UNMET NEEDS AND UNUSED CAPACITIES: TIMEBANKING AS A SOLUTION | Neva Goodwin, PhD and Edgar Cahn, JD, PhD

Reproduced from: https://pubs.lib.umn.edu/index.php/ijps/article/view/911/1057

UNMET NEEDS AND UNUSED CAPACITIES: TIMEBANKING AS A SOLUTION

Neva Goodwin, PhD and Edgar Cahn, JD, PhD

Acknowledgement: This paper is dedicated to the memory of Richard Rockefeller, who brought the authors together and who made significant contributions to the information technology that enables TimeBanks to work smoothly.


Abstract

In market economies many human activities have little or no money value; these include, especially, the kinds of caring labor that are supplied, mostly by women, mostly in homes and communities. Nevertheless, there is, as ever, a great need for such activities. At the same time, wealthy societies are producing ever more people who suffer from feeling that they have little or nothing of value to offer to the world. Retired people, in their growing numbers, are the most obvious examples, but teenagers and other youth, who in other societies can contribute significantly to the well-being of a family or a community, are seldom seen as assets in modern economies. Market-dominated societies have had difficulty expressing the value of work that is not organized for profit. Such work is undertaken in the public purpose economy, consisting of governments and their agencies as well as non-profit organizations. Much of this kind of work is also undertaken in the core economy, where households and communities carry on their internal activities of resource management, production, distribution, and consumption. The core economy and the public purpose economy, together with the market economy, are a trio that are differentiated by their goals; by what kind of demand they respond to; by how they define and reward work; and by what kind of currency they use. TimeBanking is an innovation in currency that turns out to affect all of these areas by getting us out of the binary box that classifies all contributions in just two ways: work (defined in market terms), or volunteering (defined as uncompensated labor). Responding effectively to different values and goals than those recognized in the market, TimeBanking has been shown able to respond to a wide variety of unmet needs by creating relationships where everyone can get some of their needs met, and everyone is valued for what they can offer.

Keywords: caring labor, core economy, co-production, currency, dependency, retirees, TimeBanking, value, work


Interdisciplinary Journal of Partnership Studies, Vol. 5 [2018], Iss. 1, Article 3.

Copyright: ©2018 Goodwin & Cahn. This is an open-access article distributed under the terms of the Creative Commons Noncommercial Attribution license (CC BY-NC 4.0), which allows for unrestricted noncommercial use, distribution, and adaptation, provided that the original author and source are credited.

Citation: Goodwin, N., Cahn, E. (2018). Unmet needs and unused capacities: Timebanking as a solution. Interdisciplinary Journal of Partnership Studies, 5(1): Article 3. https://doi.org/10.24926/ijps.v5i1.911


PROBLEMS AND SOLUTIONS

The significant problems we face cannot be solved at the same level of thinking we were at when we created them.

(Statement widely attributed to Albert Einstein)

Our society has a plethora of significant problems. The most obvious ones are on the economic side of ‘demand.’ They are about demands that apparently can’t be met; the result (to speak in more human terms) is people with unmet needs. They are neglected or ill-educated children; people who are caught in a downward spiral of crime and punishment; homeless families; old or sick or handicapped people receiving insufficient care. Often, we see these problems as insoluble because, we say, there aren’t enough resources to supply care and material goods for people who cannot, themselves, earn enough money to pay for what they need.

But there is another, subtler category of problems; strangely, it is almost a mirror image of the first one. On the ’supply’ side of economics, this has to do with human resources that are unused – people suffering because no one seems to want what they have to offer. Who are they? The list overlaps largely with those just named as having unmet needs; it includes youths; criminals; people who are old, sick, poor, or handicapped; people whose domestic responsibilities (e.g., as sole guardian of young children) make it impossible for them to fit into a “normal” work schedule; people who possess no apparently marketable skills. These people are in trouble because they have no defined role in our economic system. They aren’t earners; therefore, they are dependent on what others give them – or, in the case of criminals, what they manage to take for themselves, outside of society’s normal modes of distribution and exchange.

None of this is new. Unmet needs have been with our species from time immemorial. Human capacities marginalized by our economic system are a somewhat newer issue, having grown vastly with the emergence of markets as the dominant economic force, along with the simultaneous increase of material wealth. The reason that unmet needs persist in the United States is not because the society, as a whole, is poor; they persist alongside greater wealth than any human society has ever before possessed.

Unused resources: Elders

Endless example of the great, and needed, talents that are being left by the wayside are to be found in our growing population of retired people. It is virtually without precedent in history that we can expect to spend the last third of our lives in retirement. What a triumph of medicine, that we are living so long! What an economic achievement, that our society can afford to support a huge number of people who are not considered economically productive, at a level that would have been considered wonderfully comfortable a couple of centuries ago! But the picture is not entirely rosy.

Many people come to age 60 or 65 worn out after years of work, looking forward to a life of leisure. As the golden years roll on, however, the charm of doing nothing tends to wear off. It turns out not to be much fun to find that nobody needs you. Symptoms begin to develop – often symptoms that take elders to doctors who recognize that they are the listener of last resort for lonely, empty lives. Lacking anything better, they hand out medication. This is a picture of appalling waste – appalling, and unnecessary. And there are alternatives.

To start thinking about alternatives, imagine a situation in which everyone in a community of elders is invited to describe all the things they can do. There would be a great range:

“I can bake cookies.”
“I can play chess.”
“I can fix small electrical appliances.”
“I could drive someone to a doctor’s appointment.”
“I can take care of plants – indoors or out.”
“I could read to someone who’s bedridden.”
“I can telephone someone who’s lonely.”
“I could do someone’s grocery shopping.”
“I can do some carpentry.”

Now imagine that everyone in this community is given one TimeBank hour to start with, worth one hour of someone else’s time. The members are invited to call or email with requests for what they need. The requests and offers are sorted by software that selects the most appropriate matches to fill the need. What do you think the results would be?

