Funny Money: In Search of Alternative Cash. David Boyle
in a ten-page form and read over thirty pages of detailed instructions. ‘Had the department been assigned to invent the family, the procedures would have exceeded the entire Code of Federal Regulations,’ wrote Cahn and Rowe bitterly. ‘With further studies pending.’
But there were reasonable worries for the politicians. What would happen, for instance, if there was a run on the time dollar bank? If every time dollar earned is a potential demand on a hospital or government department, does that mean the state would be legally liable? The questions hung in the air. Then there was the problem of volunteers, the people earning the time dollars – or ‘service credits’ to use the official term – by helping old people. Should they be trained? What happens if they get sued? Or worse, what happens if they abuse or defraud the system? There were some organizations that were implacably opposed to the whole concept. ‘We feel that one of the basic tenets of volunteer service is NOT receiving a quid pro quo,’ the American Red Cross told congressional hearings on the subject.
But as Carolee DeVito from the University of Miami School of Medicine said: ‘Service credits legitimize the worth of time.’ And it was because of this that the Miami project was rescued suddenly by Florida’s Senator Carrie Meek. She was enraged by the cuts to black elderly programmes in Miami being sponsored by the Florida Office on Aging. ‘We missed out on urban renewal. We missed out on the War on Poverty. We missed out on the money to rebuild Liberty City after the riots. And we are NOT going to miss out on this opportunity.’
Senator Meek’s ‘volunteers’ managed to attract old-fashioned dollars from the Robert Wood Johnson Foundation, the biggest health trust in the USA, which was just then looking for pilot time dollar projects. They arranged for twelve government-sponsored volunteers from the massive VISTA programme, and they divided the whole project equally between the blacks, the Hispanics, the Jewish community and the blue-collar Anglos.
Two years later, it was Miami’s time dollar project which received the first nationwide TV coverage. The report covered a low-income block of housing for old people, 85 per cent black and 10 per cent Hispanic. They filmed one resident, a grandmother called Daisy with an artificial leg, tutoring in the local primary school in return for time dollars – and spending them on lifts from the store from Pepe. Pepe spoke almost no English, but somehow the two of them managed to get along on their weekly shopping trips. ‘I don’t know what I would do without Pepe,’ she told the cameras.
Nearly a decade later, the Miami project was administering more than 8,000 hours of time dollar earnings every month, across thirty-two offices in the city. It had long since burst out of just helping old people, and the system had been taken over by the community as a whole. You could spend time dollars there on anything from plumbers to baby-sitting.
Miami was lucky. Just when they needed heavyweight backing, the Robert Wood Johnson Foundation was looking for them. Miami, Boston, New York City, Washington DC, St Louis and San Francisco were given enough money to fund time dollar banks for three years, paying wages to organizers, setting up computer systems, renting offices, and funding all those other mundane things you need in offices, like paper clips, plastic cups and lavatory paper.
The St Louis project also attracted media attention. They were based at Grace Hill, an energetic programme to help old people carry on living at home, backed by generous federal grants – which suddenly disappeared with a wave from a magic wand by the Reagan administration. Organizers were left with 750 frail old people on their books, 500 of whom would have to go into nursing homes if they received no support. What could be done? Board members locked themselves away for a day with a management consultant to come up with a solution. ‘We told them we had to find a way to make less more,’ said Grace Marver, later director of the local time dollar programme.
And that’s just what they did. MORE – the Member Organized Resource Exchange – used time dollars to fund the services they needed. Now up to 10,000 volunteers help 1,500 old people stay out of old people’s homes. Only a third of the volunteers told researchers that they had been motivated by earning time dollars, but then a third of them had never volunteered for anything before.
By 1990, three years later, the six projects in the six cities were already organizing more than 143,000 hours of time dollars every year and had attracted 4,500 participants to earn them. Edgar Cahn’s idea was beginning to work, and some solutions to the potential pitfalls were also beginning to emerge.
The state of Missouri decided it would underwrite the value of time dollars themselves, like central bankers. They had been the first state to pass time dollars legislation, and had the good sense to realize that bureaucracy would kill the idea stone dead. They even managed to resist the temptation to draft regulations until a whole year after time dollars began there. Missouri still backs people’s time dollar earnings: if the system collapses, the state will provide the services which honour the earnings. They ‘promise to pay the bearer on demand’.
Most of the big time dollar banks decided to solve the ‘volunteer problem’ by taking out volunteer insurance. Most check out the people when they join. Many will refuse to fix young people up with tasks which would take them into old people’s homes. ‘It’s not that I was afraid for the seniors,’ said one organizer I met later. ‘I was worried about the safety of the young people.’
In fact, according to Cahn and Rowe, in all the millions of time dollar transactions around the US A in over a decade, nobody has ever sued. ‘People don’t mess with their local support systems,’ he said. No volunteer has ever been sued in writ-happy America, which is why you can still get a million dollars’ worth of volunteer insurance for $3.
Then there was the big daddy of problems: were time dollars taxable? It would be a terrible waste if all those frail elderly people had earned their time dollar hoards by looking after their neighbours’ children or by finger-aching achievements in crochet, only to face an IRS swoop for tax evasion. Worse, the IRS would obviously expect them to pay tax in old-fashioned dollars. The same problem was faced by the local money pioneers in the UK: ‘I don’t think the Chancellor of the Exchequer really wants his lawn mowed,’ said one Inland Revenue official.
But Edgar Cahn was a law professor and this made all the difference. Time dollars can’t be taxable, he said, because they are not real money: they are just records of services. ‘In the old days, did you tax people when they looked after their neighbours’ kids? Did people get taxed on the sugar they lent?’
The IRS agreed. Service credits are not taxable, they ruled, and so it remains. But they do have to be reminded every so often. ‘When President Clinton summoned us to a “season of service”,’ said Cahn in a letter to the New York Times, ‘I do not think he meant services to the IRS.’
‘Time dollars represent a psychological and monetary reward for rebuilding the non-market economy,’ says Cahn. It is a kind of social money, and it can be given extra value if it is backed by government departments or underpinned by businesses. And it seems to work. After over a decade of time dollars, the idea is now firmly entrenched, firmly researched and funnelling a new kind of money – mainly, but not exclusively, among older people. There are now nearly 200 time dollar banks operating across the USA, from the Community Carers Service Bank in Berkeley, California to the Ohana Kokua Program in Hawaii; from the Give and Take Service Bank in Ohio to the BEST Time Bank in Laredo, Texas. There are even a few experiments in Japan.
‘When people came from Germany and Japan and Sweden and said we need to do this too, I realized this was not a Ronald Reagan problem,’ said Cahn. ‘Something was going on in every industrial society that I didn’t understand.’
What was going on? ‘Gridlock: moral, political, fiscal,’ said Ralph Nader in the introduction to Edgar Cahn’s book. Then along comes the time dollar, ‘an organized, inflation-proof currency that can provide as constant, as powerful, as reliable a reward for decency as the market does for selfishness.’ If you believe that money began as a way of building relationships, rather than as an essential aid to shopaholism, then time dollars look as though they are going back to the roots of the whole idea.
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