An overview of a Time Exchange
A point by point description on how to set up an Exchange
A general run through on setting up an Exchange.
Setting Up A Taxi Exchange
Setting Up An Egg Exchange
We have many scenarios. Each explains the specifics of how to set up a positive market focused on one specific economic sector. More to follow
Exchanges are composed of between 3 and 15 persons. An Exchange is an economic unit or small group of persons that form a positive market. Any product or service provided by the free market or public sector can be provided using a Positive Exchange. Public goods such as policing and health care and education can be produced with the same facility as conventional goods and services. The distinction being that Exchanges exist to systematically replace the public sector.
Exchanges can preferentially be registered as a charitable not-for-profit corporation. It may facilitate operations, for the time-being to legitimize the enterprise in the eyes of the state.
Every member of the Exchange owns one voting share. Common Shares allow the member to vote in elections and on policy initiatives and also to a share of the assets of the organization were it sold. However, Exchanges are never sold or liquidated. Exchanges can be transformed in terms of their economic purpose, but Exchanges never become non-viable.
Exchanges also issue Preferred Shares as a form of voucher-based currency. Preferred Shares represent the equity of the corporation and are issued based on the accumulated assets of the organization.
Exchanges are as varied as the goods and services people need.
An Exchange has an average of 12 persons though the actual number is not important and will vary as needs dictate. So long as the numbers correspond to what is considered adequate to perform a function the number is sufficient to form an Exchange. The numbers are relevant only to the ability of the group to work effectively together.
God is a God of science and precision and numbers and orders of magnitude. God makes sense in measurable and quantifiable ways. Gods belief system is not subjective or opinionated or without foundation. God created His world first and so He grabbed the moral high ground and the most defensible position. The devil may have mounted an offensive, but he occupies the muck and the mire and the shaky ground. Logic and science are both in God’s service.
Caring for the planet is a measurable activity. As we add value to the planet, we can measure this value. Capitalists may show they are making a profit when in fact liabilities are being externalized. Double entry bookkeeping permits the formation and externalization of liabilities and often encourages it. Perhaps a lawsuit waits in the wings or an employee has made a choice that will bring the company down. The accounting of a business is never very accurate in terms of its real costs, when Double Entry Bookkeeping is used. No company measures the pollution they create or add this cost to their price of their products. But these are real costs.
Exchanges as a small group program generates its own money. Exchanges do not require the assistance of either banks or bureaucrats.
Capitalization is achieved through Positive Funding. Members sell their assets to the Exchange for preferred shares; they receive equity in exchange for their assets. Equity is a financial vehicle used to express value. A piece of equipment sold for $500.00 is an asset worth $500.00 and therefore represents $500.00 worth of equity.
Equity is represented by preferred shares. An Exchange that receives an asset valued at $500.00 is able to issue 500 preferred shares valued at $1.00 each to the member who provided the asset. Preferred shares have economic value and can be exchanged for goods and services. Preferred shares represent a fully backed currency issued by the Exchange and used as a unit of value in all economic transactions.
Christians are required to divest themselves of personal wealth and yet they are required to be doers of good works, including the care of their families. The only way these parameters can be satisfied is through the formation of a Theocratic Exchange. As was said personal property required for the care of oneself and family is not the issue here. What is on the table is capital or commercial assets. All surplus goods need to be given to the church. What we have has to be committed to the nation of God. Our personal goods are those things that enable us to work for God. They make our foundation strong. What is not needed by us for our walk with the Lord is needed by others to help them in their walk. All this must be donated to the church.
Exchanges are organizations given a specific mission to build the church. The church is all the wealth and glory not given over to Babylon. The church is everything that we have not put into the hands of Satan and his minions.
By assuming ownership of our assets and reimbursing us with a currency created by the church we have sold all we have. This currency is used for the purchase of goods and services. It can be freely given away because it will always serve to build the church. There is no way to divert this into the economy of Satan i.e. Babylon.
Each person who donates goods or services or cash is given a corresponding number of preferred shares equal in value to the value of the donation in units of the national currency. One preferred share being equal to one unit of the national currency.
A core need is identified. Donations are made consistent with servicing that need. This is called the capitalization phase.
An executive is appointed to administrate the market. He or she appoints members to handle the set up and operation of the market. All goods and services are paid for in preferred share units unless other arrangements are made.
All costs are paid for as much as possible using preferred share units. (Prefers).
Payments are made in prefers on a 1 to 1 ratio with the national currency. Thus, if something would normally cost $10.00 it is valued at 10 prefers or 10 preferred shares.