Throughout New York City, such programs have been operating for almost three decades. Many seniors at risk of needing nursing home care have remained self-sufficient by helping each other through the TimeBank model. Currently, New York’s largest is the ArchCare TimeBank, in which over 1,600 individual members and 96 organizations have exchanged more than 58,000 hours of service since 2014 (ArchCare, 2017, see Appendix A; DosSantos 2016). Members shop for groceries, provide escorts to appointments, offer home repairs, place friendly phone calls or prayer calls, and more. The credits earned can be spent for classes in calligraphy, English, Spanish, cooking, and trips to the museum. Frail seniors knit blankets for nursing home residents. Members make new friends and share home-cooked food at monthly potluck dinners. And teams pitch in when anyone comes home from the hospital and needs a support system.

ArchCare is the continuing care community of the Archdiocese of New York. As research places greater and greater weight on the social determinants of health, ArchCare has made optimal use of the cost-saving and life-saving potential of the ArchCare TimeBank.

When ArchCare’s assessment nurses, social workers, and care managers encounter health plan members who are socially isolated, report feeling depressed, or have needs that fall outside the capacities of health care workers, these members are referred to the TimeBank. Homebound ArchCare members have been matched with TimeBank members for friendly calls and prayer, social visits, technology help, mail assistance, language practice and even a tap-dancing workshop for a 90-year old retired nun. Surveys of both those giving and receiving the services show improvements in self-reported physical and mental health, and reductions in social isolation.

Untapped assets: Youth

If you ask the right questions of a bunch of teenagers, you will begin to appreciate the difference between marketable skills and intrinsic capacities. When asked about skills, their eyes glaze over. But if you ask them about things they have done for a younger brother or sister, a grandparent or aunt, the list can cover a wall. It will include painting, woodwork, setting drywall, fixing cars and bikes, teaching boxing and karate, speaking Spanish, cooking all kinds of special dishes, shopping, doing fancy nails or hair-dos, sewing, babysitting, helping with homework, and reading Bible stories.

Our society gives plenty of signals to kids who cannot speak grammatically or read or spell at their grade level that their economic future is bleak. A future world populated by robots, in which artificial intelligence issues directives and shapes transactions, might render all of us obsolete. In England, we would be designated “redundant.”

Can we do better? Another example of success using an alternative currency makes it increasingly evident that the other characteristics of an economy – the goals it pursues, the demand to which it responds, and the way work is defined and rewarded – are closely connected to the currency that is used.

In Chicago, more than 1,000 students at 20 public schools have earned Time Credits that they can cash in for a recycled computer by tutoring younger students (Cahn, 2004, pp 101, 105). Many of the best tutors had previously been labeled as having Attention Deficit Disorder and/or needing special education. These tutors have high expectations of their tutees, reasoning, “If I can do these exercises, anyone can.” And the younger students respond. Because older students praise them for succeeding, younger students no longer have to fear peer rejection if they show they can learn. At the same time, the older students are finding out that they have abilities no one had appreciated. Attendance goes up on tutoring days, because these “problem kids” now have a role as educators.

Wasted assets: People in prison

Lawbreakers – and, too often, their families – are the ultimate human discards: people for whom the rest of society never expects to find a use. Yet lawbreakers are also people, most of them possessing widely needed capabilities – capabilities for human responsiveness that our government knows it can’t possibly afford to pay for, if it were to attempt to provide love and attention needed by children and others who can’t buy what they lack. We have cited some TimeBank programs as bringing together unmet needs and unused capacities. Can TimeBanks achieve the same in the world that people enter when they step outside of the law? We have seen some encouraging experiences.

For a decade, beginning in 1998, the Annie E. Casey Foundation invested in TimeBanking as part of a community-building initiative. In the San Diego site, women recovering from drug addiction, upon coming out of prison, paid for the social services they received with Time Credits that they earned helping each other. Their Time Credit work helped them to show the authorities that they were now suitable parents, eligible to get their children back from foster care (Annie Casey Foundation, 2004, p. 10). In the Washington, DC site, families were able to earn Time Credits when children wrote to a parent in prison and the parent wrote back. The families could then trade the Time Credits for a round trip ticket to the prison to visit the father (Cahn 2004, pp 109-112).

There are now 600 Youth Courts across the country. In several, TimeBanking has been used to reward teen jurors who earn Time Credits hearing cases and imposing appropriate sentences on non-violent juvenile offenders. The Youth Court in Washington, DC was one of the earliest and largest. It functioned as the primary diversion program for the District’s non-violent juvenile first offenders. Teenagers arrested for the first time would go before juries of their peers – other teenagers – who had the power to sentence them to community service, to an apology and pay-back, to a curfew, to writing an essay, and/or to jury duty. As a result, there came to be juries composed 100% of former offenders hearing cases of teenagers who did just what they had done a couple of months earlier. Former offenders can sometimes be the toughest jurors; they know about peer pressure, phony excuses, and survival choices. Once the sentence had been discharged, every hour of jury duty earned a Time Credit that jurors could give to their families to pay for day care or other services provided by the local Time Credit network; or they could cash in their Time Credit for a recycled computer, repaired by people (including former offenders) who were also earning Time Credits. The computers had been donated by people who wanted to get rid of their old models – and receive a tax credit in the process (Cahn, 2004).

MONEY AND VALUES

The examples just cited are exciting because they are instances of success in areas where failure of social, ‘do-good’ programs is more likely the norm. Why do TimeBank programs work when others don’t? What do they offer that is special? The writers of this article are an economist and a lawyer-activist (Edgar Cahn is the inventor of Time Credit) who, a decade ago, spent a year puzzling over this question together. Focusing on these programs, probing into why they work so well to solve problems that had seemed insoluble, we have worked on a jigsaw puzzle whose pieces, once assembled, revealed a novel and dramatic picture.

