A moneyless economy , or non-monetary economy

A moneyless economy , or non-monetary economy, is a system of distributing goods and services without payment in money. The simplest example is the family household . Other examples include the barter economy , the gift economy and primitive communism .

Even within a monetary economy there is a significant amount of non-monetary transactions. Examples include domestic labour, caring for loved ones, community activity or friends helping one another. This unmonetised labour represents an important part of the economy and may account for half of all work performed in the United States . [ 1 ] These non-monetary sub-economies are called embedded non-monetary economies.

A non-monetary economy could make the labour market more inclusive by rewarding more kinds of work.

An embedded non-monetary economy is one that functions without money inside a larger monetary system. The non-monetary economy performs tasks that benefit individuals and for which the monetary economy does not normally reward payment. [ 2 ]

Barter economies also represent an important form of unmonetised interaction, although for the most part this kind of interaction is largely temporary, since the economic system is in a state of transition. [ 3 ] [ 4 ] It is usually also regarded as a side effect of tight monetary policy, for example under a liquidity crisis such as Russia's in the 1990s, where barter transactions accounted for 50 percent of sales for medium-sized enterprises and 75 percent for large ones. [ 5 ] Economists formerly regarded barter systems as precursors of monetary systems, but there is no evidence in favour of this view, or even for the existence of stable barter systems over long periods of time. [ 3 ] [ 4 ]

A time bank is a community organisation that brings together people and local organisations for mutual aid, using previously untapped resources and skills, valuing work that is normally unrewarded, and valuing people who have been marginalised in the conventional economy. [ 6 ] This is what family members or friends usually do for one another, but in the absence of supportive mutual networks the time bank recreates these connections. These interactions are based on exchanging hours spent on activities, where the unit of measurement/currency is "time dollars". These are exchanged for hours of labour and can be redeemed for services from other members. [ 7 ]

A local exchange trading system (also local employment and trading system or local energy transfer system; abbreviated LETS) is a local, democratically organised, not-for-profit community enterprise that provides a community information service and records the transactions of members exchanging goods and services using a local currency. [ 8 ] LETS allow people to negotiate the value of their working time or services, [ 9 ] and to keep wealth in the place where it is created. [ 10 ] LETS networks facilitate exchange between members by providing a directory of offers and wants and by allowing each member to obtain interest-free credit .

The social economy refers to the space between the public and private sectors occupied by civil society, including community organisations, volunteering, social enterprises and cooperatives. The social economy represents a "broad family of initiatives and organisational forms — that is, a hybridisation of market, non-market (redistribution) and non-monetary (reciprocity) economies". [ 6 ] Rather than being a marginal activity on the fringes of the formal economy, it represents a significant level of activity: the United Kingdom's "civil society" sector provides employment equivalent to 1.4 million full-time staff (5% of the economically active population) and benefits from the unpaid labour of the equivalent of 1.7 million full-time volunteers (5.6% of the economically active population), while contributing 6.8% of GDP . [ 6 ]

Edgar S. Cahn developed the concept of the core economy to describe the informal social networks that he regarded as the foundation of society and that, in his view, were being eroded as the monetary economy delegitimised them. The core economy, as he defined it, consists of social capital [ as he defines it? ] and generates collective efficacy, which is of critical importance to the core economy. [ 1 ]

Collective efficacy refers to the effectiveness of the informal mechanisms through which residents themselves maintain public order. More specifically, it is a shared vision or fusion of residents' shared willingness to intervene and to create social trust (a sense of engagement with and belonging to public spaces), by intervening in the lives of other residents to combat crime, increase voter turnout or encourage residents to recycle. These informal mechanisms are what Cahn calls social capital — a public good provided by citizens who participate in the development of their communities (from raising children and caring for the elderly to volunteer work). Cahn believes that this kind of work is essential to a democratic and stable society. [ 1 ]

