I was looking up the liberty dollar due to reading an adjacent thread (Practical Agorism), and came across this wikipedia page (I vaugley remember seeing a reddit headline for an article on the time-dollar before, but I sadly did not bookmark it…):
Time-based currencies value everyone’s contributions equally. One hour equals one service credit. In these systems, one person volunteers to work for an hour for another person; thus, they are credited with one hour, which they can redeem for an hour of service from another volunteer.
I would’ve posted this in Practical Agorism, but felt it would be better as a seperate thread. What are your thoughts on this “time-dollar”?
This is terrible in my opinion. It sounds like something a labour theory of value proponent would use. It completely ignores productivity and would destroy the entire labour market. How do we differentiate betweem the economic value derived from a guy cleaning a toilet, and somebody manufacturing high-tech computer chips? Using this idea the two would be the same.
Liberty dollars are interesting. I’ve long been fascinated by the development of an alternative commodity-based money. Practically, though, the government would never tolerate it, so strategically it would be necessary to have a reformist in power to avoid the crackdown. However, once a reformist is in power it would be much easier (and more effective, given that dollars are used in ~33 countries) to just re-establish the dollars link to gold. However, it would certainly be prudent to reestablish a free-market in money and encourage competing currencies. Even though they would be inferior to a gold-based dollar, they would be valuable in preventing the gold-based dollar from going back to being a fiat currency.
I lived near Ithaca, where Ithaca-Hours are widely accepted. But I didn’t participate in their system, so what I’m about to say could be all wrong…
AFAICT the Ithacans refute the labor theory of value in practice. A dentist might take Ithaca Hours, but he takes more than the amount of time it takes to clean your teeth. If I have that right, it could actually be a decent currency.
That doesn’t change anything, really; if a dentist charges 10 hours for 1 hour of work, another dentist would have to perform 10 hours of dental work on him in order to pay him back.
Again, not if I have it straight. The other dentist would also get 10 hours (or some similar amount) for 1 hour of (dental) work. So he could trade even for dental work, or do ten hours of yard work for an hour of dental work.
Sure. But remember it was invented by socialists. In practice (disclaimer again: if I have it right), however, the users proved the socialists wrong by entering into voluntary contracts and setting prices which violated the “everyone’s hour is the same” rule.
If that’s how “time-hours” can operate, that might be why I originally thought it was an interesting, as voluntary contracts would be copasetic with Agora activity, methinks. I also think this would more effective at a local and/or community level.
This came up on another forum where one of the folks has a thing for expiring currency as a method of dealing with wealth accumulation (which is bad for some reason).
So I read the link and immediately dismissed it because everyone’s time isn’t equal but also wondered how the currency is created in the first place?
Do you work for an hour to get a buck or do you just write a promissory note to someone who has worked for you stating that you will work for them for an hour some time in the future and this becomes currency?
Seems like the people who issue this currency could get a whole bunch of free labor and not have to work at all to back the notes they are printing just like fractional reserve banks produce money out of thin air in the current system.
Or I guess they could be individualized so they are the equivalent to a coupon for a specific service but then you would run into the double coincidence of wants problem.
Probably should read the OP’s link, maybe it answers this…
Why not just trade your labor for a real commodity instead of a piece of paper with questionable backing?
Doesn’t Krugman report a system similar to this? He records its failure as a market failure. IIRC, Callahan mentions it in Economics for Real People. I think the participants exchanged baby sitting time or something to that effect. Krugman posited the market had failed in this system for some reason, but Callahan demonstrated that it was in fact a case of the market not being properly operational.
He is just accounting for all the college years he spent learning how to clean those teeth.
Seriously, I would hate cleaning sewers for Ithacas while someone is a dog walker. The problem is that you don’t even want to spend more time down there than necessary, so you can’t even cheat to get more Ithacas.
Indeed; I have much to learn economically; I mainly posted this up as a curiosity. Ultimatley, the concept seems to be fairly unreliable, although I’m not aware of what success Ithaca Hours may or may not have had.
The obvious problem of course is the determination of value. Only accounting for labour time doesn’t take in account investment (in education, on the tools to do the job, organizing things etc), enjoyment, risk, effort, etc. The only incentive in this economy for someone to give up pursuing an easier, more fun job for a harder one is unemployment. In dilluted-socialist Europe, people complain it’s hard to get a first job after college because everyone wants experience, just imagine a society where every guru is grabbing easy, entry-level jobs with their teeth. There is no incentive to progress in the career. Anyway, no way this would work for goods, only for direct services. Big Brother isn’t quite sophisticated for that as of yet.
Anyway, I think what people are ignoring here is problems with the supply of money. If there is no flexibility in the price level, as you have too much inflation, people have a lot Ithacas saved, and nobody will be working… You can’t just stop injecting money into the economy, because hoarders is a problem with this money… Remember, the price of labour is fixed, so as the supply of money is reduced, you need to increase it, otherwise people will start bartering, or God forbids, start using real money.
Since the central bank need a lot of room here to get the supply of money right to keep the number of transactions going for the established fixed prices, I think this money will need to have some expire date or something, no?
There is no incentive to progress in the career. Anyway, no way this would work for goods, only for direct services. Big Brother isn’t quite sophisticated for that as of yet.