In setting up an Exchange look to where the most value can be added, that is where the need is greatest. Perhaps the community has a large surplus of tools and equipment and a need for tools and equipment that is not being met. This serves as the basis of a tool rental facility or a used tools and equipment store or, set up a workshop that can be leased or rented by members.
If there is a need for an art gallery to display the work of a group of artists an art gallery could be set up.
If the price of beef is a problem a Beef Exchange could be formed with members providing the money to purchase a side of beef and then selling this to members in a silent or Dutch Auction.
Members could set up a babysitting business with some members providing the service for other members and the users of the service contracting to provide housekeeping or other services to benefit the babysitters. The point is to create jobs not simply to create work.
Plumbers and other trades people could create an Exchange which served as a central office from which jobs could be assigned and paperwork maintained. Each member would be paid in prefers fully or partially and these spent in the community with participating retailers.
What is set up is less important than the community identifying a need and supplying that need with what the community already has.
As much as is possible the need for cash is reduced. If a food store could be encouraged to accept prefers and local farmers are willing to sell produce to this store for prefers then an economy based on prefers could easily be set up. As other local stores and service providers joined the market the need for national units of currency would decline.
Members always seek to replace businesses that need dollars with businesses that will take prefers.
Products and services that can only be purchased with units of the national currency are systematically replaced with products and services that are obtained using prefers.
All volunteers are paid in prefers. The more prefers in circulation the larger the Exchange economy.
Even the volunteers as a hospital could over time be paid a prefers wage.
Housekeepers could be given an income using prefers. (See the video on Why Are Housewives Not Paid A Living Wage?)
Students could be paid in prefers for getting good grades, and passing their exams, this would eliminate the need to pay extraordinary premiums to those who need to stay in school for long periods to get a higher education.
It is a principle of the Exchange economy that all work that adds value to the Exchange economy ought to be paid for.
The following scenario describes a taxi service set up as a Christian mission to help those who need transportation. The mission objective is to provide work for members and a means of transportation that is less polluting and costly than other alternatives.
Several cars are sold to the Taxi Exchange by members of a local community. The Exchange is a local mission set up by the community as a charitable mission. Exchanges are small groups numbering a dozen or so that come together as a mission to add value to the church for the church so that the church can better serve its mission field.
The vehicles purchased by the Taxi Exchange become assets of the mission. The Exchange swaps Preferred Shares or equity in the Taxi Exchange for the vehicles. The owner of a vehicle valued at $6,000.00 would receive 6000 Preferred Shares each with a cash value of $1.00 as compensation for the capital provided. This process is referred to as the capitalization of the mission phase.
Preferred Shares are issued in denominations that are multiples of each other. Preferred Shares are used in the way currency is used in conventional markets. Riders pay their fare using Preferred Share as a medium of exchange (currency).
Earnings over charges are reinvested in the mission. Members own the equity of the Exchange as preferred shares. It pays the Exchange to hire members to do any work the organization needs doing. Wages are paid using the Exchange’s preferred shares. It benefits both the member and the mission to have members fulfill the roles opened up by the mission’s activity. It benefits the Exchange and its members if the members help one another find jobs within the mission field of the Exchange. It is the work done by members as well as the business activity generated by members that adds value to the church.
Those with credits prefer to spend Preferred Shares rather than hoard them or lend them as they do not receive interest on them and the preferred shares are only useful as a medium of exchange within the Exchange. Members look for ways to spend Preferred Shares (PS) within the church body. This increases the potential for jobs to be created. As more people join more capabilities emerge and so unique ways of adding value and capacity to the church can be established. Exchanges provide different goods and services in response to different charitable ends. All of this activity adds value to the church helping it to fulfill its role in bringing people to Christ.
The church body is able to create specialization spontaneously as social costs are eliminated. Five persons who joined the taxi service may be plumbers. In time they will come together to provide plumbing services to the church as a Plumbing Exchange. Providing plumbing services is the way these members add value to the body of Christ and reduce waste. Thus, the church grows and diversifies spontaneously as members acquire more diverse specializations.
Even as the members of one Small Group Exchange work together as a group with common goals, this Exchange joins with other small group missions to broaden the range of goods and services available creating a larger and more diverse missions’ field. Each Exchange is headed by a chairperson. The chairperson of each Exchange forms a council to administrate the activity of the connected Exchanges. This is part of the macroeconomic theory of the church.
The free enterprise model of ownership which is also known as capitalism and the state-based ownership of communism both require the backing of the state. Capitalism and communism and all the other political and economic ideas of man ultimately contribute to the building up of Babylon. Babylon is simply a concept denoting an unbiblical and non-scientific understanding of reality.
