Saturday, August 29, 2009

Basis of Community Currency Issuance

Backed by a person’s commitment to volunteer/spend time either in the future or hours already earned in a LETS or Timebank
Backed by a business’ promise to allow redemption for goods or services or a discount for them
Backed by a community loan which will eventually be repaid (especially good for import replacement)
Backed by a grant to an organization to provide some common good to the community
Backed by US dollars in a bank
Backed by a commodity- gold, silver, food security, a commodity basket

Why community currencies?

by Deirdre Kent

There is mounting evidence and increased awareness that the world is in serious trouble, environmentally, socially, and economically. In most cases we’re well aware of what actions are required in order to address the problems; the trouble is that there never seems to be enough money to carry out necessary remedies!

People often fail to make a connection between environmental degradation or social disintegration and the design of our money system.

At the heart of the money shortage is a monetary system that drives exponential growth, of everything! Exponential growth cannot be sustained on a planet with finite resources. The shortage of money comes about because most of the money we use has been created by commercial banks as interest bearing debt. Since the principal has been created but not the interest, people and firms are obliged to compete with one another to find the money to pay the interest, causing some at least to go further into debt, and putting enormous pressure on natural resources.

Each year the total money supply must increase by at least the amount of interest demanded, increasing the debt burden in every indebted sector - company, credit card, student, mortgage, and hire purchase. To recoup the interest on debts, businesses build into their prices a percentage for interest. The result is that those who are net debtors pay more on the combination of their shopping baskets and their debt than they can ever earn from interest on their savings or investments. One result is that money is constantly being transferred from the many net debtors to the few net creditors, widening the gap between rich and poor.
'Closing the Gap' becomes an impossibility.

The money supply is forced to increase exponentially and economic activity must constantly expand to avoid inflation. This demand for ‘growth’ in turn brings escalating pressures on society and the environment. The driving force behind the economic growth imperative is the interest bearing debt money system, a neglected factor in the sustainability discussion.

Money as a measure that represents finite resources is at odds with a system based on exponential growth. With this system the business cycle of 'boom and bust' is inevitable and an inflation rate persistently as high as 3% erodes the value of money for everyone – business and professional people, teachers, nurses, those on salaries, those on benefits or in retirement.

Although a great deal of attention has been paid to reforming national and international currencies, a quiet, unassuming worldwide movement to reclaim monetary democracy at a local level has begun – namely the movement to create local currencies.
Living Economies believes that an essential ingredient of an abundant, sustainable and just economy is interest free money at every level - international, national and local, a belief at the heart of the world wide development of thousands of community currencies over the last 20 years.
In a culture where the means of exchange is dominated by supranational and national currencies like the US dollar and the Euro most people fail to appreciate the potential power of currencies designed for regional and local use.

In the face of the increasing inability of the present monetary system to satisfy the needs of people and protect the environment, the introduction of a comprehensive range of currency systems will allow people to choose the one most suited to the nature of a particular trade. Recently developed smartcard technology can accommodate up to five different currencies simultaneously. Whereas the national currency is kept artificially scarce to maximise profits for the banks, local currencies have the advantage of being in sufficient supply for all desirable trades. With plenty of local currency in their purses - whether electronic or real - shoppers can really choose to buy local.

A second advantage is that it gives people ownership of their currency, notes created for a particular community give them identification with place. Thirdly, with an abundant and interest free currency designed for local exchanges, retailers can choose local suppliers, maximising self-reliance and reducing unnecessary transport costs. Community currencies will therefore create incentives for import replacements.

A fourth advantage is that manufacturers and primary industries, freed from paying interest on their own currency, can then choose to make longer term commercial decisions. This will favour, for example, organic production of food and the manufacture of more durable goods. Importantly, in an age where increased automation and new technologies are creating mounting underemployment and joblessness, a variety of sufficient local currencies will increase employment opportunities, helping stem the tide of increased social disruption

Benefits derived from a change to interest free money and the creation of diverse and well designed complementary currency systems will flow upwards from local, through regional, national, and supranational levels, and in the process diminish the gap between rich and poor. Additional benefits include increased importance of traditionally undervalued activities, discouragement of environmentally destructive activities, increased support for small enterprise development and the strengthening of social relationships.
The potential positive impact of community currencies on the environment and on society will be profound. At the same time, developing the best working models possible will provide economic ‘life rafts’ should there be collapse in the global financial system.

Friday, August 28, 2009

The JASeconomy Story

Late last year, a call out was made through NoBAWC (Network of Bay Area Worker Cooperatives) at Counterpulse in San Francisco to discuss the people's response to the economic crisis and alternative economic solutions. All kinds of folks came out and decided the discussion should not end there. So a few of us have been meeting for many months now and decided to host a Festival of Grassroots Economics to make visible the alternatives already happening in the Bay Area, to create synergies and to initiate new projects to create a formidable challenge to the highly dysfunctional capitalist economic system. In a sense to take our economy back and put it in the hands of the working people. The all volunteer group organizing this is JASecon - Just. Alternative. Sustainable. economy (pronounced Jazz Econ, a musical metaphor).

I thought one way to strengthen these grassroots economic projects was to create community currencies that would enable an abundant medium exchange to support projects that meet people's needs and support local businesses in a time of monetary scarcity. The energy and resources exist to create the new economy, but community currencies would be helpful in facilitating the exchanges to move the energy and resources to where they need to go even the US dollars may not be there. Here is Bernard Marsalek's (long time worker at worker cooperative Inkworks press and member of NoBAWC) take on JASecon.

Bernard Marszalek
18 August 2009

For many Americans working for oneself is a dream. And every year thousands, if not tens of thousands, hope to realize that dream – some for more than the first time.

To start a business, first an opportunity to make a profit on the venture needs to be present. Next, a business plan is devised to show how to take advantage of that opportunity. And lastly, the plan is presented to a banker, or a venture capitalist, or, if you are so fortunate, an uncle with deep pockets. The process may not be easy, after all a vast majority of new businesses fail within the first few years, but it is a well-worn path with little mystery to it and considerable support for the attempt.

But what if you see an unmet economic need in your community and you want to address it and are not driven by the overwhelming desire to profit from the venture? How do you start? Who do you see about planning and financing?

Six years ago a group in West Oakland, a low-income community, found themselves in this position. Their goal was to bring fresh produce and good food to a neighborhood abandoned by chain groceries. The prospect of selling food in this community didn’t register with the corporate world as a profitable pursuit. This meant that the usual financial resources were unresponsive, especially to a group with no history of running a grocery store and no collateral to put up.

By concentrating on the obvious social need, and guided by the goals of achieving food security, the group successfully sought seed money from foundations to finance the project. First to organize were community members with a common desire to work together in a democratic way. Several years of intense work ensued to develop into a functioning collective with a true peer relationship. In the meantime they surveyed their neighborhood and visited groceries, both cooperatives and “natural foods” establishments. They studied nutrition, made contacts with farmers to supply food directly to lower costs, and they sold food in stalls around the neighborhood to establish friendships and solidify their project to ensure its success.

As they embedded themselves in their community and demonstrated their savvy they did fund-raising, sought non-traditional financing and requested city economic development funds.

Finally, after all this work the Mandela Food Cooperative, had its grand opening as a democratically managed worker co-op. After only a few months of operation they have exceeded their financial expectations.

Worker co-ops are the smallest section of the cooperative sector in the U.S. and as such are for the most part “below the radar”, even though there are over 300 of them spread across the country. The San Francisco Bay area has the largest concentration of worker co-ops, collectives and volunteer groups focused on economic ventures. Many people know Rainbow Grocery, Cheeseboard Collective and Inkworks Press, all decades old; less well known are the three dozen democratically managed workplaces that are members of the Network of Bay Area Worker Cooperatives (NoBAWC, pronounced No Boss).

Besides these enterprises, there are numerous groups, organized in diverse ways, developing an economy from the grassroots, outside of public and private funding. This new economy is most evident in the area of urban agriculture. The Bay area initiated the first schoolyard gardens where students learned that food comes from well-tended soil and not store shelves. Twenty years later some of the graduates from the schoolyard gardens are reclaiming vacant and abandoned urban lots and growing vegetables.

Many of these gardens involve neighbors, kids and adolescents in a community-wide project showing what organized groups can do to meet their needs. Contacts with local farmers furthers the learning process and extends the range of the urban, grassroots agricultural economy. What’s significant is that the lessons learned organizing for food security can be transferred to other areas. Civic skills develop and opportunities for both individuals and community betterment are realized.

Another large sector of the alternative economy arises from the cycling community. Bike kitchens, for example, have sprung up everywhere. They provide opportunities to learn mechanical skills to aid the mobility of kids and adults in dense urban environments. As this sector expands innovative designs for bikes to meet specific tasks are engineered. Berkeley is the home, for instance, of several ventures that explore human-powered mobility for disabled people. And as the cycling community moves into the mainstream non-automotive urban design begins to take shape.

Many areas of grassroots economic development spin off related projects. A kind of ripple effect occurs from what are essentially small, but highly creative projects. Both do-it-yourself green building design and urban agriculture led to the creation of a network of greywater projects, for example. A similar convergence led to urban agriculturalists offering gardening services for homeowners too busy to build and tend their own gardens. The home-grown surplus often then is shared with those who have no space for gardens or who can’t afford to buy fresh vegetables.

Similar synergies are evident with alternative fuels like bio-diesel – vegetable oils rescued from restaurants – that in their reuse provide an eatery with a “green” credential while at the same time lowering the carbon footprint of vehicle deliveries.

The diversity of community-based economic projects, from housing to community currencies, from alternative energy systems to collectively managed low-cost health care, from co-op janitorial services to opensource software creation, encompasses every sector, but is often unrecognized. There is no corporate marketing and branding. Some people trade with one co-op and never visit another. The average person may know of one street-level economic sector, but not how they relate to others.

A goal of the Grassroots Economic Festival is to bring together a variety of economic projects for the public to see close up and to appreciate the creativity and value of bottom-up efforts to fulfill real needs.

The same sort of insularity that we find with the public occurs with the practioners. Dedicated people apply their skills to one area to sustain an effort against great odds and never have the opportunity to see how what they have learned, what skills they have developed, might have relevancy in another area.

