Time = Money

By on October 27th, 2016 in Editorial

There are some, however, who have taken the concept further and far more literally, using time as an alternative currency that (to some extent) eliminates the need for conventional money, while also functioning as a community development tool.

One of the first instances of time-based currency was issued in the UK by the National Equitable Labour exchange in 1832, which printed ‘Labour Notes’ promising to ‘deliver to the bearer exchange stores to the value of [unit of time]’ in denominations of 1, 2, 5, 10, 20, 40, and 80 hours.

The exchange rate of such a currency is simple – and can be entirely independent of any established form of legal tender. At its most basic, a person can exchange one hour of a particular service for one hour of a different kind of service, or for goods of equal value to the going rate for an hour of the service they provide. The beauty of such a system is that everyone has time, while not everyone has money.

In the words of Edgar Cahn – frequently referred to as the founder of ‘time-banking’ – conventional pricing mechanisms place value on scarcity, thereby defining ‘every fundamental capacity that has enabled our species to survive [as] worthless’. In its place, he envisaged a system predicated on the ability of humans to care for and help each other. Essentially, he hoped to monetise the activities traditionally relegated to volunteer work.

But – contrary to popular opinion, it seems – he was not the first to have the idea. The world’s first time bank opened in 1973 in Japan, the brainchild of self-described housewife Teruko Mizushima who had spent the previous 30 years pathologically streamlining her life, ostensibly obsessed with ways to use her time more efficiently. She was also (unsurprisingly, perhaps, having borne witness to the Second World War) greatly preoccupied with the idea of being prepared for emergencies and able to circumvent any material scarcity or hardship. She believed money was no guarantee of a secure life.

So, having ‘retired’ as a mother following her son’s marriage (her words), Mizushima set up the Volunteer Labour Bank in 1973. She travelled the country, proselytising the virtues of a system that allowed its members to ‘save up’ hours by performing tasks valuable to other members or the community, and cash them in for other services at a later date. It was exactly like a real bank, with fastidious accounts recording time spent and accumulated by each member. At its height, the bank had 4000 members, and many of the services exchanged involved caring for sick relatives or children.

After Mizushima’s death in 1996 – and without her charismatic evangelism –  membership of the Volunteer Labour Bank fell to 1000. Yet the idea spread, and today there are time banks in 34 countries, with at least 300 each in the US and the UK. The idea of time as currency is also a key component in the penal system; community service is essentially a form of penalty paid off by performing a set number of hours of volunteer work.

Much as would be the case with the Volunteer Labour Bank, community-minded individuals today can sign up with organisations like Economy of HoursTIMEREPUBLIK or TimebankingUK.

It’s a fascinating, almost utopian concept, and – given that freemarket has a great appreciation for time as a commodity (and we have structured our business model around an ability to save our customers time as well as money) – we can only admire the ambition and vision of those who have sought to repurpose time as a currency for the greater social good.

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James is freemarket’s Chief Commercial Officer. He has a history of finding new ways to solve age-old financial challenges and was responsible for launching some of the first online money transfer and prepaid card initiatives in Europe.

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