How to Start a Gift Circle

What is a gift circle?

A gift circle is an open circle where people come to help each other, and share their needs and services. People share their services and help as a gift, without expectation of anything in return.

What is the purpose of a gift circle?

To allow people to help each other and to create a sense of community. And to further the gift economy.

What is a gift economy?

A gift economy as we define it is where people give something without the expectation of anything in return.

What are examples of gift economies?

Burning Man, Rainbow gatherings, Wikipedia, open source software.

What is the format of a gift circle?

The format we use is a work in progress, and an open source adventure. We are still experimenting.

The form we have been using is with everyone sitting in a circle, and then the order goes:

1. Check-in – where people say their names and a little bit about their recent or current experience(s).This helps everyone get to know each other better and get comfortable.

2. Sharing of needs. People share what their needs are. This could be a ride to the city, finding a housemate, someone to walk the dog, editing services, etc., etc.

3. Service offering. People offer something to the group, just “putting it out there” for whoever might need that service or object. Alternatively an offering can be made to the group as a whole. One way this can be done is to write on a slip of paper the services you have to offer and then put that in the middle of the circle. Then anyone who wants can pick up that slip of paper up. (Although we have not found this format necessary.)

4. Giving thanks. People express gratitude for services and things they have received from previous circles.

5. Scheduling. People get together and share when they can get together to give/receive their services.

Is the circle open or closed?

The circle seems to work better when it is open, because new people allow new services to be offered.

What the time frame for a gift circle?

The circle can be anywhere in length from half an hour to a couple of hours.

What is the motivation for people to give?

Sometimes people give because they genuinely care about others and want to help them. Sometimes it is because they have a gift they would really like to share with others. Sometimes it is because they want to build community. Sometimes it may be because they want to get to know others better.

What is the role of gratitude?

Gratitude changes the mood in the circle. The circle can be guided to access their sense of gratitude.

Is there barter in the gift circle?

For the most part we are focusing on pure gifting without the expectation of anything in return. So it is not barter that occurs in our circle. However participants can of course choose to do a little barter on the side.

What is role of non-attachment?
When we give, we give from a place of wanting to share. There is no expectation of getting anything in return. We may also give from a place of wanting something in return. There is an attachment to an expectation. Letting go of this attachment creates a whole new energetic. A group may not start with this level of non-attachment, but it can evolve to this level.


What if people have a hard time expressing their needs?

It can be a new experience for people to express their needs directly, especially to a group. But it is part of the empowerment process. Many of us may have learnt not to ask or expect for our needs to be met. There can be gentle encouragement from the group for people to express their needs, and others can gently prompt a person to find and express their needs. Sometimes it just takes a little time to realize what your needs are, and that you can ask for them to be met. There can also be discussion time for circle members to discuss how they feel expressing their needs.

Is there a facilitator?

Yes, we have found it useful to have a facilitator for the meeting. Sometimes different people may chime in and suggest ways to lead. As more people become adept at facilitating the meeting, the meeting can become more ‘multi-facilitator facilitated.’

What is role of facilitator?

To think about overall time needs – approximately how long should each person speak in order for the process to finish on time; does the group need to break into smaller circles to enable each person to have time to talk? To guide the group to listen more deeply to each other. To sense the mood the circle and allow things to flow in order to allow the best experience for the group as a whole.

How often do you meet?

We meet once a week.

Should you have the same facilitator every week?

We have found it useful to have different people facilitating. This allows many people to gain the understanding of how to facilitate the circle, and for the circle to benefit from the personality of many different people, and for members to understand the role of the facilitator as an equal. Facilitation can give people a different sense of the circle, that they have to be aware of many things at the same time. By introducing different people to facilitating it builds a sense of awareness in more members. Multiple facilitators gives the circle more resilience. If ‘founding facilitators’ are not there or drop out, the circle will still go on.

What happens if people are not following up to get their services?

We found initially that it was a strange experience for some people to call up someone to see if they could access the service offered. People can give encouragement to each other to follow through on calling up people to get the service. It can take a little time to learn to do things in this new way.

If the circle gets big how do you have time for everyone to say their needs?

We have sometimes been splitting the group into smaller subgroups. In those subgroups people get a chance to share with each other their needs. The subgroups can then share back to the larger groups, relating the needs of the people in the subgroups.
Should the format be the same each week? How does the circle evolve?
Experimentation is welcome in the circle. People can try different formats and ways of expression. Play with different exercises to get people to come from different motivations, to listen, to have games to build community. We suggest that people at the end of each meeting consider what worked and what did not. Then this develops a feedback process to adjust and adapt. Different group composition creates different dynamics. The circle needs to be adaptive to these different conditions.

What happens if things are not working properly?
The group holds within it the seeds of how to figure out for itself how to solve problems within the circle. There can be meetings outside the circle to figure out how to orient and adjust so that the circle works.
What if a circle doesn’t have people who give?
A culture of giving needs to be grown. It can be useful to start off with people who already care about each other, and are more willing to give. Then as new people come in that culture can be shared. A sense of community and caring about each other creates the atmosphere for giving. If people are a little hesistant to give, the circle can orient itself a little more to building community, and a sense of shared identity. Improvisational exercises, games or icebreakers represent one way for people to relax and get to know each other more.
What is the role of higher consciousness in the gift circle?
A higher consciousness field allows people to become more connected, intuitive and open. There is an intuition of when to help someone out, what needs to express. The consciousness field can allow people to be heard, and that itself is transformative. The field guides the unfolding of the circle.
How does a circle get into higher consciousness states?
Listening, opening the heart, being vulnerable, silence after people express.
Where can I go to get in the discussion loop, find out more?

email alplo@yahoo.com

Get a copy of Alpha Lo’s and Alden Bevington’s book Open Collaborations, available at: https://www.createspace.com/3359137

Is there a network of gift circles?
Yes there is, and they learn from each other different best practices, share knowledge, and help co-evolve the gift circle movement. There is beginning to be gatherings, workshops, and teleconferences that bring together people from different gift circles.

What are pods?
Pods are where two to four people get together from the gift circle and work on clarifying what their deeper intentions and goals are for life. From there they can make a strategy to achieve these goals, and figure what their needs are in relationship to these strategy. Fellow pod members commit to helping each other with these needs for a certain length of time which can be anywhere from 3 weeks to much longer. They also bring their needs to the larger regular gift circle. In this way over time people can keep track of how their needs are fitting into a longer range goal.

How does gift circles relate to neighborhood development projects?

Starting a gift circle in an area is a great way to begin the process to develop the social capital – networks of trust, people willing to help each other, with which you can then open-source community projects. So for instance if you wanted to start an urban farming/network of community gardens in your area, or you want to start a bike coop, or gift economy holistic health clinic, tapping into the power of a network of gift circles in your area for help with the project can get the project rapidly happening.

How can gift circles help with social justice issues?

Gift circles create a model where the people being helped also help others. So its more empowering than traditional welfare models. Gift circles have helped homeless people get housing whilst they are also helping others. Gift circles allow the rich to help the poor and the poor to help the rich.

What is an organizational gift circle?

This is a gift circle which brings together many different organizations. The organizations share their needs and gifts. This allows different organizations to begin synergizing, working together and sharing resources.

Towards a Democratic, Cooperative and Caring Economy

This blog was first posted on Matt Gonzalez's blog "As It Ought to Be" http://asitoughttobe.wordpress.com/

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.

Why We Started Giftflow

by Hans Schoenberg
from Shareable.net

The most emailed NY Times article right now is titled “But Will It Make You Happy?” Questioning our consumer culture, the author interviews a number of wealthy yet unhappy people who found relief in giving away their many possessions. One of the interviewee’s has the last line: “Give away some of your stuff,’ she advises. See how it feels.”

Here in New Haven, Connecticut, USA, there are hundreds of people living within one mile of the coffee shop where we wrote this essay who lack access to some of the most fundamental human needs. At the same time, hundreds more are frustrated with the way consumption has taken over their lives and cluttered their homes. The abundance of stuff that is the result of our consumption driven culture could potentially be used to not only help friends share with friends, but to change entire communities.