The big picture emerged as we recognized that TimeBank programs are not just operating in one economy – the market economy; nor are they operating outside of the economy. Instead, examining their success, we came to recognize that several economies are operating side by side; that the health of each of these economies depends upon the health of the others; and that where there is more than one kind of economy, there may need to be more than one kind of money.

This reality was for a long time difficult to see, because modern Americans have a fixation on money, and on the markets in which we earn and spend our money. This focus makes sense in some parts of our lives, and in some parts of our larger society. It creates problems – and prevents us from finding ways to solve problems – when it takes over where it doesn’t belong, crowding out other values.

Charitable organizations, for example, jump to the tune of their funding sources, hustling for the money they perceive as the life-blood of their organization, even when this pulls them away from their mission. The values of public service are not the same as market values, but this difference is too often forgotten by philanthropists, policy makers, and other government employees who are asked to weigh costs and benefits by the only yardstick most people know: the money metric of the market.

The difference between price and value

We are accepting great and unnecessary harms by allowing so many of our values to be defined in the framework supplied by money. Above all, this is true for the values attached to the work we do. A wage is a price, and a price is a special kind of value: market value. It is generated by the market forces of supply and demand, in which there is a premium on scarcity. Scarcity raises the market value of specialists – in direct opposition to the imperatives of evolution. It is obvious that the skills that are most critical to the survival of our species could not have been developed as rare specializations; if only an elite few knew how to care for children and provide basic health and nutrition, we would not have made it out of the Stone Age.

The imperatives of human survival are caring, sharing, mutuality, and (in modern translation) neighboring and civic engagement. These values are virtually invisible to the wage-setting function of markets. While markets value what is rare and specialized, human survival and human values derive from the basic, generalized skills that are built into our human nature. This explains the terrible paradox of economics: that the most critical activities of humankind are those that receive the lowest wage – or none at all. Thus, a money-skewed value system gives rise to a skewed definition of work. Raising children, strengthening families, creating safe neighborhoods, taking care of senior parents, and the various works of citizenship are defined, in money terms, as the lowest level of work – or not seen as work at all.

As long as we accept this skewed definition of work, there will continue to be a terrible sucking sound, as functions and resources are extracted from the worlds where children are raised, elderly are cared for, and democracy is nurtured. Women will be praised for dressing for success, and pressed to “get a job!” instead of wasting their time doing the things that mothers do – the things that children need. People who take market jobs raising crops, teaching children, and nursing the sick will be paid wages that most Americans won’t accept, so that we have to import these essential workers from abroad – leaving the questions: Who will teach the children in the countries from which our guest workers come? Who will care for their growing populations of elderly people? Meanwhile, in the United States, even with poorer populations around the world on which to draw, we still have critical shortages in nursing, teaching, and day care; our market system just cannot figure out a way to pay enough for these essential activities to make people want to do them.

What does it take to motivate people to perform the tasks essential for human survival and well-being? Even in our modern, market-obsessed economy, the low-wage workers in the ‘caring’ professions often give more of themselves than workers in comparably low-paid but less meaningful work. It is tempting to be nostalgic for a past in which this kind of work was performed for free. That is not the answer.

The essential functions of home, family, and neighborhood used to be taken care of by free or cheap labor that was made available by the subordination of women, supplemented by the exploitation of immigrants, minorities, and children. Before the advent of Social Security benefits, older people and people with disabilities were dependent on their families for needed care, with psychic costs on both sides, but also often with real benefits in multigenerational relationships. Something close to equal opportunity for women, and Social Security for older and disabled people, are major and historic accomplishments, but they come with costs that are now becoming more and more apparent. We are, in fact, facing a critical labor shortage, as described by sociologist Amitai Etzioni:

In any other industry, if you remove a million employees without reducing the job requirements very much, nobody would deny that the industry is woefully shorthanded. If we take a million women out of a million households to work outside the home, and replace them with precious little in child-care services, few babysitters and little more grandparenting, then the parenting `industry’ is woefully shorthanded (and television sets and the streets are overworked). This is not an argument for women to stay home to do the parenting but for someone to do more of it.

(Etzioni, 1983, p. 116)

For a variety of reasons, the critical mass of adults who used to help discharge the functions of family are no longer present under one roof. We see more and more families headed by a single adult, usually a female. Fewer and fewer families can call upon grandparents to supply the experience, the authority, the forgiveness, and the hugs that are so vital. This means that we can’t solve today’s problems simply by exhorting, preaching, threatening, or punishing the families and neighborhoods that are most in trouble. We need to redefine our problems in order to approach them on a new level.

How can we overcome the distance between the work that so badly needs to be done and the people who are seen as having nothing to contribute? The critical first step is to get out of the value system in which value depends on scarcity, and common human capacities are assigned such low value that they are not worth selling. If we focus on the aspect of demand that can be defined as unmet needs, and on the aspect of supply that exists in underutilized human capacities, we will find ourselves searching for an economy – a system for organizing production, distribution, maintenance, and consumption, by relating supply to demand – that can mobilize unused human capacities to meet unmet needs.

SEVERAL ECONOMIES

Economics textbooks imply that there is only one economy worth talking about: the market economy. However, in the last few decades of the 20th century a more pluralistic view has gained ground, propelled initially by ecologists who insist that our economic behavior is embedded within, and completely dependent on, another economy – what Charles Darwin called “the economy of nature.” This is a system in which production, distribution, and use of materials and energy is carried out with such seamless efficiency that there is virtually never any waste; the output of each part of the total, ecological process is the input to another part.

We face an urgent need to improve our interactions with nature’s economy. Comparable to the market paradox of high-paid stockbrokers and low-paid nurses is Adam Smith’s famous paradox of costly diamonds and free water (Smith, 1776). Ecological economists are probing the market’s inability to value adequately the common gifts of nature whose importance is not reflected in their price.

