The Pop-Up City just published an article about the Makkie, a community currency for a socially disadvantaged neighbourhood in Amsterdam. Essentially, it’s a time-swap system that allows people to trade their services (chores) by a form of non-legal tender – formalizing the concept “you scratch my back, I’ll scratch yours”. Interestingly, the Makkies can also be used to get discounts at local stores.
According to Pop-Up City, the aim of the Makkie and other community currencies – often introduced by social workers or urban planners – is usually to strengthen social cohesion. QOIN, the agency that conceived the Makkie, has a fascinating and exhaustive overview of “complementary currencies” that points out many differences to standard currency (it’s also a great primer on money in general, and easy to read).
While it does state that legal tender is “politically loaded”, one key factor goes unmentioned: when alternative currencies are used, the complete trade value is immediate. What do I mean by that?
In a welfare state, social security and other pension costs are not primarily covered privately, but routed to recipients via the state – through taxes, or by being factored into the price of services. If you’re employed, your employer has to pay into your pension fund. If you’re self-employed, you do. The consequence is that services become more expensive to offer and use, because you pay not only for the work done now, but also towards the – distant – future of the worker. In many states with ballooning welfare costs, services become so prohibitively expensive that entrepreneurs are discouraged – the results are outsourcing of labour or economical stagnation, both of which can lead to unemployment.
Alternative currencies like a time-swap system are different. Everyone’s day has 24 hours, and an hour given is an hour got – whether you use it now or when you’re a pensioner. This means that services too expensive to give or “buy” in the regulated context of money-exchange can suddenly be traded again. Of course, in direct swap systems the cost of education is not factored in. Neither are opportunity costs. There are many ways in which non-legal tender is perhaps less exact, less fair than traditional money. My guess is that people choose these currencies not only because they foster a sense of community, but because they make services less expensive in the immediate sense since they are not taxed – which also means they are less bureaucratic. It seems only natural that these currencies would blossom in recession times, and in highly regulated and/or intransparent societies. The mind games of the financial world have created huge inequalities of income and wealth, and eroded trust in capitalism and traditional moolah – the Occupy movement is testament to that. Obviously, an economy based only on money is not working for most people. Introducing more, or bigger, complementary currencies to broader groups (not only marginalised neighbourhoods) could be a way of humanising, of equalizing societies that seem to be drifting ever more apart.