Unlike the market economy, the core economy relies on specialisation reinforced by a do-it-yourself attitude, which "builds self-esteem and a voluntary interdependence that replaces the involuntary dependency generated by industrial and market specialisation" [ 1 ] , and where self-sufficiency is based on interdependent family or community units (instead of the atomised individual of the market economy). This model reduces or eliminates the involuntary dependency generated by the strict division of labour in a market economy. It also focuses on alternative distribution mechanisms instead of pricing, using instead normative considerations such as need, fairness, altruism, moral obligation or contribution. [ 1 ]

Collective efficacy and social capital are central elements of two very successful examples of civic non-monetary economies: time banks and local exchange trading systems ( LETS ). These labour systems provide alternative forms of currency earned for time spent in direct service to the community, such as working in a community garden, recycling, fixing leaky taps, babysitting. These units of time can be used to ask other participants in the labour system to perform work they need, or can serve as a forum in which ad hoc tasks or needs can be announced and exchanged. These systems function largely outside the monetary economy, although they do not replace it and do not seek a return to barter systems. [ 11 ]

In 1998 the organisation Redefining Progress estimated that housework amounted to 1.911 trillion dollars, roughly a quarter of US GDP that year. [ 1 ] According to the Bureau of Economic Analysis in 2010, if housework were tracked it would increase GDP by 26%. [ 12 ] More than a decade later, housework continues to be a key source of fundamental support for the nation's economy. Such housework includes cleaning, cooking, and caring for and educating children.

There may be a closed household economy , where a particular (possibly family) group of individuals benefits from the work performed.

In extreme cases of survival the open character of the family economy is most evident. Food, clothing, toiletries and essential items were often passed on or exchanged among war-affected, impoverished families in Eastern Europe after communism. [ 13 ] Cooking, cleaning, sewing clothes and various kinds of labour can intuitively be perceived as work. An Australian study (1992) found that about 380 million person-hours a week were spent on these unpaid activities, compared with 272 million hours a week on paid work. [ 14 ]

A significant portion of these hours can be attributed to caring. Caring can take two forms: raising children and caring for the sick, the elderly and the infirm, which is still typically expected of women and girls. [ 14 ] Children represent not only a product of the family but also a valuable resource for society as a whole. At home children can help with chores and are thus a valuable resource. In a broader sense children are a public good: an investment into which time, energy and money are put so that they may become stable adults who help reduce public debt and contribute to social welfare, and are thus a public good. [ 15 ] As they grow up and are educated, children have the potential to benefit society in whatever profession they enter or whatever output they ultimately produce. [ 16 ]

Goods and services produced in the home are available to the non-market economy as a whole. Society at large benefits from this unpaid labour, whether in immediate form or on a more abstract, macro scale.

Another form of home care also benefits society as a whole. Nursing care provides assistance to the elderly, the disabled, people with terminal or chronic illnesses, and those who are generally frail or in need of help. Anyone who cares for a person in any of these situations is a caregiver . For the most part this help is provided free of charge by friends or relatives of the sick person.

Nursing care often goes beyond the nursing duties associated with caring for someone who is ill or recovering from surgery. Frequently caregivers must also keep the house in order, provide meals and interact with medical staff and doctors, among other responsibilities. Nearly 80% of the work that keeps the elderly out of nursing homes is unpaid labour by family members. [ 1 ]

In 1997 the value of the labour produced by caregivers was estimated at 196 billion dollars. In 2007 this figure was 375 billion dollars. [ 17 ] At that time the federal government spent only 32 billion dollars on formal health care and 83 billion dollars on nursing home care. [ 18 ] According to these statistics, only half of the necessary amount is spent on nursing home and home care. These figures do not take into account the financial burden, nor the emotional labour that is an integral part of this work.

