Skip to content

Creating Wealth out of Nothing

December 13, 2004

Two weeks ago, the Mail & Guardian ran a story by Norman Reynolds (Ora Points the Way) in which he argues that alternative, community-based currencies keep wealth in the community. He cites the Ora – the currency of ‘Boerestaat’ Orania – as an example. Yet there is a better example: The Talent Exchange is a successful local economy that has been operating in
Cape Town for close to two years.

The Exchange is essentially a bartering system, except that you don’t exchange directly between two people – a dozen eggs for an oil change, forexample – because of the obvious impracticalities of that system. Instead, when you trade with some one you earn an invented currency called a ‘Talent’. Talents don’t physically exist -there are no bank notes – but are entered into a database as a credit for the seller and a debit for the buyer. You can then use your credits to buy something else on the system. This is called a Local Exchange and Trading System (LETS), a community currency system that has been around since the 1930s. In a LETS system, the
sum of all debits and credits always adds up to zero. There is no physical currency, just a record of the value of the trades done. There are a number of LETS in operation, especially in the UK and Australia, where they are popular among Greens. The total value of LETS trades world wide is estimated to be at about R100 million, but until now they have been isolated from each
other.

The problem with these systems is that is there is a tremendous amount of admin involved in recording all the trades. This has meant that there is a ceiling of about 700 members on a system before it becomes too unwieldy to be useful. This is where the South African example is unique – it’s the first system to run off a web-based database, at http://www.ces.org.za.

The website
works just like Internet banking – if you cut my hair, I give you my account details and you go online and debit me. If you don’t have a computer, your local area coordinator will enter the trade for you. This means there is theoretically no ceiling – the Cape Town Exchange has almost a thousand members, and is growing fast.
Thanks to software written by South African Tim Jenkin – author of Inside Out, about his escape from Pretoria prison after being arrested as an ANC activist – there are now plans to link these systems to create a sustainable alternative currency internationally, all using the same software to trade with each other.

Anyone can join the Exchange. When you register, you get an account number and make an offering. You are now ready to earn and spend Talents. The Exchange is jointly ‘‘owned’ by all who use it. Anyone wanting to start an initiative using Talents may do so, and there have been a number of Talent Fairs – markets where goods and services are bought and sold using
the alternative currency – organised by members.

One of the organisations most active on the Exchange is permaculture organisation Permacore. Recently Permacore teamed up with the city council on a sustainable living project. They worked with 30 households in Mitchell’s Plain, introducing them to the system and getting them to build up creditsby doing tasks for each other. Then they held a Christmas fair in Lost City, Mitchell’s Plain, to allow people to buy gifts for Christmas without spending money. Members were invited to bring goods to trade.

Beau Horgan of Permacore was very pleased with the response: “This project cost R620 to organise”, he said, speaking at the fair. “And we’ve created about R14000 worth of value in Talents today – all from people sharing their skills”.
I have been on the system for 18 months, and in that time I have earned and spent around 12 000 Talents on organic wine, olive oil, flights around the Peninsula, computer hardware and software, office equipment, massages, Japanese lessons and more. This hasn’t cost a cent. To earn Talents I have held sushi rolling workshops, catered for parties, and written copy for
people who can’t afford to pay rands for it. The system is ideal for launching a small business or piloting a project without spending rands. For example, you can get training, a business plan,
tax advice, a website, business cards and flyers for Talents. You can also try out your idea on the Exchange first, and make all your mistakes there, before venturing into the rand economy.

Our townships are full of skilled people, unemployed nurses, teachers and builders, their skills wasted because there is no money to pay for them. At the same time, there is a tremendous need that is not being met – once again, for macro economic reasons beyond the control of the community. What better way to improve our lives than to make our own money?

Advertisements
One Comment leave one →
  1. Mike permalink
    October 1, 2005 11:36 pm

    make money quick is easy. make money quick

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: