Even in a monetary economy, there are a significant number of nonmonetary transactions. Examples include household labor, care giving, civic activity, or friends working to help one another. These nonmonetized labors represent an important part of the economy, and may constitute half of the work done in the United States.[1] These nonmonetary subeconomies are referred to as embedded nonmonetary economies.
The nonmonetary economy could make the labor market more inclusive by rewarding more forms of work.[2][example needed]
Embedded nonmonetary economies
An embedded nonmonetary economy refers to an economy that functions without money inside a larger monetary system. The nonmonetary economy undertakes tasks that benefit individuals that the monetary economy does not generally reward with payment.[2]
Core (or social) economy
The social economy refers to the space between public and private sectors occupied by civil society, including community organizations, volunteering, social enterprises, and cooperatives. The social economy represents “a wide family of initiatives and organisational forms — i.e. a hybridisation of market, non-market (redistribution) and non- monetary (reciprocity) economies”.[3] Rather than being fringe activities at the margins of the formal economy, this amounts to a significant level of activity: The "civil society" sector of the United Kingdom employs the equivalent of 1.4 million full-time employees (5% of the economically active population) and benefits from the unpaid efforts of the equivalent of 1.7 million full-time volunteers (5.6% of the economically active population), and contributes 6.8% of GDP.[3]
Edgar S. Cahn developed the concept of the core economy to describe the informal social networks that he considered the bedrock of society, which he felt were eroding as monetary economies de-legitimized them. The core economy as he defined it consists of social capital,[when defined as?] and generates collective efficacy that's of critical importance to the core economy.[1]
Collective efficacy refers to the effectiveness of informal mechanisms by which residents themselves achieve public order. More specifically, this is the shared vision or fusion of shared willingness of residents to intervene and create social trust (the sense of engagement and ownership of public spaces), intervening in the lives of other residents to counter crime, increase voting, or encourage residents to recycle. These informal mechanisms are what Cahn calls social capital, a public good provided by citizens who participate to build up their communities (from raising children and taking care of the elderly to volunteer work). Cahn believes this kind of work is essential to a democratic and stable society.[1]
Unlike a market economy, the core economy relies on specialization reinforced by a "do-it-yourself" attitude that “Builds self-esteem and a voluntary interdependence that replaces involuntary dependence that comes w/ industrial and market specialization”[1] and where self-sufficiency is based upon interdependent family or community units (instead of a market economy's atomized individual). This model reduces or eliminates the involuntary dependence that comes with the market economy's strict division of labor. It also focuses on alternative distribution mechanisms to pricing, using instead normative considerations like need, fairness, altruism, moral obligation, or contribution.[1]
Collective efficacy and social capital are central to two very successful examples of civic-based, non-monetary economies: time banks and local exchange trading systems (LETS). These work systems provide alternative forms of currency, earned through time spent in directly serving the community, e.g. working in the community garden, recycling, repairing leaky faucets, babysitting. These units of time can be used to ask other members of work systems to do jobs they need, or may act as a forum in which special jobs or needs can be communicated and traded. These systems operate to a large degree outside of the monetary economy, though do not supersede the monetary economy or seek a return to systems of barter.[4]
A time bank is a community-based organization which brings people and local organizations together to help each other, utilizing previously untapped resources and skills, valuing work which is normally unrewarded, and valuing people who find themselves marginalized from the conventional economy.[3] These are things that family or friends might normally do for each other, but in the absence of supportive reciprocal networks, the time bank recreates those connections. These interactions are based upon the exchange of hours spent on an activity, where time dollars are the unit of measure/ currency. They are traded for hours of labor, and are redeemable for services from other members.[5]
Community building
In 1998, Redefining Progress estimated that housework amounted to $1.911 trillion, roughly one-fourth of the U.S. GDP that year.[1] As of 2010, the Bureau of Economic Analysis found that household work, if tracked, would increase the GDP by 26%.[6] More than a decade later, household work continues to provide a key source of foundational support to the domestic economy. Such household work includes cleaning, cooking, care giving, and educating children.
There may be a closed household economy, where a specific (perhaps familial) group of individuals benefits from the work performed.