So another goal of the festival is to introduce these varied projects to the people involved in one area on a daily basis. We hope for synergies to become evident. For a vibrant, but still small economy, to step up its presence requires first the recognition that we are not isolated. With that recognition solidarity develops. And with solidarity we have the basis for creating a just and sustainable economy.

For more info, go to

Thursday, August 27, 2009

Creating Community Currency Loops

Piggybacking on Guillaume's blog about funding public art through community currencies, I will go back to the idea of veggies shares.
* The urban farming or CSA project would issue acknowledgments of veggie shares currency to any people and businesses for in-kind (time or supplies) or monetary donations made to the project.
* Restaurants, grocery stores, and farmers market vendors could show their support by agreeing to accept some of these acknowledgments (veggie shares) for partial payment of goods/services they provide.
* Those businesses could then use the currency to buy food from these projects if so desired.

Letter from the Brazilian Solidarity Economy Movement



“Looking at the future, I wish that our region of Santa Maria, which
is relatively poor, would be more intensely supported by attitudes of
Hope. We don’t want complacent people, nor we want to give anyone any
false hopes. We want to be agents of true Hope”.

(Dom José Ivo Lorscheiter, late Bishop of Santa Maria, Brazil).

Since 1994 takes place in Santa Maria, state of Rio Grande do Sul,
Brazil, the yearly Solidarity Economy Fair, which would complete on
the 10th, 11th, and 12th of July 2009 its 16th state-level edition and
its 5th edition as an international event.

For 16 years, this event has been dreamed, planned and carried
out by the strength of the horizontal networks of the Solidarity
Economy Movement, gathering around the Brazilian Forum of Solidarity
Economy, the state-level Forums, the 60 organizing commissions of
Projeto Esperança/Cooesperança of the diocese of Santa Maria, our
institutional partners, the governmental and non-governmental
organizations, the social movements and the worker-managed

The yearly fair of Santa Maria is part of a National Program of
Solidarity Economy Fairs, a public policy that supports fair and
solidarity-based production and consumption.

Since 2001, the Fair became a national event with the
participation of many worker-managed enterprises from other states and

The 2008 event counted with the presence of about 145 thousand
people from 25 countries, 27 Brazilian states and around 400
municipalities, with the participation of 850 worker-managed
enterprises and many Solidarity Economy Networks from Latin America
and other continents. It offered them a large amount of training
events such as national and international seminars, workshops, the
International Ecumenical March for Peace, the Youth Mobilization,
diverse exchanges of experiences and cultural moments with the
presence of different cultures, ethnicities and a large amount of
indigenous people from many tribes.

The Santa Maria yearly fair: “A Learning and Teaching Experience”.

The year of 2009 will enter history in a different manner, with a
projected record attendance of 150 thousand participants. The
voluntary work and effort of the 60 organizing commissions former by
worker-managed enterprises that compose the network of Projeto
Esperança/Cooesperança, integrated in the social work of Banco da
Esperança (Cáritas Diocesana) of the Diocese of Santa Maria, of
Cáritas Brasileira and Cáritas Regional/RS, of SENAES (Secretaria
Nacional de Economia Solidária/National Secretariat of Solidarity
Economy), of IMS (Instituto Marista de Solidariedade) and many other
partner and supporting organizations which came to this event, one
year ago, have been interrupted and cancelled.

Why was the Fair cancelled if other public events kept on
happening around the country?

The argument of Judge Eloísa Helena Hernandez de Hernandez was
that “there would be an agglomeration of people”, which would pose a
risk of contagion of the H1N1 flu. What could we say of other
agglomerations: public transport, movie theatres, shopping centres,
parties, nightclubs, markets, sports events, harvest festivals, car
fairs and may other events that lead to large agglomerations of people
in Santa Maria and other towns and cities in Rio Grande do Sul and the
whole of Brazil? Is our air different? Is our food different? Is our
work different? Is our athmosphere different? Or the true reason is
that Solidarity Economy opens to the world the possibility os a new
economic model, of Solidarity-based Development, of inclusion, of
sharing, of human dignity, where the excluded of the mainstream
economic model have a voice and an active role through interactive and
engaged participation?

You can check the course of events in the following chronology:

1. On July 1 2009, the representatives of the organizing commission of
the Santa Maria yearly fair and of the Santa Maria town hall had a
meeting with Dr. José Haidar Farret, Municipal Secretary for Health,
to arrange the Medical Team and the supporting Mobile Unit for the 3
days of the Fair. It was confirmed by Dr. José Haidar Farret that his
team would provide assistance during the whole duration of the event,
including for the 4th Youth Mobilization and Camp. We trusted that the
Municipal Secretariat for Health would provide all the necessary

2. On July 2 2009, there was an enlarged meeting with various segments
of the health sector, representatives of the town hall and the central
organizing committee of the 16th FEICOOP. During this meeting there
was a long debate on which segments of the health sector wanted to
cancel all the events. However, the organizing committee reflected on
the issue and decided to cancel only the international events. This
decision was sent on the same day to Mayor Cézar Schirmer, who
manisfested his agreement in keeping only the national events.

3. On July 3rd 2009, all the segments of the health sector mentioned
beforehand had a meeting with the Public Prossecutor, Mr. João Adede Y
Castro. He recommended the organizing committee the cancellation of
all the events connected with the Fair and demanded the town hall the
total cancellation of all events. The documents were sent around 5PM
the same day to the organizing commission.

4. On July 4 2009, on the “Centro de Referência de Economia Solidária
Dom Ivo Lorscheiter”, in Rua Heitor Campos, s/n, in Santa Maria, we
had a meeting of about 170 representatives of the organizing
committees, which requested, in the presence of lawyers, a
reconsideration of the judiciary decision. This negotiation went until
July 7 2009 at16h30min, when it was announced in the press, by the
town hall, the APPROVAL of all the national events, since the
organizing committees have already cancelled all the international
events, with the agreement of Mayor Cézar Schirmer. On the very same
day, around 18h, the public prosecutor, Dr. João Marcos Adede Y Castro
imposed a cautionary lawsuit, demanding the cancellation of all the
national and international events.

5. On July 8 2009, around 10h30min, the organizers received a document
ordering the total and compulsory cancellation of all events, with a
penalty of R$ 50.000,00 (fifty thousand reais) for each of the
organizing entities of the events of 2009: Santa Maria Town Hall,
Diocese of Santa Maria, Banco da Esperança and Projeto
Esperança/Cooesperança in case they didn’t follow the orders.

6. From July 1 until July 12 2009, there were several meetings with
the central organizing committee of the Fair, as well as with the
partner institutions. We also received thousands of telephone calls
and E-mails requesting information on this situation.

The total cancellation of the Fair was announced just one and a
half days before the scheduled beginning of the national events,
making it impossible to warn the caravans that were coming from
distant regions and were already on the road. Still, despite the
cancellation, everybody that left their homes to come to our events
were well received by us.

We manifest our repulse and our deep indignation to public
prosecutor Dr. João Adede Y Castro nd judge Dra. Eloísa Helena
Hernandez de Hernandez, who did not have the capacity to listen to the
organizers, nor gave them the chance to exercise the right to
self-defense and clarification of the situation. This indignation
spread across all the national and international Solidarity Forums and
Networks at the world level, the very same movement that is
strengthening the construction of a new model of solidarity-based and
sustainable development with public policies through a new form of
organization, production and just, ethical and solidarity-based
production, trade and consumption.

In fact, these events represented a wound in the “Heart” of the
worldwide movement of Solidarity Economy

When the order for the definitive cancellation of all national
events came on July 8 2009, 15 caravans of participants have already
left from different regions of Brazil. Despite the cancellation of the
Fair, these caravans organized, in Santa Maria, a very significant
movement of sharing, exchange of experiences, knowledge and protest in
different areas of the town and the surrounding region. Among them was
a visit to the tomb of Dom Ivo Lorscheiter, at the Sanctuary Basílica
de Nossa Senhora Medianeira; the March of Hope, in which thousands of
people supporting the same cause claimed for Hope, Courage Justice and
Freedom, strengthening the Web of Hope in the perspective that
“Another World is Possible”.

Durign these three days, facing an exclusionary and oppressive
system that is generating a growing “excess mass” of poor and excluded
people outside the formal labour market, we reaffirmed the need and
the urgency of turning Solidarity Economy into a large-scale worldwide

With that aim, we are setting up for the month of January 2010,
in the framework of the commemorations of the 10th anniversary of the
World Social Forum, which will take place in the metropolitan region
of Porto Alegre, the 1st World Social Forum of Solidarity Economy and
the 1st World Fair of Solidarity Economy in Santa Maria, Rio Grande do
Sul, Brazil, just before the events in Porto Alegre. These events will
take place in the presence of all the worldwide networks of Solidarity
Economy affirming that “Another World is Possible” and that “Another
Economy is Happening”.

Santa Maria, RS - Brazil, 10 to 12 July 2009.

Signed by representatives of the 60 organizing committees of the 2009
Fair and the representatives of the 15 Brazilian states, together with
the Brazilian Forum of Solidarity Economy, the state-level Forums, the
partner organization and sponsors of the cancelled events.

“If you want to plan for a year, plant cereal;

If you want to plan for 30 years, plant trees;

If you want to plan for 100 years: Mobilize and organize the
mobilization of the PEOPLE” (Chinese Proverb).

Funding Public Art with Community Currency

Thoughts on the future of money
Funding public art with community currency?
Guillaume LeBleu
first posted here
August 15th, 2009

Last week, Interactive Architecture ran an article about the Singing-Ringing Tree sculpture in Burnley, Lancashire, UK. The video resonated very much with some of my recent thinking on how public art that is part of the commons can be at the heart of community economic development.

First of all, it reminded me of an interview of Douglas Rushkoff about his latest book Life Inc where he tells the story of how Middle Age cathedrals were built:

The Vatican and central Rome did NOT build the cathedrals. The funds came from local currency. They were what we would now call “demurrage” currencies that were earned into existence. Towns ended up creating more value than they knew what to do with! They started investing in their infrastructure and their windmills and their water wheels; and also in their future in the form of cathedrals and other tourist attractions.