Each year, Yale Recycling’s Spring Salvage program gathers the goods students would have otherwise thrown away as they move out of their dorms. The “waste,” worth hundreds of thousands of dollars, is then distributed to local nonprofits. This event demonstrates that the New Haven community already has the resources it needs in the form of excess stuff, but for most of the year those resources sit unused in our houses and dorms. A system only exists to reuse this “waste” once a year and only because Yale can afford to finance it. We saw an opportunity to reimagine how communities can share and work together.

We started GiftFlow to give communities a new set of tools. Here’s how it works: individuals log onto GiftFlow and create a profile where they list everything they have to give away (ranging from a spare jacket to an hour of volunteer time) and everything they need. You give what you can to get what you need. Each transaction is recorded so that individuals can gain a reputation for contributing to their community.

The driving force behind the system is an ethic of indirect reciprocity or circular giving. Lewis Hyde described it best in his book The Gift:

“Circular giving differs from reciprocal giving in several ways. First, when the gift moves in a circle, no one ever receives it from the same person she gives it to...When the gift moves in a circle its motion is beyond the control of the personal ego, and so each bearer must be part of the group and each donation is an act of social faith.”

Hans first came across accounts of gift economies while studying economic anthropology. Giving without expectation of immediate return, many people in Mali participate in an informal gift economy that includes everything from child care to food from the garden. They see the gift as a string, connecting families, friends and neighbors in a web of mutual support. As a political organizer, Hans believed the idea of a gift economy carried far more potential to create change than mainstream campaigns around distant and often negative political issues.

The ethic of indirect reciprocity can support entire organizations, however, these social structures aren’t always robust. Cris learned this first hand when he helped to create the New Haven Bike Collective. Based around a gift economy of unwanted bicycles and the free time of volunteers, the main drag on the group came from a constant sense of being “free-ridden.” People would take a free bike and give little back to the organization. Cris immediately got involved in Giftflow because he saw how it could provide a platform to account for who supports and who benefits from the Collective.

In the past, gift economies only worked in small social circles because of problems with coordination and reputation. Brandon had been studying how the Internet can change social interactions, and realized that an online social network could support a gift economy. A website could strengthen and formalize what is already happening in communities around the world, making it work well across greater distances, in larger social circles, between individuals as well as institutions.

Our team continues to grow. We are a non-profit and welcome the gifts and contributions of anyone who might be interested. We hope that the online community of GiftFlow creates an offline community of mutual interdependence and support.

Beyond Money

I went to a panel and discussion last night hosted by a spawn of Daniel Pinchbeck’s Evolver group, which aims to create positive transformation of consciousness by 2012. The topic of the discussion was “Beyond Money” with Guillaume Le Bleu from Open Money in San Francisco and Matthew Edwards from Circle Center in Fairfax.

Guillaume talked about tools for facilitating indirect reciprocity or karmic payback for good deeds in the community in order to reinforce the doing of good deeds and support the lives of those that do them, including creating reputation-based systems that certify the goods deeds and then receive economic benefits in their communities. One example given was when people help fix potholes in the road, there is no direct payback. But we could facilitate that payback by giving them some kind of certificate that they could then use at a bike shop for a discount.

Matthew emphasized building networks and systems of trust and reciprocity or gift-giving within the local community that meet everyone’s needs. Right now we usually rely on a small family or friends circle that meets few needs without money and then a much wider circle that meets needs through the monetary system and global economy. We could develop (or redevelop) the middle circle of local community that could meet many of our needs through alternative currencies. We can do this through things like time exchanges that don’t place too much emphasis on keeping score. He has a system that allows the receiver of a service to make a gift to the giver of the service in whatever amount they see fit.

The most interesting discussion blossomed in the World Café. We came up with more questions than answers. Matthew raised another question, “ how do we bridge gift economies and alternative currency systems?” –bringing the best of the two together. Along a similar vein, I observed that there seems to be two primary goals that currencies systems seem to want to meet: achieving better allocation of resources/getting good things done and overcoming alienation to create community and trust. So I asked, “how do we create systems that synergistically meet both of these goals?”

We spent some time in small groups discussing these questions and came up with more questions. How do create systems that assess true value, not market value? You can create a system that minimizes the individual accounting of services and goods so that there is space to value things in other ways, using gifts to reward, simple accounting of hour-for-hour, offering zero and up sliding scale, making sure everyone’s needs are met. Creating abundance of things a community needs permits less commodification and then other values emerge. If exchanges are not moderated simply by the market and how much cash you have in your account, it permits the complexity of the individual and community context to be more transparent and hence exchanges can be adjusted based on principle (how much does this person need this thing and how good have they been to the community) rather than the simple question of, “do they have the money to pay?”

Reputation and trust-based systems help reinforce doing good for the community, but the system should in some way make sure that everyone’s needs are met regardless of their reputation, work or status or there will be individual and possibly community breakdown. People should receive rewards for doing positive acts in their community but no one should be made to suffer as the community as a whole will likely suffer.

The market often makes money flow to certain people or businesses based on image and advertising, not what they actually do. We have politicians, celebrities, pollution companies, financial institutions, internet companies all making lots of money regardless of the fact that few do much for the world given their enormous resources. How do we create a system that assess rewards what people actually do to help meet needs and create happiness and not just what their image purports they contribute? This can be done in smaller scale networks of trust so that transparency and feedback can occur within the group. This also makes sure that everyone, at least in the network, is cared for. Is it much harder to let people you know in a circle of trust fall through the cracks if they become unable to care for themselves than if we are all separated by an anonymous medium of exchange. People then are also less seen as functions or roles in the economic system to be owned by the employer and supported by dollars if their service is up to par rather all divine beings worthy of care and love and autonomy to make some decision about how they spend their life energy. Exchanges based on complexity of context and relation rather than anonymous exchange also help build community and collective wisdom as you are developing connections with others and assessing how the whole context and the value of the exchange fits into the transaction.

This group was optimistic that synergies of gift economies and community currencies would help facilitate the necessary transformation of consciousness to make 2012 something to look forward to. We already working on it. Come join us. Or start a project yourself.

TimeBank & Trust: The Mira Luna Interview

TimeBank & Trust: The Mira Luna Interview
Planetshifter Magazine
by Willi Paul
01/16/2012

Big dictators.
Speculators
Senators
And Agitators,
They tell what all they gonna do,
When they get
Into their office,
See what they can
Take off of us,
Take from me and take from you.

Finance-man
He frisk us, frisk us
Lawyer man,
He won't protect us,
Where O where is a honest man
Barber-man, he
Clip your whiskers
Money-man, he
Clip your sister.
Banker man, he take your land.

Can’t beat finance,
Man and weather,
Workin’ man got to
Get together,
Have a big meetin' down in town
Workin’-man gotta
Take the groceries
Feed the widows,
Feed the orphins.
Pass the groceries all around

Corn Song by Woody Guthrie + Blackfire

* * * * * * *

Interview with Mira by Willi

Give us an integrated economic vision for a local bay area city in 2025? How are you developing and sharing such a vision?

I think there are tough times ahead, a lot of crises that will likely climax in the next 10 years. We need to build the infrastructure for the new economy while trying to imagine all the things that could go wrong. That's not easy or fun to do. The best way to deal with so many factors in flux is to design relatively simple and diverse solutions. Simple solutions leave less to go wrong and diverse solutions provide resiliency.

What would this look like in terms of economy? A more simple economy with more direct flows from producer to consumer and vice versa. Less complicated goods to manufacture that can easily be produced locally by many people in many different ways. More services that directly meet our needs, rather than 5 middlemen, with many people being able to provide those services. We need to rapidly start replacing imports with local manufacturing and cottage production.

Let's take medicine as an example. Right now, you go to a doctor that had to go through a very expensive long training, she runs fancy tests and prescribes medicine. There are few people that can prescribe medicine, few companies who make the testing devices, few who do the tests and few that make the medicine. All of its expensive and there is a lot of scarcity in conventional medicine and too narrow flow channels for how many people are unwell. So if we had many people trained in barefoot medicine, like herbalism, traditional Chinese medicine, massage, homeopathy, nutrition, Qi Gong, saunas and sweats, yoga, Ayurveda, etc. then we would have a lot of direct flows and a lot of diversity. I would approach all of our economic needs that way. There's many ways to convert solar energy into usable energy for humans. I think the region of the greater Bay Area is a good, realistic size for a sustainable economy that can provide the variety of goods that most people need.

