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Community dollars as good as gold

By Paul Titus

Whether they are called community dollars, green dollars, or barter & exchange systems – local trading initiatives offer an alternative to money.

Once widespread in New Zealand, community trading fell out of favour during the 1990s. Now, with an Internet banking system making exchange networks easier to operate, they are once again gaining in popularity.

Community exchange systems use their own currencies to keep track of credits and debits as members exchange goods and services among themselves.

Hand made items, crafts, preserved and cooked food, textiles, plants, and second-hand goods are popular items of exchange, as are services.

The exchange holds monthly or bi-monthly markets where people meet to trade but members of the exchange also contact one another to swap goods and services.

Christoph Hensch is treasurer for Canterbury Community Dollars. He says when someone joins an exchange they open an account and begin trading. Transactions are recorded as a credit to the seller and debit to the buyer.

“The system is different than money banking because there is no punishment for being in debt. Some people must be in debt if others are in credit. The best way to participate is to both give and take goods and services. The only requirement is that you must balance your account if you leave the exchange.

Christoph Hensch
“Community dollars are created and used in a different way than standard money. They are not a commodity that can be moved from one place to another so no one can exploit the system. Rather they are about the relationships people have with one another.”

Christoph says the concept began in Canada in the 1970s and was known as Local Exchange and Trading System (LETS). The idea spread to other countries; the first exchange in NZ was established in Whangarei in 1987.

“From there they spread over the whole country. In 1989 the Plains Exchange and Barter System (PLEBS) started in Christchurch. In the next two or three years it boomed to 500 or 600 members. The high point was 1994 when there were about 100 local exchanges nation-wide,” Christoph says.

“After that it began to decline and exchanges in Auckland, Hamilton, and Wellington closed. A number of people in Christchurch wanted to close but a hardcore still believed in it. Our numbers dropped to 45 but we are now back up to more than 60.”

There now community in exchanges in about 10 centres including Invercargill, Timaru, Blenheim, Motueka, Wanganui, New Plymouth, and Thames. While most trading takes place within each exchange, there is a mechanism for people to trade with members of other exchanges in NZ and even overseas.

In part, Christoph attributes the resurgence in interest to the Community Exchange System (CES) software. Developed in South Africa, the software makes it much easier for people to record their transactions and monitor their community dollar accounts. People use a password to log onto a website to view their account. Exchanges in 10 countries around the world are now part of the CES system.

Some people have said community dollars are a form of tax evasion but Christoph denies this.

“If people exchange items as part of a business that is their main source of income, the exchanges are indeed taxable. But most exchanges in community trading networks are goods people make or services they provide as part of their hobbies. It is more like people helping other people, or doing favours,” he says.

For more information on community trading you can visit the Canterbury Community Dollars website (communitydollars.org.nz) or the Community Exchange System site (www.ces.org.za).