It is hard to imagine operating in a world where the per-ounce price of water rises higher than that of diamonds. It is almost equally difficult to imagine rearranging our market system to pay nurses what stock-brokers earn. The prices set in the market make sense – in the market context. But they don’t make sense in the context of our human values. The problem is that today, where the two value systems come into conflict, the market virtually always prevails. The challenge before us is to find ways to operate in accordance with our human values; not to overturn the market, or replace it, but to complement it with other systems where human values can be better reflected.

Our search begins with a recognition of several economies. In addition to nature’s economy (which will not be our focus) we suggest that there are several human economies:

The market economies

Market economies are what the economics textbooks are about. These can be divided in several ways. We could look at the markets in which goods and services are bought and sold; vs the financial markets in which money flows, often without playing a direct role in the production or exchange of goods and services. Or we could look at the portion of the market that to some degree fits within the assumption of competition found in economics textbooks, vs. the “corporate command economy”. The latter consists of huge islands of coordinated activity within multinational corporations wherein transactions are protected from the stormy seas of competition outside their bounds. It has been estimated that trade within multinational corporations, called intra-firm trade, accounts for about one-third of total world trade. (See “Multinational Corporations in the Global Economy”).

The public purpose economy

The public purpose economy consists of governments and their agencies; non-profits such as charitable foundations and social service organizations; and international institutions like the World Bank or the United Nations, along with their agencies.

The core economy

In the core economy, households and communities carry on their internal activities of production, distribution and consumption.

To understand what we can learn from this breakdown, we need to consider some distinguishing characteristics of these three economies – in particular:

  • their goals or justifications;
  • what currency they use;
  • what kind of demand they respond to; and
  • how they define and reward work.

Goals.

If you look at the market economy from the perspective of their principal actors – firms – it is evident that their goals and motivations are organized around the principle of profit-making.

The most striking difference between the market economy and the public purpose economy comes out in the phrase by which some of its members are often described: non-profit. The public purpose economy is a collection of institutions that are justified by their stated intention to act for some broader good than their own profit or enrichment, though they may differ widely in their definitions of what is ‘good’.

The core economy’s justification and purpose is the survival and well-being of its members. It is located in home, family, and neighborhood: places that function as markets for emotional, social, and civic transactions. It is here that children are raised, meals are prepared, homes are maintained and lived in, and the first line of defense is maintained against sickness, sadness, and anti-social behavior.

It is worth noting, here, some widely accepted assumptions that hinge on the distinction between ultimate (or final) goals and intermediate goals. The activities of the core economy directly address the ultimate human goals of survival and well-being. The market economy produces goods and services that are sold as though they would promote these goals; but there is a significant indirection here. Theorists of the market economy have offered economic growth, growth in GDP, and the profits that feed such growth, as though these things were ends in themselves. They are not. They are only means to humanity’s final goals.

Currency.

To understand the idea of currency it is useful to contrast it with barter. In a barter economy, there is a direct exchange, of shoes for child care, or food for soap, etc. In a barter economy, if you want something you have to find someone who has that thing, and who wants what you have to offer. Very cumbersome. A currency is an intermediary between the buyers and sellers – thus called a ‘medium of exchange.’ A currency can carry information (especially about what people want), and it can store value that has been generated at one time so that it can be used at another, later time. To a remarkable degree, it motivates inventiveness and inventions. Think, for example, of all the creativity that is sparked by money – the currency that is so well-known that it is hard to imagine that there could be any other.

Money is wonderful stuff. It makes it possible for us to buy a honeydew melon, and to sell a book we have written, without needing to find some improbable person who wants to trade his melon for our book. It makes it possible for us, while we are working and earning the stuff, to store up a claim on resources that we will need, maybe many years in the future, when we are not earning. And the wonderful system in which we most obviously use this invention is the market economy.

The public purpose economy also usually uses money as its medium of exchange; recognizing this reality, while we will later suggest some other options, we will often refer to both this and the market as ‘monetized’ economies. But we also need to note an exception, in the public purpose use of volunteers. Here, in theory, there is no exchange, and hence no need for a medium of exchange: the volunteers give, they don’t get. However, the public purpose economy is suffering from an ambiguity. Its goals are closely allied to those of the core economy, and its principles of volunteerism look like the principles on which the core economy operates – but, as we will note under the topic of work, there are significant differences. In fact, borrowing the currency of money from the market economy, and trying to copy volunteering from the core economy, the public purpose economy is often misled and confused by both. It suffers severely from not having a currency designed to fit its special character.

The core economy hardly uses money at all in its internal transactions (exceptions tend to be small, as when the kids’ allowances are tied to doing chores). If we define volunteering as a one-way street, in which the recipient gives nothing in return, we will also find that this is not the most characteristic type of activity in the core economy. Core transactions are embedded in networks of intimacy, identification, and reciprocity, so that, when the core economy is operating in its healthiest form (which is by no means all the time) – ‘suppliers’ of goods and services in the core do not feel depleted. This suggests some kind of exchange.

Some parts of this exchange are best understood as barter: “I’ll cook if you do the dishes.” In many cases, however, what is ‘supplied’ by one person, at one time, feels more like an exchange because this person knows that she will get her ‘demands’ met, though likely at a different time, and not necessarily from the same person. An example is the care we give to old people (who may or not be our parents), in the hopeful expectation that we will receive similar care when we are old, from others in our circle of neighborhood and family (who may or may not be our children). It is not easy to define the currency that operates to permit these non-barter exchanges. It might be love; sometimes it is guilt; or it could go by names such as obligation, responsibility, or neighborliness.

Demand.

Money is wonderful stuff – if you have it. When economists talk about ‘demand’ they mean people’s desire to have things; but the market economy can only perceive, and respond to, a special kind of demand. ‘Effective demand’ is the desire and ability to purchase something at the going price. If your wants aren’t backed up by enough money, they aren’t effective – in the market.