In extreme cases of survival, the open nature of the household economy is most evident. Food, clothing, toiletries, and basic necessities were often shared or exchanged amongst war-torn, impoverished families in East Europe post-communism.[7] Cooking, cleaning, clothes-making, and forms of work may seem to be intuitively thought of as work. An Australian study (1992) determined that an estimated 380 million person-hours per week were spent on these types of unpaid activities, compared to 272 million hours per week at paid work.[8]
A large portion of these hours can be attributed to nurturing. Nurturing can take two forms, in terms of raising children and nursing the sick, elderly, and infirm, both still usually expected from women and girls.[8] Children represent not only a product of a household but an asset to the community as a whole. In the home, kids may provide help in the form of chores and so are an asset. In a greater sense, children are a public good: an investment in which time, energy, and money are spent so that they can become stable adults who share in reducing national debt and contributing to Social Security, thus a public good.[9] As children mature and learn, they have the potential to benefit society in whatever profession or products they eventually produce.[10]
The products and services produced within a home are open to the non-market economy at large. Society as a whole benefits from this unpaid work, whether in an immediate manner or a more abstract, macro scale.
The other form of home-based nurturing also serves benefits society as a whole. Care giving provides assistance for those who are elderly, disabled, suffering terminal illness or chronic illness, or are generally frail or in need of assistance. Someone who cares for someone in any of these positions is a caregiver. This is largely provided unpaid by friends or family of the patient.
Care giving often exceeds the nursing tasks that come with caring for someone who is ill or recovering from surgery. Often, caregivers also must maintain the dwelling, provide meals, and interact with medical providers and doctors, among other responsibilities. Nearly 80% of labor that keeps seniors out of nursing homes is unpaid labor by families.[1]
In 1997, the value of work produced by caregivers was estimated at $196 billion. The figure was $375 billion for 2007.[11] At the time, only $32 billion was spent on formal health care and $83 billion spent on nursing home care by the federal government.[12] According to these statistics, only half as much money is spent on nursing and home health care as is necessary. These numbers do not take into account the financial burden as well as emotion work that is an inescapable part of this work.
The same research estimated that in 1997 caregivers would have received $8.18 as the hourly wage.[12] As of May 2013, the hourly wage was estimated at $9.14 when averaging the minimum wage in Florida[13] and the median wage for Home Health Aides.[14] Caregiving requires a large dedication, as much as 22 to 70 hours a week. An estimated 25.8 million people as of 1997 performed these tasks.[12]
Caregiving has a disproportionate effect on women and white households.[11] The cost of caregiving is exorbitant, nearly five times what Medicaid would have spent on long-term care, meaning only wealthy families can afford to do this type of in-home care. The intersection of class and race in this phenomenon is an important place to explore as less advantaged families will have to rely on government care, potentially at the risk of having less quality care. These statistics also highlight a differential effect on women, showing that women disproportionately do caregiving work.[11]
Valuing all work changes perceptions of what constitutes valuable work. Acknowledging a non-monetary economy may change the ways in which the unemployed, poor, women, and other stigmatized persons’ work is valued. It can allow citizens to see their community as a more cohesive, intertwined system that deserves their time and energy. Exploring this economy also exposes numerous areas of help that do not have enough support from the public and private sectors. Education and caregiving in particular highlight where assistance is needed and often not provided.
Barter economies also constitute an important form of non-monetized interaction, although for the most part this kind of interaction is viewed[by whom?] largely as a temporary fix as an economic system is in transition. It is also usually considered a side effect of a tight monetary policy such as in a liquidity crisis, like that of 1990s Russia where barter transactions accounted for 50 percent of sales for midsize enterprises and 75 percent for large ones.[15]
Moneyless interaction of individuals with the monetary economy
This concerns individuals who agree with a participant of the monetary economy to exchange goods or services (reciprocation) or to receive them without any obligation (genuine gift.) For instance, begging for anything but money, perhaps in exchange of religious services, as is the case for mendicants. Examples of individuals:
Free contributions to the intellectual common good
This is a case of mutualism (see macroeconomies below) embedded in the monetary economy and restricted to intellectual labor. Typical examples are posting questions and answers on an internet forum, the production of open-source software, and the development of articles on Wikipedia. In these cases, subsistence is usually guaranteed by the monetary economy. Categories of such contributions are Commons-based peer production, Open source, Creative Commons license, and so on.
Non-monetary macroeconomies
The following is a list of moneyless systems which intend (or did) encompass an entire society.
Moneyless systems having a technological component
The following systems aim at moneyless societies, often aided by technology.
Technology-driven, often centralized ("resource based") societies: the Zeitgeist movement, its related projects named Venus, Auravana, or Kadagaya in Peru,[19] and the Money Free Party.
The Technocracy movement, which proposes to replace money with energy certificates.
