TORONTO STAR
Sunday July 20, 1993
BARTER
WHEN MONEY IS TIGHT, TRADING GOODS AND
SERVICES IS ONE WAY TO BOOST THE
LOCAL ECONOMY
THEY PLAN TO CREATE JOBS USING BARTERED
TIME
Back when times were good, Doug Brennner
couldn't have told you the
difference between a GreenDollar and a
loonie. That's because Brenner
had lots and lots of loonies: In 1989,
he sold $2.8 million in Ralph
Lauren Polo pants, GUESS shirts, Ocean
Pacific bathing suits and what
he calls 'Yuppie-brand-name clothes."
His personal income from his
nine retail clothing stores, some with
catchy names like
The Boomer Club, was more than $100,000
that year.
But when the recession hit, clothing sales
dropped. His business went
into bankruptcy in 1991, throwing 50 staffers
into unemployment and
forcing Brenner to begin looking for a
way out of the proverbial hole.
It was at a support group for the unemployed
earlier this year that he
heard about the GreenDollar system, a
form of barter which some see as
an innovative economic shot in Toronto
Local Employment and Trading
System, or LETS system. However, GreenDollar
systems or LETSystems are
better known in Australia, New Zealand
and England.
And they really aren't so new. Toronto
author Jane Jacobs, an expert
on the economic role of cities, terms
them the most ancient form of
trading."
"Money is very convenient," she says.
"But when there is not enough
money - as there is in a recession - barter,
or local trading with
some kind of local currency or accounting
system in place, gets people
using their skills . . . It encourages
them to develop new skills. It
also fosters honesty and it brings people
in a com-munity together,
neighbors get to know each other. It's
a kind of homemade safety net."
One of the founders of the Toronto LETSystem,
Dr. David Burman, sees a
connection between it and improved public
health.
"It helps create an environment in which
people can be well," says
Burman, who has a Ph.D. in community health
and is also a Metro
dentist.
"We've seen the connection between unemployment
and heart disease;
we've seen the connection between unemployment
and violence. This
helps get people out of that cycle," he
says, adding that the system
has the "potential to change the social
environment from one of
scarcity in which people are always looking
over their shoulders to
one of abundance where people feel like
giving.
The Toronto system started three years..
ago with five people. Today,
it has 325 members who exchange among
themselves using computer
credits called GreenDollars.
Those using the system can receive real
dollars plus Green ones, which
they usually do because taxes are paid
just as if one is using real
money. Some transactions may be paid for
entirely in green. But again,
according to Revenue Canada, income generated
in Greendollars is
taxable if it is earned as part of your
usual profession.
"The beauty of this is that people don't
have to have any GreenDollars
when they join ... they create GreenDollars
themselves by spending
them," says Sat Khalsa, administrator
of LETS in Toronto.
"I've been able to go to a chiropractor
and have massages," says
Burman who in turn accepts 25 per cent
of his fee for dental work in
GreenDollars. Rev. Lindsay King of Willowdale
United Church, another
member of the system, recently had a deck
built using GreenDollars.
He, in turn, offers counselling.
One can also get a haircut, have the house
cleaned, take saxophone
lessons; there is even a a room for rent,
$65 pet week - 50 percent
Green - on the LETS Notice board, a list
of goods and services, which
every member receives monthly.
Doug Coyle, Ontario director of the GreenDollar
system, sees the
concept as similar to that of Canadian
Tire offering Canadian Tire
Money to encourage customers to spend
at its stores.
A lot of businesses are offering such
incentives," he says. Ours is a
kind of community currency, it doesn't
go away. It stays in the
community to keep people working.
There is nothing but positive that can
come of it says Jacobs.
But she says governments sometimes are
reluctant to endorse the system
because it's feared they miss out on local
taxes.
"However, what governments fail to see
is that the system teaches
people to act on their own behalf and
may ultimately help them to
depend less on the government welfare
or other types of financial
support."
About the only thing that can go wrong
with a LETSystem is that people
stop participating and the system shuts
down. That's what happened
with Canada's first LETSystem which British-born
Michael Linton formed
on Vancouver Island in 1983.
Linton, who came to Canada in 1975 worked
as a physical therapist
until the early 1980s when the recession
hit. Faced with unemployment,
Linton recalled a lecture he had attended
many years earlier at
Cambridge University in England.