The demands that can be heard or seen by the other two economies are not so restricted. Both the public purpose and the core economies are sensitive to needs. They are also, of course, sensitive to wants that might not be defined as needs (a murky distinction to make, in any case), and there are various kinds of pressures that can make these demands (both wants and needs) more ‘effective.’

Governments in the public purpose economy respond to the voice of their constituents. Some voices are more effective than others; this differential may be defined as power. Charitable organizations are often designed to respond to specific kinds of needs – but, again, there are differences among the ‘needy’ in how well they can make themselves heard. And the confusion in the public purpose economy, deriving from the large role that money plays, often places a significant requirement for market-type effectiveness on the demands to which it attends, when it mimics the markets in selling its services. Examples include non-profit hospitals that require payment before service, or (more subtly) garbage collection that is more frequent in the high-tax areas of town.

The core economy, as noted, responds to needs; but here, too, some people are better at making their needs heard than others. There is the squeaky wheel principle; and there are also varieties of domestic and community power that can be megaphones for some voices, while drowning out others.

There are many needs that are not being met within either the market economy or the public purpose economy, either because there isn’t enough money available, or because there are things that money can’t buy. And there are many wasted human capacities that are, or could be, mobilized outside of these economies, to meet the needs for which money isn’t the answer. Especially important needs that often fall outside of the monetized economies, into the sphere of the core economy, are for raising children and for turning physical spaces into homes and neighborhoods. Other needs are partially, but very inadequately, served within the two monetized economies: needs such as care of elderly people, those with long-term sickness or disability, and others who for various reasons are unable to earn enough money to live on. And there is a long list of needs that are consigned to one or another of the monetized economies, but which many people feel are not being very well served there. Outstanding on that list are education, health care, and criminal justice.

As we think about significant problems that our society has so far been unable to solve, a focus on currencies turns out to be a remarkably productive way to break through some previously impenetrable barriers to change.

Work.

The manner in which work is understood and rewarded is often similar between the market and public purpose economies, because of their shared dependence on money to facilitate transactions: in both, work is normally defined in terms of jobs to which wages or salaries are attached. However, these economies’ disparate goals create an uneasy and unstable difference in their attitudes toward work.

In the market economy, there is a theory of wages which says that every worker should be paid exactly the amount that his or her work adds to the employer’s revenue. The reality is, indeed, rather different from the theory; but anyone who has taken an introductory economics class knows how the system is supposed to work.

In the public purpose economy, revenue (profits) are not the defining issue, so the workers’ contribution to revenue cannot be used to justify what they are paid. However, the public purpose economy is currently in a state of great insecurity about its identity. It is criticized for inefficiencies (some of which are real, while others are invented or greatly inflated by those whose self-interest is served by diminishing government), and told that it needs to more exactly imitate the market economy. In attempting to obey these injunctions, institutions in the public purpose economy feel pressure to define their workers’ productivity and to set compensation accordingly. But the value of the things they are producing – from environmental quality to day care, from prisons to trade agreements – usually isn’t defined by a price tag, and is normally hard to quantify. Given the contemporary mood, which holds up market pricing as the best gauge of all value, this puts the public purpose economy at a disadvantage, not only in its employment policies, but in many other ways.

Nor is volunteering the solution to this dilemma. That approach copies what appears to work in the core economy, by replacing a money exchange with rewards that may be thought of as a sense of purpose, or meaning, or human value. Indeed, there is much satisfaction in being needed, in doing for others the things that make human life possible and worth living. However, there are several problems in the relationship between the volunteer and the recipient of volunteer help.

One problem is that the volunteer earns (and may even depend on) a kind of moral superiority, precisely because the relationship is set up on the assumption that nothing is given in return. The recipient, at the other end of this one-way relationship, loses dignity and self-respect when the role is understood as only that of recipient. And even the most morally superior volunteers can burn out because they feel they are only giving, never getting.

Lack of reciprocity is not only a problem for volunteering; it can also affect the human interactions in programs of the public purpose economy wherein workers are paid, but still assume a one-way flow from professional to client, from giver to receiver. The service provider is empowered, the recipient demeaned. That kind of ‘helping’ also sends the message: “The way to get my attention and concern is by having problems.” The public purpose systems that do work well often are successful precisely because they find an alternative – we call it “co-production” (Ostrom, 1997) – to the one-way-street approach to matching resources with needs.1

How are workers in the core economy compensated? Partially, their work contributes to their own well-being and comfort. However, much of this work benefits people other than the worker (the sick friend or relative, the young child, the family members who eat meals they did not prepare, etc.). There is a growing literature on the ‘caring labor’ that may be unpaid, as in the core economy, or else is usually underpaid, when it flows through another economy. (It isn’t only nurses; almost all paid work that is defined as ‘caring labor’ receives money wages lower than other jobs requiring comparable skills or experience.) Theories on this topic emphasize two issues. One is power of various sorts (e.g., the gender/power link, psychic pressure, or the power that aligns with those who follow cultural norms). The other is the psychic reward that comes with knowing that one is contributing something valuable. Although the second of these can be exaggerated by people who are benefitting from cheap caring labor, it is indeed a powerful force.

When work in the core economy gets to feel like the one-way street of volunteering, burnout can, and often does, happen here, too. At best, however, homes and neighborhoods are bound together with a sense of reciprocity; the core worker feels an identity with the larger group (family, neighborhood, community) which means “I’m doing this for us,” not “I’m doing this for them.”

RELATIONS AMONG THREE ECONOMIES

Reconceptualizing our universe in terms of multiple economic systems is an uphill struggle, but it may become easier as actors in the market begin to recognize (as, in fact, more and more investors and CEOs are beginning to recognize) that economic health doesn’t only mean a healthy business sector. The market and public purpose economies together cannot do what is necessary to maintain the health and sanity of workers through their productive years; far less can it assure them of a dignified and comfortable old age.

