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How we can find Wealth by Inventing our Own Currency

December 13, 2004

Since I joined the Talent Exchange, I have bought six cases of organic, handmade garagista Cabernet Sauvignon, two cases of olive oil, had a flight around the Cape Peninsula in a light aircraft, bought computer hardware and software and office equipment, started Japanese lessons, had massages and nurturing treatments, and bought boxes of organic vegetables. I’m planning to start scuba lessons soon. None of this has cost me a cent – in fact, most of the above are luxuries I can’t afford to spend money on.

How have I paid for all of this? By earning an alternative currency called Talents. 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 Talent Exchange is essentially a bartering system, except that you don’t exchange directly between two people – a dozen eggs for an oil change, for example – 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 all 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.

There’s a problem with these systems, though, and that is the 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, the Talent Exchange, is unique – it’s the first system to run off a web-based database,
at 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. This means there is theoretically no ceiling – all the admin is done when individual traders enter their trades on the website.

There is a searchable database of offerings and wants, so if you need a mechanic or a lawyer or some one to align your chakras or channel your guides, you can find it in seconds. And if you don’t have a computer, you can go along to your local area co-ordinator, who will help you to find what you need and enter your trades for you.
There are a number of trading communities, in Cape Town, Johannesburg, the Garden Route, and some of the smaller towns in the Western Cape. Each community is a closed system, but it is possible to trade between systems.

And anyone can set up a system – all you do is email the administrator and ask to use the software, which is free. LETS systems around the world have started asking for the software, and it is likely that at some time in the near future there will be an international network of systems trading with each other in a sustainable currency based on what people need.

Cape Town is the only community that has really taken off, and that has reached the critical mass to make it possible to live off the system. Cape Town has three trading communities: the general system, called the Cape Town Talent Exchange (CTTE), the Oude Moulen system, for residents of the alternative community of Oude Moulen near Observatory, and the TSiBA
Education system. TSiBA is an institution offering university accredited courses. Students can pay for their education by earning Talents paid at a fixed rate: they can pay for their degrees by doing 30 hours of work per month, in tasks that include admin work, tutoring, or passing on their
skills in their communities.

The CTTE first took off in predominantly White suburbs populated by alternative thinkers, like Noordhoek, Muizenberg and Observatory. This is because of the demographics of Internet access. But a recent attempt to launch the Exchange in the township of Lost City in Mitchell’s Plain was a massive success. Suddenly, township residents could earn as much as they
needed, as they created currency to pay each other and realised the tremendous wealth in skills they had. They were able to earn Talents doing tasks for each other, and spend them at a Talent Exchange Christmas fair, where they bought children’s toys and other goods in the currency they’d just earned.

Imagine our townships, filled with skilled people who are idle – and frustrated – because there’s no money to pay for their skills. People who are poor according to conventional economics have no money, but a host of skills and other resources. One person in the community might have a whole lot of old planks, another might have building skills, another a small piece of land, and another group a vegetable garden. Put them together, and they can build a shop for the veggies, which they can sell for more community currency, and so, with each transaction, increase the wealth of the community and make it more self-sufficient by mobilising existing
resources – human and material.

What the community does not have, it can trade with outsiders. Allow the system to grow organically, and slowly but surely the Rand loses some of its power over us. Our townships are full of builders, nurses, security guards, teachers and other skilled people. Many of them are unemployed. By mobilising their skills we could make a big difference.

So what is exactly the Talent Exchange?

Last refuge of the lost liberal?

Communism in action?

The best living example of anarchist mutual aid?

The purest free market on earth?

Or an alternative economy for barefoot lentilkop hippies?

The truth is somewhere between all of this, and there are as many answers as there are members of the system – almost a thousand. Though it’s probably accurate to say that the lentilkoppe are in the majority – the most active participants are permaculture organisation Permacore, who have been signing up township communities, teaching them permaculture and trading on the system.

