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Wednesday, May 11,2011

Time is money

What are time banks and how are they faring in mid-Michigan?

by Adam Molner
Illustration by Vince Joy

Brett Dreyfus first heard about time banks
about 15 years ago, but he was in no position to start one: “I just
didn’t have the time,” he said.  


But when Dreyfus was elected as a
Meridian Township trustee in 2008, things changed. Dreyfus organized
three planning sessions last September that he hoped would be the
genesis of a currency system that, at first mention, usually leaves
people scratching their head. 


“When I first say what time banking is,
people usually say ‘OK.’ But as I explain it a minute or two further,
they don’t. At first they think it’s just another volunteer program,”
Dreyfus said. 


Dreyfus’ hopes became a reality. The
10-member Meridian Time Bank is “small, diligent and grew like a
garden,” he said. What started out with a few planning sessions nearly a
year ago has grown into an organized operation that officially launched
last month. Members wash each other’s houses, fix cars, grow gardens —
and charge each other for it. But not with money.


Time banking is an alternative currency
that uses a person’s time instead of bank notes. An organized group of
people forms a time bank. Together, they complete tasks for one another —
from mowing a lawn to fixing a computer hard drive. Members agree to
accept hours of time, in increments of one hour, as a payment for
services. The founder of TimeBanks USA, Edgar Kahn, insists that the
time bank hour is not merely a form of volunteering, but rather a new
kind of money. 


Of course, this begs the question: What is money?  Most
people probably wouldn’t consider this a difficult question. They might
reach into their pocket, pull out a wad of dollar bills and say: “This
is.” And they’d be right — sort of. Scholars such as Douglas Rushkoff,
author of “Life Inc,” say that, over time, we’ve come to see those green
things — also known as centralized currency — as the only thing that
can be called money. In this respect, we are severely limiting
ourselves, he says.  


What is it about those little green
pieces of paper? The numbers that are written on them determines each
one’s relative value. And we can use them everywhere to purchase goods
and services. Each has worth because we all agree that it has worth. But
they can also be local and take many forms. Bernard Lietaer, in his
book “The Future of Money,” writes: “Money is an agreement, within a
community, to use something as a means of payment.”


The Meridian Time Bank is by no means the
first of its kind. Time banks exist all over the world, including
several in Michigan. The Lathrup Village TimeBank in metro Detroit was
started by Kim Hodge in 2008 and is regarded as Michigan’s most
successful time bank.  


Lathrup Village’s success didn’t come easy.  It took “a lot of work and a lot of time,” Hodge said. “It takes a good year to get a group of people together.”


Lathrup Village’s time bank started with
30 members. By the end of the first year they were up to 60. By the
second year, membership grew to more than 100.


While the concept can seem somewhat
complicated, it’s actually quite simple. Everyone who joins the time
bank starts out with a balance of zero. Here is a hypothetical situation
that explains how exchanges are made: If Joe spends one hour mowing
Cathy’s lawn, then Joe’s account is credited one hour and one hour is
deducted from Cathy’s account. Joe can then redeem that time bank hour
for one hour of service. What makes this system more flexible than
bartering is that the time bank hour is a standardized unit. If Cathy
has nothing to offer that interests Joe, he can solicit the services of
someone else using the time bank hour, which all members of the time
bank have agreed to accept as legal tender.  


A time bank is an example of what is
called a mutual credit system where the money is created at the time of
the transaction and is worked into existence. As more people join the
time bank and more services are performed, more credits are created.
It’s also known as complementary currency.


“Most people look at it and say, ‘OK,
well how are people ever going to trust a complementary currency?’ And
the fact is, you don’t need to trust a complementary currency, because
it’s real; it’s actual hours of time that you get credited to you as
opposed to the currency we use now,” Rushkoff said when I interviewed
him two years ago.


A similar concept to time banking has
been around the Lansing area since 1991. Founded by Gary Kay, Trade
Network Inc. organizes businesses to help them make barter exchanges
with one another. Whereas the Meridian Time Bank allows members of a
community to exchange services, Trade Network is a for-profit,
business-to-business barter network. The two operate in different
realms. “It’s really more of hobby thing,” Kay said of time banks. “What
we do is on a much higher scale.”


Transactions made through Trade Network,
as well as with other commercial barter networks, are subject to
taxation and traders must fill out a 1099-B tax form. Time bank
transactions have been ruled by the IRS to be tax-exempt.