There is a growing interest in the topic of ‘social capital.’ This topic recognizes the market economy’s need for socialized beings: people who have been nurtured since infancy to become thoughtful, healthy, mature adults, ready to accept the disciplines and learn the skills of modern production. The core economy is the primary source for the creation of social capital – the place where cultural and ethical norms are nurtured. To the extent that it fails to promote norms of honesty, responsibility, etc., then the other economies must fall back on the far less efficient alternative of policing. If governments and police are corrupt (as they are likely to be if the people are corrupt), then efficiency leaks out of enforcement-dependent market and public purpose economies very quickly.

Alvin Toffler once asked the CEOs of some Fortune 500 companies, “How productive do you think your workforce would be if they were not toilet trained?” (Swan, 1998). Employers seek a workforce that is responsible, hard-working, and trustworthy. But if the market wants its workers to be ants, it wants consumers to be grasshoppers: materialistic, irresponsible with their money, seeking instant gratification, and caring nothing for the future. It happens, however, that all workers are also consumers. As whole people – who are not only workers and consumers in the market economy, but also citizens, family members, friends, etc., in the core and public purpose economies – we cannot afford to have all our values defined in the framework supplied by money as the medium of exchange.

The values that are represented and nurtured in the core economy are often ones that are subscribed to by the public purpose economy; but the latter hasn’t been able to break out of the wage-equals-value mentality. There is widespread agreement, in the core and public purpose economies, that it is important to meet basic human needs; to provide education that will help people develop their mental, physical, and moral capacities; to produce adults with the ability to enjoy and to contribute to the society in which they live; and to foster human qualities of kindness, responsibility, honesty, willingness to work for what matters, and the ability to love and be loved. But the public purpose economy allows itself to be judged by the standards of the market economy. It has accepted a production mode in which workers are treated like factory workers, producing ‘public goods’ that are supposed to be measured.

Economists use the term public goods for things like traffic safety, or public parks, or public transportation, which we know will not be adequately produced by the market, because it is impractical to divide these products up and sell access to them individually. The encroachment of the market economy mentality implies that the public purpose economy should quantify in advance benefits that are unquantifiable. How could anyone have known in advance (or, for that matter, with hindsight) the money value of our systems of public parks or public education? If such proof had been required, would the Advanced Research Projects Agency (ARPA) have invented the internet? How much government research and development would get funded? Would there have been a space program? A Peace Corps?

As we come close to the end of our description of three human economies, we should note that the balance among them is different than what most people assume. Would you guess that the market economy is the largest of the three? That is only correct under certain conditions. If we measure the size of each economy according to dollar output, then of course the market economy is the largest, for the core economy does not measure its output in money, and the public purpose economy does not know how to measure its output. However, if we use a different measuring rod – the number of hours of human work in each economy – we get a more complex story.

There have been a number of efforts to put a monetary value on the production generated by households in the US and other advanced countries. The 1995 Human Development Report of the United Nations Development Program compared quantifications of economic activity around the world with estimates of unpaid productive activities of women and men – activities whose results were intended for household use, for the benefit of the community, or for non-monetized exchange. The report found that, globally, only slightly more than half of the total time spent on “economically productive activities” was going through formal markets and reported in standard income measures such as GDP (United Nations Development Programme [UNDP], 1995). A wide range of other estimates, from those of conservative Chicago economist Gary Becker (1981) to feminist economist Nancy Folbre, (2002) similarly find that at least 40% of this country’s productive work (measured in hours) goes on outside of the money economies. See Figure 1.

Figure 1: Value of labor costs in household production of non-market services as per cent of GDP, 2008 (Ahmad & Koh, 2011)

Country-by-country analyses in developed countries show more differences. A 2011 meta-analysis looking at all Organization for Economic Co-operation and Development (OECD) countries (Ahmad & Koh, 2011) (see Figure 1) used national time use surveys to estimate how much total time is spent on unpaid care work. The market value of this total time was then calculated in two different ways. In the opportunity cost method, the time spent on core work was multiplied by average after-tax wages for the country; this indicated how much of their potential wages unpaid care workers have to give up in order to carry out their care responsibilities. In the replacement cost method, the time spent on core work was multiplied by average after-tax wages for domestic workers, which unpaid care workers would receive if they went to work in the market economy.

Looking just at elder care, a 2015 Rand study using the opportunity cost method found that the cost for informal caregiving of elderly people by friends and relatives in the United States comes to $522 billion a year (Rand, 2015). That is larger than all of Medicare spending in 2014 ($449 billion) and more than twice the $211 billion now spent in the market and public purpose economies together for commercial homemakers, who are paid at an average rate of $11 per hour; but the work described here was not paid for with money. Chari, Engberg, Ray, and Mehrotra (2015) note that, “Replacing that care with unskilled paid care at minimum wage would cost $221 billion, while replacing it with skilled nursing care would cost $642 billion annually.” An AARP report says that “Family caregiving today is much more complex, stressful, and costly for caregivers than ever before” (Reinhard, Feinberg, Choula, & Houser, 2015. Looking into the future, the report notes:

Although the family has historically been the major care provider for older relatives and those with disabilities, the number of potential family caregivers is declining. The caregiver support ratio estimates the number of potential family caregivers—those in the primary caregiving years (ages 45–64)—for every person age 80 and older (those most likely to need Long Term Support Services). In 2010, the ratio was at its highest as the baby boomers aged into the prime caregiving years. The baby boomers began turning 65 in 2011. The oldest boomers start reaching age 80 in just 11 years (2026).

The caregiver support ratio has begun what will be a steep decline: decreasing from a high of 7.2 in 2010 to 6.8 potential family caregivers for every person in the high-risk years in 2015. By 2030, as the boomers transition from family caregivers into old age themselves, the ratio will decline sharply to 4 to 1. It is expected to fall further to less than 3 to 1 in 2050, when all boomers will be in the high-risk years of late life.