The second thought I have had recently is that a currency is a unit of contribution to a common goal, and it is this common goal that gives the value to the currency, because the common goal provides a social incentive for everyone to participate in their own way, some by contributing directly to the common goal and being issued currency, others by contributing indirectly to the goal by accepting it for goods/services. In my view, individuals’ common goals or common individual goals are what initially create community, more than anything else.

A public art piece like the Singin-Ringing Tree is such a common goal. It creates long-term value for local businesses like the cathedrals of the middle-age. It creates identity and pride for the local population. It also create jobs.

One approach to funding art is to seek grants from tax-funded government development agencies, but this approach can be viewed as quite inefficient since it requires tax collection, projects competing for funding with other projects, and a hierarchical and highly centralized decision making process.

Another approach could be to use a community currency dedicated to the particular art project. It would work like this:

* The art project would issue acknowledgments for in-kind or monetary donations made to the project. Issuance would be made public.
* Businesses could show their support by accepting some of these acknowledgments for partial payment of goods/services they provide.
* The notes, if printed in paper, could bear an artist rendering of the public art piece to be built.
* After it is built, the public art piece would likely attract tourists to whom the notes could be sold as a “piece” of the art piece, likely for many times the face value in dollar, since originals would be in limited supplies. This would provide a natural way for the currency to disappear from circulation, and be replaced by new ones for new projects.

Tuesday, August 25, 2009

Print Your Own Money

Posted by Douglas Rushkoff, September 23, 2008 on BoingBoing blog

Everyone seems to want to know about the economy these days, so we may as well go there. It's as great an example as any of a program that not only got out of control, but became so prevalent - so accepted - that we came to take it for granted. We think of the economy and its rules as given circumstances, when they are actually constructions.

In brief, the money we use is just one kind of money. Invented in the Renaissance, and protected with laws banning other kinds of money, it has very particular biases that lead to almost inevitable outcomes.

I just finished a book (more on that later in the week), where I make the case that our highly corporatized society was really forged during the Renaissance. Aristocrats were losing power just as a new merchant class was gaining it. So they made a series of deals through which merchants' companies were granted monopoly charters from the monarchs in return for a sweet cut of the proceeds. Merchants got to lock in their status as newly rich, while monarchs stopped their own descent. Merchants supported the monarchs whose charters granted them exclusive access to new territories or industries, and monarchs got to do colonial expansion once-removed.

The invention of centralized, national currency was meant to support all this. Where localities had previously been free to mint their own currency based on the crops they had grown, now they were forced to borrow money from a central bank. This allowed the issuer of currency - the crown - to extract value from every transaction. Anyone who wanted to buy anything from anyone else had to run it through the central authority - coin of the realm - one way or the other.

This engendered competition for money, which was now a scarce currency issued at interest, instead of a local currency as abundant as the year's crop. Moreover, any business wanting to borrow money for equipment or development had to pay back several times what they had borrowed. This meant bankruptcy was built into the currency system. If a business borrows $100,000, for example, they'll have to pay back $300,000 by the time the loan is due. Where does that money come from? Someone else who borrowed.

Meanwhile, local currencies had the opposite bias of centralized currency. Local currencies lost value over time. They were really just receipts on the amount of grain that farmer had brought to the grain store. Since some of that grain was lost to rats or water, and since the grain store had to be paid, money devalued each year. This meant the money was biased towards being spent. That's why reinvestment in infrastructure as a percent of total revenue was so high in the late Middle Ages. It's why they built those cathedrals. They were local efforts, by people looking to invest their abundant wealth into real assets for their communities' future. (Cathedrals were built to attract pilgrims and tourism.)

Unlike local currencies, centralized currencies were biased towards retaining their value over time. Capitalism (in addition to being a lot of other things) is the way people get rich simply for being rich. Capital becomes the most important component in the capital/labor/resources equation. Since the purpose of the Renaissance innovations was to keep the currently wealthy wealthy, the currency was biased to favor those who had it - and could mete it out at high interest rates to those who needed it for their transactions.

What we witnessed over the past decades has been the necessary endgame of the scenario.

Today, in essence, the central bank lends money to a federal bank, which loans it to a regional bank, and so on, each bank paying interest to the bank above, and charging more to the one below. By the time the person or business who needs the money gets it, they're paying an awful lot of interest - so much, that it amounts to a drag on their ability to do business. The speculative economy, rather than fueling the real economy, drags it down.

The only way for banks - who run such an economy - to make more money is to lend more out. So they looked for more borrowers, as well as more places to park their cash. As a result, the things you and I depend on in the real world became investment vehicles. Homes, oil, name it. So the costs of all these things went up not because of any real laws of supply and demand, but because they had become new classes of investment.

As for finding new borrowers, well, that's why Bush kept talking about "home ownership" as the right of every American, why lending standards were lowered and, of course, why bankruptcy for individuals was made so much harder. They wanted to lend more money, but didn't have any more qualified borrowers. By changing bankruptcy laws, they meant to make it impossible for borrowers to cry uncle. (This was a 150-million-dollar lobbying effort by the credit industry, over the course of an entire decade.)

Eventually, the tension between the speculative economy and the real economy simply had to become too great. Lending money, in itself, doesn't actually produce anything. On the contrary, it strains those few who are still attempting to produce things. It's what turned so many companies into balance-sheet-driven outsourcing operations. Only so many bankers and investors can be supported by industry and homeownership.

We're not really watching an entire economy fail. We're watching a particular program fail. Only because it's not sandboxed like a bad plug-in in Google's Chrome browser, the resource leak sucks money from everywhere.

If we can adopt what we Boingers might call the "Happy Mutant Approach" to this crisis, however, this is not an entirely hopeless situation. Yes, corporations may lose the ability to keep us employed as the banking investment they depend on to operate dries up. But this corporate activity was always extractive in nature, getting (or, historically, forcing) people to buy mass-produced, and nationally distributed food and other goods that were once produced locally.

The collapse of centrally controlled commerce and currency simply creates an opportunity for local commerce and currency to revive. For people to learn to work and live together on a human, local scale - as the original free market advocate, Adam Smith, actually suggested. Admittedly, this would be a painful transition for many - but it's better than maintaining dependence on a fiscal system designed from the start to turn people and communities into extractable corporate assets. (Think about that the next time you're called up to "human resources.")

Whether or not we've had time to fully embrace the Craft/Maker/cyberpunk/Boing ethos, our ability to provide for ourselves and one another directly, locally, even socially instead of entirely through centralized commerce, will determine how well we can navigate the near future.

For starters, check out the LETS system and other complementary currencies for how to make your own currency, Bernard Latier's book The Future of Money free online, and Local Harvest for Community Sponsored Agriculture opportunities near you.

Money can be just as open source as any other operating system. It used to be.

Monday, August 24, 2009

Hey Bay Area! Take Your Businesses Back!

Workers Want Their Jobs, by Peter Ranis

The 136 workers who ended their strike against Bronx-based Stella D’oro Biscuit Co. in July could offer a test case of whether the public sector is willing to intervene on behalf of workers.

With the United States facing its greatest rates of unemployment and under-employment in decades — currently 9.4 and 16.3 percent respectfully — the efforts of Stella D’oro workers and neighborhood members will not be enough to save these jobs.

What is needed is a coalition that includes neighborhood and labor groups, as well as legal and political activists, that will push the New York City Council and New York State Legislature, to apply eminent domain laws to keep the Stella D’oro factory where it is by having it become a worker-run cooperative.

COMMUNITY ACTION: Union activist Judy Gonzales protests outside the Bronx-based Stella D’oro Biscuit Co. as the factory’s striking employees returned to work July 7 after winning an 11-month strike. The workers are now organizing to stop the owners from closing the plant. PHOTO: MICAH LANDAU

The Stella D’oro workers, who are represented by Local 50 of the Bakery, Confectionary, Tobacco Workers and Grain Millers Union, have shown themselves to be a coherent and solid group of workers, striking for 11 months to keep their jobs — without a single participant crossing the picket line. On June 30, the National Labor Relations Board ruled that Brynwood Partners, the owners of Stella D’oro, had engaged in unlawful labor practices.Hard on the heels of this victory, Brynwood Partners announced plans to close the factory by October.

The time is ripe, especially in the era of the Obama presidency, to use eminent domain to expropriate with compensation enterprises like Stella D’oro, which are in danger of being sold or moved out of state by their super-profit-seeking owners and managers.

In the United States, eminent domain has been used for many decades to make way for the construction of various public projects, ranging from highways and hospitals to municipal offices, schools and public parks.In 2005, the Supreme Court expanded the government’s power of eminent domain when it ruled in Kelo v. New London that the city of New London, Conn., could seize private property for reasons of “public purpose.”

According to the Court, this was a permissible public use under the takings clause of the Constitution, as the intent was to create jobs and increase tax revenues.In the preponderance of state constitutions, eminent domain is permitted for “stated public purposes” or a “recognized public purpose.” Compensation is paid at the market value of the factory at the time of expropriation.

In the case of Stella D’oro, the factory would be turned over, with an initial public subsidy, to the employees. Without owners and managers, the workers have the technical skills to run these factories as cooperatives while saving the huge salaries skimmed off the top by former managers.

If eminent domain was applied to keep the Stella D’oro factory in the Bronx, the purchase of the factory would be funded through a combination of state or city compensation (which would be paid over a period of years) along with a temporary public subsidy or low-interest loan guarantee, which would guarantee the factory’s productivity in the initial months of the transition.

This financial assistance would, in most cases, be less than the tax concessions, subsidies and other benefits routinely showered on private businesses that maintain or bring jobs into a community. And in the Stella D’oro case, no new land seizure is required and no displacement of homes or other businesses would occur.

Eminent domain is a mechanism of legislative public policy, no different from the power to tax or regulate workplaces to ensure the health and safety of employees and surrounding communities. It must be used creatively.

The current crisis of American labor requires new forms of alternative union associations that go beyond collective bargaining.Why shouldn’t federal recovery and stimulus measures be directed at workers who make products or provide services rather than subsidizing failing investment banks and insurance companies?

Brynwood Partners cannot be free of societal obligations. By outsourcing their functions, they have broken a social contract for which there must be reparations and consequences. Labor has few options, and the use of eminent domain would begin a debate about the obligations and potential of communities, city councils and state legislatures to dent the silence and retreat of American labor before the loss of jobs with livable wages.