“They are simply a different form of the
things neighbors do for one another,” Cahn, the founder of TimeBanks
USA, wrote in his 1992 book, “Time Dollars.”


The time bank is not without its critics.
Due to the unconventional nature of such a system, various questions
regarding its viability will naturally arise. One of the first questions
people ask is, “How can we perform all necessary transactions with time
bank hours? 


“Time-banking is not meant to replace the
current monetary system, rather to complement it,” Hodge of Lathrup
Village said. “Many people do not have the same level of funds or income
today that they have had in the past, yet they still have assets and
skills to share. Time-banking facilitates connections among people who
can then share those skills.”


Another concern is that people who are
professionals feel that by treating every hour of work to be of equal
worth, their services are devalued. For instance, a website designer may
feel that an hour of programming is worth more than one hour of mowing
lawns. 


“Time-banking is not meant to devalue
anyone, rather to value everyone,” Hodge said. “Time-banking core values
are about respecting each person’s individual skills and assets and
finding ways to use those skills to help others. Too many people feel
less valuable than others, and our culture allows that to happen. We are
changing that paradigm.”


Still, others wonder how this will affect
the greater economy at large. If people begin soliciting services from
their neighbors for time bank hours rather than from businesses, could
this potentially hurt those businesses? 


“Local currency systems tend to be small.
Most are between 75 and 150 or so people. So, any impact on existing
businesses is likely to be small,” said Ed Collom, a professor of
sociology at the University of Southern Maine who has studied
complementary currencies. 


Users of complementary currencies claim
the purpose is to encourage people to procure services locally rather
than from large corporations. So, instead of getting an oil change from a
national chain, one could get his or her oil changed by a neighbor or
maybe from a local oil change shop. But aren’t local people employed at
national chains? They need to make a living too. How do time banks
affect them?  


“If members (and people) lessen their reliance upon chain
retailers, there are benefits to the local economy as a whole,” Collom
said. “I don’t really see these systems as having much of a negative
impact on chain retailers or the formal economy. They’re small DIY
networks. If I get an oil change through my local time bank, it’s
analogous to me cooking more meals at home rather than visiting
restaurants.”


The Meridian Time Bank is not the first
of its kind to surface in the greater Lansing area. Susan Geshalt and
her husband, Nicolas, residents of the Hawk Nest neighborhood in East
Lansing, started their own time bank after Susan heard about the concept
from Hodge, of the Lathrup Village time bank.


The residents exchanged time bank hours for things like
mowing lawns and babysitting. But, as Hodge mentioned, managing a time
bank can be a lot of work as there are a great number of administrative
duties that must be performed.


“It’s hard to sustain if people aren’t
paid to organize it,” Geshalt said. “The biggest thing was reminding
people to go online and use it.” Most everyone I spoke with said members
of the time bank are much more reluctant to ask for services for
themselves than they are to perform them for others. Geshalt and her
husband eventually became too busy, leading to the dissolution of the
time bank.


For now, anyone can join the Meridian
Time Bank — even if they live outside of Meridian Township. Time banks
are more effective in smaller areas because the close proximity of the
members makes it easier to make exchanges. As more cities start time
banks — such as East Lansing, where efforts to start one are being led
by City Council member Nathan Triplett — residents who are members of
those communities will be encouraged to join their local time bank and
to withdraw from the Meridian Time Bank. 


Those from outside of Meridian Township
who join will be required to make an as yet-undetermined amount of
transactions per year.  


While participants in many time banks do
offer elder care and child care as potential services, early on, the
Meridian Time Bank will discourage members from providing these services
until liability issues can be worked out. Some time banks have
insurance to protect individuals while working in service of the time
bank.  


In order to prevent stagnation, credit
balances will be capped at plus- or minus-five time bank hours. Limiting
excessive credits or debits will help ensure that the time bank hours
continue circulating.  


These are merely Dreyfus’ suggestions of
how the time bank should work. While this should provide an accurate
picture of what the time bank will look like, the members of the time
bank have the final say, he said.


And that’s how Dreyfus envisions the Meridian Time Bank growing — through member input, one at a time.


“The nature of the time bank is that if you move too fast, you burn out,” Dreyfus said. 


“The good will that is generated will
naturally resonate with other people as they talk about it. People will
get the ‘Ah-ha’ moment. If it depends on any one person, it’s doomed to
fail.



Care to Join?
Contact Brett Dreyfus at MeridianTimeBank@gmail.com or attend the next informational session Saturday, 11 a.m. at the Meridian Activity Center, 4675 Okemos Road.

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