Time is money

What are time banks and how are they faring in mid-Michigan?

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Brett Dreyfus first heard about time banks about 15 years ago, but he was in no position to start one: “I just didn’t have the time,” he said.  

But when Dreyfus was elected as a Meridian Township trustee in 2008, things changed. Dreyfus organized three planning sessions last September that he hoped would be the genesis of a currency system that, at first mention, usually leaves people scratching their head. 

“When I first say what time banking is, people usually say ‘OK.’ But as I explain it a minute or two further, they don’t. At first they think it’s just another volunteer program,” Dreyfus said. 

Dreyfus’ hopes became a reality. The 10-member Meridian Time Bank is “small, diligent and grew like a garden,” he said. What started out with a few planning sessions nearly a year ago has grown into an organized operation that officially launched last month. Members wash each other’s houses, fix cars, grow gardens — and charge each other for it. But not with money.

Time banking is an alternative currency that uses a person’s time instead of bank notes. An organized group of people forms a time bank. Together, they complete tasks for one another — from mowing a lawn to fixing a computer hard drive. Members agree to accept hours of time, in increments of one hour, as a payment for services. The founder of TimeBanks USA, Edgar Kahn, insists that the time bank hour is not merely a form of volunteering, but rather a new kind of money. 

Of course, this begs the question: What is money?  Most people probably wouldn’t consider this a difficult question. They might reach into their pocket, pull out a wad of dollar bills and say: “This is.” And they’d be right — sort of. Scholars such as Douglas Rushkoff, author of “Life Inc,” say that, over time, we’ve come to see those green things — also known as centralized currency — as the only thing that can be called money. In this respect, we are severely limiting ourselves, he says.  

What is it about those little green pieces of paper? The numbers that are written on them determines each one’s relative value. And we can use them everywhere to purchase goods and services. Each has worth because we all agree that it has worth. But they can also be local and take many forms. Bernard Lietaer, in his book “The Future of Money,” writes: “Money is an agreement, within a community, to use something as a means of payment.”

The Meridian Time Bank is by no means the first of its kind. Time banks exist all over the world, including several in Michigan. The Lathrup Village TimeBank in metro Detroit was started by Kim Hodge in 2008 and is regarded as Michigan’s most successful time bank.  

Lathrup Village’s success didn’t come easy.  It took “a lot of work and a lot of time,” Hodge said. “It takes a good year to get a group of people together.”

Lathrup Village’s time bank started with 30 members. By the end of the first year they were up to 60. By the second year, membership grew to more than 100.

While the concept can seem somewhat complicated, it’s actually quite simple. Everyone who joins the time bank starts out with a balance of zero. Here is a hypothetical situation that explains how exchanges are made: If Joe spends one hour mowing Cathy’s lawn, then Joe’s account is credited one hour and one hour is deducted from Cathy’s account. Joe can then redeem that time bank hour for one hour of service. What makes this system more flexible than bartering is that the time bank hour is a standardized unit. If Cathy has nothing to offer that interests Joe, he can solicit the services of someone else using the time bank hour, which all members of the time bank have agreed to accept as legal tender.  

A time bank is an example of what is called a mutual credit system where the money is created at the time of the transaction and is worked into existence. As more people join the time bank and more services are performed, more credits are created. It’s also known as complementary currency.

“Most people look at it and say, ‘OK, well how are people ever going to trust a complementary currency?’ And the fact is, you don’t need to trust a complementary currency, because it’s real; it’s actual hours of time that you get credited to you as opposed to the currency we use now,” Rushkoff said when I interviewed him two years ago.

A similar concept to time banking has been around the Lansing area since 1991. Founded by Gary Kay, Trade Network Inc. organizes businesses to help them make barter exchanges with one another. Whereas the Meridian Time Bank allows members of a community to exchange services, Trade Network is a for-profit, business-to-business barter network. The two operate in different realms. “It’s really more of hobby thing,” Kay said of time banks. “What we do is on a much higher scale.”

Transactions made through Trade Network, as well as with other commercial barter networks, are subject to taxation and traders must fill out a 1099-B tax form. Time bank transactions have been ruled by the IRS to be tax-exempt.

“They are simply a different form of the things neighbors do for one another,” Cahn, the founder of TimeBanks USA, wrote in his 1992 book, “Time Dollars.”