In the future, we will be shifting back to a relationship-based and to some degree peer-to-peer economy. This means that the economy will look more like vast, intricate web, with many interconnected functions, nested and overlapping. It looks inefficient to the capitalist, but efficient towards what? A web supports you much better than a single line or two of thread. One thread breaks and that's it. The Timebank is helping to develop this web through exchange and connected unconnected groups to help each other. The Network of Bay Area Worker Coops is doing this by creating a web of relationship and exchange within the network. Just Alternative Sustainable Economics, is a project we started to tie together all the pieces of the alternative economy to support each other at the regional level. The US Solidarity Economy Network attempts to do this at the national level.

What are the hurdles in your personal strategic plan as you promote your transition to localization?

There isn’t a lot of funding for the work that needs to be done – developing alternative economic projects, taking them to scale, and building community. Funders are behind the curve. In the meantime we need to build a realistic bridge to the new economy so that people can survive while doing it. It's challenging for people who still have to have jobs for health reasons, a mortgage, family, etc. The Timebank is great for building that bridge because it rewards people with hours for the work of building the new economy and therefore that work is more sustainable. Another hurdle is the psychosocial habits we have that hold us back in the old economy - distrust, separation, competition, fear of scarcity, etc. In order to get there, we need to reduce our dependency on the old economy as much as possible. Right now it holds so much power, take away ours, and keeps us treading the hamster wheel in old habits that are destructive.

Are you attracting potent partners these days? Who are the strongest?

There is a lot of interest from potential partner organizations in the Timebank and other alternative economic projects. Seniors, people with disabilities, low income communities of color. These groups all need the new economy and so are the most eager to pioneer. Their lives depend on a new economy. Environmentalists are interested, but because many are white, middle class, able bodied people they are still living comfortably in the old economy and haven’t been as willing to step up to the plate in general as much as I’d hoped. There is less of an urgent push from them although they seem to definitely seem to get it.

What qualities in permaculture do you see as critical to building an alternative economy?

Biodiversity is something that is lacking in the mainstream economy. We get our needs met through fewer and fewer channels. This is a big problem for resiliency. If one avenue fails, we have catastrophe. The more elements we have the same function, the better. At the same time, the most promising elements are those that stack functions – for example, a local CSA providing jobs to youth, low cost organic food in more neighborhoods, funding to expand organic farming, space for animals, delivering on bikes to reduce fossil fuel use, and healing the earth.

Zones are also helpful in thinking about the economy. We should focus most on the zones closest to us and develop them, redeveloping the local economy at many levels, but starting with zone one. The largest zone is really skewed in taking over what should be our closest zones. In thinking about how we steal from the future by a debt based and growing, malignant economy, we can reinvest in our local ecology by doing away with interest or even using negative interest so that it becomes more attractive to give your money to local sustainable projects that create real wealth.

I think the whole process of developing and planning a permaculture site, observation, visioning, mapping, etc. would be really useful for redesigning the economy. Right now we go with the flow and it’s going in all the wrong directions.

Are you pro or anti capitalism? Neither?

Anti-capitalism, but not anti-market. I am opposed to making money off money and exploiting people and the Earth, but not in aggregating money for projects for the common good. I am also opposed to the concentration of wealth that capitalism encourages, which lead to huge power inequalities. Democracy and capitalism in its current form are incompatible. Because capitalism encourages growth and exploitation, I also see it as incompatible with sustainability goals in its current form. Capitalism is a multi-faceted beast, some parts may be salvaged, while other parts need to be swiftly discarded.

Many folks decry the greenwashing in the business sector. How do you dissect corporations, organizations and individual behavior to uncover corruption?

In all my years of activism and policy work, I see working on large or distant corporations’ behavior as mostly futile. The only way to have transparency, accountability, and democratic oversight is through local and regional economies. The further from the local you get, the more corruption and the less trust.

I have been outspoken in my criticism of permaculture schools who offer costly trainings with little regard to employment support. How are your projects creating jobs? Do you have any examples?

The timebank is creating jobs with a currency called an hour that you create at the time you provide a service –it’s a mutual credit system. It requires someone else to pay an hour, but it’s really just a guarantee that the receiver will help someone else out in the future. This way people can create their own jobs by using their skills without having to wait for money to appear at a business and then apply for the job. There isn’t much money out there these days, which is ridiculous because there are plenty of workers and work that needs to be done. Worker cooperatives also create jobs and more than conventional businesses because there isn’t someone at the top making a lot of money and worker coops will usually keep their workers in tough times instead of laying-off or selling off the business. Coop housing means people invest in place and community.

Do we need new symbols, stories and/or language to engineer the new economy?

Yes, we need new stories that will be about how people are tied together by helping each other, making the whole community stronger. We need stories of collective will, heroic gifts and reciprocity. We need stories that help shift our identity from me to we and illuminate our interconnectedness.

What is the role of competition in your new economic vision?

It’s quite limited. We need to engineer the new economic system so that the most well taken care of people are those that are the most cooperative, generous, caring, community-oriented, sustainable, and so on. Reputation systems are very important in this re-engineering. Our current money system only has one reputation element – how much money you have in your bank account determines everything. It’s a very incomplete picture of social reality that leaves the best people suffering because they are defined by their small bank accounts. In the new economy, we need ways of communicating and perhaps converting into currency good deeds and reputation. The smallest unit of this model is a gift circle where everyone is witnessing each other's gifts and reciprocating directly. The Timebank is a larger scale gift circle that allows people to exchange with people they don't yet know, but may become part of their community as trust is built.

How does time work for us and against us in a timebank? Do you want government to play a role?

You can only spend what you earned in a timebank and everyone’s hour is equal. This means you can’t make time off time like in capitalism. If you don’t have time, you won’t have hours. You can save them up though for the future in some timebanks and this can be a form of social security in old age. Governments are interested in Timebanks because they can provide lots of services at a small cost and take over functions that governments spends lots of money on, like taking care of people who are ill. So sometimes timebanks get grants from the government, which is helpful to get off the ground, but can create precarious dependency. If the government wants to support the Timebank, that’s fine, but ours will always be a member governed timebank.

Tell us about the Bay Area Community Exchange (BACE). What successes can you point to? What is on the horizon for 2012?

We just passed 1000 members and trading is happening often several times daily. We are forging partnerships with all kinds of community service organizations. These partnerships can be a strong force to get more active members and provide needed services on the Timebank. Also, we have a decentralized organizing strategy, allowing anyone to organize in their neighborhoods throughout the Bay Area or as a community forming an interest group on the Timebank using our software and operating under the core principles. We are encouraging more of this organizing as autonomous but cooperating local nodes of a regional reciprocity economy. We hope to improve the geographic organizing capability of the Timebank if funding comes in to help transition to more locally self-sufficient and interdependent neighborhoods.

We also want to have more in person swaps after the enormously successful Timebank Holiday Fair. Look for a Homesteading Skillshare Festival this year and more work with the SF Free School. Carebanks for seniors and people with disabilities are on the horizon. We are working in partnership with SF’s computer access program called BTOP to expand the Timebank’s reach where it’s needed most.

During the Great Depression, in the US, hundreds of thousands of unemployed people that got together to form Timebank-like exchanges to provide the currency to support clinics, foundries, mills, schools and so on. One in Oakland, was called the Unemployed Exchange Association. It definitely can be done though it's a little harder because we are so dependent on big banks. Of course, that's all just an illusion. We don't need banks for anything. They don't do anything but enslave us to their scarce, debt-based money.

Are there unique urban and rural needs and solutions to the present unsustainable economy?

Personally, I don’t think urban living is sustainable in the long run. It relies too heavily on resource import and export of waste. Most people employed in urban areas are inadvertently exploiting elsewhere in order to be able to have a job that provides no needed goods or services to society in a kind of pyramid structure. They are also disconnected with nature and cannot sense their disharmonies with it. The ecological feedback loops are missing in an urban culture. In the meantime, we need to build community in urban areas to make the transition. That is true for rural communities as well. Both have been disconnected and we need to be working together towards the transition. Urbanites need to start learning survival and homesteading skills and how to work with nature. These skills have almost been entirely lost in urban culture. Again, it’s a crisis of resiliency. We now have less than 1% of people that know how to grow food. We need training programs that train trainers in all the neighborhoods.