Peter Ranis is the author of Class, Democracy and Labor in Contemporary Argentina. He has written extensively about the factory. This article is from The Indypendent August 14, 2009.

Saturday, August 22, 2009

The Capitalist City or the Self-Managed City?

(An excerpt of this article by Tom Wetzel originally posted here)

Anti-gentrification protests, rent strikes, and squatting buildings are examples of what I called class struggle over the built environment. Working class politics can't be reduced to the politics of the labor movement but derives from the various strands of struggle that emerge from working class communities; that is, communities of people who aren't bosses and whose life prospects are shaped by selling their time to employers.

Nonetheless, labor or workplace organizations are an important potential force for change because the system can't function without the work people do every day.

A weakness of the American labor movement is the domination of most national unions and large, amalgamated locals by rigid, professional cadre hierarchies that don't work the jobs that the members do. The professional cadre will tend to disfavor mass mobilization and militant struggle because of its risks to the union as an institution, and because it puts the rank and file into the center of the action. The power and careers of the hierarchy are based on their relative monopolization of expertise and levers of decision-making.

A different kind of industrial organization is needed to develop the capacity and self-confidence of workers for making their own decisions, controlling their own lives. Collective action and self-management of the struggle by the rank and file are crucial to developing a movement that workers can feel is "theirs."

In the past the labor movement in the USA has made major forward strides only during periods of mass upheaval, as in the years before World War I and the 30s. During such periods new types of organization tend to be created. A new labor rebellion would pose the possibility of new self-managed worker organizations emerging.

Since the emergence of the "new social movements" (of women, racial minorities, gay people, the disabled, enviros) in the 60s/'70s period, a number of the organizations these movements generated came to be dominated by professional/managerial cadres. Because class circumstances shapes the life prospects of women and people of color, for example, the needs of working class women or workers of color are often not adequately addressed by such organizations. My earlier discussion of New Urbanism illustrates how environmental organizations sometimes ignore the impacts of their proposals on working class communities.

Women, people of color, gay folks and the disabled have specific concerns that also reflect their class situation. There is no impermeable barrier between the "new social movements" and class politics.

To be a force for change the working class needs to be more than just a heterogeneous collection of population groups. Solidarity is at the heart of working class politics. Solidarity implies concern for others in a context where they are in struggle against those who dominate them in some way, and where it is understood there is at least the possibility that you might require their solidarity in the future.

Development of an intra-class alliance presupposes some process by which the concerns of specific groups can be communicated to, and become the concerns, of, other groups, thus expanding the boundaries of their solidarity. The concerns specific to women or people of color, for example, need to become concerns of other organizations such as unions or housing groups.

An important milestone in the development of the working class into a more cohesive force are unifying moments, situations where much of the population is drawn into thinking of themselves as "us" versus "them." The general strikes in San Francisco, Toledo and Minneapolis in 1934 were unifying events that shaped class consciousness in that period in the USA. What if, for example, the unions in California were to organize a mass march of tens of thousands on Sacramento to protect public workers against cuts, and to defend the communities they serve?

Class politics includes struggles around needs not adequately met through the market - affordable housing, public transit, democratic media, universal health care, good low-cost child care, and protection of the environment. Movements around such social goods can help to bring together a variety of sectors of the population.

Movements can and do make demands on the government for social goods that augment inadequate wage income. Concessions can sometimes be won through protest and struggle because the government must maintain a facade of "representing everyone" in order to maintain its legitimacy.

High-quality, low-fare public transit is a social good that can provide access to all that a city has to offer - jobs, housing, entertainment, medical offices and so on. A point to cheap fares is to ensure that everyone has equal access no matter how low their income is.

Neo-liberals, on the other hand, propose privatization and competing services for public transit. This program has been disastrous when carried out in Great Britain and Santiago, Chile. Competing services degrade accessibility because of the lack of seamless connectivity between all the operators. Private competition leads operators to creaming off a more affluent clientel, leaving areas and groups underserved.

Flexibility and ease of access for transit riders requires a network that is a single, comprehensive system of reliable, frequent services, with low fares and free transfers. A bewildering array of private operators who may go out of business next week creates barriers to travel flexibility and access for riders. This is why public transit was historically regarded as a "natural monopoly." In practice the main aim of transit privatization in the USA has been to drive down the wages of transit workers.

These considerations lead some to defend statist central planning. But this also has its problems: it subordinates the transit workforce to an authoritarian hierarchy, leads to management empire-building, and disempowers low-income bus riders who get overcrowded and inadequate services at high fares.

However, there is a third model for public transit based on direct negotiation between workers and riders. This would presuppose the creation of an organization through which the transit workers would manage the transit system. Many of the decisions in the day-to-day management of a transit system mainly impact the workers. The principle of self-management says people are to have control over the decisions that impact them. Self-management of the transit system avoids a bloated managerial hierarchy.

But many of the decisions about the operation of the transit system directly impact the riders - cleanliness and safety, reliability and frequency of service, fares. To empower the riders to have a say over these decisions a riders council could be created to negotiate with the workers organization over the issues that impact riders. The direct worker/consumer negotiation model could be applied to other social services such as health care, education, and public utilities.

Applying this to my earlier discussion of community land trusts, we could envision a CLT negotiating construction with a non-profit construction workers co-op.

Direct worker/consumer negotiation points us in the direction of a global alternative to capitalism. Participatory economics (ParEcon) is a vision of a non-market, socially-owned economy based on grassroots participatory planning and direct negotiation between workers and consumers. The building blocks of a participatory economy are self-managing bodies such as workplace councils and neighborhood assemblies. The neighborhood bodies provide the channel for consumer input.

In ParEcon people in their councils develop proposals for what is to be produced. Both individually and in groups we figure out what we want to do at work or to consume. These proposals filter outward through organizations over a larger geographic scope, depending on where the proposals would have impact. Through a give-and-take process the proposals would be refined to develop comprehensive agendas for what is to be produced. The essence of ParEcon, says Michael Albert, is "a cooperative, self-managing negotiation of collective well being rather than a top-down or competitive pursuit of narrow advantage."

For cities, ParEcon poses the possibility of a horizontal, self-managing regionalism in planning investment in public goods such as transportation and other infrastructure and in meeting social needs such as housing, child care and health care.

The way that we organize today helps to determine future possibilities. Self-managed mass organizations are necessary if the working class is to develop the self-confidence, skills, and self-organization that would enable it to emancipate itself from subjugation to an exploiting class.

Building self-managed institutions (CLTs, media collectives, etc.) and developing mass organizations (such as unions) through which rank-and-file people can self-manage their struggles is prefigurative in the sense that it points beyond capitalism, towards the Self-managed City.

Tom Wetzel has worked as a gas-station attendant, philosophy teacher, typesetter, and technical writer. He is president of the San Francisco Community Land Trust.

Friday, August 21, 2009

Recipe for Successful Community Currency

By Paul Glover, founder of Ithaca Hours

Printing local money sets the table for a feast provided by your city or town. Here are my suggested ingredients for spicing local trade with local cash.

1. HIRE A NETWORKER. During the past 15 years, nearly 100 American community currencies have come and gone. Ithaca’s HOURS became huge because, during their first eight years, they could rely on a full-time Networker to constantly promote, facilitate and troubleshoot circulation. Lots of talking and listening.
Just as national currencies have armies of brokers helping money move, local currencies need at least one paid Networker. Your volunteer core group-- your Municipal Reserve Board-- may soon realize that they’ve created a labor-intensive local institution, like a food co-op or credit union. Playing Monopoly is easier than building anti-Monopoly.
Reduce your need to pay the Networker with dollars, by finding someone to donate housing. Then find others to donate harvest, health care, entertainment.

2. DESIGN CREDIBLE MONEY. Make it look both majestic and cheerful, to reflect your community’s best spirit. Feature the most widely respected monuments of nature, buildings, and people. One Ithaca note celebrates children; another displays its bioregional bug. Use as many colors as you can afford, then add an anti-counterfeit device. Ithaca has used local handmade paper made of local weed fiber but recently settled on 50/50 hemp/cotton. Design professionally-- cash is an emblem of community pride.

3. BE EVERYWHERE. Prepare for everyone in the region to understand and embrace this money, such that it can purchase everything, whether listed in the directory or not. This means broadcasting an email newsletter, publishing a newspaper (at least quarterly), sending press releases, blogging, cartooning, gathering testimonials, writing songs, hosting events and contests, managing a booth at festivals, perhaps a cable or radio show. Do what you enjoy; do what you can.
By 1999, Ithaca HOURS became negotiable with thousands of individuals and over 500 businesses, including a bank, the medical center, the public library, plenty food, clothes, housing, healing, movies, restaurants, bowling. The directory contained more categories than the Yellow Pages. We even created our own local nonprofit health insurance.
Imagine millions of dollars worth circulating, to stimulate new enterprise, as dollars fade.

4. BE EASY TO USE. Local money should be at least as easy to use as national money, not harder. No punitive “demurrage” stamps-- inflation is demurrage enough. No expiration dates-- inspire spending instead by emphasizing the benefits to each and all of keeping it moving. Hungry people want food, not paper, so hard times can speed circulation.
Get ready to issue interest-free loans. The interest you earn is community interest-- your greater capability to hire and help one another. Start with small loans to reliable businesses and individuals. Make grants to groups.

5. BE HONEST AND OPEN. All records of currency disbursement are displayed upon request. Limit the quantity issued for administration (office, staff, etc) to 5% of total, to restrain inflation

6. BE PROUDLY POLITICAL. Local folks from all political backgrounds find common ground using local cash. But local money is a great way to introduce new people to the practicality of green economics and solidarity. I enjoyed arguing with local conservatives, then shaking hands on the power we both gain trading our money. Hey, we’re creating jobs without clearcutting, prisons, taxes and war!
You can make it likelier that your money is spent for grassroots eco-development by publishing articles that reinforce these values. By contrast with global markets, our marketplaces are real places where we become friends, lovers, and political allies.

Glover teaches at Temple University, and consults for
community economic development.