The same study estimated that in 1997 caregivers would have earned 8.18 dollars an hour. [ 18 ] As of May 2013 the hourly wage was estimated at 9.14 dollars, averaging Florida's minimum wage [ 19 ] and the median wage of home health aides. [ 20 ] Caregiving demands great dedication, from 22 to 70 hours a week. It is estimated that as of 1997 some 25.8 million people performed these tasks. [ 18 ]

Nursing care has a disproportionate impact on women and white families. [ 17 ] The cost of nursing care is prohibitively high, nearly five times what Medicaid would spend on long-term care, which means that only affluent families can afford this kind of home care. The intersection of class and race in this phenomenon is an important area for study, since less well-off families will be forced to rely on public assistance, potentially risking lower-quality care. These statistics also highlight the differential impact on women, showing that women are disproportionately likely to perform nursing care work. [ 17 ]

Recognising the value of all labour changes ideas about what constitutes valuable work. An awareness of the non-monetary economy can change attitudes towards the labour of the unemployed, the poor, women and other stigmatised groups. It would allow citizens to see their community as a more cohesive, interconnected system deserving of their time and energy. Studying this economy also reveals numerous areas of assistance that are inadequately supported by the public and private sectors. In particular, education and nursing care show where help is needed but often not provided.

This concerns individuals who arrange with a participant in the monetary economy to exchange goods or services (reciprocity) or to receive them without any obligation (a genuine gift). For example, begging for anything other than money, perhaps in exchange for religious services, as is the case with mendicants . Examples of such individuals:

1. Raphael Fellmer [ 21 ]
2. Heidemarie Schwermer [ 22 ]
3. Carolien Hoogland [ 23 ]
4. Mildred Lisette Norman

This is an example of mutual aid (see macroeconomics below) embedded in the monetary economy and limited to intellectual labour. Typical examples are posting questions and answers on internet forums, developing open-source software and creating articles for Wikipedia. In these cases subsistence is usually guaranteed by the monetary economy. Categories of such contributions include commons-based content creation , open source , Creative Commons licences and so on.

Below is a list of moneyless systems that were intended (or are intended) to encompass the whole of society.

The following systems aim to create moneyless societies, often facilitated by technology.

1. Technologically oriented, often centralised ("resource-based") societies: the Zeitgeist movement , its associated projects called Venus, Auravana or Kadagaya in Peru [ 24 ] , and the Moneyless Party.
2. The Technocracy movement , which proposes replacing money with energy certificates.
3. Large-scale algorithmic allocation (as envisaged by Stefan Heidenreich) for matching "coinciding transactions", each of which "has consequences beyond all the immediate participants". Nevertheless, this procedure imitates money "when our profiles, our preferences and our consumer history are used to calculate who will buy what and where". [ 25 ] Transactions are recorded, and "matches" are determined along with utility/urgency and reputation/personal history. [ 26 ]
4. Paradism, which relies heavily on automation. [ 27 ]
5. The movement for unlimited individual remuneration proposes using numbers (or other symbols) that do not represent any fixed quantity of physical property (cash, gold, etc.) to reward the merit of individuals and enterprises in terms of the productivity, creativity, usefulness or necessity of the work performed/the product or service provided, unconstrained by budget limits or price instability. The numbers assigned to each individual account represent cashless income, and expenditure is made by a personally written cheque, a payment card reading or an electronic transfer. The amount in each individual account is adjusted according to income or expenditure by simple arithmetic operations (addition or subtraction) that reflect changes only in the individual's economy, not in the collective economy. The collective economy depends only on the quantity of available natural and human resources required to produce a given kind of product or service, and not on the amount of cash in circulation. The "cashless society" movement is considered a forerunner of this movement.

In what follows, less attention is given to technology. The boundaries between the systems described below are often blurred. The transplantation example is international, but it can also be classed as microeconomics.

