Volatility

August 3, 2011

Time Dollars vs. Command Dollars

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The idea for time dollars (T$) first came to Edgar Cahn while he was in the hospital recovering from a massive heart attack. He saw himself as an activist who had devoted his life to helping others, and it was deeply disturbing to him to lie passive and helpless, unable to do much for himself, with few decisions in his hands – “Once out of the Intensive Care Unit, the most important thing you have to do is fill out the breakfast, lunch, and dinner menu. The most important decisions you have to make involve cream of wheat, toast, and juice. They let you read the newspapers.”
 
This was the early 80s, and those newspapers were full of bad economic news, in particular high unemployment and massive job destruction. Everywhere Cahn looked he saw people being forcibly rendered useless by this economic system. There was an overwhelming sense of passivity and helplessness. Cahn had an epiphany, that his own demoralization was a microcosm of the mass demoralization of unemployment, wherever people saw this as some law of nature to which they had to submit passively. And it was the same phenomenon of passivity he knew all too well from spending many years fighting the War on Poverty. Where it came to poverty, he knew from the inside all the pitfalls of dependency cycles and top-down dispensation to passive “clients”.
 
It hit him that we needed an alternative to the dollar economy whose main focus was turning the passive poor and unemployed, society’s designated “throw-away people”, into activists on their own behalf. People first needed to take action for themselves, their friends and families, their communities, their democracy. In the process they could also directly tackle their own problems of poverty and unemployment.
 
The basic problem with the capitalist economy is always the same – the dollar (or any command currency, but I’ll use the dollar as my example) fails to measure more than a fraction of the core economy (relegating to the picayune category of the “informal economy” most essential work, all the work done by friends, families, communities, upon which the “free market” so shamelessly free rides). In a malign example of the tail wagging the dog, the dollar forces the entire economy into its commodification strait jacket even though only a small portion is ever suited to be commodified. In the process it always generates market failures big and small, strewing their destruction all over the place (and as a rule leaving it to the core economy to clean up most of the mess, except where the clean-up itself can be corporatized).
 
The epitome of the dollar effect is that this economic measure, which dictates the structure of the economy, inevitably (and by intentional design) leaves vast amounts of ability and good will to work shipwrecked, unable to exert itself productively. Mass unemployment is the most obvious example of this. But underemployment, jobs whose quality and satisfaction fall far below what they could be, and all aspects of the command economy which intimidate people into falling short of their real potential, are further examples.
 
At the same time that the dollar shipwrecks vast amounts of unrealized work potential, it leaves vast amounts of human needs unmet. The effect is simple enough – as far as command economists are concerned, if you don’t have the money to buy food, then you don’t really want to eat. You have no “demand” for food. They and their dollar economy impose this state upon all non-rich people, with regard to all levels of need. If the market can’t efficiently provide a service in exchange for dollars, that service isn’t provided, no matter how necessary to human beings. Here too, the market fails everywhere you look.
 
So we have tremendous unused work resources milling about while so many unmet needs cry out to be met, and all because the workers can’t justify being paid dollars for their work (according to the capitalist measure), and those in need lack the dollars to pay. The problem is nothing more or less than the dictatorship of the command currency, and capitalism, itself. Abolish the market, and we can abolish its failures, which are its main trait. Remove this artificial, arbitrary constraint, and we can fix the problems.
 
Remove it – or avoid it. Cahn’s idea for an alternative within capitalism was time dollars. Setting up an economic measure which would be based not on payment in dollars, which people in need lacked, but on reciprocity of time, which those able to provide possessed. An unused resource would meet a previously unmet need, and the recipient would then use his own unused resources to meet someone else’s needs. The two key elements are:
 
1. Each hour of work, no matter what its nature, is equal. One = one. 
 
2. Everyone in the network is first of all an active provider, and is to see herself primarily in this way. We are only recipients where necessary. It’s true that we all have needs and can use help, but we receive this help as part of our share in the social wealth our acts of giving create. So our taking is merely the obverse of our giving, and is also a form of giving in that it helps empower those who give to us.
 
People develop self-respect and self-confidence out of taking responsibility for themselves, becoming active in helping themselves and others, giving to others, and helping others become such activists of gift-giving themselves. The whole network is based on cooperation and giving.
 
This helped answer the question which constantly bombarded Cahn when he first hit the road with his time dollar idea – “How are time dollars better than real money?” Cahn at first considered this to be a frivolous, bad faith question on its face. By its nature time banking was going to apply to parts of the core economy “real money” (command dollars) had forsaken. The fact that time dollars could exist at all proves they’re better than command dollars for at least some things. They’re to help fix market failures. (I’ll add that by now the manifest failure of the market vastly exceeds its successes. The magnitude of the failure goes far beyond what Cahn himself probably realizes.) 
 