Paul Glover
(215) 805-8330

Tuesday, August 18, 2009

The Case for Prefigurative Economics

There has been a lot of buzz about possible reforms to the current economic system in the US and alternatives to it. I am concerned that this effort is being led by similar mentalities that created the current highly dysfunctional and unjust system. Let me explain. The current system was designed by the ruling class, mostly white men from privileged backgrounds. And the new system is being designed by mostly wealthy white men. Though they may give lip service to things such as increasing relative equality, you will rarely hear them speak of changing the power structure which gave birth to and maintains this economic system and they are not interested in participatory decision-making processes. They still think that they have the best ideas and that the undereducated, relatively unsuccessful bulk of the population doesn’t know how to run an economy or what is actually in their best interest.

There are economists, techies, politicians, social entrepreneurs and venture capitalists who think they have the latest and greatest gimmick (sometimes inaccessible, high tech tools) that will help save the world. Though some of their ideas may be good, they have done little reality checking with the rest of the population and what those people would actually want their economy to look like. They are not interested in listening to and incorporating ideas from regular folks. Underlying this I think is a dangerous attachment to their own egos. They want to assuage their guilt and at the same time become or remain rich or famous. I put Bill Gates in this category. They are not willing to get down with the people to hear their ideas or do the grunt work of building the new economy. They want fancy, sexy applications that they will get credit for. They are not interested in sharing power, the base of their wealth or acknowledgement. They are not interested in being a part of the most basic unsexy things that need to happen to create change. And they often say things like the system we have is not so bad, it just needs some adjustment and innovation. Tell that to the millions who have died from hunger, pollution and hazardous, slave-like work conditions.

Yes, I may be exaggerating the point here in order to illustrate what I see as a potentially serious threat to the integrity of the restructuring of the new economy. History is littered with good intentions gone wrong (as well as nefarious intentions). Royalty, politicians, religious leaders, CEOs, financiers, academics, scientists, representatives in the UN, World Bank and IMF all think they know best. Though they rarely do unless they are they are the best of listeners, humble and not corrupt or driven by ego. It is not that we should shut these people out, we need everyone’s hands on deck, we are all in this together and everyone has a piece of the truth. But I find that even when I am giving the space to speak among these men, I am rarely listened to. And I also know that your experience shapes your perspective on reality and your perspective shapes your decisions. I would not want decisions about our economy to be based on a small, relatively homogeneous range of experience that would affect vast numbers of diverse kinds of people. We don't need more charity, modest reforms and techno-fixes handed down from high pedestals, lest we keep living the same story over and over again. We need to build the new economy from the grassroots up with collective participation of the people. If inefficiency is the price of collective, participatory decision-making, I'd choose less stuff and more peace and justice.

Friday, August 14, 2009

Towards a Democratic, Cooperative and Caring Economy

This blog was first posted on Matt Gonzalez's blog "As It Ought to Be"

There has been a lot of talk lately about how we should reform our economy. In order to figure out where we want our economy to go, we need to evaluate where we currently are. The economy we operate within in the US is, by many measures, not taking care of our most basic needs. The US spends more on healthcare than any other country, but is now ranked 50th in longevity and 47 million people in the US are without health insurance. 3.5 million people, 39% of them children, currently experience homelessness every year and 30% of Americans are on the edge of poverty. 36.2 million people live in households considered to be food insecure, including 12.4 million children. Even by the most conservative standards, the US ranks 23rd in world happiness despite its enormous wealth, making up one quarter of the world’s GDP. We work longer hours for less pay doing unsatisfying work and have little time to connect with each other, as the social fabric of our communities slowly disintegrates. Why is wealth being pulled away from the things that we need and the things that make us truly happy?

Where money flows is partly determined by where it comes from. US dollars are issued solely by the Federal Reserve (a private financial institution) as debt (usually from loan agreements, including to the US government), which means it must be paid back with interest. The money to pay for this growing debt comes out of one person or institution’s pocket and interests accumulates in another’s pocket, creating inequalities and pooling wealth in fewer and fewer hands. The Federal Reserve attempts to set the value of the dollar by controlling the supply of it as a scarce resource. So even though there is enough food or housing for everyone, there will not be enough money in the hands of those that need it to pay rent or buy food, especially in times of economic recession. Markets also create artificial scarcity for the sake of increasing value, making only somewhat scarce resources and very abundant resources seem very scarce.

Scarcity created by the centralized monetary system and the market encourage unnecessary competition and greed out of fear that there isn’t enough resources out there for everyone. In the US, the top 10% of the population now possesses 80% of all financial assets while the bottom 90% holds only 20%, a significant threat to democracy, as concentration of wealth also leads to concentration of unchecked power. A continually growing economy is not sustainable, a boom-bust economy is not secure, and an unjust economy will lead inevitably to other social problems.

With the current economic crisis, we have an opportunity to create tools and structures that facilitate a shift away from wealth accumulation and competition for scarce resources to a more democratic, cooperative, and caring economy. How do we start to make this transition? We must start to decentralize our economy and develop aspects of it that have disappeared after decades of free market and capitalist fundamentalism.

If you can imagine, we operate within three economic circles. In the innermost circle, immediate family and friends give freely amongst each other (though less than they used to) – this network of trust is primarily a gift economy, usually with no expectation of direct reciprocity. Our local communities used to provide the middle circle of economy, meeting most of our basic needs that our families and friends couldn’t. This middle circle was made up of local government and also people and business we knew well, trusted and exchanged with regularly, usually reciprocally through barter or exchange of money. Evaluations of who needs what the most, who we trust, and who deserves the most would influence our trading. Today most of this middle circle is gone. Now the outer circle, consisting exclusively of anonymous monetary exchanges in the global economy, determined primarily by the highest market value or profit, has consumed most of the two inner circles. We have very little control over this outer circle of trade and it has done great damage as it is run by businesses and people who have little vested interest in or responsibility towards the communities that they affect.

In order to create a better economy, we need to redevelop the inner and middle circles and reduce the dominance of the outer circle. There are many grassroots projects already underway to develop the inner and middle circles – worker cooperative development organizations, cohousing and cooperative housing projects, community credit unions, land trusts, urban community gardens, bicycle kitchens, free clinics, sustainable local investment programs, ridesharing, recycling stores, and community currencies are just a few examples. Though we can’t completely jump ship right away from the current economic system, we can slowly build alternatives as a transition to the new economy. Community currencies, though not a panacea, can be an especially potent fulcrum point in making this shift.

Regional or municipal community currencies that are well constructed can help redirect wealth away from corporations and towards local businesses, local governments, and not for profit groups. They can also provide stability in a roller-coaster market economy so that people don’t lose their jobs and public services don’t need to be cut. Local currencies re-pattern behavior by encouraging local exchanges, relationships and local self- and small business employment, increasing local community self-sufficiency and sustainability. Spending locally results in three times the income effects, three times the wealth effects, three times the jobs, and three times the tax income, before it leaves the community. Community currencies combined with import replacement could drastically increase local wealth and stability. Ithaca Hours and Berkshares paper currencies are two good examples of paper currencies successfully being used in the United States, as well as the Worgl in Austria and the Chiemgauer in Germany. Over 300 alternative scrips issued in North America during the Great Depression.

For other needs and wants, we should create soft currencies within the middle circle that transition us towards the gift economy and indirect reciprocity. We should design these currencies so as to maximize feelings of abundance and trust in communities. Soft currencies include mutual credit systems like time banking and LETS (Local Employment/Exchange Trading Systems). Time banks are based on hour-for-hour exchange that reduces the emphasis on keeping score, creates abundance because we all have some time and skills to offer, and reduces inequalities through a single standard metric, the hour, rather than the market value of that hour. Because there is no interest in this system, there is no incentive to accumulate credits and no problem with being in debt. Wealth then circulates more fluidly throughout the community, which means people are taking care of each other. Time banks and other mutual credit systems now number in the hundreds in the US and in the thousands across the world. The most successful mutual credit system is the Swiss WIR bank, a business to business trading and accounting system, which has captured a significant portion of the economy and buffered it from depressions.

In order to create a more loving economy, we should also create as many opportunities for gift giving as possible. Gifting builds a collective consciousness that we are all in this together and we trust each other to take care of each other. There are many examples of successful gift economies. The entire country of Mali functions primarily on a gift economy. Other examples of gift economy are practiced in Black Rock City by participants of Burningman and in the Pacific Northwest by indigenous peoples during potlatch ceremonies. Spreading around the world contagiously are small events which epitomize the gift economy, called Really Really Free Markets, in contradistinction to the capitalist free market, which actually gives nothing away for free and tries to commodify everything. In a Really Really Free Market, skills are shared, services are offered, music is often is provided, and goods are given away, but no money, barter, or advertising is allowed. Everyone receives reward merely by seeing others benefit from their gifts and they may take whatever they need, whenever they need it, building trust that all will be provided for.

As we grow these inner and middle circles, we will see a shift toward a more democratic, cooperative, caring , and dare I say, loving economy. Our currencies, businesses, banks, and investment mechanisms should all be based on our highest values and the kinds of relationships we want rather than these tools and structures determining our relationships and our values. It is time to move forward consciously, deliberately and and fearlessly to create the new economy.

Check out the Really Really Free Market and start one near you. Check out Bay Area Community Exchange or the Complementary Currency Resource Center and start a community currency. Check out JASecon and create a whole new economy in your region.

Thursday, August 6, 2009

What is a timebank?

A timebank is a community currency system designed to pool the resources of the community and distribute those resources in a decentralized way. Timebanks are a kind of mutual credit accounting system, where credit between two parties is created at the time of transaction. While there may not be enough US dollars in a community to create needed exchanges, mutual credit is abundant in that anyone can provide a service and get credit if they have the time.

One member is debited a certain number of hours in her account in receipt of a service and another member is credited the same number of hours in his account for giving a service. Each member has a balance, which is the sum of their credit and debits. When a member gives as much as she receives, her balance is zero. Negative balances are both allowed and encouraged as they represent circulation of resources within the community.

Timebanks also function as a directory of resources, listing the members of the system and what their gifts, offers and requests are. This helps build a stronger local economy by enabling people to identify others that may be able to meet their needs locally. It also helps people to get know others that they might not otherwise meet in our neighborhoods.

