Time-based currencies

The community currencies most widely used to recognise the value of activities neglected by the mainstream economy are timebanks. The principle behind such currencies is simple: one hour’s work equals a unit of time. Exchanges between members are mediated by a broker, who matches the requests of one member with the skills offered by others.

A second model useful for increasing social inclusion, which is a derivative of traditional timebanking, is that of time-based currencies often referred to as time-credit systems. Although working on the same principle of one hour = one credit, this model overcomes certain limitations of timebanks: most significantly, exchanges are not limited to being between individuals or by the mediation of a central broker. Instead, the currency – whether physical or electronic – itself mediates exchanges, circulating freely between any individual or organisation willing to issue or accept it.

While timebanks tend to operate in hyper-local geographic areas and are usually limited to members exchanging their skills with one another, a fully-fledged time-credit currency has greater potential to engage businesses and larger-scale community projects.

Both LETS and time dollars form much of the basis of present day community currency schemes, practised all around the world in networks of different sizes. There has not yet been a reliable census of all the systems in operation – in part due to the varying terminology used in different languages, as well as many projects’ hyper-local focus, which means that systems often emerge and disappear quietly.

These grassroots currencies, launched by individuals and small groups of concerned citizens, reached new levels of significance when the ‘trueque’ community currencies in Argentina supported the livelihoods of up to 10 million people following the 2001 crash of the national currency, the peso.

More recently, the euro crisis has prompted other examples of similar currency initiatives – like the TEM in Volos, Greece, and many others in Italy and Spain – that have thrown the question of currency pluralism into the political mix.

While the TEM (‘Alternative Monetary Unit’ in Greek) hit the local markets and international news as if it were a brand new invention, it was not – as we have seen in this chapter. Efforts to design countercyclical currencies to fill the gaps when national currencies fail will undoubtedly continue.