The speaker had talked about how illogical
it was for people to be out
of work during recessions because even
in tough times, there are
people with skills. There is work to be
done. The only obstacle is a
lack of cash.
In other societies, if a road needed to
be built and there were
skilled people, they didn't stand around
lamenting the lack of money.
They simply got together and built the
road. This kind of reasoning
made sense to Linton and to the approximately
700 people who joined
that system over the next three years
and ultimately traded $300,000
in goods and services.
"The recession was what got it going,"
says Linton's wife Shirley. But
by 1986, when it ceased to function, there
was enough real currency
around so that people didn't have the
incentive to use the system.
"It's a confidence situation," she says.
"People really have to be
willing to network to make it work."
Shirley Wade Linton recently started a
new LETSystem for women in her
community. Her husband, meanwhile, is
in Australia, on a trip paid for
by the Western Australian government,
helping l communities establish
LETSystems.
The Australian and New Zealand governments
have each given some
$50,000 to local communities to begin
and promote LETSystems.
In Michigan, Missouri and Florida, state
governments are also funding
local Time Dollar systems (similar to
the LETSystems), says Khalsa.
Unfortunately, Canadian LETS organizers
have not enjoyed the same
success with our governments.
"The government is so obsessed with big
issues the overlook small
things like LETSystems," says Khalsa.
"There are lingering doubts in
people's minds .... people think this
is so great the government is
going to crack down and put a stop to
this."
Khalsa says that while Revenue Canada
is quite clear on what taxes one
must pay in the system, LETS organizers
have no clear idea about what
happens to someone receiving unemployment
insurance who earns
GreenDollars. Does one declare them just
as one does real currency?
An official with Employment and Immigration
Canada told The Star
anyone receiving unemployment insurance
benefits would indeed have to
report GreenDollars as income.
"Despite much concerted effort, .. (from
LETS organizers in Ontario,
Manitoba and Saskatchewan) we haven't
been able to get this resolved
and we haven't been able to get governments
to support us," says
Khalsa.
Official support would help bring more
people into the LETSystem, said
Brenner, who is trying to get backing
from the town of Newmarket and
its chamber of commerce.
Although Newmarket Mayor Ray Twinney has
given the system his
tentative approval, he says he is waiting
for a recommendation from
the chamber before officially endorsing
it.
The chamber, which represents 400 small
businesses, meanwhile, has set
up a subcommittee to study the issue and
is expected to make
recommendations to its membership at a
meeting late next month.
Newmarket (pop. 48,000) is feeling the
effects of the recession just
as many other towns are, says Brenner
who closed three of his stores
in the Upper Canada Mall, the town's largest
commercial centre. "Those
stores are still empty today," he says.
"Business is slow here."
A lot of Newmarket people work in Toronto
and also send their money in
Toronto, all of which hurts Newmarket
business, says Brenner. But the
GreenDollar System has the potential to
turn that around.
"We're not trying to replace Canadian
currency; rather, we're looking
at helping ourselves and helping the local
economy," says Brenner.
"People would trade with local people;
these GreenDollars can't be
used in Toronto or anywhere else and that
helps people here."
Meanwhile Gail Vaughan of the Newmarket
office of the Canadian Mental
Health Association says the system has
the potential to counteract
some of the "feelings of hopelessness,
" in the community,
She's seen the effectiveness of such a
system in Spring, Texas, a
bedroom community near Houston, where
she, her husband and three
children lived between '79 and'83.
"It was similar to the Newmarket-Toronto
situation," she says. "There
was a terrible number of empty stores.
It was very hard for small
businesses to compete so close to a major
city."
To protect and encourage the local Spring
economy, local people
started TRADELINE, which functioned similarly
to the GreenDollar
system.
"We knew we might get something cheaper
in Houston, but instead of
going there we use TRADELINE," says Vaughan.
"It was great. My husband
was able to get a crown for his tooth.
We could go out to restaurants,
we had our dryer fixed. We bought a stereo,
TV, jewelry and drugstore
items . . . there was no end to what we
could do. . . ."
In return, Vaughan's husband did autobody
work. She made crafts. When
the Newmarket system gets going, she figures
she could do newsletters.
"For young people, It's especially hard
not to feel hopeless," she
says. "This encourages people to become
entrepreneurs. It gives people
some incentive, some hope that they can
do something."