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Ralph Nader > In the Public Interest > Edgar Cahn/Time Dollar

Edgar S. Cahn has developed an idea that can revolutionize the exchange of needed services between people who have little money but considerable time. He calls it the Time Dollar and it’s already working in ten states.

For the former Dean of Antioch Law School, the Time Dollar represents only the latest of his contributions to the less fortunate. He and his wife, Jean Cahn, were instrumental in founding the national Legal Services program for the poor which passed Congress in the Sixties.

Now he has developed a plan for service credits as a local currency that is so simple, he wryly says, it took him two years of study to figure it out. One hour equals One Service Credit. You earn these credits by providing help to others and you spend them to acquire help for yourself or someone you want to help.

The first use of these credits has been to provide help to the elderly such as homemaker or respite assistance. Most of the programs now underway are generating over 6000 hours a year and growing. In Miami, the program is generating over 4000 hours each month.

There are several different models to Cahn’s concept. One he calls a form of barter: my time for your time. The IRS has ruled that it is tax exempt because it is not “commercial in nature.” For instance, older adults could earn service credits staffing a pre-school day care program or providing a baby sitting service for working parents with a sick school-age child. In turn, the parents could pay back by providing rides as part of a driver’s pool for elderly persons needing transportation at night or on weekends.

Another model is working in Michigan where adults earning credits donate them for use by the elderly. In New York City, an HMO provides additional “non-medical” support services for people who participate in a service credit program. The HMO has been willing to waive one premium per year for members who earn service credits.

But Cahn’s system has far broader applications than its present uses in literacy tutoring, meal preparation, cooperative food purchasing and delivery, adult day care, child day care, light home repair, escort services, and neighborhood crime watches. It can apply to teenagers exchanging credits with elderly citizens. It can have a wide geographical range. For example, credits are honored statewide in both Missouri and Michigan.

It can be a combination of service credits and dollar costs. One example is a dollar charge for lunch and materials at a day care center and service credit charges to pay service credit volunteers staffing the program. Another variation covers a two-tier mortgage for home renovation, a dollar mortgage would apply for materials and a skilled foreman, alongside a service credit mortgage for the labor given by a pool of volunteers. Both debts would be paid off in regular installments over a period of years.

There is also a system of “mixed wages” whereby public assistance programs may hire a person to work for both dollars and service credits.

Computerizing service credits can identify supply and demand with an efficiency exceeding that used by traditional barter systems, social service agencies or by the market, says Cahn, because there no longer needs to be a “double coincidence of want” (you need my cow; I need your plough) at the same time.

To Cahn, service credits are more than another kind of currency, another way of freeing people to become producers: They have a “clear potential to generate and sustain networks of mutual support that function as a kind of extended family and that help knit neighbors together with a renewed sense of community — of common purpose, common need and common identity.”

Illustrating the profound impact service credits can have Cahn notes that “service credits are unaffected by inflation: an hour remains an hour; does not depend upon the federal budget or the rate of unemployment: service credits can be earned so long as there is another human being in need of help.”

Service credits send out many messages but perhaps none more important than that the real wealth of our society is its People, adds Cahn, and that our capacity to meet our own needs can be enlarged greatly by our willingness to help each other.

(Readers interested in establishing service credit systems in their community may write to Dr. Edgar S. Cahn, District of Columbia School of Law, 719 13th Street, NW, Washington, DC 20005.