Time-Based Currency

What Is a Time-Based Currency?

Time-based currency is a type of money where the value is based on units of time, as opposed to being backed by some precious metal or by an administration's fiat capacity to levy taxes. The thought is that labor-time can be diminished to a normalized unit of economic value that can then be utilized in exchange.

Understanding Time-Based Currency

Currencies have generally been based on concrete or intrinsic value measures. For example, over the entire course of time gold or silver coins were valued for their metal substance, and for a long time the value of the U.S. dollar was based on the value of gold where Congress commanded the weight in gold for which one U.S. dollar could be reclaimed. Today, the value of the U.S. dollar is based on supply and demand in a free market where dollars are freely exchanged for different currencies, and where most fiat currencies today get their value from the trust of an administration's ability to increase government rates and deal with the money supply.

Time based currencies, then again, get their value from hours of labor worked. Time-based currencies are commonly issued and upheld by time banks, which are formed by individuals who wish to make economies based on the principles of mutualism and fairness, instead of just profit and loss. The idea that labor-time is a common source of economic value begins from early political financial specialists like Adam Smith, David Ricardo, and Karl Marx, who all showed up at a labor theory of value (LTV).

How Time-Based Currency Works

Time-based currencies are issued by time banks, to work with the exchange of goods and services among the participation of the time bank.

Time banking and time-based currencies require a couple of extra limitations to be put on a currency, to safeguard the values of mutual aid and balance. For example, suppose a time bank sets the value of one time dollar at one hour of human labor. We should likewise specify that there are two individuals from the time bank: a craftsman and a doctor. By participating in the time banking scheme, both the craftsman and the doctor consent to give a certain number of hours of service to the community, and to do as such in exchange for time dollars, which they can then trade in for services they need done. Suppose that the craftsman builds a bureau for the doctor, and that it takes him five hours. He will earn five time dollars, and have the option to utilize them to purchase medical services from the doctor, even however the woodworker and doctor would earn very different salaries on the open market.

The concept of time banking comes from the possibility that the idea of our financial institutions, marketplaces, and currencies really decide the idea of the societies we live in. When markets are impersonal, and the value of a person's labor is resolved exclusively on what more unusual figures it worth, it can advance a community that is impersonal, and where close bonds are not formed between neighbors.

The concept of time-based currencies has most as of late been advocated by the legal researcher Edgar S. Cahn, who additionally helped to establish the Antioch School of Law in Washington, D.C. In his book No More Throw-Away People, Cahn illustrated four core principles for time banking, later adding a fifth. They are:

• We Are All Assets: Everyone has something to contribute
• Rethinking Work: Rewards all work, including unpaid and care work
• Reciprocity: Helping each other build strong connections and community trust
• Social Networks: Belonging to a social network gives our lives seriously meaning
• Respect: Respect and poise are the basis for a sound and cherishing community and lies at the core of a majority rules government

Time Based Currencies in the Modern Economy

Time-based currencies are not common, however can be found among some local currency projects. In 2021, there were around 200 time banks in the United States.

One model is the Ithaca HOUR, presented in 1991 in the upstate New York town of Ithaca to assist with prodding neighborhood economic activity and keep economic value inside the community. The value of one HOUR is pegged at $10 and is a time-based currency system where one hour of any work is equivalent to one more hour of work. Today, there are more than $100,000 worth of Ithaca Hours in circulation.

The Fureai Kippu is a notable illustration of a sectoral currency in Japan with the essential unit of account being an hour of service to an elderly person.

Features

• A time-based currency is a form of money whose value gets from a normalized unit of labor hours worked.
• Time-based money isn't common; be that as it may, a few models, for example, Ithaca HOURS exist on a neighborhood or community scale.
• The possibility that labor-time is a fundamental source of economic value has been around since basically the eighteenth century, when early financial specialists like Adam Smith, David Ricardo, and Karl Marx each proposed a labor theory of value.
• The management and issuance of time-based currency is accomplished through dedicated time banks that keep a ledger of transactions and the money supply.