Large-scale algorithmic distribution (as envisaged by Stefan Heidenreich) for negotiating "matched transactions," each of which "has effects beyond all immediate participants." Yet, the procedure emulates money "when our profiles, our likes, and our consumer histories are used to calculate who will buy what and where."[20] The transactions are recorded and, along with utility/urgency and reputation/personal history, the "matches" are determined.[21]
The Unhampered Individual Rewards movement, which involves using numbers (or other symbols) not representing any fixed-amount physical property (cash, gold, etc.) to reward individual-person and individual-enterprise merit in terms of productivity, creativity, utility, or necessity of the work performed/product or service provided, not limited by monetary budget constraints or pricing instability. The numbers allotted to any individual account represent a cash-free income, and expenditure is accomplished with personally written check, purchase-card swipe or electronic transfer. The amount in each individual account is adjusted according to income or expenditure by simple math (addition or subtraction) which only represent changes in the economy of the individual involved, not in the collective economy. The collective economy is dependent only on the amount of natural and human resources available needed to produce a particular type of product or service, not the amount of cash in print and in circulation. The "cashless society" movement is considered to be a precursor stage for this movement.[citation needed]
Other moneyless systems
In the following, technology is less emphasised. The boundaries between the below systems are often blurred. The example of transplantation is international but could be classified as a micro-economy, too.
Mutualism in the sense of a (moneyless) economic theory. People contribute to a community without payment not only to help but also because they expect to be helped by a member of the community when in need (a selfish interpretation of solidarity.) So, the term 'mutualism' is understood as aid by the community and not necessarily reciprocation. (Compare to generalized exchange.) For example, if a transplantation center donates a kidney to another center, then its entitlement to receive a kidney from the community is increased by means of its export balance.[23] Other examples are the anarchist communities during the Spanish Civil War, where quota and rations were used for distribution,[24] and the Mink'a communal work.
Debt system, as used in manorialism or with the aid of the tally stick. To continue the previous example, if a transplantation country donates a liver to another country, then the recipient country is obliged to return one at the earliest occasion. To save transportation cost, such obligations are passed from one creditor country to the other in the obvious way.[25] The transplantation clearing house could (if time would allow) further diminish transportation cost by deferring such alienation of the obligations. This would be similar to the fairs from which the banks and government-issued money evolved.[26]
The redistribution economy, which is a more authoritarian case of mutualism. For example, the Incas and possibly, also the empire of Majapahit.[27]
A combination of mutualism and redistribution: Uruganda and similar economies like Umuganda/Isarongo and Ubuntu. These economies are based on culture rather than a fool-proof system.[28] For Ubuntu, see also Contributionism as described by Michael Tellinger.
Labor vouchers, which are inalienable certificates of hours worked.
Non-monetary (state) communist currents, ranging from libertarian proposals[29] to the harsh reality of Democratic Kampuchea. Many communists and socialists envisaged a moneyless society.[30]
Gift economies: other than the word suggests, the gift in such economies usually comes with an obligation to do something in return.
Altruistic society: as proposed by Mark Boyle, a moneyless economy is a model "on the basis of materials and services being shared unconditionally" that is, without explicit or formal exchange.[31]
The subsistence economy, which caters only for essentials, often without money.
Calculation in kind, which (in a restricted form) dispenses with any general unit of calculation when exchanging goods or services.
Natural economy, where resources are allocated through direct bartering, entitlement by law, or sharing out according to traditional custom.
Non-market ecosocialism as advocated by Anitra Nelson: as for the nonmonetary aspect, each household "guesstimates" its basic needs, which are met in return for "collective production as a community obligation." The production, distribution, and procurement of goods and services from "more distant communities" are collectively agreed on.[32]
Policy implications of embedded non-monetary economies
The UK in particular has been targeted by the government since the New Labor administration of the mid-1990s onwards—the social economy has been developed as a means of delivering effective public services, and mobilizing active citizenship. In 2002, for example, the Department for Trade and Industry (DTI) 2002 launched the Strategy for Social Enterprise to develop “the government’s vision … of dynamic and sustainable social enterprise strengthening an inclusive and growing economy.” The intent of the Strategy was to create an enabling policy environment for social enterprise, to make social enterprises better businesses, and to establish the value of social enterprise, in order that the sector may help to deliver on a range of policy agendas: productivity and competitiveness; contributing to socially inclusive wealth creation; neighborhood regeneration; public service reform; and developing an inclusive society and active citizenship.[3]
However, by and large current policy does not reflect the implications of a system that does not validate actions that transmit community values, provide support, generates consensus, etc. These actions in the past were subsidized by cheap or free labor derived from subordinate groups, like women and ethnic or racial minorities, who as a result of entering the workforce to receive monetary validation negate these positive public goods.[1]
The biggest issue that time bank coordinators face, as a result, is funding. Time banks do not rely on volunteers, but require financial support — to pay the time broker’s salary, for a publicly accessible drop-in office, for marketing costs — to successfully attract socially excluded people in deprived neighborhoods. While many UK time banks have been supported by grant funding from the National Lottery, over time it becomes harder to secure ongoing funding, or to increase the funding available for time banks overall, and established projects close while new ones are begun elsewhere.[3]
United States time banks and the IRS
Organizations that administer time banks, barter networks, or currencies may register for tax-exempt status under section 501(c)(3) as non-profit organizations working to benefit the community.[33] The IRS has recognized some time banks as tax exempt; it is harder to obtain exemptions for a barter network or local currency, as they are harder to prove as operating purely on a basis of service to the community.
