Labor money timelier than ever

In a recent article in the Bangor Daily News describing volunteer efforts to clean up a Millinocket stream, there was a brief mention of the Katahdin Time Dollar Exchange and the idea of “time dollars.” Earlier articles in the BDN on Sept. 3 and in the Portland Press Herald on June 6 also discussed “time dollar” programs in Maine.

“Time dollars” are not a new idea. Historically, they were known as “labor money.” The idea is simple enough, if revolutionary in its potential. Briefly, when a person joins a time-dollar cooperative, the person agrees to provide an hour’s worth of work or service so that they may receive in return another member’s hour of work or service.

As the BDN’s article of Sept. 3 explains: “Imagine having a person install a ceiling fan in your home and paying for the service by reading to a child for an hour.” Thus, all labor is treated as of equal value, unlike the money marketplace where an hour of Pete Sampras’ tennis time is worth considerably more than an hour of child care by your neighbor. The modern American version of the “time dollar exchange” is attributed to Dr. Edgar Cahn in 1980. The BDN reported that the concept has spread to 150 exchanges in the United States, including seven offices statewide in Maine, and nearly 600 worldwide.

The idea of “labor money” grew out of economic critiques directed at the theories of David Ricardo (1772-1823), the most influential economic thinker of his age. Ricardo’s study of England’s domestic industries led him to conclude that the relative values of commodities in a given market tended to be dominated by the quantities of labor invested. Consequently, he concluded that profits vary inversely with wages in the traditional market. Many social and economic thinkers were drawn to Richardo’s economic analyses, although many sought to challenge and revise his ideas. The Englishman Robert Owen (1771-1858) and the Frenchman Joseph Proudhon (1809-65) were among the better known.

Robert Owen was a self-made man who became a textile factory owner in the north of England. Owen was a progressive owner in an era dominated by open exploitation of factory workers who toiled for long hours in unbearable conditions. Owen believed that Ricardo’s economic principles could be revised if there was cooperative control of industrial production. This would mean, in Ricardo’s terms, that “profit” – the economic margin that accrued to owners over and above the worker’s investment of labor in them – would be divided equally among the workers. Based on his analysis, Owen set up the first “labor exchange” in London which issued “labor-notes” – whose unit was a single hour of work – that could then be exchanged for goods and services. Owen also established one of the 19th century’s earliest communes (in New Harmony, Indiana) based on the same principle. After several years, however, both the London labor exchange and the New Harmony commune failed.

Proudhon was an economic radical as a younger man. Among Proudhon’s most forceful statements was the view that property – in the form of one person’s accumulated labor in a thing, which was then exploited to another person’s benefit under capitalism – constituted nothing but theft. Building on this premise, Proudhon and his followers devised a plan to replace the existing European money systems with a “currency” based on labor time instead. Although Owen’s efforts preceded his, Proudhon and his followers treated the idea as their own. The idea gained some political support in a number of European countries but Proudhon’s “bank of exchange” was never created.

The Proudhonists’ success in popularizing the idea of labor money led Karl Marx to treat their ideas at length in his 1857-58 working notebooks, called the “Grundrisse.” While Marx agreed that the value of any commodity is determined by the labor time it cost to produce it, Marx did not agree that a simple labor exchange based on one hour-chits would produce social equality. Marx believed that the theory of labor money foundered on the particular facts that one man’s hour-chit equals another man’s two hour chit, or another’s half hour chit.

By the end of the nineteenth century the enthusiasm for the idea of labor money had run its course. Writing in 1973, the social philosopher Martin Nicolaus could state, “The labour-money scheme has no significant life toda. …,” and for the most part, he was correct. However, little did Nicolaus know that beginning in 1967 a band of eight communards on a 123 acre Virginia tobacco farm was beginning what has now become a successful 35 year experiment with “labor credits” (that is, labor money).

Twin Oaks Community, 45 miles northwest of Richmond, and now grown to over one hundred members, was founded on the idea of labor equality. Each member must contribute a weekly quota of work to the community. Every hour of labor is equal to every other hour of labor. For that hour of labor, a member receives a “labor credit.” “Quota’ – accumulating approximately 40 labor credits a week – entitles one to all the benefits of the community – housing, clothing, health care, transportation, and so forth. The credits may also be exchanged for personal services, vacation time, and other things of value. In short, as the director of Maine’s Time Dollar Network told the BDN, “The goal [of labor money] is really to build community and neighbors; to alleviate isolation and build trust.”

Perhaps “time dollars” is an old idea whose time has come – again.

Robert C. Hauhart teaches sociology at the University of Maine at Machias. He is writing a book on Twin Oaks Community which he has studied for 25 years.