Fourth Corner Exchange Brings Time Dollars to Whatcom

Francis Ayley is a business consultant who’s been active in monetary reform for 30 years. He founded North London LETS, the second-largest Local Exchange Trading System in the UK, in 1990, and is a founding member of Fourth Corner Exchange in Whatcom County. Lia Ayley saw North London LETS grow from an idea in Francis’s mind in 1990 to a thriving local currency system, and is delighted to see a Time Dollar system being established in Bellingham. Lia is a former psychotherapist turned freelance writer.

Do you have enough money? For most people, the answer to this question is “no.” Most of us have needs and wants beyond what our current income can support. And if we don’t have the money, we can’t buy what we need, unless we find someone willing to lend us money and agree to pay back the loan with interest. But that’s just a fact of life, right?

Wrong! In fact, monetary scarcity is simply a structural feature of our present money system, rather than a necessary part of life. Economists openly admit that within our current system, “money must be relatively scarce so that it can serve as a store of value.”1 Thus we have a money supply based on scarcity. The effect of this is to prevent people who want to trade from trading.

For example, I have a tractor and I want to sell it. You need a tractor and you want to buy mine, but you don’t have the money, so we cannot trade. This lack of money commonly prevents people from completing trades that would otherwise occur, because money is scarce and not always around when you need it. Many people cannot even meet their basic survival needs (food, housing, clothing, health care) because of the scarcity aspect of money, even though the means to meet those needs are all around them. They may also have abilities that other people need, but if the people who need what they can offer also lack money, everybody loses.

There are other monetary systems that have no element of scarcity associated with them and that don’t need to keep money scarce in order to maintain its value. Local currencies, or local trading systems, are one example. Sometimes called LETS (Local Exchange Trading System), Green Money, ‘scrip’ or Time Dollars, local currencies are not widely known in the U.S., but they are thriving in many other countries in the world, including England, Australia, New Zealand, Argentina and many countries in Europe.

Local currencies bridge the gaps in the conventional money system by allowing people to trade what they need at a local level, and many local currencies are examples of money systems based on abundance.

For example, in a LETS system there is always as much money available as people need, because the money is issued at source by the members of the local currency group as they trade, not by a central bank. The trading is not limited by how much local currency you have in your account, but by what goods and services are being offered by other people. If it’s available, you can buy it.

The idea that money could be so plentiful as to allow us to meet all our needs is a shock to many people. We have become so accustomed to our usual currency of scarcity that it is hard to imagine money could be abundant. In accepting our present limited supply money system, we have accepted a limited way of thinking about and using money.

Time Dollars are another type of local currency that can reflect an abundant view of money. In Whatcom County, Fourth Corner Exchange was established in 2004 as a mutual-credit Time Dollar system. It now boasts 78 members who are trading goods and services such as childcare, home repair, cooking, yard work, acupuncture, housecleaning, woodworking, computer tech support, feng shui, massage and more.

Their Web site, http://www.4thcornerexchange.com also serves as a fully interactive database where members can list their wants and needs, view the offered and wanted listings of other members, record their trades and communicate via telephone or email. Written by Calvin Priest, a systems analyst who is also a Fourth Corner Exchange member, the database has now been offered as open source software, making it freely available to other local currency groups around the world.

As a member of Fourth Corner Exchange, people are given time credits for exchanging goods and services with others, which they can use to ‘buy’ the goods and services they need. As in many other local currency systems, if there is not enough credit in your account already to buy what you need, no problem. You simply go into ‘commitment,’ an agreement to trade an equivalent amount of your own goods and/or services at some point in the future, with no time limit and no interest.

Far from being something to be avoided, ‘commitment’ is an essential feature of the system. Unlike debt, which benefits the lender disproportionately and penalizes the person who has taken out the loan (through interest payments and repayment schedules), commitment primarily benefits the person who has taken it on, by making it possible for them to trade for what they need when they need it.

Secondarily, commitment benefits the person selling their goods/services, by increasing their credit balance and enabling them to repay their own commitments. And finally, commitment benefits the local community, contributing to a vibrant, thriving local economy in which everyone gets their needs met.

Local currency systems have been established before in Whatcom County, and the previous systems all eventually failed. Approximately nine out of 10 local currency systems do fail, and there are a number of reasons for this. One of the primary reasons is that people’s thinking has been so conditioned by the scarcity paradigm that they are unable to think or act in terms of abundance. Their local currency system begins to reflect the limitations of their thinking and becomes more and more like the conventional money system, leading in the end to failure. Successful local currency groups recognize this tendency, and provide an educational component to counteract this effect.

Another reason many local currencies fail is that the founders, excited by the concept of a local currency, fail to recognize that it is people who make or break a local trading system, and thus do not facilitate the development of personal contacts and one-to-one relationships on which local communities thrive. This mistake is not unrelated to the growing dominance of larger and larger corporations affecting larger and larger portions of our lives.

Over the last 50 years, the “corporatization” of America has led to the slow degradation of our communities, as small, local businesses have made way for huge multinationals and ‘faceless’ bureaucracies, the bottom line taking precedence over all other considerations. Loans that used to be approved by a loan officer are now approved by a computer; the local shopkeeper who could extend credit to customers in times of need has been replaced by the impersonal credit card. This has reinforced a view of trading in which monetary exchange is seen as primary, and personal relationship, if it exists at all, is secondary. ‘Business is business,’ and people are cautioned not to let feelings get in the way of profitable business transactions.

Conditioned by this situation, it is easy to focus on the ‘trading’ aspect of local currencies, and forget that it is people who are making those trades, and it’s also personal relationships that underpin people’s willingness to trade with one another. Successful systems usually provide ongoing opportunities for social connections between members, fostering a sense of community and the personal contacts that facilitate trading.

A thriving local currency brings the elements of community, relationship and goodwill back into our transactions. Without the limitations of a scarce money supply, people experience a natural shift in emphasis from “Do I have enough money?” to “Do I want to trade with this person?” Goodwill between people becomes essential to exchanges, because without goodwill between you and the other members of your community, they may not choose to trade with you. As relationships, rather than money, become primary to exchange, the social alienation fostered by our current monetary system is replaced by the connections between people that build and strengthen community.

Finally, in an abundance-based local currency system, no one has an advantage over anyone else because they have more money. This is true economic democracy, which does not exist in our present money system. In our current system, ‘money is power,’ and the people with the most money disproportionately control the lives of millions of others. Abundance-based local currency puts the power squarely back into the hands of the people, by providing each individual with the power to meet their needs and contribute to their community. §