Being a time bank alone does not enable an organization to obtain tax exemption under 501(c)(3).[34] If, instead of a time bank, an organization operates a local currency or barter network, such an organization may be deemed to be operating for the private benefit of individuals, even if those individuals are members of a charitable class. An exchange platform that is designed for use of the broader community, and not specifically for a charitable class, may not be considered a tax-exempt activity for a 501(c)(3) organization.[33]
Yenmez, M. Bumin (2015). "Incentive compatible market design with applications". Int J Game Theory. 44 (3): 543–569. doi:10.1007/s00182-014-0444-8. S2CID45772688. (Refers to models without transfers.)
Han, Qiaoming; Du, Donglei; Xu, Dachuan; Xu, Yicheng (2018). "Approximate efficiency and strategy-proofness for moneyless mechanisms on single-dipped policy domain". Journal of Global Optimisation. 70 (4): 859–873. doi:10.1007/s10898-017-0586-x. S2CID4593321. (Mentions many more non-monetary mechanisms.)
Vest, Richard Perry II (2021) Non-monetary Economies: A Study on Different Governing Principles. MSc Thesis 8246, Davis College of Agriculture, Natural Resources and Design. https://doi.org/10.33915/etd.8246
Albenberg, Harold (1970), The computer and the moneyless society (Dissertation)
F., A. (1932), World platform of the moneyless system
Consult worldcat.org to locate the last two publications.
Related Research Articles
In trade, barter (derived from bareter is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Economists usually distinguish barter from gift economies in many ways; barter, for example, features immediate reciprocal exchange, not one delayed in time. Barter usually takes place on a bilateral basis, but may be multilateral. In most developed countries, barter usually exists parallel to monetary systems only to a very limited extent. Market actors use barter as a replacement for money as the method of exchange in times of monetary crisis, such as when currency becomes unstable or simply unavailable for conducting commerce.
A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a system of money in common use within a specific environment over time, especially for people in a nation state. Under this definition, the British Pound sterling (£), euros (€), Japanese yen (¥), and U.S. dollars (US$) are examples of (government-issued) fiat currencies. Currencies may act as stores of value and be traded between nations in foreign exchange markets, which determine the relative values of the different currencies. Currencies in this sense are either chosen by users or decreed by governments, and each type has limited boundaries of acceptance; i.e., legal tender laws may require a particular unit of account for payments to government agencies.
In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. A regional currency is a form of local currency encompassing a larger geographical area, while a community currency might be local or be used for exchange within an online community. A local currency acts as a complementary currency to a national currency, rather than replacing it, and aims to encourage spending within a local community, especially with locally owned businesses. Such currencies may not be backed by a national government nor be legal tender. About 300 complementary currencies, including local currencies, are listed in the Complementary Currency Resource Center worldwide database.
A local exchange trading system is a locally initiated, democratically organised, not-for-profit community enterprise that provides a community information service and records transactions of members exchanging goods and services by using locally created currency. LETS allow people to negotiate the value of their own hours or services, and to keep wealth in the locality where it is created.
This aims to be a complete article list of economics topics:
Monetary reform is any movement or theory that proposes a system of supplying money and financing the economy that is different from the current system.
Monetary policy is the policy adopted by the monetary authority of a nation to affect monetary and other financial conditions to accomplish broader objectives like high employment and price stability. Further purposes of a monetary policy may be to contribute to economic stability or to maintain predictable exchange rates with other currencies. Today most central banks in developed countries conduct their monetary policy within an inflation targeting framework, whereas the monetary policies of most developing countries' central banks target some kind of a fixed exchange rate system. A third monetary policy strategy, targeting the money supply, was widely followed during the 1980s, but has diminished in popularity since then, though it is still the official strategy in a number of emerging economies.
In economics, a medium of exchange is any item that is widely acceptable in exchange for goods and services. In modern economies, the most commonly used medium of exchange is currency. Most forms of money are categorised as mediums of exchange, including commodity money, representative money, cryptocurrency, and most commonly fiat money. Representative and fiat money most widely exist in digital form as well as physical tokens, for example coins and notes.
