes – 6 units/hour, or 15 minutes – 4 units/hour).
While most time-based exchange systems are service exchanges in that most
exchange involves the provision of services that can be measured in a time unit, it is
also possible to exchange goods by 'pricing' them in terms of the average national
hourly wage rate (e.g. if the average hourly rate is $20/hour, then a commodity
valued at $20 in the national currency would be equivalent to 1 hour).

Contents

 1History

o 1.119th century

o 1.220th century

o 1.321st century

 2Time dollars

o 2.1Timebanks

o 2.2Timebanking

 3Timebanking and the timebank

 o 3.1Time credit

 4Criticisms

 5Timebanking around the world

o 5.1Global timebanking

 6Studies and examples

o 6.1Elderplan

o 6.2Gorbals timebank study

 7See also

 8References

 9External links

o 9.1Bibliography

History[edit]
19th century[edit]
Main articles: Labour voucher and Cincinnati Time Store

Truck system of payment by order of Robert Owen and Benj Woolfield, National Equitable Labour
Exchange, July 22nd 1833.

Time-based currency exchanges date back to the early 19th century.

The Cincinnati Time Store (1827-1830) was the first in a series of retail stores
created by American individualist anarchist Josiah Warren to test his economic labor
theory of value.[1] The experimental store operated from May 18, 1827 until May
1830.[2] The Cincinnati Time Store experiment in use of labor as a medium of
exchange antedated similar European efforts by two decades. [3]
The National Equitable Labour Exchange was founded by Robert Owen, a
Welsh socialist and labor reformer in London, England, in 1832.[4] It was established
in Birmingham, England, before folding in 1834. It issued "Labour Notes" similar to
banknotes, denominated in units of 1, 2, 5, 10, 20, 40, and 80 hours. John Gray, a
socialist economist, worked with Owen and later with Ricardian Socialists and
postulated a National Chamber of Commerce as a central bank issuing a labour
currency.[5]
In 1848, the socialist and first self-designated anarchist Pierre-Joseph
Proudhon postulated a system of time chits.
Josiah Warren published a book describing labor notes in 1852.[6]
In 1875, Karl Marx wrote of "Labor Certificates" (Arbeitszertifikaten) in his Critique of
the Gotha Program of a "certificate from society that [the labourer] has furnished
such and such an amount of labour", which can be used to draw "from the social
stock of means of consumption as much as costs the same amount of labour." [7]
20th century[edit]
Edgar S. Cahn coined the term "Time Dollars" in Time Dollars: The New Currency
That Enables Americans to Turn Their Hidden Resource-Time-Into Personal Security
& Community Renewal, a book co-authored with Jonathan Rowe in 1992. [8] He also
went on to trademark the terms "TimeBank" and "Time Credit". [9][10]
Timebanking is a community development tool and works by facilitating the
exchange of skills and experience within a community. It aims to build the 'core
economy' of family and community by valuing and rewarding the work done in it. The
world's first timebank was started in Japan by Teruko Mizushima in 1973 [11] with the
idea that participants could earn time credits which they could spend any time during
their lives. She based her bank on the simple concept that each hour of time given
as services to others could earn reciprocal hours of services for the giver at some
stage in the future, particularly in old age when they might need it most. In the
1940s, Mizushima had already foreseen the emerging problems of an ageing society
such as seen today. In the 1990s the movement took off in the US, with Dr Edgar
Cahn pioneering it there, and in the United Kingdom, with Martin Simon from
Timebanking UK and David Boyle, who brought in the London-based New
Economics Foundation (Nef).
Paul Glover created Ithaca Hours in 1991. Each HOUR was valued at one hour of
basic labor or $10.00. Professionals were entitled to charge multiple HOURS per
hour, but often reduced their rate in the spirit of equity. Millions of dollars' worth of
HOURS were traded among thousands of residents and 500 businesses. Interest-
free HOUR loans were made, and HOUR grants given to over 100 community
organizations.[12]
21st century[edit]
According to Edgar S. Cahn, timebanking had its roots in a time when "money for
social programs [had] dried up"[13] and no dominant approach to social service in the
U.S. was coming up with creative ways to solve the problem. He would later write
that "Americans face at least three interlocking sets of problems: growing inequality
in access by those at the bottom to the most basic goods and services; increasing
social problems stemming from the need to rebuild family, neighborhood and
community; and a growing disillusion with public programs designed to address
these problems"[14] and that "the crisis in support for efforts to address social
problems stems directly from the failure of ... piecemeal efforts to rebuild genuine
community."[15] In particular Cahn focused on the top-down attitude prevalent in social
services. He believed that one of the major failings of many social service
organizations was their unwillingness to enroll the help of those people they were
trying to help.[16] He called this a deficit based approach to social service, where
organizations view the people they were trying to help only in terms of their needs,
as opposed to an asset based approach, which focuses on the contributions towards
their communities that everyone can make.[17] He theorized that a system like
timebanking could "[rebuild] the infrastructure of trust and caring that can strengthen
families and communities."[15] He hoped that the system "would enable individuals
and communities to become more self-sufficient, to insulate themselves from the
vagaries of politics and to tap the capacity of individuals who were in effect being
relegated to the scrap heap and dismissed as freeloaders." [18]
As a philosophy, timebanking, also known as Time Trade [19] is founded upon five
principles, known as TimeBanking's Core Values: [20]

