New kinds of exchange

• Author: Janelle Orsi
• Profession: Is the Director of the national nonprofit Sustainable Economies Law Center, and she is a 'sharing lawyer' in private law practice in Oakland, CA
• Pages: 259-298

259

CHAPTER FIVE

NEW KINDS OF

EXCHANGE

PART 1: I CAN SEE CLEARLY NOW THE MONEY’S GONE

A community w ithout dollars is not a community w ithout wealth—

this basic understa nding fuels the shar ing economy. Every community,

no matter how money-poor, has, at the very least, a wealth of human

resources and the capacity to c reate material resources. Dollars g ive us a

very organized mea ns of sharing and exchanging those resource s. How-

ever, when there is a scarcity of dollars, our economy need not grind

to a frightening halt. We need only find additional ways to share and

exchange. Our systems for exchange could be as organized as a local

currency or online mutual credit system, or as casual as swapping and

gift-based provision among friends and community members. This vast

realm of economic possibility, of course, churns up new legal gray areas

and unique challenges for attorneys working in this realm.

The Scarcity of Dollars

To the extent that people want them badly and use them often, dollars

will always be in our lives. But t oday, U.S. society is pla gued by foreclo-

sures, business closu res, and unemployment—these are both the causes

and the effects of dollar scarcity. Even in better economic times, t here

have always been people who do not have enough money to meet their

basic needs.

Scarcity is built into our money system itself. The majority of

money in circulation today was issued by banks in the form of loans.

Money is, essentially, lent into existence, with interest. Repay ing a loan

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260 | P  L   S  E

with interest means the borrowers must work hard to earn even more

than they have spent. People end up competing with one another to

earn that premium a nd to get ahead financial ly. Inevitably, some people

do get ahead, and do so at the expense of others who fall beh ind, fall into

default on credit cards, and fall into poverty. In such a system, money

will always be scarce for some people. Today, in 2012, it is scarce for

many.

If all dollars in ex istence were to simply disappear—evaporating

from our wallets and our bank accounts—t he sum total of all wealth in

society would not be affected in t he least. In fact, the disappearance of

dollars would be our good fortu ne if it were to help us see that we have

other reasons, incentives, a nd mechanisms for providi ng that wealth for

one another. If dollars were out of the picture, huma ns would find innu-

merable and creative ways to exchange.

Even though dollars will not disappear entirely, their abundance

is subject to wild fluctuation, and we would do very well to establish

alternatives to our dependence on dollars. The more ways we find to

exchange, the more resilient our economy will be in diff icult times. For

example, in 2011, the world watched as Greece suffered from a dramatic

financial collapse, after which barter networks and local currencies

gained strong traction, giving people means to continue transacting

with each other.1

Also, in the 1930s, when Switzerland experienced a scarcity of t he

national currenc y, a complementary currency known as the WIR was

created. The WIR is not a printed cu rrency, but an exchange system

that exists only in bookkeeping. Today, the WIR continues to play a

strong role in the Swiss economy, with tens of thousands of people cir-

culating the equivalent of $3 billion in WIR.2 Use of the WIR grows

in popularity when t he Swiss Franc becomes scarce; because use of the

WIR restores bala nce and enables transaction during times of scarcit y,

the Swiss economy is somewhat insulated from t he extreme effect s of

recession.3 A society that implements such complementary systems and

habits of exchange can therefore be far more resi lient during tough

1. Rachel Donad io, Bat tered by Economic Crisis, Greeks Turn to Barter Networks, N.Y.

T, Oct. 1, 2011.

2. For more information on the W IR Bank, see htt p://www.wir.ch.

3. 60 Years of the WI R Economic Circle C ooperative: Origin s and Ideolog y of the

Wirtschaftsring (Thomas Greco tran s. of article appea ring in W IR Magazin (Sept .

1994)). http://proje cts.exeter.ac.u k/RDav ies/arian/w ir.html.

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New Kinds o f Exchange | 261

economic times and will also be far less likely to suffer from extreme

ups and downs.

The Spectrum of Ways to Exchange

In the United States, there are already innumerable ways to exchange

without money at the national, local, and personal levels. First of all,

there are now systems to exchange with complete strangers all over the

country. For example, last year, I “bought” and “sold” 18 DVDs using

SwapaDVD.com, and the only currency I used consisted of “points” I

earned after mail ing free DVDs to total strangers. Many other websites

have now been established to allow people to swap goods and services

within a network and to pay one another with “points,” “credits,” or

through other systems for t racking transactions.4 The Green America

Exchange5 is an example of a barter exchange, where members, who

are mostly green businesses, can offer their ser vices and goods to other

members, and receive “payment” in Exchange Dollars. In addition,

Facebook has created its own currency called “Credits,” which can

be used to purchase apps, games, a nd other virtual goods. Credits are

earned in a variet y of ways—by playing games, watching ads, pay ing ten

cents to Facebook, or buying an Arby’s sandwich.6

At the level of local communities, t here are now many time bank s,

which are communities of people who do favors for one another in

exchange for “time dollars” that can be “spent” within t he network to

meet a variety of needs. Time banks are unique in that one person’s

hour is valued the same as someone else’s hour, so there is no market-

based valuation of people’s services. In addition, people can spend time

dollars and accumulate a negative account balance, a nd they are never

legally obligated to “repay” them. It means that people who are in need

can use a time ban k to get assistance, without having to first accumu-

late a positive balance. In this respect, time banks aren’t exactly facili-

tating barter; t hey are facilitating a c ulture of givi ng that could be an

incredibly important tool for providing for people with diverse needs.

Local currencies—both paper and digital—are also beginning to f low

4. R B   R R, W’ M  I Y: H C 

C  I C  W W L ( Harper Collin s 2010).

5. See http://www.greenamericaexchange.org.

6. Mark Hachman, Buy an Arby’s Sandwich, Get Facebo ok Credits with Plink, PC M,

Mar. 26, 2012, http://www.pcmag.com /article2/0,2817,2402151,00.asp.

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