“New Hydrids: Paths to 21st Century Socialism from the Bottom Up” and a piece on OWS are on the home page of the US Solidarity Economy Network. Are you a supporter of Occupy? What is your understanding of their economic strategy?

Yes, I am a supporter of Occupy, although all OWS camps have their own ideals. I do think we need to occupy what’s ours collectively to build the new economy. We will need those resources. Some Occupiers are now moving from occupying the streets to occupying their economy – homes, workplaces, schools, clinics, etc. Although this phase is just beginning, US SEN is supplying information about alternatives to Occupy groups to move this initiative along.

How do you critique Wilson Riles’ Radical Alternative Currency System for Oakland?

Regular people need to be able to earn currency through work, otherwise the currency will not help much to eliminate problems of scarcity and unemployment. This needs to be built into the currency system to a greater extent. In particular, you need a way for low income people to get their hands on ACORNS without having to have cash. All of this can be easily changed in the design of issuance or by hiring lots of people to work for ACORNS on public projects that don't have jobs and accepting the ACORNS in taxes. For a similar model that was wildly successful, see the miracle of Woergl, Austria during the Great Depression.

Creating a Giving Culture? An Interview w/ Bernard Leitaer

Interviewed by Pamela Gerloff

Is it natural to be generous and to share our resources? Maybe, says Bernard Lietaer, author of 10 books, including The Future of Money: Creating New Wealth, Work, and a Wiser World (Century/Random House, 2001) and Of Human Wealth: Beyond Greed and Scarcity (ACCESS Foundation, 2003), but it goes against our cultural norms. And that, he maintains, is the fault of our money system. Our money system shapes us, fostering particular emotions and behaviors, thereby affecting fundamental aspects of society. To create a giving society, change the way our money system works. Sound impossible? Not to Lietaer. He says it's perfectly do-able, and within a single generation, too.

MTM: Is this an entirely new way of thinking about money?

LIETAER: I believe it to be a new angle. The reason is that I have been exposed to money systems from a variety of perspectives, in a way that few people have. My friend Willis Harman, who was the founder of the Institute for Noetic Sciences and a mentor in my life, said I had been trained for 25 years to look at money systems as no one else has. Most people believe that the existing system is the only one possible. The image that comes to mind is that humans are to money like fish are to water. Fish are born, live, and die in water. That is why it is so difficult for them to understand the nature of water. Similarly, we humans live within our money system and it is generally transparent to us. But I've been tossed around a few times and become a flying fish, so I've been exposed to our money system from the outside. That's why I may have a different perspective on money.

MTM: If what you say in The Future of Money is true, the ideas you introduce are startling in their ability to get at the root of core social problems, such as poverty, the breakdown of the family in Western society, and even, perhaps, violence. They can also make us more generous people.

LIETAER: Yes. Our money system affects, in particular, our emotions and relationships. Money systems can promote greed and scarcity or generosity and abundance. Therefore, different money systems have predictably different effects on individuals, communities, and societies.

MTM: And this is not theoretical; it is based on empirical evidence?

LIETAER: Yes. In the world today there are several thousand communities that are experimenting with non-conventional money systems operating right alongside conventional money. These exist in places like the United States, Europe, China, and Japan. And we now have considerable evidence that different currencies create different behavior patterns and relationships among the people who use them.

MTM: What are some of those behavior patterns and relationships and how can a money system do all of that?

LIETAER: Let me start first by defining what money is, and is not. It is not a thing, though it may appear to be one. If you have a thing-say, a pen-and you go off to a deserted island, you still have a pen; it will still function as a pen on the island. In contrast, money is an agreement within a community to use something as a medium of exchange. Therefore, when you take money to your island, the money becomes simply a piece of paper or metal or whatever. But it is no longer money because on your island the agreement has become meaningless.

Because money is an agreement within a community, we can design money to be almost anything we want it to be. For example, it can be a piece of paper, a coin, practically any item, or a service performed. When we agree to consider something an acceptable medium of exchange, we have established a form of currency.

MTM: And because money is an agreement, it exists only where relationships among people exist.

LIETAER: Yes, the very existence of money implies a community within which the medium of exchange is acceptable to all. The community could be a group of friends who meet to play cards and use tokens as money. The community could be a temporary one, such as soldiers on the war front who used cigarettes as a medium of exchange. Or it could be the world community in which an exchange agreement is reached by treaty, as in the case of the Bretton Woods agreement in 1945, which made the dollar acceptable reserve currency worldwide.

MTM: You say that the kinds of relationships that result from money exchanges are different, depending on the currency system you're using.

LIETAER: That's right. When you go to a store and buy a pack of batteries, you pay with dollars and the transaction is over. It's complete; something has been exchanged for another thing.

However, in what is called a gift-giving economy, when you make a transaction, something very different occurs. Let's say you're on your way to the store to buy some AA batteries. Your neighbor, sitting on his porch, sees you. You stop to chat and he says, "Oh, I have some extra batteries. Here, you can have a couple." Now you have the batteries; you have made a transaction. But it's an "open transaction" -a reciprocal exchange has not occurred. So you now have a connection to your neighbor that, as a human being, you are not likely to ignore. Perhaps the next time your neighbor runs out of milk, he'll knock on your door and ask if he can borrow some. A relationship has been formed or strengthened.

MTM: And when relationships are formed, community is built.

LIETAER: Exactly. Gift exchanges actually build community. In fact, the word 'community' derives from the Latin cum munere, which literally means, "to give among each other." So in our language itself, there is the recognition that community is related to the act of giving to one another.

MTM: It seems that the idea of reciprocity is important to your concept of community and gift-giving. In community, there is a giving back and forth. The giving isn't in only one direction.

LIETAER: Yes, gifts tend to become reciprocal. When I give you something, someday you will give something back- either to me or to someone else in my community. In contrast, commercial money exchanges are a closed transaction, so no ongoing relationship is formed. I give you the money and you give me the item or service and we're done. Neither of us owes anybody anything. It's an effective means of exchange, but it doesn't tend to lead to community building.

MTM: And this is true within the family as well?

LIETAER: Yes. We used to live in extended families. In fact, we can still observe such extended families in southern Italy and South America, where a familia typically consists of 70 or 80 people. But, gradually, there has been a systematic worldwide trend toward replacing extended families with nuclear families. Why? Part of the answer is that we now have money exchanges within the extended family. When Granddad moves in, we expect him to pay for his housing with his pension. When our children do household chores, we pay them for their work. Such monetized exchanges fail to create relationships of reciprocity. The parents have given their children the gift of life, the gift of education, and so many other things. If the children don't have the opportunity to give back to their parents, they are unable to participate in an essential aspect of true community.

MTM: The "giving among each other."

LIETAER: Yes. So when you start paying your son to cut the grass, you may unwittingly undermine the family.

MTM: So how do we restore families and communities through our money system?

LIETAER: Many communities now are using "local currencies" that create and reinforce community. There are various systems in use. One of the simplest is time-dollars, where the unit of account is the hour of service. For example, for every hour you give in service to someone in your community you are entitled to receive an hour of service from someone else.

Another system is in operation in the town of Ithaca, New York. There, they have created a paper currency called "Ithaca Hours," which is intentionally limited in its circulation to approximately a 50-mile radius around Ithaca. Many local businesses accept payment in both Ithaca Hours and conventional money. Keeping the currency local ensures that the money remains within the local economy, rather than being spent elsewhere. It also tends to create ongoing relationships among community members.

These local currencies, used in conjunction with our conventional money system, allow communities to solve many of their problems without relying on conventional money to do it. This means that scarcity of money is no longer an obstacle to solving social problems.

MTM: In The Future of Money, you give many examples of non-conventional currencies throughout the world that have had very positive social effects. If these currencies are so effective, why don't we replace our conventional money system with them?

LIETAER: I don't believe we should discard the money system we currently have. For one thing, it is so deeply embedded in our social and economic system that it would be very hard to do. But the deeper reason has to do with the necessary complementarity between cooperation and competition within a society. There has to be a balance between "gift-giving" and "monetized" economies.