 Everyone is an asset
 Some work is beyond a monetary price
 Reciprocity in helping
 Community (via social networks) is necessary
 A respect for all human beings
Ideally, timebanking builds community. TimeBank members sometimes refer to this
as a return to simpler times when the community was there for its individuals. An
interview at a timebank in the Gorbals neighbourhood of Glasgow revealed the
following sentiment:
[the time bank] involves everybody coming together as a community ... the Gorbals
has never—not for a long time—had a lot of community spirit. Way back, years ago,
it had a lot of community spirit, but now you see that in some areas, people won't
even go to the chap next door for a some sugar ... that's what I think the project's
doing, trying to bring that back, that community sense ... [21]
In 2017 Nimses offered a concept of a time-based currency Nim. [22] 1 nim = 1 minute
of life. The concept was first adopted in Eastern Europe.[23] The concept is based on
the idea of universal basic income. Every person is an issuer of nims. For every
minute of his/her life he creates 1 nim that can be spent or sent to other person as
well as money.

Time dollars[edit]
Time dollars are a tax-exempt complementary currency [24] used as a means of
providing mutual credit in TimeBanking. They are typically called "time credits" or
"service credits" outside the United States. TimeBank members exchange services
for Time Dollars. Each exchange is recorded as a corresponding credit and debit in
the accounts of the participants. One hour of time is worth one Time Dollar,
regardless of the service provided in one hour or how much skill is required to
perform the task during that hour. This "one-for-one" system that relies on an
abundant resource is designed to both recognize and encourage reciprocal
community service, resist inflation, avoid hoarding, enable trade, and encourage
cooperation among participants.[25][26][27][28]
Timebanks[edit]
Timebanks have been established in 34 countries, with at least 500 timebanks
established in 40 US states and 300 throughout the United Kingdom. [29][30] TimeBanks
also have a significant presence in Japan, South Korea, New Zealand, Taiwan,
Senegal, Argentina, Israel, Greece, and Spain. [31][32][33] TimeBanks have been used to
reduce recidivism rates with diversionary programs for first-time juvenile offenders;
facilitate re-entry of for ex-convicts; deliver health care, job training and social
services in public housing complexes; facilitate substance abuse recovery; prevent
institutionalization of severely disabled children through parental support networks;
provide transportation for homebound seniors in rural areas; deliver elder care,
community health services and hospice care; and foster women's rights initiatives in
Senegal.[34][35][36][37][38][39]
Timebanking[edit]
Timebanking is a pattern of reciprocal service exchange that uses units of time
as currency. It is an example of a complementary monetary system. A timebank,
also known as a service exchange, is a community that practices time banking. The
unit of currency, always valued at an hour's worth of any person's labor, used by
these groups has various names but is generally known as a time credit in the US
and the UK (formerly a time dollar in the US). Timebanking is primarily used to
provide incentives and rewards for work such as mentoring children, caring for the
elderly, being neighborly—work usually done on a volunteer basis—which a pure
market system devalues. Essentially, the "time" one spends providing these types of
community services earns "time" that one can spend to receive services. [40] As well as
gaining credits, participating individuals, particularly those more used to being
recipients in other parts of their lives, can potentially gain confidence, social contact
and skills through giving to others. Communities, therefore, use time banking as a
tool to forge stronger intra-community connections, a process known as
"building social capital". Timebanking had its intellectual genesis in the US in the
early 1980s.[41] By 1990, the Robert Wood Johnson Foundation had invested USD 1.2
million to pilot time banking in the context of senior care. Today, 26 countries have
active TimeBanks. There are 250 TimeBanks active in the UK [42] and over 276
TimeBanks in the U.S.[43]

Timebanking and the timebank[edit]

Timebank members earn credit in Time Dollars for each hour they spend helping
other members of the community. Services offered by members in timebanks
include: Child Care, Legal Assistance, Language Lessons, Home Repair, and
Respite Care for caregivers, among other things.[44] Time Dollars AKA time credits
earned are then recorded at the timebank to be accessed when desired. A Timebank
can theoretically be as simple as a pad of paper, but the system was originally
intended to take advantage of computer databases for record keeping. [18] Some
Timebanks employ a paid coordinator to keep track of transactions and to match
requests for services with those who can provide them. [45] Other Timebanks select a
member or a group of members to handle these tasks. [46] Various organizations
provide specialized software to help local Timebanks manage exchanges. The same
organizations also often offer consulting services, training, and other materials for
individuals or organizations looking to start timebanks of their own. [47]
Example services offered by timebank members[44]