The time bank is not without its critics. Due to the unconventional nature of such a system, various questions regarding its viability will naturally arise. One of the first questions people ask is, “How can we perform all necessary transactions with time bank hours? 

“Time-banking is not meant to replace the current monetary system, rather to complement it,” Hodge of Lathrup Village said. “Many people do not have the same level of funds or income today that they have had in the past, yet they still have assets and skills to share. Time-banking facilitates connections among people who can then share those skills.”

Another concern is that people who are professionals feel that by treating every hour of work to be of equal worth, their services are devalued. For instance, a website designer may feel that an hour of programming is worth more than one hour of mowing lawns. 

“Time-banking is not meant to devalue anyone, rather to value everyone,” Hodge said. “Time-banking core values are about respecting each person’s individual skills and assets and finding ways to use those skills to help others. Too many people feel less valuable than others, and our culture allows that to happen. We are changing that paradigm.”

Still, others wonder how this will affect the greater economy at large. If people begin soliciting services from their neighbors for time bank hours rather than from businesses, could this potentially hurt those businesses? 

“Local currency systems tend to be small. Most are between 75 and 150 or so people. So, any impact on existing businesses is likely to be small,” said Ed Collom, a professor of sociology at the University of Southern Maine who has studied complementary currencies. 

Users of complementary currencies claim the purpose is to encourage people to procure services locally rather than from large corporations. So, instead of getting an oil change from a national chain, one could get his or her oil changed by a neighbor or maybe from a local oil change shop. But aren’t local people employed at national chains? They need to make a living too. How do time banks affect them?  

“If members (and people) lessen their reliance upon chain retailers, there are benefits to the local economy as a whole,” Collom said. “I don’t really see these systems as having much of a negative impact on chain retailers or the formal economy. They’re small DIY networks. If I get an oil change through my local time bank, it’s analogous to me cooking more meals at home rather than visiting restaurants.”

The Meridian Time Bank is not the first of its kind to surface in the greater Lansing area. Susan Geshalt and her husband, Nicolas, residents of the Hawk Nest neighborhood in East Lansing, started their own time bank after Susan heard about the concept from Hodge, of the Lathrup Village time bank.

The residents exchanged time bank hours for things like mowing lawns and babysitting. But, as Hodge mentioned, managing a time bank can be a lot of work as there are a great number of administrative duties that must be performed.

“It’s hard to sustain if people aren’t paid to organize it,” Geshalt said. “The biggest thing was reminding people to go online and use it.” Most everyone I spoke with said members of the time bank are much more reluctant to ask for services for themselves than they are to perform them for others. Geshalt and her husband eventually became too busy, leading to the dissolution of the time bank.

For now, anyone can join the Meridian Time Bank — even if they live outside of Meridian Township. Time banks are more effective in smaller areas because the close proximity of the members makes it easier to make exchanges. As more cities start time banks — such as East Lansing, where efforts to start one are being led by City Council member Nathan Triplett — residents who are members of those communities will be encouraged to join their local time bank and to withdraw from the Meridian Time Bank. 

Those from outside of Meridian Township who join will be required to make an as yet-undetermined amount of transactions per year.  

While participants in many time banks do offer elder care and child care as potential services, early on, the Meridian Time Bank will discourage members from providing these services until liability issues can be worked out. Some time banks have insurance to protect individuals while working in service of the time bank.  

In order to prevent stagnation, credit balances will be capped at plus- or minus-five time bank hours. Limiting excessive credits or debits will help ensure that the time bank hours continue circulating.  

These are merely Dreyfus’ suggestions of how the time bank should work. While this should provide an accurate picture of what the time bank will look like, the members of the time bank have the final say, he said.

And that’s how Dreyfus envisions the Meridian Time Bank growing — through member input, one at a time.

“The nature of the time bank is that if you move too fast, you burn out,” Dreyfus said. 

“The good will that is generated will naturally resonate with other people as they talk about it. People will get the ‘Ah-ha’ moment. If it depends on any one person, it’s doomed to fail.


Care to Join?
Contact Brett Dreyfus at MeridianTimeBank@gmail.com or attend the next informational session Saturday, 11 a.m. at the Meridian Activity Center, 4675 Okemos Road.

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