How does the Community Exchange System work?
The object of the Community Exchange System (CES) is to facilitate trade without using our conventional national currencies, and build community at the same time.
By 'trade' we mean the normal economic activity of providing goods and services by 'producers', 'sellers' or 'providers', and the receiving of these by 'buyers', 'customers', 'clients', 'patients', 'consumers', 'receivers', etc.
The CES serves two basic functions:
Although the CES is internet-based it also works for those who do not have computers or smart phones. Each user gets an account number and a password, and this gives them access to their account on the CES web site. The site works like a true online banking service. Users can enter transactions, view their current balances and obtain statements of account. They can also keep track of the trading position of others.
Those without computers can interface with the system through local-area coordinators, who serve as local 'branches' of the exchange. Coordinators are trusted users who have rights and facilities to perform actions on behalf of others.
Goods and services are advertised on the web site through an 'Offerings List'. Users look through this list, or do a search, and if they find something they want they contact the seller who then provides the goods or service. 'Payment' is effected either through the buyer signing a Trading Sheet provided by the seller, or through a cheque-like Trading Slip that serves both as a means of 'payment' and a receipt for the goods or service. The information on the Trading Sheet or Trading Slip is entered by the seller into a transacation form on the web site. This credits the account of the seller and debits that of the buyer. Accounts record these debits and credits, giving a balance after each transaction.
A positive balance represents a claim against the community while a negative one represents a commitment to provide goods and services to the community. Those who have received are not obligated to their providers but 'pay' for what they have received by doing or giving something to someone else in the community.
To ensure that unscrupulous buyers do not exploit the system, details of each user's overall trading position are available to all and limits prevent excessive negative and positive balances. General trading statistics are also available to show how much trading is taking place.
The web site also provides all the information needed to contact other users. There is also a 'Wants List' where users can advertise for goods and services they require.
Trading in this system requires no supply of money, either by the community as a whole or by each user. Instead of using a 'hard' currency, which then has to be allocated by some authority according to a formula, the 'currency' of this system is the pure recording of the values exchanged in trade. It is a true moneyless exchange system that performs all the functions, and more, of a conventional money-based exchange system.
There are CES exchanges in many countries. Each exchange has its own 'currency', 'trading space' and administration but the users of one exchange can trade with the users of other exchanges, making trading with CES just as convenient as trading with conventional currencies.
CES 'currencies' are units of measure rather than tradable commodities like conventional currencies. However, to make these 'currencies' meaningful to users, their units of value or account are usually referenced against national currencies or time. This helps users to price their offerings. Those exchange groups which use the national currency as their price reference are in no way tied to them and can deviate from them in times of rapid inflation.
There are no rules for pricing in the CES: the 'law' of supply and demand prevails. However, within the context of the CES, certain services that otherwise would not be highly valued, might increase in value because of their relative shortage. Other services that outside the CES are expensive might be cheaper in the CES because the provider wishes to attract custom.