(Reinhard, Feinberg, Choula, & Houser, 2015, pp 115-116)

Identifying different human economies, and understanding their characteristics, enables us to get out of the binary box that had classified all contribution either as work (defined in market terms) or as volunteering (defined as uncompensated labor). It invites us to search for other measuring rods for productivity, for growth, for contribution.

APPLYING A NEW WAY OF THINKING

If it is not because of overall poverty that the problems we have cited remain unsolved, neither is it because of inattention. Many approaches have been tried – many local, state, and federal programs, as well as ethical and religious movements, and creative programs in the non-profit sector – and the problems are still there. So caring people, in despair, look away. What we require are new social inventions: specifically, social inventions that can bring unused capacities together with unmet needs.

Make a leap: Suppose that the inventions we are seeking are ones that will strengthen social capital, especially informal support systems. Make another, larger leap. Consider that one of the great social inventions of all time is money: an extraordinarily versatile thing in itself, and one that has unlocked an astonishing cascade of additional social, technical, institutional, and other inventions. In fact, most current proposals for addressing social problems have to do with money – tax schemes, interest rate manipulation, funding increases, funding cuts, money-based incentives to businesses or charities, and so on. Might a new kind of currency unlock new creativity that can succeed in some of the places where other efforts have failed?

The past thirty years have seen promising experiments with just such an idea – TimeBank programs such as those we described at the outset. Many of those now earning this currency are people whom the market does not value: children, teenagers, elderly people, people with disabilities, and households receiving some form of public assistance (such as welfare, food stamps or public housing). For every participant, each hour of labor earns one Time Credit. Those credits can be spent to secure an hour of help for oneself or one’s family; credits can be (and often are) given to others. In some situations in which far-sighted managers or administrators have recognized the dependence of the market economy and the public purpose economy on a healthy core economy, credits can be used for food from a food bank, as a contribution toward rent, or for health care or legal services or recycled computers. There are many examples, around the world.

There are about 500 TimeBanks in the United States, with as many as 50,000 members (http://timebanks.org). In 2017 a TimeBank was created in the United Kingdom to provide care and companionship for elderly people, partially funded by the government. In this system, people contribute time helping others, accumulating credits to eventually be redeemed when they themselves need assistance later in life (Boyle, 2015). TimeBanking has become popular in New Zealand, where businesses and organizations can also participate, offering goods and services in exchange for time credits rather than money (Cahn, J. Ozanne, & L. Ozanne, 2015).

WHY DO TIMEBANK PROGRAMS WORK?

The urgent need to mobilize unused capacities to meet unmet needs has brought to the fore the importance of redefining work in the core and the public purpose economies, and given it renewed recognition. It turns out that this shift in focus also requires us to redefine the meaning of acceptable compensation. Activity powered solely by money is not sufficient. But, as noted earlier, traditional conceptions of volunteering have serious limitations.

Time Credits work as a linking mechanism, to bring together needs and capacities, using and interlocking the different economies where each one works best. TimeBank programs are fully compatible with the definitions of work that are intrinsic to the ultimate human goals of survival and well-being. At the same time, this system of compensation can combine some form of material gratification with major infusions of psychic gratification. In the examples we have given, the ‘workers’ are not earning minimum wage. They are earning something of monetary value, but it is clear that monetary return (or its equivalent) represents only one element of the compensation. They are also receiving the sense of being needed, of doing something that is intrinsically worthwhile – what may be summed up as a sense of meaning. This is what volunteers receive, and it is a large part of why people volunteer. But the dualistic nature of the Time Credit payment – meaning plus a usable currency – goes beyond what volunteer programs have been able to accomplish.

TimeBank programs have been able to tap the energy and talents of the very people who conventionally have been labeled the problem. They enable human beings for whom the market economy has no use to redefine themselves as contributors, and they give society a way to value activities that the market economy does not. Thus, they tap into an enormously potent and flexible new medium of exchange, at the same time as they emphasize the reality that people who are seen as ‘in need’ must be involved in the work of filling their needs.

The fact we have just cited is evident in many places. In education, it is well known that successful teachers are not the only active participants in education; if the students are not actively involved, no learning will take place. Similarly, doctors alone can’t make people well; if the patients don’t take their medicine, lead healthy lives, and avoid harmful substances, doctors can only do a little patching up. Education and health can sometimes be achieved by a motivated, intelligent ‘client’ who is determined to learn or to get well on her or his own; they cannot be achieved by a provider acting without the co-production of the student or patient. Such co-production is the only efficient and effective way to raise the level of health and education in a population.

The same goes for community safety: how much of that can be delivered by the police, without cooperation from the residents? And the same, too, has finally been discovered in the professions that offer ‘economic development’, whether in the Third World or in our inner cities or impoverished rural areas. Sociologists, planners, and economists are finally beginning to recognize that the people who need economic development are, themselves, the keys to that development taking place. Their understanding and prioritizing of the problems they face, their skills and commitments, are the most important resources that can be brought to bear. With those resources alone – without some additional inputs of organization and maybe money – economic development is difficult to accomplish. Without them, it is impossible, no matter how much money is poured in.

CONCLUSION

Initiated as a practical solution to an immediate problem, the TimeBank system has turned out to apply in a wide range of situations. It has accomplished something far bigger than might have been expected, first of all by getting us out of the binary box that classifies all contributions in just two ways: work (defined in market terms), or volunteering (defined as uncompensated labor). TimeBanking supplies us with another measuring rod for contribution in the core and the public purpose economies. The latter economy, in particular, has suffered from the lack of a currency it could call its own. We have found more and more places in the public purpose economy – education, care of young and old, rehabilitation of social deviants – and expect to find yet more – where the use of this new currency fills what had been a great, unrecognized need.

The programs we have described represent a kind of social invention, a kind of entrepreneurship. A distinctive common feature is that they all require some money to operate – but they do not operate on the same wage principles as the monetary economies.