Child care Legal assistance Language lessons

Home
Respite care Account management
repair

Writing Odd jobs Office/business support

Tutoring Driving instruction Delivery

The mission of an individual timebank influences exactly which services are offered.
In some places, timebanking is adopted as a means to strengthen the community as
a whole. Other timebanks are more oriented towards social service, systems
change, and helping underprivileged groups. In some timebanks, both are
acknowledged goals.[48]
Time credit[edit]
The time credit is the fundamental unit of exchange in a timebank, equal to one hour
of a person's labor. In traditional timebanks, one hour of one person's time is equal
to one hour of another's. Time credits are earned for providing services and spent
receiving services. Upon earning a time credit, a person does not need to spend it
right away: they can save it indefinitely. However, since the value of a time credit is
fixed at one hour, it resists inflation and does not earn interest. In these ways it is
intentionally designed to differ from the traditional fiat currency used in most
countries.[49] Consequently, it does little good to hoard time credits and, in practice,
many timebanks also encourage the donation of excess time credits to a community
pool which is then spent for those in need or on community events.

Criticisms[edit]
Some criticisms of timebanking have focused on the time credit's inadequacies as a
form of currency and as a market information mechanism [further explanation needed]. Frank Fisher
of MIT predicted in the 80s that such a currency "would lead to the kind of distortion
of market forces which had crippled Russia's economy."[50]
Dr. Gill Seyfang's study of the Gorbals TimeBank—one of the few studies of
timebanking done by the academic community—listed several other non-theoretical
problems with timebanking. The first is the difficulty of communicating to potential
members exactly what makes timebanking different, or "getting people to understand
the difference between timebanking and traditional volunteering." [51] She also notes
that there is no guarantee that every person's needs will be provided for by a
timebank by dint of the fact that the supply of certain skills may be lacking in a
community.[51]
One of the most stringent criticisms of timebanking is its organizational sustainability.
While some member-run TimeBanks with relatively low overhead costs do exist,
[46]
 others pay a staff to keep the organization running. This can be quite expensive for
smaller organizations and without a long-term source of funding, they may fold. [51][52]

Timebanking around the world[edit]

Global timebanking[edit]
In 2013 TimeRepublik [53] launched the first global Timebank. Its aim is to eliminate
geographical limitations of previous timebanks. [54][55] Since 2015 TimeRepublik has
been promoting Time Banking within local governments, municipalities, universities,
and large companies.[56][57][58][59] In 2017 TimeRepublik won the first prize at the BAI
Global Innovation Awards in the Innovation and Human Capital category [60]
The Community Exchange System (CES) is a global network of communities using
alternative exchange systems, many of which use timebanks. Timebanks can trade
with each other wherever they are, as well as with mutual credit exchanges. The
system uses a base 'currency' of one hour, and the conversion rates between the
different exchange groups are based on national average hourly wage rates. This
allows timebanks to trade with mutual credit exchanges in the same or different
countries.

Studies and examples[edit]

Elderplan[edit]
Elderplan was a social HMO which incorporated timebanking as a way to promote
active, engaged lifestyles for its older members. Funding for the "social" part of
social HMOs has since dried up and much of the program has been cut, but at its
height, members were able to pay portions of their premiums in time credits (back
then called Time Dollars) instead of hard currency.[61] The idea was to encourage
older people to become more engaged in their communities while also to ask for help
more often and "[foster] dignity by allowing people to contribute services as well as
receive them."[62]
Gorbals timebank study[edit]
In 2004, Dr. Gill Seyfang published a study in the Community Development
Journal about the effects of a timebank located in the Gorbals area of Glasgow,
Scotland, "an inner-city estate characterized by high levels of deprivation, poverty,
unemployment, poor health and low educational attainment." [63] The Gorbals
Timebank is run by a local charity with the intent to combat the social ills that face
the region.[63] Seyfang concluded that the timebank was effective at "building
community capacity" and "promoting social inclusion." [64] She highlights the
timebank's success at "[re-stitching] the social fabric of the Gorbals." [64] by "[boosting]
engagement in existing projects and activities" in a variety of projects including a
community safety network, a library, a healthy living project, and a theatre. [64] She
writes that "the timebank had enabled people to access help they otherwise would
have had to do without," help which included home repair, gardening, a funeral, and
tuition paid in time credits to a continuing education course. [65]