In spite of the essential phoniness of the question, Cahn still wanted to answer it. He did extensive research and discovered a two part answer. One part is quantitative, while the other was a philosophical realization which sounds obvious to us, but apparently was still novel back in the 80s.
 
The quantitative finding was that given the overarching capitalist paradigm, time dollars have “a competitive advantage over volunteering”. Volunteering uses a resource and meets a need, and in the process bestows a psychological benefit on the giver. But it’s a one-way, and often one-off, transaction. T$, on the other hand, does what volunteering does but also empowers the recipient to be a giver himself, generating the same psychological benefit. The nimbus of the gift-giving spirit envelops everyone in the network and becomes the general mindset. Receiving becomes the derivative of giving. Receiving becomes just taking a rest from giving, which is one’s characteristic act. Action becomes the everyday human quality. Passivity ceases to exist at all. These are all the potential implications of the network based on mutual exchange of the gifts of work, with T$ as the mechanism of accounting for them.
 
(Why is such accounting is needed at all? It’s to help integrate people into networks where they may not personally know all the other members at first, and also for the sake of anyone still psychologically clinging to the dollar measure, who may need to be weaned from it with an alternative. But these probably aren’t major issues. The main reason such accounting was needed is more down-to-earth: It’s capitalism, within which the time bank needs to exist, and by whose strictures it must abide to the extent the bank and its members still need cash for various purposes, which demands quantitative measures of some sort. Cahn would soon discover how essential this accounting was to get politicians and prospective funders to take him seriously.)
 
The time bank network also creates a sense of community and ongoing engagement among the givers. A transaction isn’t one-off, but a community act. Even if two people don’t conduct further transactions specifically between themselves, their transaction was still a piece of an ongoing evolution, the continuation of a history and a vector toward a future.
 
So that’s the stuff which Cahn (with some help from the London School of Economics) was able to number-crunch. On the philosophical level, Cahn simply challenged what I call the Status Quo Lie. The question about “better than real money” was circular and question-begging, since it was assuming “better” according to criteria imposed and enforced by the command currency itself. But time dollars challenge these criteria as such. The answer was simple: Any type of money has certain characteristics and measures things according to those characteristics. Change the characteristics, and you change the measure.
 
Cahn, according to his own testimony, only wanted to use time dollars where the regular dollar (what he himself seemed willing to call “real money”) had failed. “I wasn’t trying to get rid of money or replace it.” So his subjective view was similar to that of the neoclassical synthesis which relegated Keynesianism to specialized circumstances (“bastard Keynes”), or MMTers who propose jobs programs but only where the job creation wouldn’t compete with the private sector. This is a particularly craven and picayune mode of reformism, which goes to such lengths to come up with theoretically good ideas and then immediately wants to cripple them in practice, because in the end it flinches from taking on capitalism as such. It’s part of the reason reformism can’t work.
 
But as I said in my previous post, we can reverse this special-case dynamic. Where possible, we can take reformism and render it transitional toward positive democracy. This can be our transitional synthesis.
 
In the case of T$, the potential is obvious. It’s already dedicated to maximizing participation. Since the main quality of true economic and political democracy shall be the full opportunity for direct worker and citizen participation in self-management and self-rule, it follows that anything which strives for bottom-up participation is in principle headed in the right direction. (In practice we need to guard against abusive hijackings. It’s possible for a time bank to become exploitative as well, although I haven’t heard of real life examples.)
 
So the true answer is that time dollars are better than “real money”, objectively and completely.
 
1. “Real money” isn’t real at all except through its forcible imposition by the capitalist system. This is coercion, not nature. This is true of all system impositions. It’s true of everything except economic democracy. In reality there’s no such thing as real money.
 
2. T$ can value all work and can do so efficiently and fairly. The economy of regular dollars values only a small fraction of work (along with an obscene amount of parasitism and vandalism which aren’t work at all), and does so in an extremely unfair and inefficient way.
 
Idle, bottlenecked work resources, the frustrated will to work; and unmet needs. Surely there are ways to match these up other than the dollar? Obviously, there have to be such ways. How did humanity exist without money for over 99% of the span of our natural history? And just as obviously, the dollar has failed disastrously and must be overthrown. Economic democracy shall be the end result of this overthrow. Time banking can be a transitional tool toward this.
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1 Comment

  1. Off-topic . . . somebody else is taking up the cause of Direct Democracy (not exactly sure they mean the same thing)

    Gerald Celente . . . http://www.prisonplanet.com/celente-solution-the-21st-century-global-game-changer.html

    Comment by Tao Jonesing — August 3, 2011 @ 10:11 am


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