We need more such social inventions. That will require resources from all the different economies. Fortunately, much of the fundamental research and investment has already been made by major foundations over the past 15 years. (See www.timedollar.org). As these social inventions gather momentum, it is possible that their greater efficiency will cover much of their cost. They also provide other savings that become evident when one quantifies the social costs of otherwise maintaining the status quo in schools, prisons, health care, public housing, and elsewhere.

It is clear that there are common human assets that are ignored by the market economy and, too often, by the public purpose economy (especially as it tries to mimic the market). These assets are critical to building the world we all want. TimeBank programs exemplify ways that the values of the core and the public purpose economies can be recognized and reinforced. As TimeBank networks have evolved, they have generated lessons about co-production, social involvement, and compensation/recognition whose interrelationship have only gradually become evident. Most importantly, they have shown that everyone is a potential contributor, when we turn the telescope around the right way and count what really counts: when we align our ultimate goals with human values, rather than market values.


References

Ahmad, N. & Koh, S. (2011). Incorporating Estimates of Household Production of Non-Market Services into International Comparisons of Material Well-Being (Working Paper No. 42). Paris, France: Organisation for Economic Co-operation and Development. Retrieved from http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=std/doc(2011)7&doclanguage=en

Annie E. Casey Foundation and the Center for the Study of Social Policy. (2004). Building Community with Time Dollars. https://www.cssp.org/publications/neighborhood-investment/making-connections/making-connections-building-community-with-time-dollars.pdf

ArchCare (2017) Report: TimeBank Program Statistics December 31, 2017; New York City, NY. (See Appendix A).

Becker, G. (1981). A treatise on the family. Cambridge, MA: Harvard University Press

Boyle, D. (2015, February 6). How TimeBanking is making a difference to patients’ lives. The Guardian. Retrieved from https://www.theguardian.com/healthcare-network/2015/feb/06/time-banks-patients-lives-long-term-conditions.

Cahn, E., Ozanne, J., & Ozanne, L. (2015, December 16). Pay it forward: the New Zealand town where your time is a currency. The Guardian. Retrieved from https://www.theguardian.com/sustainable-business/2015/dec/16/new-zealand-time-banking-currency-community-earthquake.

Cahn, E. & Rowe, J. (1992). Time dollars: The new currency that enables Americans to turn their hidden resource – time – into personal security & community renewal. Emmaus, PA: Rodale Press.

Cahn, E. (2004). No more throw-away people: The coproduction imperative. Washington, D.C.: Essential Books.

Cahn, E. (2006). Priceless money: Banking time for changing times. Washington, DC: TimeBanks USA. Chari, A. V., Engberg, J., Ray, K. N., & Mehrotra, A. (2015). The opportunity costs of informal elder-care in the United States: New estimates from the American time use survey. Health Services Research, 50(3), 871-882. doi:10.1111/1475-6773.12238

Chari, A.V., Engberg J., Ray, K.N., and Mehrotra, A. (2014, October 7). “The opportunity costs of informal elder-care in the United States: New estimates from the American time use survey”. RAND.org. Retrieved from www.rand.org/t/EP66196.

DosSantos, J. (2016, January 20) TimeBank Volunteers Build Savings That Reward Service”. Catholic New York. Retrieved from http://www.cny.org/stories/timebank-volunteers-build-savings-that-reward-service,13518?

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APPENDIX A: ArchCare TimeBank


Neva Goodwin, a PhD economist, is Co-director of the Global Development and Environment Institute at Tufts University. She is active in a variety of attempts to systematize and institutionalize an economic theory – “contextual economics” – that will have more relevance to contemporary real world concerns than does the dominant economic paradigm. She has edited more than a dozen books, and is the lead author of three introductory textbooks: Microeconomics in Context, Macroeconomics in Context and Principles of Economics in Context. A European edition of Macroeconomics in Context was published in Fall, 2017. Goodwin seeks ways to translate an understanding of the economy in its full social and ecological contexts into action and policy. She also seeks a deeper theoretic understanding from exposure to on-the-ground experiments in alternative socio-economic institutional design, and is involved with efforts to motivate business to recognize social and ecological health as significant, long-term corporate goals.

Edgar Cahn, PhD, JD, is a Distinguished Professor at the University of the District of Columbia David A. Clarke School of Law; Founder of TimeBanks USA, a currency of empathy and equality; Ashoka Fellow; Co-founder of the National Legal Service Program (now Legal Services Corporation); Co-founder of the Antioch School of Law (now UDC David A. Clarke School of Law); Founder of the Youth Court of D.C., Co-Founder of the National Homecomers’ Academy (enabling those returning home from prison to define themselves as community builders);and Founder of the Racial Justice Initiative (utilizing a novel legal theory to dismantle structural racism in juvenile justice and child welfare). He is co-author (with his late wife, Jean Camper Cahn) of “The War on Poverty: A Civilian Perspective) the blueprint for the National Legal Services Program, and author of Hunger U.S.A.1968 (A Report by the Citizens Board of Inquiry into Hunger and Malnutrition in the United States); Our Brothers Keeper: The Indian in White America; Time Dollars: The New Currency that Enables Americans to Turn Their Hidden Resource – Time – into Personal Security and Community Renewal; No More Throw-Away People: The CoProduction Imperative; and Priceless Money: Banking Time for Changing Times .

Correspondence about this article should be addressed to Neva Goodwin at Neva.Goodwin@Tufts.edu or Edgar Cahn at yeswecan@aol.com

Produced by University of Minnesota Libraries Publishing, 2018


Endnotes

  1. The term “co-production” was first used by Elinor Ostrom in her 1997 paper, “Crossing the great divide: Co-Production, synergy and development,” published in Peter Evans, ed. Retrieved from:
    http://escholarship.ucop.edu/uc/item/8mp05335. In 2000 Edgar Cahn reframed the term in his book No More Throw Away People, The CoProduction Imperative. In this paper it is used in Cahn’s sense.