In economics, a time-based currency is an alternative currency or exchange system where the unit of account is the person-hour or some other time unit. Some 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. Others use time units that might be fractions of an hour. While most time-based exchange systems are service exchanges in that most exchange involves the provision of services that can be measured in a time unit, it is also possible to exchange goods by 'pricing' them in terms of the average national hourly wage rate.
Economic anthropology is a field that attempts to explain human economic behavior in its widest historic, geographic and cultural scope. It is an amalgamation of economics and anthropology. It is practiced by anthropologists and has a complex relationship with the discipline of economics, of which it is highly critical. Its origins as a sub-field of anthropology began with work by the Polish founder of anthropology Bronislaw Malinowski and the French Marcel Mauss on the nature of reciprocity as an alternative to market exchange. For the most part, studies in economic anthropology focus on exchange.
An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society. It includes the combination of the various institutions, agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community.
A complementary currency is a currency or medium of exchange that is not necessarily a national currency, but that is thought of as supplementing or complementing national currencies. Complementary currencies are usually not legal tender and their use is based on agreement between the parties exchanging the currency. According to Jérôme Blanc of Laboratoire d'Économie de la Firme et des Institutions, complementary currencies aim to protect, stimulate or orientate the economy. They may also be used to advance particular social, environmental, or political goals.
In economics, an optimum currency area (OCA) or optimal currency region (OCR) is a geographical region in which it would maximize economic efficiency to have the entire region share a single currency.
Labour vouchers are a device proposed to govern demand for goods in some models of socialism and to replace some of the tasks performed by currency under capitalism.
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment.
In monetary economics, the currency in circulation in a country is the value of currency or cash that has ever been issued by the country’s monetary authority less the amount that has been removed. More broadly, money in circulation is the total money supply of a country, which can be defined in various ways, but always includes currency and also some types of bank deposits, such as deposits at call.
A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another measure of value, such as gold.
The Community Exchange System (CES) is an internet-based global trading network which allows participants to buy and sell goods and services without using a national currency. It may be described as a type of local exchange trading system (LETS) network based on free software. While it can be used as an alternative to traditional currencies such as the Australian dollar or euro or South African rand, the Community Exchange System is a complementary currency in the sense that it functions alongside established currencies.
Economic democracy is a socioeconomic philosophy that proposes to shift ownership and decision-making power from corporate shareholders and corporate managers to a larger group of public stakeholders that includes workers, consumers, suppliers, communities and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit and deny the polity a democratic voice in economic policy decisions. In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's inherent effective demand gap.
This glossary of economics is a list of definitions containing terms and concepts used in economics, its sub-disciplines, and related fields.
1 2 Seyfang, Gill (January 2004). "Working Outside the Box: Community Currencies, Time Banks and Social Inclusion". Journal of Social Policy. 33 (1): 49–71. doi:10.1017/S0047279403007232. S2CID154475834.
↑ Peacock, Mark S. (15 November 2006). "The Moral Economy of Parallel Currencies: An Analysis of Local Exchange Trading Systems". American Journal of Economics and Sociology. 65 (5): 1059–1083. doi:10.1111/j.1536-7150.2006.00491.x.
↑ Smith, Adrian (2002). "Culture/Economy and Spaces of Economic Practice: Positioning Households in Post- Communism". Transactions of the Institute of British Geographers. 27 (2): 232–250. doi:10.1111/1475-5661.00051. JSTOR3804544.
1 2 Ironmonger, D. S. (1996). "Counting Outputs, Capital Inputs and Caring Labor: estimating Gross Household Product". Feminist Economics. 2 (3): 37–64. doi:10.1080/13545709610001707756.
↑ Folbre, Nancy (May 1994). "Children as Public Goods". The American Economic Review. 84 (2): 86–90. JSTOR2117807.
↑ Innes, A. Mitchell (May 1913). "What is money?". The Banking Law Journal: 377–408.
↑ Arjan van Aelst (1995) Majapahit Picis: The Currency of a 'Moneyless' Society 1300-1700. Bijdragen tot de Taal-, Land- en Volkenkunde, Vol.151, nr.3, pp.357-393
↑ Nelson, Anitra; Timmerman, Frans, eds. (2011). Life without Money: Building Fair and Sustainable Economies. London: Pluto Press. ISBN9780745331652. Abstract: https://wiki.p2pfoundation.net/Non-Market_Socialism See pp.33 ff. of ch.2 by Anitra Nelson: Money versus Socialism, pp.23-46.
↑ Mark Boyle (2012) The moneyless manifesto. Hampshire: Permanent Publications and White River Junction: Chelsea, p.34
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