Norman Reynolds recently argued in the Mail & Guardian that alternative, community-based currencies keep wealth in communities (“Ora points the way”). But there is a better example of a localised economy — Cape Town’s Talent Exchange.
Operating for almost two years, the exchange is essentially a bartering system. But people do not exchange goods directly — a dozen eggs for an oil change, for example — because this is impractical. Instead, they trade in an invented currency called “Talents”.
These have no physical existence — they are entered on a database as a credit for sellers and debit for buyers. Credits can then be used to buy something else on the system.
Local Exchange and Trading Systems (Lets) have been used since the 1930s. A number of Lets operate elsewhere, notably in the United Kingdom and Australia, where they are popular among Greens. The total value of Lets trades worldwide is estimated to be about R1-billion.
The weakness is the administration involved in recording all trades. Above a ceiling of about 700 members, the system becomes unwieldy.
As the first system to run off a web-based database, at www.ces.org.za, Cape Town’s Lets is unique. The website resembles Internet banking — if you cut my hair, I give you my account details and you debit me online. If participants lack a computer, the local area coordinator enters the trade.
In theory, this means there is no ceiling — the Cape Town Exchange has almost 1 000 members and is growing rapidly. There are now plans to link systems across the world to create a sustainable alternative international currency.
Anyone can join the exchange, which is jointly owned by all who use it. On registering, participants receive an account number and make an offering.
Anyone wanting to start an initiative may do so, and members have organised a number of Talent Fair markets where goods and services are traded in Talents. The system is ideal for launching small businesses or piloting projects without spending cash. One can get training, a business plan, tax advice, a website and business cards, for instance.
The potential advantages for South Africa are obvious. The townships are full of trained people whose skills are wasted because there is no money to pay for them.
At the same time, there are tremendous unmet needs — again, for reasons beyond communities’ control. What better way to improve our lives than to make our own money?