Money Wise

Dancing Rabbit Economy

Here is an interesting idea that Dancing Rabbit Ecovillage in rural northeastern Missouri is actually practicing. Restarting an economy after a major monetary or social collapse will be very difficult. The amount of silver and gold in the hand of ordinary people will be very mall. Bartering things for things is very cumbersome at best. Often, you may have a need and simply have nothing anyone wants to trade for it. When your local society begins to recover (and yes, this might take some year) there will be a great need for simple labor. I do not know if Dancing Rabbit’s system would work but it might be a start. See more information.
Bartering Currencies
No longer just theory, people at Dancing Rabbit are already using the alternative currency to pay for food and housing and are being paid to do garden work, construction, research and crafts.
Alternative currencies (or local bartering currencies) have a long and rich tradition, and we are happy to become a part of it. One of the greatest advantages of using alternative currency is that it strengthens local economies. By limiting a currency's usefulness to a local sphere, that currency will always help support the local economy. This is an active, institutional way to help prevent the outflow of money [read silver & gold] that often causes economic problems in small towns. Also, people can be paid for their labor, even when there are not sufficient US dollars [read silver & gold] available. Our currency is based on the Hour as the standard unit. This is designed to help create a more egalitarian respect for all forms of work and the people doing the work. While people can still charge whatever they wish when using the alternative currency, making the standard unit an Hour definitely suggests that everyone's time is worth the same, be it as a teacher, computer programmer, childcare provider, artist or administrator.
Fundamentally, money is a medium of exchange, a system of carrying information about value. Money is important because it allows two people to trade even if only one of them has something the other wants. Money becomes the value placeholder for such exchanges. But money itself has no intrinsic value, its value is derived from the degree of trust that it can be used to acquire the things you want. 


How it works
The entity doing the buying and selling of DR Hours will be called the Alternative Currency Pool. The ACP will print physical DR Hours, issue them to people, and keep track of people's balances.
There are two ways people can pay for things with DR Hours. They can pay with paper currency [read silver & gold], or they can write a check. Everyone will start off with a zero balance, but they'll be allowed to have a negative balance. We've decided to give everyone a line of credit of 40 Hours, that is, people can have a balance as low as -40 Hours. The total balance of DR Hours should stay close to zero, though, because any time one person makes their balance smaller, another person's balance will increase.
To illustrate how the system works, here are a few simple examples of transactions made with DR Hours. The ACP loans Jeffrey 5 DR Hours, Jeffrey has 5 DR Hours on hand, but a balance of -5 DR Hours with the ACP (1). Then if Jeffrey gets an Alline massage, and pays Alline 1 DR Hour (2), Jeffrey has 4 DR Hours on hand, -5 with the ACP, and Alline has 1. The total balance is zero. Next, Alline writes a check to Kalen for 3 hours for some of his pottery. When Kalen deposits the check, Jeffrey has 4 cash hours and a balance of -5 with the ACP, Alline has 1 cash hour and a balance of -3 with the ACP, and Kalen has a balance of +3 with the ACP, all adding up to zero.
What we're using DR Hours for Last summer, non-Skyhouse members eating with Skyhouse started using an alternative system of paying for food. Instead of requiring people to pay for their food in US dollars, Skyhouse agreed that people could pay in hours. This worked well for Skyhouse, because Skyhouse needs lots of help building its buildings, and it worked well for the people eating with us, because it gave them a way to pay for their food without having to work income jobs outside of Dancing Rabbit.
This year, Skyhouse is no longer going to run an eating program, instead, we're creating a separate co-op Eating Association, that will provide food for anyone interested in participating. The EA will continue to accept hours as payment (3), but this year the EA is hiring a gardener full time (4) for the growing season. It would be unreasonable to expect our gardener to never drive anywhere, or never make any phones calls, both of which require US dollars [read silver & gold] to pay for, so our gardener needs to get paid at least partly in US dollars [read silver & gold] , not just DR Hours.
This is where the partial funding of DR Hours comes in. Skyhouse still needs people to help us build our buildings, so it's happy to buy DR Hours with US dollars [read silver & gold] (5), then the gardener can trade DR Hours for the dollars [read silver & gold] that the pool has (6). The gardener will be able to spend DR Hours to buy things that don't have to be imported from outside the community and then people who accept those hours as payment can spend them on the EA. Our local economy is off and running!

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