Definitions money -an agreement within a community to use something as a medium of exchange. gift economy -exchanges in which people offer gifts, or their skills and talents, to others without receiving conventional money in exchange. monetized economy - an economy where informal gift exchanges have been replaced by exchanges using conventional money. The United Nations uses this criterion to define a "developed country." conventional currency - a money system that uses conventional money as the medium of exchange. In a conventional currency system, money is issued with interest, through bank-debt; by definition, the money must be scarce and therefore elicits competition among it users. complementary currency - a means of exchange other than conventional money, used in local communities to link unmet needs with unused resources. Complementary currencies do not have interest, and elicit cooperation rather than competition among users.

I use the Taoist concept of yin-yang to articulate this idea because English does not have adequate words to express it. Using Chinese words may seem exotic, but the concept of yin-yang is a very precise construct for which Western language simply has no equivalent. It means more than just opposites co-existing together. It contains the idea of transcending polarity to reach a higher unity.

In Chinese philosophy, yin represents the feminine energy, and yang represents the masculine. They are not opposites; they are complementary elements of a whole. Both are needed to have a balanced system. Each element of the whole has its own characteristics. For example, yin diffuses, flows, and creates networks; yang centralizes, concentrates, and creates hierarchies.

Our "normal" or conventional money is an extreme yang construct. It is centralized and hierarchical. It is created by bank-debt through an authority-the Federal Reserve and the banking system. As economists Jackson and McConnell correctly state: "Debt-money derives its value from its scarcity relative to its usefulness." In other words, conventional money has to be scarce or it will become valueless. Furthermore, it is always created with interest, which further concentrates money; by definition, interest flows from those who don't have money to those who do. Finally, everybody needs to obtain this money because it is the only one the tax authorities accept in payment. So people have to compete among each other to obtain that scarce currency. In short, every feature of our conventional money system is yang.

A yin money system is the opposite. The currency is not issued by a central authority. In the time-dollar system, if I do something for you I get a credit and you have a debit; the money is created by the people who use it. And there is always enough of it. If we agree that I do something for two hours instead of one, we create enough currency to reflect that fact. We don't have to compete to obtain this currency, and I don't have to borrow it from somewhere and pay interest on it.

The potlatch model of the Northwest Indians is an example of a yin economy. In that system, those who are most admired and respected are those who have given the most. They spread their wealth out among the community through the potlatch ceremony. In our yang economy, we tend to view people who have concentrated wealth as being the ones to admire.

MTM: What you're saying makes a yin economy sound more desirable than a yang economy.

LIETAER: I don't see yin as "good" and yang as "bad." My point is that we need both in proper balance. There is a role for competition and concentration of money and a role for cooperation and flow of money. However, I do maintain that in our modern society, the fact that we have a monopoly of yang currency systematically distorts that balance.

In the Taoist system, when there is an imbalance toward yang, the solution is not to get rid of the yang, because that would only create excess yin-which would be another kind of imbalance. Instead, whenever there is excess yang, Taoists always recommend that we "calm the yang and activate the yin."

Among the Northwest Indians- who lived in what is today Washington, Oregon, and Northern California-the potlatch ceremony was a ritual through which gifts such as food and clothing were distributed to members of the community. Those who shared their wealth in this way were regarded with admiration and respect.

MTM: How do we do that?

LIETAER: One powerful way to "calm the yang" is to give some of your money away when you have more of it than you need. In a yang economy, this takes effort because you're operating 'out of the box,' from a yang perspective. If, for example, you're giving money away for reasons other than to avoid paying more taxes, you're abnormal in such a monetary system. But giving away money will help create a balance in the overall system, because it is dispersing some of the currency, which has been overly concentrated in one place.

A good way to "activate the yin" is by introducing what I call complementary (or yin) currencies into local communities.

MTM: What are complementary currencies?

LIETAER: They are currencies that link unmet needs with unused resources. Such currencies don't have interest, and elicit cooperation rather than competition among the people who use them. Complementary currencies-when sufficiently developed-counterbalance the effects in a community of the conventional currency.

In Bali, for example, there is a traditional "dual currency" system-one is a gift-giving currency, where people offer their skills and talents to others; the other is the conventional national currency. Typically, an adult Balinese spends about 30% of his or her time in the complementary- currency (yin) economy, and the balance in the conventional (yang) economy. People who have visited Bali and have been able to appreciate the quality and joy of life of the ordinary Balinese will have some idea of what a world in balance might feel like .

MTM: Would you say more about what happens when we don't have a balance of currencies?

LIETAER: A society that operates exclusively with a yang currency will tend to "starve" all yin functions: for example, community building, and taking care of our kids, our elderly, and the environment. It will also suffer from various dysfunctions, which even those who have a lot of that currency will experience.

MTM: Such as?

LIETAER: Well, the countries that are most "developed" are those that are the most "monetized;" that is, they have replaced informal gift exchanges with conventional (yang) currency exchanges. They are also those that, by many measures, have the least healthy community functioning; they have very high levels of despair, suicide, and social dysfunction.

On an individual level, I know some wealthy people who are truly happy, but they are rare. In a discussion I had with several financial professionals who advise multimillion-dollar families about what to do with their money, unhappiness was one thing those advisors could say that their clients had in common. Unhealthy family relations was another.

MTM: And you attribute this to our currency system?

LIETAER: An extreme yang currency system has a shadow phenomenon, in the Jungian sense of shadow; it is the manifestation of something that is repressed. For a long time, I asked myself, "What is the difference between a society that is using only conventional (yang) money, and a society using a dual (yin-yang) money system?" It took me six months of research and four months of living in Bali to realize what the answer is.

MTM: What is it?

LIETAER: The short answer is trust. In a society with dual currencies-which is therefore in greater yin-yang balance- people trust the universe to be supportive; they trust their community to be helpful when needed; they trust the family to be there, whatever happens; and they trust the future. In a society where the yin is repressed, people lack trust.

In our culture, the most typical dysfunction within wealthy families is distrust. This lack of trust manifests in a pattern of four concentric circles, which psychologist Bernice Hill calls "the sacred wounds of money."

The outer circle represents the social level. Let's say I am known as a person of wealth in my community, and I make a reservation at the restaurant down the hill. There is a whole set of expectations that comes into play even before I arrive. People at the restaurant will expect me to come with a specific type of car, a specific type of woman, and a specific type of interest in food, because of my financial reputation and status. This is known as "the burden of expectations." I, Bernard, do not exist anymore as an individual. I am everything that goes along with the label of me as a wealthy man. Of course, because I am a wealthy person, I'm supposed to leave a big tip, even if I didn't think the service was good. If I don't, I'm a bastard. So I can't trust the feedback society gives to me about myself and who I am.

The second circle represents the lack of trust among my friends. One of the major questions people of wealth have is, is he or she really my friend? If I were no longer wealthy, would this person be my friend? So, people who are wealthy have trouble trusting their friends.

Then there is the family level. Let's say my brother is being very nice to my grandfather. I wonder: Will that create a problem with my inheritance? (Will he get more than I will?) Or perhaps my father says to me, "If you marry that girl, I'll disinherit you." So my family interactions are tainted by money, which makes it difficult for me to trust my family.

Finally, there is the individual level- and this shows up particularly among those whose wealth is inherited. Who am I? Am I only a bank account? Is there something about me that's me and not just my money? In the end, I have no clue. So I don't quite trust myself.

These are the shadow sides of money. Loss of trust is the core of the problem. And the first reaction that people who are not wealthy have is, "I wish I had that problem"-which is absolutely not understanding the depth of the issue. The cliché, of course, is that money doesn't buy you happiness, but even that doesn't address the deeper issue of loss of trust.

MTM: Lack of trust does seem to be a pervasive phenomenon.

LIETAER: All of that is from the perspective of an individual with wealth. From a broader societal viewpoint, the distrust manifests as the breakdown of community. If we believe we can address social problems by throwing money at them, we are not addressing the issue of people not being able to trust each other.

In a society using exclusively conventional money, money typically gets concentrated at the top of the social system. If you have money, you get more by just having it. Then you find that others are jealous of it, so you need police and an army to protect it. In such an environment, people can't trust anyone or anything.

So, by introducing local (yin) currencies into an excessively yang conventional currency system, we begin to recreate community. It's like weaving a tapestry. When I give to another person, I weave a community strand by creating a relationship with the particular community member I am giving to. We are becoming interdependent.

If I am using a time-dollar system, I am weaving strands a little differently. I am still creating strands within the community, although not with the particular individual I have given to. It is, instead, a multilateral process. I give something to one person, that person gives something to another, and eventually, someone else gives something to me. It is the combination of all these interactions-all these many strands-that completes the tapestry. This is what it means "to give among each other." And this is how we build community. The role of the gift is greater than it may appear.