One aspect that distinguishes timebanks from other kinds of mutual credit systems is that everyone's time is valued equally. This aspect encourages people whose time is undervalued in the market - women, the elderly, people of color, and the disabled - to join this more equitable system. On the other hand, people who are valued higher in the market, because of physical traits, training, or education often join timebanks because they like being part of a more equitable system and realize its importance in creating a healthy and peaceful community.

When time offered based on the hour and not based on trying to get the highest market value, this helps to create a more cooperative culture since people aren’t competing to get the best deal. It creates a consciousness shift where you don't have to focus on keeping score so much because there is less scarcity in the system, allowing other values, context and relationships to emerge and determine the perception of the value of the exchange. This in turn encourages a more giving, caring and trusting culture. Additionally, when people aren't rewarded for work with money at an amount determined by the market, their hidden gifts and passions can emerge, creating a society of more happy and self-actualized people.

Sunday, August 2, 2009

Living in the UXA: Oakland Currency During the Great Depression

Living in the UXA: Oakland Currency During the Great Depression, by John Curl

At the height of the Great Depression, a group of unemployed Oakland workers decided to take matters into their own hands. The system wasn’t working, so they set up their own system. Money was nearly worthless, so they decided to live by barter. They called themselves the Unemployed Exchange Association and they soon went on to write a remarkable chapter in American economic history. This is their story.

Ju1y 1932. The economy has stopped-cold. Factories are locked, money is scarce. One out of seven Californians is unemployed. Social welfare programs are almost non-existent. Large numbers are destitute, hungry. Buildings stand vacant, boarded up. Food prices are next to nothing, but many thousands have nothing at all. California fields are rotting with tons of fruit and vegetables. Few farmers have money to pay harvesters; there is no market; many small farmers are losing their land. Thousands of children, women, and men have taken to the highways and rails, searching for survival.

"Hoovervilles," shantytowns of the homeless, have sprung up around the country over the past three years. The largest in the Bay Area is "Pipe City," near the railroad tracks by the East Oakland waterfront, where hundreds live in sections of large sewer pipe that were never laid because the city ran out of money. One of Pipe City's frequent visitors is Carl Rhodehamel, once an electrical engineer at GE, a cellist, an inventor of several key technological developments in radio and early “talkies," an orchestra conductor, a composer whose "Little Symphony" had once been a favorite with KGO fans. But now Rhodehamel is unemployed and down on his luck.

But not for long. There is a streak of genius in him that will sweep him out of Pipe City and into the leadership of an organization that will stir California and the country.

Carl Rhodehamel

Rhodehamel and two others find an abandoned grocery store not far away, in Oakland’s Dimond-Allendale district that can be used for meetings. Soon a group of six unemployed men begin to meet and discuss ways out of their problems. All are skilled and experienced workers, but all realize it could be years, if ever, before they'll find work in their fields again. Since the system isn't working to provide their needs, they decide to form their own system. Since money is scarce, they dispense with money altogether. From now on they will try to provide themselves with everything they need to live by barter.

They begin by going door-to-door in the neighborhood, offering to do home repairs in exchange for "junk" from people's basements and garages. But to make their system really work they realize they'll have to grow larger. They distribute fliers, trying to gather all the unemployed in the neighborhood into the group.

On the evening of July 20, 1932, some twenty people meet at the Hawthorne School and organize the Unemployed (or Universal, as they'd later call it) Exchange Association, a title they immediately abbreviate to UXA. The X stands not only for exchange, but also for the "unknown factor" in an algebraic equation.

The UXA offers a new social equation to one neighborhood in Oakland – one whose echoes will soon be heard around a nation desperate for change.

* * * * *

I first heard of the UXA in 1978. It was election time at the Berkeley Co-op grocery, and I was looking at photos and statements of board candidates in the Co-op News. Alongside a picture of a thoughtful ageless face, surrounded by a long mane of white beard and hair, was a candidacy statement different from all the rest. It began with a description of the UXA, and went on to call for the Co-op to expand its role as a marketing organization by undertaking the "ownership of the natural resources used to produce most of the goods it sells." The candidate pointed out that "time-killing" had been a fatal disease for the UXA and chided the reigning Co-op establishment for a similar affliction. The candidate's name was Oser Price.

The UXA sounded so unusual that I cut out Price's statement and saved it. I don't remember if I voted for him but as he said to me later, "I didn't run to get elected; I ran to get this information out."

A couple of years later at an Oakland Museum exhibit of California history in photography, I saw several pictures of the UXA taken by Dorothea Lange. My interest caught, I began rummaging through card catalogs in various East Bay libraries for more information, and. discovered a surprising wealth of literature written in the early '30s about the "self-help movement" and particularly about the UXA. I realized I had stumbled upon an important but now forgotten corner of American history, a visionary social movement whose collapse had left artifacts scattered all over my own back yard...

“We are not going back to barter: we're going forward into barter. We're feeling our way along, developing a new science.” – Carl Rhodehamel

Their first focus was the neighborhood itself. They began by fixing up each other's homes and circulating unused articles of every variety among themselves, cycling the useless into the useful. There had been little work in the neighborhood in the three years since the crash of 1929, so there was a great backlog of home repairs to be done. An abandoned grocery at 3768 Penniman became their first storeroom and commissary; it was soon overflowing with household and industrial articles. Broken items were repaired or rebuilt. The neighborhood, previously immobilized and choked with despair, was suddenly bustling with activity and confidence. People poured into the new organization.

U.X.A. Coordinators (L-R) foundry, lumber, odd jobs; trading, graphic arts, special contacts.

They soon began sending scouts around Oakland and into the surrounding farm areas, to search out salvageable things they could acquire in labor exchange deals. Labor teams followed. All work was credited by a point system; one hundred points were awarded for an hour's work. UXA members exchanged points they'd earned for a choice of items in the commissary. Each article brought in was given a point value that approximated the labor time that went into it, with some adjustment for comparable monetary value. Many services were also offered for points, eventually including complete medical and dental care, auto repair, a nursery school, barbering, home heating (firewood), and some housing. At the UXA's peak it would distribute forty tons of food per week.

They called their system "reciprocal economy." They made no distinction in labor value between men and women, unskilled and skilled, lesser and greater productivity. Members could write "orders" (like checks) against their accounts to other members for services provided. It was all done on the books, without a circulating script.

A General Assembly made up of all UXA members held final power. The assembly selected an Operating Committee in semi-annual elections, to coordinate the functions of the group. The UXA was divided into various sections: manufacturing, trading, food, farming, construction, gardening, homeworking, communications, health, transportation, bookkeeping, maintenance, fuel, personal services, placement, and food conservation. There was also a sawmill and a ranch. The headquarters' staff represented a section as well. Coordinators from each section met with the Operating Committee to form a Coordinating Assembly, the basic ongoing decision-making body.

The Operating Committee met four nights a week at the UXA's headquarters on East 14th Street at 40th Avenue. These were open meetings at which plans were hashed out in democratic discussions. Anybody with an idea – member or not – was welcome to sit in and was heard after the day's job commitments had been dealt with. The only rule was to speak one at a time.

On Friday nights the section coordinators joined in and formed the Coordinating Assembly. Oser Price was coordinator of the manufacturing section between 1932 and '35. He describes the meeting: “The Coordinating Assembly had a big round table – nobody was at the head. There we held weekly brainstorming, sessions. We could solve some of the most difficult problems by everybody tossing in their ideas - no matter how wild they were – and we would come up with answers that would work."

The section coordinators were appointed by the Operating Committee, with the workers in each section holding veto power. The coordinators had no authority over members; and could be recalled at any time. Power flowed from the bottom up. The workers in each section decided issues relevant to their work, approved or disapproved committee and assembly actions, and determined the admittance of new members into their section. Outsiders often expressed amazement at how well they functioned with no boss, foreman, or manager. In order to make decision-making viable, the numbers in each section were kept down to about twenty-five; when sections got much larger than that they split into two. "We were too busy," Oser Price says, “scratching around getting all the things we needed to survive to have many hassles."

Oser Price at a former U.X.A. site in Oakland in 1983

News of the new organization quickly reached certain vigilant ears. Word was passed to the proper channels of the Oakland police department that the UXA was a "revolutionary" group with "Communist" leaders. Meetings were raided by the Red Squad. The commissary was once closed on the pretext that they were violating an ordinance prohibiting the sale of food and clothing from the same store. Utilities were shut off.

But the UXA bounced back, explaining to whomever would listen that organizing to barter was not the same thing as organizing to overthrow the government. Despite the harassment, the UXA grew, within only six months, to a membership of 1500. They began producing articles for trade and sale. They set up a foundry and machine shop, woodshop, garage, soap factory, print shop, food conserving project, nursery and adult schools. They rebuilt eighteen trucks from junk. They branched outside of town maintaining a woodlot in Dixon, ranches near Modesto and Winters, and lumber mills near Oroville and in the Santa Cruz mountains.

A typical Coordinating Assembly meeting:

Twenty-five women and men crowd about the, huge round meeting table, elbows touching. Another twenty form a second circle around them. In the center of the table is a foot-high lighthouse; as its light revolves, the letters UXA flash. It's already past 8 p.m. Better get started; there's a lot to get done. The secretary takes down the day's commitments, detailed in an indexed looseleaf book and written on small yellow slips of paper. They go through the commitments one by one. What has been done and what not? What deals made? Which jobs have progressed, which have been finished? The different coordinators speak about their sections. They quickly go through twenty or thirty items. Fields have been harvested; trenches have been dug; wheelbarrows have been salvaged; cars have been painted; orders have come into the foundry; carpentering and plastering have been done; a deal has been made for wood; arms have been made for dental chairs; a contract to build a barn has been agreed on; a barge and tug have been leased to haul produce and wood; a group of apartments have been rented for labor and services; a wrecking deal has been discussed; an idle planing mill has been discovered; an order for office furniture has come in; a gasoline trade is in the works; a potato chip slicer is being converted for a sauerkraut project. Voorhies reports that a farmer near Hayward will trade sixty percent of his apricot and plum crops for harvesting labor. Can the UXA do it? Rutzebeck of personnel says labor is available. Hill is made coordinator. Price of manufacturing reports that the swing saw bearings have been cast and are ready. Hanson says the saw needs a new motor. Llewellan knows of a motor but the owner wants a piano. Pugh says the trading section has one listed: they can get it for digging out part of a cellar, but it needs tuning. Is a piano tuner on the exchange list? Yes, three of them. After all the items are finished, there is a general discussion of ideas for new activities, how to get more labor power, and how to build leadership. By that time it is 11 p.m. and, since all have had their say, the chair, Rhodehamel, calls the meeting to a close. But people linger afterward; discussion continues far into the night. Impressed with their success, they talk about how to implement barter on a social scale, so all who can find no place in the capitalist economy can join into cooperatives and create a new American way of life. They are convinced that a "reciprocal economy" could bring the whole country out of the Depression – from a U.S.A. of despair for the unemployed to a U.X.A. of mutual aid and hope.

