What is the Community Exchange System?

« Back

The Community Exchange System (CES) is a community-based exchange system that provides the means for its users to exchange their goods and services, both locally and remotely. It could also be described as a global complementary trading network that operates without money as it is commonly understood.

Unlike the conventional money-based exchange system, the CES has no physical currency. The idea that such a currency is required before any trading can take place is an ancient one and increasingly irrelevant in this day and age of computers and the Internet. Information can replace currencies and at the same time eliminate most of the problems associated with regular money.

There are many similar trading systems around the world, commonly know as Community Exchange Systems, Local Exchange Trading Systems (LETS), Mutual Credit trading systems, Trade Exchanges or Time Banks.

Apart from using information instead of currencies to facilitate exchange, these exchange systems are community-focussed in order to build community and keep wealth where it is created. The CES takes this a step further by providing the means for inter-community trading, right up to the global level.

As the 'currency' in the above types of exchange systems is information it does not have to be ‘created’ like conventional money so there is no need for an issuing authority or for a supply of it, and none is required to start trading. ‘Money’ in these systems is a retrospective score-keeping that keeps a record of who did what for whom and who provided what to whom. There can never be a shortage of information as there can be of money, as information does not have to be created and limited by a third party (banks or government) in order to give it value and meaning. For this reason the concepts of borrowing, lending and interest are meaningless in the CES.

There are many different types of complementary exchange systems (CESs) and they are growing in popularity throughout the world. Some use ‘hard’ currencies, where notes and coins are issued by the group for their own use; others use time as a 'currency' rather than notes; and yet others use a ‘virtual currency' which is the recording of the values of goods and services exchanged.

Complementary exchange systems foster the real wealth of communities and rebuild a sense of worth and self-esteem among their users. Around the world they report an increased sense of vitality in all sectors of the communities using them. While these exchange systems might have a slightly different function for each of these sectors, they certainly have relevance to all.

These systems provide infinite opportunities for exchanging one's narrow specialisations for the goods and services offered by others. In this way a complementary exchange system acts like a supplementary currency, creating an additional stream of value in a community. By supplementing conventional cash flow with a local exchange system a community can provide an additional source of essential goods and services that become scarce in economic downturns and protect itself from changes and fluctuations in the national money supply.

I help you, and you help another—and someone else helps me. The recipients of help become, in turn, the providers of help. What goes around comes around. By helping others you become entitled to receive goods, services or help from someone else. When you receive something, someone else is entitled to claim from the community the equivalent of what they provided.

How does it work?

CES exchanges compile and distribute a directory of goods and services offered by the users registered with them, as well as a list of their ‘wants’ or requirements. When a user requires something advertised in the directory the seller is contacted and the trade takes place. The buyer 'pays' the seller by signing a trading sheet provided by the seller or by handing over a cheque-like trading slip that records how much the buyer is agreeing to be debited by the seller for the goods/service delivered. The slip is either handed by the seller to a group administrator who will enter the amount into the computerised system, or the information is entered directly by the seller. Sales are recorded as credits for sellers and as debits for buyers. The central book-keeping system records the relative trading positions of the traders. Those in credit can claim from the community goods and services to the value of their credit and those in debit owe the community goods and services to the value of their debit. Traders receive a regular statement of account that lists their trades and gives their balance at the end of the period. Information about the trading position of others prevents unscrupulous buyers from exploiting the system. Newsletters assist in building links and enhancing the sense of community.

Is this a form of Barter?

No! Barter almost always involves bargaining between two individuals to establish the relative worth of the goods or services they wish to exchange. There is no bargaining in the CES as the receipient is in no way obligated to the provider; you 'pay' for what you have received by delivering/selling something to another trader in the community at a later time. Complementary exchange systems are as versatile as conventional ones.

Is this just a tax dodge?

Definitely not! Our motives are noble. Our aim is to create a more equal society where wealth is distributed according to contribution, not according to the ability to ‘make money’. In other countries where these systems have become big, the state has either ignored the tax angle because it saves state expenditure on welfare payments, or there is an agreement to provide services to the state. Our approach is that when the CES becomes big, the state should become a user of the CES and participate in the normal way. In this way the state could credit itself through the services it provides to all user and debit itself by purchasing the services of CES users.

Can I only trade with members of my own exchange group?

The CES is an international trading network with exchanges in many countries. Credits earned in one exchange can be spent in another, or if you are visiting another area you can trade with local CES traders. New exchanges are starting in new areas all the time, and existing ones are growing steadily.

What other benefits are there in using a community exchange system?

One of the reasons why we took the initiative to launch this project is that it is in line with our New Economics thinking. New Economics is about rebuilding society using alternative/sustainable economic policies and practices. Complementary exchange systems fall into this category because they are instrumental in:

« Back