The system was launched by South African New Economics (SANE), an alternative economy think-tank, using software written by Tim Jenkin, a former detainee who escaped from Pretoria central prison and wrote about his experiences in the book Inside Out. Most members of the exchange are not involved with the SANE, and the system is autonomous and has taken on a life
of its own.

Ironically, the Talent Exchange is a place where the neoliberal wet dream of enlightened self-interest actually works. If I want to get a lot out of the system – buy a lot of products and services – I have to earn a lot of Talents. But I can only earn Talents by doing things that the community finds useful. And I can’t earn interest on my Talents, so if they are to be any use, I need to spend them back into the community and make some one else wealthy. So the more sushi I roll, the more copy I write, the richer I get – but so does the whole community, eating sushi at a party that didn’t cost a cent and producing newsletters for free.

Because everyone has the equal right to create currency, there is no authority controlling wealth, no governor setting interest rates. No one controls the system, although there is an accountable steering committee and various forums for dealing with issues that arise. If you want to go into
T10 000 debt, no one is going to stop you, charge you interest or break your kneecaps and evict you if you don’t pay. As long as you are offering something to the community, debt is fine. But all account details are open for all members to see, so traders can quickly get a sense of who is taking from the system and not putting back, and refuse to trade with them.

This easy access to credit, and a wide range of skills, means the system is ideal for launching a small business or piloting a project without spending a cent. For example, you can get a business plan, tax advice, a website, business cards and flyers for Talents. You can also try out your idea on the Talent exchange first, and make all your mistakes there, before venturing
into the Rand economy.

Mainstream economists argue that the system is unstable, and that because of easy access to free credit, the Talent will devalue against the Rand (the exchange rate is currently set at 1:1 for convenience) and the system will crash. “The truth about economics”, said one expert, “is that people always try to take out more than they put in”.

But this is a mistaken perception that probably says more about economists than economics, and puts too much focus on the medium of exchange – the Talent – and not enough on the community-building environment it happens in. We are used to fetishising money in our economic system. There is no point fetishising Talents as they don’t earn interest and are
only valuable when they’re spent.

Of course, we all know – as the recent film The Village reminds us – that you can’t create a utopian island in a sea of inequality. And so the CTTE mirrors some of the inequities of the outside world – lawyers, for example, are able to charge more Talents for their services than gardeners. But this is mitigated by the fact that, for the first time, an unemployed person canhire a lawyer, and pay for it by making samosas or offering township tours. Also, outside of the differences in the way the system works, most people who participate have some kind of ideological commitment to uplifting the whole community. This is not always the same, and it ranges from self-declared ‘conscious capitalists’, who see the Rand economy as inefficient, corrupt and unsustainable, to Greens, New Agers, Communists and other radicals, who see this system as a ‘non-reformist reform’.
From my perspective, the system is closer to mutual aid than anything else I have experienced. On principle, I never refuse as trade if I am able to do it – even if I have plenty of Talents and don’t need to earn any more. But I can avoid being exploited because I get Talents which I can spend on myself.

This means that whoever uses my services is making a commitment to put something of equal value back into the community. In exchange, I take what I want and need. Generally, my contribution is greater then what I get out – but I don’t spend too much time adding it all up. In practice, for me, it feels like ‘‘rom each according to his ability, to each according to his
need’.

Also different about the Exchange is what’s on offer. It offers the kind of things a community really needs, and has space for skills that are not really marketable in the conventional economy. For example, you can get some one to walk your dog, or read to you, or just keep you company. And then there are the things that you just don’’t really see, or can’’t afford, in the normal economy: lessons in sword fighting, overtone chanting and Gaelic, models and fire dancers for hire (what a way to spice up your party!), rock climbing, radio and video production, as well as every kind of fringe therapy. I’ve tried them all.

Most people are not particularly concerned about the amount of Talents they earn. The kick is in trading, in doing things for each other and having a whole database of goodies to search through.

So get trading in your community – sign up as an individual or organisation, and let’s create wealth by sharing our skills.

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