The bottom line is that we need to realize that our current conventional money is not value-neutral. We now have evidence that complementary currencies create different types of relationships than conventional currencies do. We can promote competition, greed, and scarcity, or cooperation, generosity, and abundance with our money systems. The choice is ours.

For 25 years, Bernard Lietaer has been active in the domain of money systems in an unusual variety of functions. While at the Central Bank in Belgium he codesigned and implemented the mechanism for converting Europe to a single currency system (the ECU). During that period, he also served as president of Belgium's Electronic Payment System. His experience as a consultant addressing monetary issues spans four continents and ranges from working with multinational corporations to governments of developing countries. He co-founded one of the largest and most successful currency funds, becoming its general manager and currency trader. Mr. Lietaer was a professor of international finance at the University of Louvain and is currently a visiting professor at Naropa University in Boulder, Colorado. He is the co-founder of ACCESS Foundation, an educational non-profit organization that focuses on disseminating best practices in the domain of complementary currencies.

How to Barter, Give, and Get Stuff

from Shareable.net
By Janelle Orsi
08.31.10

There are things we do for money and things we do for free. And then there is everything in between. In that between-space, there is a growing and exciting world of barter, work exchange, gift circles, mutual aid societies, time banks, local currencies, and other modes of transacting that don’t use regular money. These transactions form a huge component of the “sharing economy,” the “third economy,” the “sustainable economy,” or whatever you may call this “new economy.”

I thought it would be a fun and important project to sort out the tax, business, and labor law implications of these “in between” transactions. However, when I got knee deep into the research, I found that things got rather soupy.

Explaining legal concepts in an interesting and vivid way can be a challenge, which is why I’ve chosen to construct this article around a more familiar concept: soup. There are a couple ways of making soup that fit clearly into defined legal frameworks:

* Soup for Money: If I were to own a gourmet soup restaurant, the tax, business, and labor law questions are fairly straightforward. The income I make would be taxable and sales tax would apply (in most states). I would be subject to health and safety laws, permitting requirements, and other business regulations. The people who help out in my kitchen would be legally considered employees, and I would be obligated to pay them minimum wage, obtain workers compensation insurance, pay payroll taxes, and so on.

* Soup for Me: On the other hand, when I make a pot of soup at home for myself and my partner, neither I nor my partner pay tax on it. (The value of the soup we create ourselves is what’s called “imputed income,” but the IRS doesn’t ask us to pay tax on it.) I don’t need special business permits, and when my partner helps chop veggies, she does not become my employee.

But once we go beyond these straightforward examples, making soup is definitely not cut and dry. I should warn that having a vast body of laws and regulations doesn’t mean that we actually know how to interpret them. Courts wrestle with the meaning of laws on a case-by-case basis, and that’s where we learn how to interpret laws. When things end up in court, it’s generally because there’s a lot of value at stake, like in a car accident lawsuit or major tax evasion case.

Truth is, the IRS doesn’t very often bring people to court over tax owed on a free guitar lesson received in exchange for babysitting. Definitely not often enough for us to have much case law to go on, or to know how to interpret the rules. The rules more or less say that barter is taxed and gifts are not. (For details, see Treas. Reg. § 1.61-1; IRS Publication 525; and 26 USCS § 102.) But in an informal economy, there are infinite ways to give and receive, and the line between barter and gifting could be unclear.

Furthermore, it’s hard to know how far the taxing of barter income actually extends. The IRS rule on barter, as written, appears to tax any good or service you receive in exchange for any other good or service. In practice, however, it’s probably not such a blanket rule. The IRS doesn’t seem to concern itself with one-time, casual, non-commercial exchanges of goods or property. Administratively, it would be a hassle both for taxpayers and the IRS to report the plums I gave my neighbor in exchange for his figs. Unfortunately, it’s hard to say at what point a barter arrangement has become sufficiently formal, commercial, or regular to be something that you should report.

There are also gray areas in designating what, exactly, is a business and what is an employee. As the informal economy begins to flourish, we may be surprised to sometimes find ourselves, unintentionally, operating a business, or, unintentionally, employing someone.

Sound confusing? Perhaps some examples and an extended metaphor will help. Let’s look at how all these rules play out using other scenarios in which I make soup:

* Soup Parties: What if I started throwing a fabulous monthly soup party for my friends? It’s all for fun and for free, although my friends sometimes show their appreciation by inviting me over for dinner, or by bringing dessert to my party. For the most part, these activities fall under the category of “gift,” and there will be few legal issues to worry about. I haven’t become a restaurant and the dessert my friend brings probably won’t be taxable to me as “income.” (However, even while this seems like an unregulated realm, I’ve been surprised to learn that in some cities there are laws that limit how many people you are allowed to feed for free.)

* Gift Economy Soup: Now what if I start having weekly soup parties and my friends start doing things for free too? As the spirit of giving and generosity grow, friends might offer free massage, gardening, computer help, handy work, or other favors. Other friends hold weekly salad nights, curry nights, or cook-out nights, and I get free dinners every day of the week! In this circle of giving, no one is obligated to give or receive anything, and no one is officially keeping track of who gives what and how it should be valued. What are the legal implications here? Since the giving occurs among friends and comes from a place of generosity, shouldn’t it be tax free? And because there are no contractual expectations of compensation and because people aren’t bargaining for things at a market prices, these activities aren’t commercial, are they? I would say that’s probably right, but it’s hard to answer these questions with complete certainty. Slight variations in the above scenario could cause it to look more like example #3 (Barter Soup) or #6 (Soup Enterprises), which probably are taxed and regulated as businesses.

* Barter Soup: Now what if my accountant offers to prepare my taxes in exchange for coming to five of my famous soup nights? Deal! But what does it mean legally? This example differs from the above Gift Economy example, because now we have a direct exchange that we’ve bargained for, and we have a binding verbal contract for barter. As discussed above, it’s not clear to me that all barter is taxed, but this arrangement is something the IRS would want us to report. Another question to ask here is: am I now accidentally operating a soup business? Since I have a binding and bargained for agreement to receive valuable services as “payment” for my soup, I’ve essentially sold soup to my accountant. Regulation of business comes from all kinds of agencies – health departments, planning departments, state tax boards, and so on. In the eyes of some agencies, selling soup even one time is not acceptable. Since the law varies from place to place, and from agency to agency, the main thing to remember is: be careful and do your research before you accidentally find yourself in business.

* Time Bank Soup: To continue expanding on the soup scenarios, my next project could be going to the homes of elderly and disabled to help with cooking. Because they and I are part of a local time bank similar to the Japanese Furaei Kippu (“Caring Relationship Tickets”) system, for each hour that I spend helping out, I am credited a “time dollar” through an online accounting system. Later on, I could redeem each “time dollar” for an hour of someone else’s time. In three rulings, the IRS has given some vague indication that they aren’t interested in taxing exchange of services like this. They give at least two reasons: 1) The exchanges are informal, meaning that I get no contractual right to have my favor returned. 2) The exchanges are non-commercial, meaning that they aren’t bargained for at market rates; whether I spend an hour cooking soup or an hour providing legal advice, my hour is valued at the same rate, and all transactions are an-hour-for-an-hour. Those tax rulings are not supposed to be relied on as precedent, and there is disagreement about how they should be interpreted. Still, they provide some of our only clues about what the IRS views as being outside the realm of taxation.

* Soup for Hire: Next, my landlord, who lives downstairs from me, learns of my superb soup and asks me to become a personal chef for her family, in exchange for allowing me to live rent free. I begin cooking two meals a day for her family, and at her pleading, learn to make things other than soup. The value of my free rent should be reported as income on my tax returns, and the value of my cooking services should be reported on her tax returns as rental income. It’s quite possible that I should now be classified as her employee, since I work for her regularly and take some direction from her about what to cook. Knowing whether a household worker is an employee or an independent contractor is critical. If you misclassify a household worker, you can end up with heavy fines. (Then, when you run for public office, you can end up with “nannygate.”)