The U.X.A. in Oroville and Dixon

My search for the UXA ultimately led me back to the present: in the spring of 1983 I finally opened the phonebook and discovered, to my excitement, that there was a listing for Oser Price. I had to call several times before I caught him in. Oser at 82 leads a bustling, energetic life. Most mornings find him at a Laney College workshop practicing his welding, an art he has been developing in depth over the past few years; most evenings find him at one or another of his many involvements or at friends' homes. I found him eager to talk. His memories of those days, fifty years ago, seem scarcely dimmed or misplaced in his sharp mind. He remembers with particular clarity what it was like to be suddenly – and hopelessly – unemployed. "When you were unemployed in those days, you were on your own (or on your friends). There weren't any benefits at all..."

* * * * *

“When, as a last resort, we join together to work for one another and share the result of that work, we make a great discovery: that the other's success is our own." - Carl Rhodehamel.

The UXA was far from the only labor-exchange group in the Bay Area. It was part of what soon became a national phenomenon, a mass movement of "self-help'" or "unemployed" associations. In the summer and fall of 1932, at the same time as the UXA was forming, similar groups were organizing around the state and across the country – over one hundred in California alone. They appeared wherever conditions were ripe among the unemployed and underemployed, particularly near farming areas. It was truly a spontaneous mass movement, an idea whose time seemed to have come. By the spring of 1933, there were at least 100,000 members in about one hundred seventy-five groups in California, and another 50,000 in one hundred groups around the nation. Over the next two years, more than half a million people would be involved in at least 29 states. California was clearly in the forefront of the movement, with about two-thirds of the groups, many of the most successful ones, and (along with the Seattle area) some of the earliest.

Numerically, the largest concentration of self-help workers was in the Los Angeles - Orange County area, where about 75,000 people in 107 groups participated in the harvest of fall 1932. Among the earliest southern groups were the LA Exchange, the Compton Relief Association, and the Unemployed Association of Santa Ana. Since farming areas were' easily accessible in the south, most of these groups were focused on produce, and organized large numbers of people to harvest in exchange for a share of the crop.

Unemployed Citizens League Commissary, Santa Monica

Meanwhile, there were at least 32 self-help groups in the Bay Area: 22 in the East Bay, nine in San Francisco and the Peninsula, one in San Jose. The Berkeley Unemployed Association, at 2110 Parker Street, had sections that included sewing, quilting and weaving, shoe repair, barbering. In addition, they had a wood yard, a kitchen and dining room, a commissary, a garage, a machine shop, a woodshop, and a mattress factory. At its height the BUA involved several hundred people, and gave them full medical and dental coverage. A visitor to the woodshop in December '34 watched them working on office desks and furniture, as well as fruit lugs for the farm exchange section. Like many other groups, they later changed their name to the Berkeley Self-Help Cooperative; they no longer considered themselves unemployed.

A few blocks away on Delaware Street was the Pacific Cooperative League, which operated a garage, flourmill, wood yard, and store, as well as canning and weaving projects. It also ran a newspaper, the Herald of Cooperation, later called the Voice the Self Employed. The PCL laid claim to having organized one of the earliest labor exchanges of the Depression, when they traded an Atascadero rancher their harvesting labor for part of his apricot crop in September 1930.

Pacific Cooperative League in the Berkeley Hills

The San Jose Unemployed Relief Council (later called the SJ Self-Help Co-op) was formed by a group of laid-off cannery workers. They soon had a wood yard, a fruit-and-vegetable drying yard, store, laundry, farm, soap factory, barbershop, shoe shop, commissary, sewing project, and contracted for a wide variety of jobs and services. At their height, they were about twelve hundred strong.

The Peninsula Economic Exchange, in Palo Alto, was organized by a group of unemployed white-collar workers, professionals, and bankrupt merchants. With about a hundred member families, they operated a store on Emerson Street, a farm, a cannery, a wood yard, and a fishing boat. Unlike most of the other Northern California groups, they issued scrip – in-house currency – to members in exchange for hours worked. "Scrip exchanges" were more common at first in Southern California, but were usually plagued with problems.

Self-help groups were bursting out all over in the early '30s, but none were more highly developed than the UXA, which most observers of the movement believe to have been the most successful self-help cooperative in America.

* * * * *

Oser Price was raised in the early days of the century near Colusa, a small Northern California town, and has lived all his life in this area. "I'd been working at Caterpillar Tractor as a tool designer," he told me. "The stock market crashed in October '29, and my job came to a grinding halt the next June. Fortunately my wife was working as a night information operator at the phone company." Price spent the next two frustrating years looking for steady work or any work at all; they lived marginally off her small earnings.

When they first heard of the UXA it had already been going for a number of months; it sounded good and they quickly joined. The organization was trying to jump into a program of expanded production. The UXA didn't take long to recognize Oser's broad understanding of industrial arts and skills, and made him manufacturing coordinator. “I was in charge of the foundry, machine shop, soap-making; I had every sort of production under my jurisdiction."

Time has not dimmed the pride that rang through Oser's voice as he recalled this history. I was fascinated . . . .

With Roosevelt's New Deal came the Federal Emergency Relief Act (FERA). To the cooperatives, it was a mixed blessing. Carl Rhodehamel, H.S. Calvert of the Pacific Cooperative League, and other California leaders were called by the congressional committees drafting the bill to confer on provisions concerning grants to cooperatives for means of production. Due in part to their efforts, funds were suddenly available. Rhodehamel, however, argued – in vain – that they should not be outright grants, but loans repayable in labor exchange. Rhodehamel felt so strongly about the issue that he tried to prevent the UXA from applying for a FERA grant, out of fear of the strings attached. He was overruled by the membership. Still, although the feds considered it a grant, the FERA money was recorded in the UXA books as a loan.

By the end of 1934, FERA had distributed $411,000 to 81 groups. The UXA received grants for their sawmill, for printing equipment, gardening, and canning facilities. The Berkeley Self Help Co-op got money for their furniture, mattress, and shoe operations. The PCL used FERA grants for housing, milling, and weaving operations.

Though this federal money was welcome and helped the cooperatives expand their efforts, it also turned out that Carl Rhodehamel was right when he predicted that there would strings attached. FERA grants were used as a carrot to influence the internal affairs of many co-ops. A typical case was the San Jose Co-op, whose grants were held up due to the presence of a “radical faction” in the organization. This touched off a bitter struggle in the group. The “Reds” lost and the money came through.

Although FERA money proved to be a double-edged sword for the self-help movement, the co-ops survived it. The real kiss of death for the movement lay ahead: the WPA. But before that kiss descended, the co-ops were to spark one of the great grassroots electoral uprisings in American history.

In September 1933, Upton Sinclair, novelist, chronicler of American social reality, and a long-time member of the California Socialist Party, suddenly changed registration and threw his hat into the ring for the Democratic gubernatorial nomination. He brought with him a program he called EPIC: End Poverty in California.

Upton Sinclair

With “Production for Use” as its rally cry, the EPIC plan would have created state agencies to take over idle farms and production facilities and turn them over to the unemployed. Sinclair’s platform vowed to “establish State colonies whereby the unemployed may become self-sustaining . . . to acquire factories and production plants whereby the unemployed may produce the basic necessities required for themselves and for the land colonies, and to operate these factories and house and feed and care for the workers . . . , [to] maintain a distribution system of each other’s products . . . thus constituting a complete industrial system, a new and self-sustaining world for those our present system cannot employ."

Public bodies – the California Authorities for Land, for Production, and for Barter – would preside, respectively, over rural, urban, and exchange activities. There were also provisions for a series of social welfare programs (there were virtually no state programs at the time), and for a general redistribution of the wealth downward through changes in tax laws.

EPIC took its immediate inspiration from the self-help cooperatives, with the UXA as the classical model. To Sinclair, the cooperatives were living proof that these were not idle utopian dreams, but could actually work!

Hjalmar Rutzebeck, personnel coordinator of the UXA, took a leave of absence and became a key aide in the campaign. EPIC clubs sprang up around the state like grass after rain – ultimately 2000 of them. The EPIC News reached a circulation of 1.5 million.

Most of the cooperatives decided it was out of their sphere, as economic organizations, to formally endorse electoral candidates, even Sinclair. Sinclair agreed. But large numbers of members worked on the campaign. "Of course 'self-help' was production for use," Sinclair said later, "and those people automatically became EPICs."

Sinclair had garnered 50,000 votes running for governor as a socialist four years previously. Now he swept the 1934 Democratic primary with 436,000 votes, more than the other six candidates combined. But the California right, entrenched for decades, had not yet begun to fight.

After the primary upset, most of the Democratic old guard defected to the Republicans; the state organization ceased to be of any support. The news media, which at first had usually reported favorably on the self-help movement and on Sinclair, now turned around and attacked without quarter. Almost every newspaper and radio station came out against him. An anti-EPIC newsreel was shown in every theater in the state. Gigantic sums of money were spent to defeat Sinclair in possibly the most vicious and libelous campaign in California history.

Sinclair countered by going to Washington for support. Roosevelt – in office only a year and a half – had decided not to single out any particular Democrat for special endorsement. Sinclair noted that did not exclude his endorsing any particular plan. He conferred with Harry Hopkins, the relief administrator who was later to set up the WPA. Hopkins announced that he was ready to work with EPIC; he presented it to FDR as a potential national plan.

Sinclair wrote of his meeting with President Roosevelt:

"At the end he told me that he was coming out for 'production for use.' I said, 'If you do that, Mr. President, it will elect me.' 'Well,' he said, I am going to do it.' "

FDR indicated he would come out for the plan during a nationwide radio address scheduled for the week before the election and Sinclair hinted publicly that this would happen. On the night of the broadcast, everyone involved in the entire EPIC movement was at their radio. When Roosevelt signed off, few could believe the speech was over, and he'd said nothing about production for use. A mood of doubt suddenly permeated the campaign where optimism had reigned.