1. Mutuality in the sense of (moneyless) economic theory. People contribute to the community free of charge not only in order to help, but also because they expect help from a member of the community when they need it (a self-interested interpretation of solidarity ). Thus the term "mutuality" is understood as help from the community, and not necessarily as help in return. (Compare generalised exchange .) For example, if a transplant centre donates a kidney to another centre, its entitlement to receive a kidney from the community increases in line with its export balance. [ 28 ] Other examples are the anarchist communities during the Spanish Civil War, where quotas and rations were used for distribution, [ 29 ] and minka communal labour.
2. A debt system , as on manorial estates or by means of a tally stick . Continuing the previous example, if a transplanting country donates a liver to another country, the recipient country is obliged to return it at the first opportunity. To economise on transport costs, such obligations are transferred from one creditor country to another in an obvious manner. [ 30 ] A transplant clearing house could (if time permitted) reduce transport costs still further by deferring such assignment of obligations. This would resemble the fairs from which banks and state money originated. [ 31 ]
3. Joint financing is a set of instruments and methods used to make payments between two parties without the direct or indirect involvement of a third party.
4. A redistributive economy , which is a more authoritarian case of mutualism. For example, the Inca and possibly also the Majapahit Empire. [ 32 ]
5. A combination of mutualism and redistribution: Uruganda and similar economies such as Umuganda/Isarongo and Ubuntu. These economies are based on culture rather than on a robust system. [ 33 ] On Ubuntu, see also "Contributionism as described by Michael Tellinger" .
6. Labour vouchers are non-transferable certificates of hours worked.
7. Non-monetary (state) communist currents, ranging from libertarian proposals [ 34 ] to the harsh reality of Democratic Kampuchea . Many communists and socialists envisioned a moneyless society. [ 35 ]
8. Gift economy : contrary to what the word itself implies, giving in such an economy is usually accompanied by an obligation to do something in return.
9. Altruistic society : as proposed by Mark Boyle, a moneyless economy is a model «based on the unconditional exchange of materials and services», that is, without explicit or formal exchange. [ 36 ]
10. Subsistence economy , which provides only the bare essentials, often without money.
11. Calculation in kind , which (in its limited form) excludes the use of any common unit of account in the exchange of goods or services.
12. Natural economy , in which resources are distributed through direct barter, legal entitlement or division according to traditional custom.
13. Non-market ecosocialism, as advocated by Anitra Nelson: with regard to the non-monetary aspect, each household «roughly assesses» its basic needs, which are met in exchange for «collective production as a social obligation». The production, distribution and procurement of goods and services from «more distant communities» are agreed collectively. [ 37 ]

The United Kingdom in particular has been the focus of government attention since the mid-1990s, when a Labour administration came to power — the social economy developed as a means of delivering effective public services and mobilising active citizenship. For example, in 2002 the Department of Trade and Industry (DTI) launched the Social Enterprise Strategy in order to develop «the government's vision… of dynamic and sustainable social enterprise strengthening an inclusive and growing economy». The aim of the Strategy was to create an enabling policy environment for social enterprise, to improve the effectiveness of social enterprises and to establish the value of social enterprise, so that the sector could contribute to a number of policy objectives: raising productivity and competitiveness; promoting socially inclusive wealth creation; neighbourhood renewal; public service reform; and the development of an inclusive society and active citizenship. [ 6 ]

In general, however, current policy does not reflect the consequences of a system that fails to recognise activities that transmit social values, provide support, build consensus and so on. In the past these activities were subsidised by cheap or free labour obtained from subordinate groups, such as women and ethnic or racial minorities, who, as a result of entering the labour market for monetary reward, negate these positive social goods. [ 1 ]

As a result, the greatest problem faced by time bank coordinators is funding. Time banks do not rely on volunteers but need financial support — to pay a broker's salary, for publicly accessible premises, for marketing costs — in order to successfully attract socially excluded people from deprived neighbourhoods. Although many time banks in the United Kingdom have received grants from the National Lottery, over time it is becoming increasingly difficult to secure ongoing funding or to increase the funding available to time banks in general, and existing projects are closing down while new ones start up elsewhere. [ 6 ]

Organisations that run time banks, barter networks or currencies may register for tax-exempt non-profit status under section 501(c)(3) , as non-profit organisations operating for the public benefit. [ 38 ] The US Internal Revenue Service has recognised some time banks as tax-exempt; obtaining tax exemption for a barter network or local currency is more difficult, since it is harder to prove that they operate exclusively on the basis of serving the community.

Time bank status in itself does not enable an organisation to obtain a tax exemption under section 501(c)(3). [ 39 ] If, instead of a time bank, an organisation runs a local currency or barter network, such an organisation may be regarded as operating in the private interests of individuals, even if those individuals are members of a charitable organisation. An exchange platform intended for use by the wider community, rather than specifically for the charitable organisation, may not be regarded as a tax-exempt activity for an organisation falling under section 501(c)(3). [ 38 ]