Capital Joules - a barter facilitation system
Capital Joules* - A Barter Facilitation System
Draft - 6/16/10
What is it?
Capital Joules is an exchange system of credits and debits for labor performed. This program is designed to attract small, local businesses and individuals interested in a sustainable, resilient Capital District. The purpose of this system is to identify the services/goods of many individuals/businesses so they can more easily do business with one another. Only members who belong to Capital Joules can participate in the exchange. Capital Joules is a system of commerce and is compatible with US dollar.
What are the Advantages?
1) Expansion of a local network of people who are moving toward a sustainable lifestyle.
2) Increased resiliency of our community in the face of resource depletion and climate change
3) Accomplishment of tasks that may have been too expensive or too loosely conceived.
4) Introduction of the concept of peak oil to those who are as yet, unaware.
5) Retaining the wealth of our labor here in the region instead of exporting to the greater US and abroad.
6) Envisioning a better life and life-style for us all.
How does it work?
Membership is only limited by a desire to increase local sustainability and resilience. Every member receives 96 Joules with which she may buy or sell services and goods with other members. Joules is a time based system of commerce with 1 Joule equal to 15 minutes worth of work. A lawyer will be paid the same per hour as the seamstress, the music teacher, the ditch digger, the auto mechanic, the book keeper, the cleaning person and the solar panel installer. I acknowledge that this may not seem fair to the lawyer, however, we are moving toward a world in which physical labor as well as other lower paid jobs will become highly valued. We might as well acknowledge that reality now. It is the objective of the system to establish a more stable exchange than the US dollar.
Each three months the 96 Joules must be spent or else they will EXPIRE. However, as soon as an exchange takes place the Joule becomes renewed for another 3 months. For example if someone becomes a member on March 1st and spends 24 Joules on April 1st then those 24 Joules (in the account of the provider) will not expire until July 1st. The other 76 Joules will expire on June 1st if not spent before then. This system of expiration should motivate members to use one another for their needs and not 'sit' on the Joules.
All Joule transactions are recorded electronically at the CD Joules website by the members involved in the barter. (This is usually the purchaser who subtracts Joules from his account and adds it to the provider's.
The cost of materials and overhead can be denominated in dollars as agreed to by both the buyer and seller. The final transaction may look something like an auto repair bill with labor being denoted separate from parts. Only the Joules, not the materials, need be recorded on the website. More examples follow:
1) Someone new to gardening needs a consultant to help her with her initial effort. She contacts one of the gardeners on the membership list. At the end of the 8 hour job, she goes on the website and deducts 32 Joules from her account and posts it to the consultant she hired. The consultant now has 32 revived Joules with a new 3 month lifespan.
2) The gardener is in need of some major tree care on his property. He contacts a tree surgeon. The gardener will pay the 4 Joules an hour for the surgeon's time plus whatever they agree upon in US dollars for equipment use and fuel. On the date the Joules are transferred from the gardener to the tree surgeon those Joules will be renewed for another 3 months.
3) The tree surgeon wants to learn how to play the guitar. He locates a guitar teacher on the website and pays her 3 Joules for a 45 minute weekly lesson. At the end of each lesson he transfers 3 Joules from his account to the guitar teacher's thereby renewing those Joules for the next 3 months.
4) The music teacher wants to install a solar roof. She brings in a solar energy contractor, first for consultation and then for the installation. She will pay for all the materials in US dollars. If there is a crew of installation workers, the foreperson gets 4 Joules an hour for each worker. He may then pay the crew in dollars or Joules depending on if they are members in the system and whatever agreement they have reached between them.
5) The solar energy contractor needs fertilizer for his garden. He hires a Capital Joules farmer to bring in some manure. Between the two of them, they decide how much of the bill should be denoted in Joules and how much in dollars. As usual, on the date of transaction, the Joules are reborn in the worker's account for another 3 months.
6) The farmer has 12 Joules near their expiration date and he's going out of town for a few days. Instead of letting them disappear, he decides to donate them to the Community Joule Pool for distribution to those with unfortunate circumstances or for community projects that we can all benefit from. These 12 Joules are renewed in the Community Pool for another 3 months.
I envision that this system of barter will emphasize areas of endeavor which will be important to us in the future such as farming, transportation, education, self-performed artistic endeavors, renewable energy businesses, repair businesses, etc.
How is it governed and maintained?
New members receive access to the business directory (including the new member), 96 Joules, access to the Capital Joule website, use of an arbitration body in the Governing Group, possibility of loans or grants provided by the Joule Pool, and an invitation to attend the monthly meetings. New members will also be asked to donate a small amount of dollars for administrative costs. The system of expiring Joules should motivate members to use one another as much as possible before buying services/goods at large in US dollars. Should a member need more than her account of Joules for a large project then she can apply for an interest-free loan or grant that comes from donations to the Joule Pool.
The website and system will be maintained by the Governing Group - similar to a Board of Directors. This Governing Group (GG) will consist of an odd number of individuals (odd, not weird :) who come from varied backgrounds such as finance, computers, outreach, legal, political lobbying and marketing. The GG will be elected to serve for a 2 year term by the membership. The GG will meet on a monthly basis and the meetings will be open to all members as well as anyone in the area who is interested in learning about the system. However, only Capital Joules members can vote. The agenda will be posted at least 5 days in advance of our monthly meetings. Recommendations for agenda items may come from any member and there will also be time during the meetings for spontaneous issues.
Comparison with other local currencies:
The primary motivation behind Capital Joules is to prepare our community for resource depletion otherwise known as peak oil. Therefore, our number one objective is to broaden and deepen the connection between members who are preparing for a sustainable future. There are other local currency systems such as Ithaca Hours and Berkshares. Both make use of currency notes with serial numbers and special paper/ink. I invite readers to google Ithaca Hours and Berkshares to learn more about those systems and compare them to this Capital Joules draft. Another inspiration is Dr. Edgar Cahn is the creator of Time Dollars and the founder of TimeBanks USA. In England there is also the Totnes Pound. I believe the physical currency systems would be more difficult, costly and time consuming to manage. However, they might also yield greater strength to our community and be easier for business to use. We could start with an electronic exchange and progress to currency if the need became manifest.
Can it succeed?
The success of Capital Joules will largely depend on the services of a group of individuals who are willing to volunteer a significant amount of time plus a number of others who can volunteer some time. Once up and running, the system will also depend on the members themselves exchanging with one another. To begin with, we will need a computer specialist for the website, a financial expert to collect membership dues and liaison with the bank, a marketing/sales person for outreach in the community, and a lawyer to make sure we comply with local, state, and national laws.
The joule should be declared as income with the IRS and for NYS taxes. The best guideline for transferring Joules into dollars is probably the average earnings per hour of the income tax filer. (Paul Grover, founder of Ithaca Hours, told me that neither government body had ever questioned or audited them in the 20 years they've been in existence.) There should be more formal by-laws written if a core number of people agree that some system of local currency is worth our efforts.
(*) Joules are a unit of energy and the homonym, jewels, are a highly valued commodity.