* Soup Enterprises: Moving on with my soup scenario, now my soup has become so popular that I make multiple pots of soup every day, invite people over to share it, or put it in mason jars for people to pick up on my door step. No one ever pays me U.S. dollars for my soup, but I have been able to use soup to “pay” for most of what I need. I now get “free” health care, bike repair, fresh produce, and many other necessities and perks in exchange for soup. Even with no money changing hands, chances are that I’ve suddenly found myself in the soup business, and should pay tax on the value of most of what I receive in return. I will need a business license and various food-related permits. Also, as crazy as it sounds, when my friends come over to hang out in my kitchen and help me chop veggies, the law says I should be paying them minimum wage.

* Soup Bucks: Finally, I can take my soup operation one step further and start creating soup gift certificates. If I “buy” things with soup, it might be more convenient to give people a certificate that they can redeem for soup when they need it or which they could give to someone else. In fact, the U.S. Dollar came about in a similar way, except that it was backed by gold, not soup. If my “Soup Bucks” start circulating within my local community, they essentially become a local currency. Each certificate has value not only because it can be exchanged for soup, but because it can be exchanged with anyone who is willing to accept it. The success of Soup Bucks as a currency will be based on the community’s trust in my ability to keep on making soup. Starting your own currency and printing paper money is a legal and legitimate thing to do in all but two states, and with some limitations. But if you plan to back the currency with a guarantee of particular goods or services, then it’s possible that the currency also meets the definition of a gift certificate, which is a form of contract and has various regulations attached.

I Can See Clearly Now the Money’s Gone

Even with all the annoying legal grey areas and hurdles, transacting without regular money is one of the most important things we can do to transform our economies. But why should we even delve into this world beyond money? After all, hasn’t our national currency been a useful and efficient tool for transacting with one another? Yes, in theory.

But, in practice, dollars aren’t always there when we need them, and whole communities suffer from the scarcity of dollars. To begin to understand how our money and banking systems play a role in actually creating scarcity, I’d recommend watching the movie “The Money Fix.”

The scarcity of money could actually be our good fortune if it forces us to see that value remains even when money does not. In reality, we have a wealth of valuable people, skills, goods, time, and potential in our communities. This value is highly unrecognized and underutilized because we’ve all had a lifelong dependence on transacting almost exclusively with our national currency.

Transacting through barter, gifting, time banks, and other creative means will instantly open up potential for strong, localized, and sustainable economies. While you can’t use “Soup Bucks” to shop at Target or Safeway, you may be able to use Soup Bucks to support local crafts people, micro-farmers, small manufacturers, and friends who can help you meet your needs. Rather than struggling to compete with multimillion-dollar companies, a new generation of micro-entrepreneurs will thrive on new kinds of transactions.

The new economy comes hand-in-hand with more connected and supportive communities – neighborhoods where people know each other, circles of acquaintances who actively support each other, and more widespread use of cooperatives as a way to feed, house, and provide for ourselves and others. The new economy not only gives as a means to survive; it gives us a great way to live.

This is the first in a series. Tomorrow, we’ll look more closely at the legal nuts and bolts of the gift economy….

since people were coming and going, we focused on free stuffCredit: Shira Golding

Caveats

This article was an attempt to give readers at least some sense of orientation in relatively unsettled or uncharted legal territories. When legal definitions are unsettled, the best that we can do is 1) gain as much understanding as we can, by reading laws, regulations, tax rulings, and court cases, and 2) based on that information, make good faith and reasonable determinations about how to classify our activities. Sometimes, you may get the answer wrong, which means dealing with the consequences when the IRS, Department of Labor, or other agencies come calling. It’s up to you to decide what risks are worth taking.

Please keep in mind that the information in this article is not legal advice. Legal information is not the same as legal advice, which is tailored to an individual's specific circumstances and relies on the lawyer knowing all the relevant facts.

Acknowledgments

This article was made possible by my recent inspiring and helpful conversations with: Mira Luna, Edgar Cahn, Aumatma Binal Shah, Erin Byers, Nicolas Barry, Jenny Kassan, Mike Leung, Alpha Lo, Arno Hesse, and Guillaume P. Leblau. And the soup mania may have been partially inspired by attending Soup Stone last year.

Sacred Economics

Tuesday, 23 February 2010
by Charles Eisenstein

This article is a adapted from the introduction to the upcoming book Sacred Economics. The purpose of the book is to make money and human economy as sacred as everything else in the universe.

Today we associate money with the profane, and for good reason. If anything is sacred in this world, it is surely not money. Money seems to be the enemy of all our better instincts, as is clear every time the thought "I can't afford to" blocks an impulse toward kindness or generosity. Money seems to be the enemy of beauty, as the disparaging term "a sellout" demonstrates. Money seems to be the enemy of every worthy social and political reform, as corporate power steers legislation toward the aggrandizement of its own profits. Money seems to be destroying the earth, as we pillage the oceans, the forests, the soil, and every species to feed a greed that knows no end.

From at least the time that Jesus threw the moneychangers from the temple, we have sensed that there is something unholy about money. When a politician seeks money instead of the public good, we call him corrupt. Adjectives like "dirty" and "filthy" naturally describe money. Monks are supposed to have little to do with it: "You cannot serve God and Mammon."

At the same time, no one can deny that money has a mysterious, magical quality as well, the power to alter human behavior and coordinate human activity. From ancient times thinkers have marveled at the ability of a mere mark to confer this power upon a disk of metal or slip of paper. Unfortunately, looking at the world around us, it is hard to avoid concluding that the magic of money is an evil magic.

Obviously, if we are to make money into something sacred, nothing less than a wholesale revolution in money will suffice, a transformation of its essential nature. It is not merely our attitudes about money that must change, as some self-help gurus and "prosperity programming" teachers would have us believe; rather, we will create a new kind of money that embodies and reinforces our changed attitudes. Sacred Economics describes this new money and the new economy that will coalesce around it. It also explores the metamorphosis in human identity that is both a cause and a result of the transformation of money. The changed attitudes of which I speak go all the way to the core of what it is to be human: they include our understanding of the purpose of life, humanity's role on the planet, the relationship of the individual to the human and natural community; even what it is to be an individual, a self. This should not be surprising, since we experience money (and property) as an extension of our selves; hence the possessive pronoun "mine" to describe it, the same pronoun we use to identify our arms and heads. My money, my car, my hand, my liver. Consider as well the sense of violation we feel when we are robbed or "ripped off," as if part of our very selves had been taken.

A transformation from profanity to sacredness in money, something so deep a part of our identity, something so central to the workings of the world, would have profound effects indeed. But what does it mean for money, or anything else for that matter, to be sacred? It is in a crucial sense the opposite of what sacred has come to mean. For several thousand years, increasingly, the concepts of sacred, holy, and divine have referred to something separate from nature, the world, and the flesh. Three or four thousand years ago the gods began a migration from the lakes, forests, rivers, and mountains into the sky, becoming the imperial overlords of nature rather than its essence. As divinity separated from nature, so also it became unholy to involve oneself too deeply in the affairs of the world. The human being changed from a living soul to a mere receptacle of spirit, a profane envelope for a sacred soul, culminating in the Cartesian mote of consciousness observing the world but not participating in it, and the Newtonian watchmaker God doing the same. To be divine was to be supernatural, non-material. If God participated in the world at all, it was through miracles -- divine intercessions violating or superseding nature's laws.

Yet, paradoxically, this separate, abstract thing called spirit is supposed to be what animates the world. Ask the religious person what has changed when a person dies, and she will say the soul has left the body. Ask her who makes the rain fall and the wind blow, and she will say it is God. To be sure, Galileo and Newton appeared to have removed God from these everyday workings of the world, explaining it instead as the clockwork of a vast machine of impersonal force and mass, but even they still needed the Clockmaker to wind it up in the beginning, to imbue the universe with the potential energy that has run it ever since. This conception is still with us today as the Big Bang, a primordial event that is the source of the "negative entropy" that allows movement and life. In any case, our culture's notion of spirit is that of something separate and non-worldly, that yet can miraculously intervene in material affairs, and that even animates and directs them in some mysterious way.