Sinclair's antagonist was incumbent governor Frank Merriam, seventy years old and somewhat senile, who'd saved himself from being dumped by his own party by his violent suppression of the San Francisco longshore and general strike, which had taken place shortly before. Merriam suddenly became the darling of' the reactionary right.

Sinclair got almost 900,000 votes, 37 percent of the votes cast; Merriam got 49 percent, and a third party candidate got the difference. Sinclair was told later that there was a gunman waiting at his campaign headquarters; he was told he would have been shot if he'd won.

The EPIC uprising, even in electoral defeat, took much of the bite out of the state's right wing for decades afterwards. The reflection of many of EPIC's proposals can be seen in later New Deal programs.

Sinclair went on to offer a national version of EPIC, win a Pulitzer Prize for fiction and later was nominated for a Nobel Prize by a group that included Mahatma Gandhi, George Bernard Shaw, and Bertrand Russell. In 1936, Sinclair published a thinly fictionalized history of the UXA, the Self-Help movement, and EPIC, entitled, Co-op a Novel of Living Together. He used Hjalmer Rutzebeck, "the Alaskaman," as the model for his protagonist. Rutzebeck himself wrote a novel about his experiences in the UXA and EPIC, Hell's Paradise (1946).

After the defeat, EPIC leaders split on what to do next. While Sinclair took off on a national speaking tour, a group led by Frank Taylor set up a Production for Use Committee and worked to turn the EPIC energy into a consumer co-op movement. The consolidation of buying power would be a step to gaining' control of the economy, they hoped.

A large number of EPIC groups planned buying clubs and stores; by the fall of 1935, there were 210 consumer co-ops in California, with 50,000 members – almost all the groups newly organized. Among the most successful at first was New Day Co-op in Oakland, with fourteen hundred members, and Producers-Consumers Co-op at 668 Haight Street in San Francisco. But these and the great majority of others quickly collapsed.

Former members of New Day, however became leaders in Pacific Co-operative Services, organized in 1936. In January of the next year, they opened a tiny store at 2489 Shattuck Avenue to which the Berkeley Co-op, with around 100,000 member' families in 1983, traces a central root.

One Sunday morning Oser Price, myself, and my photographer friend Michael Ghelerter squeezed into a little car and zipped down Ashby onto the freeway to East Oakland. Our plan was to tour the main sites of UXA activities, see what was there now, and try to get a few good pictures.

We turned off the freeway at Hegenberger Road and cruised down 85th Avenue looking for the site of the old foundry. We finally stopped at an open field covered with weeds and broken foundations, and climbed out. I followed Oser, who is about half my size, back and forth around the cracked concrete slabs and rubble. He seemed a bit uncertain at first, then stopped. "This is the spot the foundry was on. Syd Splain made a cupola for it out of large oil drums. It wasn't a very big foundry, but we did a lot of casting. This made the basis for getting all of our dental and medical supplies. We made brass and bronze and aluminum castings for a supply company in trade."

Then it was on to the site of the Operating Assembly. As we drove down East 14th Street, Oser remarked about how much the ethnic makeup of' the neighborhood had changed, that the large black and Latin population had not arrived until World War II. "I don't remember any blacks in the UXA at all. They would have been welcome, but they just weren't around here then.”

The building where the Operating Assembly met was still there, at 40th Avenue; it was a Volvo dealership today. Being Sunday, it was locked and we couldn't get in. "The Assembly room was downstairs in front and the dental lab in back. Upstairs was medical and dental offices, and some living quarters," Oser said.

Not far away was "Smiley" Gilbert's old house, a quaint little wood frame structure perched on top of a hill where many UXA folks used to come to socialize after hours. Smiley was the main organizer of the Santa Cruz Mountains lumbering operation.

From there we drove to 35th and Penniman, to see a parking lot that has taken the place of the UXA commissary and crafts store. We circled Lake Merritt to 9th Street and Oak, and stopped at an apartment building, predominantly Chinese today, that the UXA had taken over, exchanging carpentry for rental credits.

Oser spoke of other sites we didn't get to: "Down on High Street near the estuary, there was this big warehouse where we produced our sauerkraut and had our soap factory. There was a shed not far from it, where we had our garage. We had good competent mechanics and good tools. I rebored an eight cylinder engine there.” Sauerkraut, because of the ready availability of lots of cabbage, became a UXA staple. "They were cutting sauerkraut with hand cutters – pretty slow" Oser recalled. "I spotted an old potato chip slicer that was sitting out in the back yard of a company in East Oakland. The manager said it wasn’t fast enough for commercial production, so for thirty hours work we got it. We went from making sauerkraut from the bucket to by the barrel...."

"The thing that killed the UXA was the cash flow from the WPA. It drained off people who needed money – and everybody did need some. People couldn't be in both the UXA and in WPA at the same time. Those who had to have cash took WPA. Soon there weren't enough people available to make the UXA work." – Oser Price

Oser and author, 1983

The Works Progress Administration of 1935, promising a cash job at a decent wage to every unemployed person able to work, undercut the entire self-help movement. Members had to choose between the limitations of barter or an assured cash income. (Only one tenth of one percent of UXA transactions had been in cash.)

Carl Rhodehamel tried to prevent a mass exodus from the UXA by arguing that these government programs would be temporary, and members would have no cooperative to come back to when WPA was shut down. Nonetheless, the exodus took place. Hundreds of groups around the country collapsed. The UXA, like the rest, faced a sudden labor shortage. They now had difficulty delivering on work promised, and fell deeper and deeper into a hole. Rutzebeck describes the situation in his book Hell's Paradise:

“Svend Norman made the rounds at the local relief centers. Here he saw, standing in line to be registered, workers and former workers from UXA, PCL, BUA, UCRA, and all the other groups; while at headquarters calls went unheeded for workers….”

Rhodehamel accused the federal government of wanting the cooperatives to fail, and Sinclair pleaded with Roosevelt and Harry Hopkins to get work in the cooperatives declared to count as WPA hours. It was all to no avail. Sinclair wound up calling WPA an "arch-enemy of self-help."

The administration probably really didn’t want independent barter cooperatives as a permanent part of the economy. Still, the New Deal was far from the only problem the movement faced. Besides the usual personality clashes and leadership disputes that are a fact of life in all organizations, especially democratic ones, the co-ops were beset by a number of particular difficulties.

In production-oriented groups, such as the UXA, productivity was an on-going problem. When the group decided that all work would be worth the same on a time basis, they hoped that spirit and education would make up for inevitable unproductive attitudes in some members. But despite weekly, classes, the UXA "School of Reciprocal Economy" was never able to overcome the "employee mentality" of some members, who tried to put in as many hours as possible without care to productivity. The result was the piling up of more points on the books than the organization had products to redeem them. Meanwhile, the scavenging operations of the co-ops inevitably diminished as their work eventually depleted the surplus products in their areas.

High turnover rate of younger members was also a problem. Young people tended to move on when they found job openings, while the older, largely "unemployable" members tended to stay in the co-ops for the long run. The result in some instances was a dearth of muscle power. At one point, the median age of the UXA was 48.

And then the young men found another occupation: soldiering.

"If there must be war, then our movement will have to wait for the fever of that war to run its course …. But all wars end, and when this one is ended, five, ten, or fifty years from now, we or such as we will again proceed …" – Carl Rhodehamel

Although Roosevelt's programs alleviated some of the problems of the depression, the "New" Deal turned out to be temporary, and California, like the nation, slumped back into lethargy as the late '30s progressed. The WPA ended, but the self-help movement did not revive, as the country and the world braced for war.

World War II finally snapped the economy out of depression, created full employment, and gave birth to the mighty industrial machine that emerged at war's end. By that time Carl Rhodehamel and many of the others who made the movement were no longer with us, and the movement on which they'd pinned their hopes and dreams was but a faint memory. Still, questions remain: If the government had not undercut the cooperatives, would they have become a permanent part of our economy? What if EPIC had won: could it have actually ended poverty and unemployment?

Rhodehamel believed that the primary reason cooperatives were needed was that a growing body of people was being permanently displaced by technological changes. The ranks of the unemployed in the '30s were filled with highly trained and skilled people who would never find jobs in their fields again, particularly middle-aged people. Today that process has accelerated; we are being told continually to prepare ourselves for a permanent situation of high unemployment.

If the US continues to change from a production economy to a service economy (with multinational firms shifting their production to the Third World, primarily Asia), a permanent underclass of unemployed, underemployed, and never-employed will continue to be formed here. Self-help associations are a natural organizational form springing from people in this situation, just as labor unions are natural for the employed.

Could the unemployed rise today in a similar movement?

There are already groups of the unemployed in the Bay Area, although none has turned to barter or labor exchange in a major way. The money system today is not stopped dead as it was in 1932. Still, a close parallel to the production side of self-help cooperatives can be found in today's work collective movement, of which the Bay Area is probably the most developed center in the nation. The most recent Bay Area Directory of Collectives, published by a local networking' organization, the InterCollective, lists over two hundred work collectives, participating in a wide variety of activities.

“Consider this," said Oser Price in 1983, fifty years later. “All of us work a certain amount of time or produce a certain amount, whatever it takes to produce a minimal survival. Beyond that everybody's on their own, and can produce or make all they can. That way you don't squelch creativity or initiative. To reduce bureaucracy to zero, you have to have as much as possible of what's done and how it's done in the hands of the people who are doing it.... Worker ownership, that's the key. I don't care how big the organization, if, you have nothing but worker ownership, it'll work ... It can happen if you make it happen: it's all up to you."

Our tour stopped at 532 16th Street in downtown Oakland where, fifty years ago, the UXA had maintained offices on the second floor. We met a young woman at the front door who turned out to be one half of the couple managing what today is an apartment building. She let us in and showed us around. I watched as Oser Price walked down the hall he'd trod half a century earlier. He stopped at a window by the fire escape, and stood there a minute gazing wistfully out. There was a faraway look in his eyes, and on his lips an almost imperceptible smile.