It is hugely ironic and hugely significant that the one thing on the planet most closely resembling the forgoing conception of the divine is money! It is an invisible, immortal force that surrounds and steers all things, omnipotent and limitless, an "invisible hand" that, it is said, makes the world go 'round. Yet, money today is an abstraction, at most symbols on a piece of paper, but usually mere bits in a computer. It exists in a realm far removed from materiality. In that realm, it is exempt from nature's most important laws, for it does not decay and return to the soil as all other things do, but is rather preserved, changeless, in its vaults and computer files, even growing with time thanks to interest. It bears the properties of eternal preservation and everlasting increase, both of which are profoundly unnatural. The natural substance that comes closest to these properties is gold, which does not rust, tarnish, or decay. Early on, gold was therefore used both as money and as a metaphor for the divine soul, that which is incorruptible and changeless.

Money's divine property of abstraction, of disconnection from the real world of things, reached its extreme in the early years of the 21st century as the financial economy lost its mooring in the real economy and took on a life of its own. The vast fortunes of Wall Street were unconnected to any material production, seeming to exist in a separate realm.

Looking down from Olympian heights, the financiers called themselves "masters of the universe," channeling the power of the god they served to bring fortune or ruin upon the masses, to literally move mountains, raze forests, change the course of rivers, cause the rise and fall of nations. But money soon proved to be a capricious god. As I write these words, it seems that the increasingly frantic rituals that the financial priesthood uses to placate the god money are in vain. Like the clergy of a dying religion, they exhort their followers to greater sacrifices while blaming their misfortunes either on sin (greedy bankers, irresponsible consumers) or on the mysterious whims of God (the financial markets). Soon, perhaps, we will blame the priests themselves.

What we call deflation, an earlier culture might have called, "God abandoning the world." Money is disappearing, and with it a third property of spirit, the animating force of the human realm. At this writing, all over the world machines stand idle. Factories have ground to a halt, construction equipment sits derelict in the yard. Yet all the human and material inputs to operate them still exist. There is still fuel, there are still raw materials, and there are still human beings in abundance who know how to operate the machines. It is rather something immaterial, that animating spirit, which has fled. What has fled is money. That is the only thing missing, so insubstantial (in the form of electrons in computers) that it can hardly be said to exist at all, yet so powerful that without it, human productivity grinds to a halt. It is as if God had forsaken the world. Even beyond the mechanical realm, we can see the demotivating effects of lack of money. Consider the stereotype of the unemployed man, nearly broke, slouched in front of the TV in his undershirt, drinking a beer, hardly able to rise from his chair. Money, it seems, animates people as well as machines. Without it we are dispirited.

We do not realize that our concept of the divine has attracted to it a god that fits that concept, and given it sovereignty over the earth. By divorcing the soul from the flesh, spirit from matter, and God from nature, we have installed a ruling power that is soulless, alienating, ungodly and unnatural. So when I speak of making money sacred, I am not invoking a supernatural agency to infuse sacredness into the inert, mundane objects of nature. I am rather reaching back to an earlier time, a time before the divorce of matter and spirit, when sacredness was endemic to all things.

My understanding of sacredness is secondary to my feeling of sacredness, or to put it better, to the feeling of being in the presence of the sacred. I cannot define that feeling, nor need I define it, because I am sure that you have felt it as well. In the presence of the sacred, we are moved to the very core of our being, we feel reverence and awe, humility and amazement, and a profound sense of gratitude. Even though, intellectually, I know that I am in the presence of the sacred all the time, only rarely do I actually feel its fullness. When I do, I feel like I have returned to a home that was always there and to a truth that has always existed. It can happen when I observe an insect or a plant, hear a symphony of birdsongs or frog calls, feel mud between my toes, gaze upon an object beautifully made, apprehend the impossibly coordinated complexity of a cell or an ecosystem, witness a synchronicity or symbol in my life, watch happy children at play, am touched by a work of genius. Extraordinary though these experiences are, they are in no sense separate from the rest of life. Indeed, their power comes from the glimpse they give of a realer world, a sacred world that underlies and interpenetrates our own.

What is this "home that was always there, this truth that has always existed"? It is the truth of the unity or the connectedness of all things, and the feeling is that of participating in something far greater than oneself, yet which also is oneself. In ecology, this is the principle of interdependence: that all beings depend for their survival on the web of other beings that surrounds them, ultimately extending out to encompass the entire planet. The extinction of any species diminishes our own wholeness, our own health, our own selves: something of our very being is lost. We can feel this sense of loss directly, as an emotion, as well as indirectly through the multiplying health crises of our time. This book will draw from ecology to help describe a sacred economy. For example, in the planetary ecosystem there is no such thing as waste: the waste of one creature is the food of another, creating a sacred gift circle. For an economy to be sacred, it must be the same.

If the sacred is the gateway to the underlying unity of all things, it is equally a gateway to the uniqueness and specialness of each thing. A sacred object is one-of-a-kind; it carries a unique essence that cannot be reduced to a set of generic qualities. That is why reductionistic science seems to rob the world of its sacredness, since everything becomes one or another combination of a handful of generic building blocks. This conception mirrors our economic system, itself consisting mainly of standardized, generic commodities, job descriptions, processes, data, inputs and outputs and, most generic of all, money, the ultimate abstraction. In earlier times it was not so. Tribal peoples saw each being not primarily as a member of a category, but as a unique enspirited individual. Even rocks, clouds, and apparently identical drops of water were thought to be sentient, unique beings. The products of the human hand were unique as well, bearing through their distinguishing irregularities the signature of the maker. Here was the link between the two qualities of the sacred, connectedness and uniqueness: in their uniqueness, objects retain the mark of their origin, their place in the great matrix of being, their dependency on the rest of creation for their existence.

In this book I will describe a vision of a money system and an economy that is sacred. In other words, I will describe an economy that is no longer separate, in fact or in perception, from the natural matrix that underlies it. I will describe a reunion of the long-sundered realms of human and nature. The human economy will no longer be something separate from nature; it will be an extension of nature that obeys all of its laws and bears all of its beauty, wholeness, and enchantment.

Within every institution of our civilization, no matter how ugly or corrupt, there is the germ of something beautiful: the same note at a higher octave. Money is no exception: its original purpose is simply to connect human gifts with human needs, so that we might all live in greater abundance. How instead money has come to generate scarcity rather than abundance, competition rather than sharing, is one of the threads of this book. Yet despite what it has become, in that original beauty of money we can catch a glimpse of what will one day make it sacred again. We intuitively recognize the exchange of gifts as a sacred occasion, which is why we instinctively make a ceremony out of gift-giving. Sacred money, then, will be a medium of gifting, a means to recreate the gift economy of a hunter-gatherer or village society on a planetary level. A sacred economy will be an economy of the Gift.

Sacred Economics describes this future and also maps out a practical way to get there. Long ago I grew tired of reading books that criticized some aspect of our society without offering a positive alternative. Then, I grew tired of books that offered a positive alternative that seemed impossible to reach: "We must reduce carbon emissions by 90%." Then I grew tired of books that offered a plausible means of reaching it, that did not describe what I, personally, could do to create it. Sacred Economics operates on all four levels: it offers a fundamental analysis of what has gone wrong with money; it describes a more beautiful world based on a different kind of money and economy; it explains the collective actions necessary to create that world and the means by which these actions can come about; and it explores the personal dimensions of the world-transformation, the change in identity and being that I call "living in the Gift."

The economic crisis we face today is just one of many crises that are converging upon us all at once: crises in energy, education, health, water, soil, climate, politics, and the environment. My previous book, The Ascent of Humanity, traced the origin of each to a common root, millennia old, that I call Separation. Their convergence is a birth crisis, in which we are expelled from the old world into the new. Unavoidably, these crises invade our personal lives, our world falls apart, and we too are born into a new world, a new identity. This is why so many people sense a spiritual dimension to the planetary crisis.

I dedicate all of my work to the more beautiful world our hearts tell us is possible. I say our "hearts", because our minds tell us it is not possible. Our minds doubt that things will ever be much different than experience has taught us. You may, as you read the forgoing encomium to a sacred economy, have felt a wave of cynicism, contempt, or despair. You might have felt an urge to dismiss my words as hopelessly idealistic. Indeed, I myself was tempted to tone down my description, to make it more plausible, more responsible, more in line with our low expectations for what life and the world can be. But such an attenuation would not have been the truth. I will, using the tools of the mind, speak what is in my heart. In my heart I know that an economy and society this beautiful is possible for us to create, and indeed, that anything less than that is unworthy of us. Are we so broken, that we would aspire to anything less than a sacred world?