We believe the reforms of Catholics and Protestants have not progressed far enough.
In the eyes of the world we own what we have but in a Constitutional Theocracy we are stewards of what we possess. Exchanges are an expression of our stewardship. Exchanges are missions that seek to fulfill the word of God through works done in faith. Exchanges are a mission field performed as a small group within a local political jurisdiction. Exchange missions do not require the existence of the state to exist and operate.
An entrepreneur going into the egg business may look for investors who donate money and equipment and receive charitable receipts for the value of the investment made. Alternatively, an Exchange can capitalize the business through donations by members, of needed assets.
Producing eggs increases Exchange equity. The egg business is able to acquire investors and capital (supplies and equipment) because the equity represented by the not for profit covers the investments.
Eggs are priced at 5 prares a dozen. Bread is priced at 2 prares a loaf. Ham is P6.00 a pound. Selling a dozen eggs gives the seller P5.00. This allows the seller of the eggs to purchase a half-pound of ham for P3.00 and a loaf of bread for P2.00.
The seller does not directly profit from the sale of ham, or eggs or other goods and services. There is no need for entrepreneurs to accumulate capital or to depreciate assets. The replacement of hens or ovens is not dependent on the business making a profit. There is no risk because one’s capital is not consumed or put at risk. In an Exchange profits are as unnecessary as insurance, both represent risk and, in an Exchange,, risk is liquidated.
When hens are needed, they are obtained by a simple inter-business transfer. If more eggs need to be produced, then the egg producing facility acquires more hens from a hatchery. The Exchange transfers hens from the hatchery to the egg producer. This is just a transfer of assets from one account in the Exchange to another account in the Exchange. Hens go one way (in an accounting sense) and prares go the other. This keeps accounts in balance.
People brought up in a climate of risk have difficulty understanding how a business could be set up, operated and expanded without borrowing or saving or making a profit. Yet as members of a family or community this is done all the time.
When you help a friend move you have created a moving company with your friend as the client. You do not receive immediate payment, nor do you make a profit but at some point, your friend will help you or he will help a friend or yours who you owe a favor to. If one friend does not repay your kindness another one does, over-all the economy of your network prospers because of the contributions that you all make to it. Social Networks are informal Exchanges. They are informal because the accounting is subjective. Each person has an account that is debited and credited as help is given and received however the accounting is mental and lacks objectivity.
Exchanges formalize social networks by the addition of a method to balance accounts.
When a business starts up the community benefits even though the business is privately owned. Even in conventional cultures the equity in a town increases when a new business is started.
Exchanges organize what mankind has always done in a better and more efficient way.
When eggs are purchased from the Local Exchange all shareholders benefit because the equity in the Exchange increases. The equity created by shareholders increases the equity of the Exchange. The Exchange benefits when eggs are sold and when bread is baked and sold and when ham is produced and sold because the Exchange is the economy of its shareholders and as the economy grows the equity of the Exchange grows. This happens in any community it is just encouraged more in an Exchange.
The Exchange provides feed and chicks to those who raise hens and ovens to those who bake bread. The Exchange provides goods and services as debits to the buyers account and as credits to the originating account. The person who provides eggs gets chickens from a local hatchery who is a client of the Exchange as needed. The hatchery is credited the value of the chickens as the egg producer is debited the same value. The hatchery uses her credits to get the farm supplies she needs. The Exchange credits the hatchery’s account for the value of the chickens sold and debit’s his or her account for the value of any supplies received.
It is not possible to externalize costs because all costs are part of the economy of the community, payable by the same shareholders who created them.
Shareholders find it beneficial to help one another because shareholders share and contribute to the same equity pool. One shareholder buying from another shareholder is akin to one friend helping another. There is no risk because the Exchange absorbs the risk and provides the benefit.
To start an egg production business the conventional way chicks, feed and equipment and facilities in which the production will take place must all be acquired. There are papers to sign and taxes to pay along with all the upfront costs. These costs add risk because these costs may not be recouped. The less likely these costs can be liquidated the higher the interest levied on any money borrowed, increasing risk of failure.
Conventional businesses may miscalculate the cost of setting up production, the owner may not have understood all of the legal requirements that comes with selling eggs or he or she may have miscalculated potential profits and not be able to replace worn out equipment. These costs could be contained within a charitable institution or Exchange. Neither the individual hatchery or egg production facility nor banker or any component of the product stream assumes any risk. Costs and risks are contained within the charitable institution or Exchange. If a business does not do well it is a weakness in the Exchange itself, a weakness in the way assets have been allocated. The Exchange addresses the risk by reassigning assets to other uses. In the free enterprise system, large risk requires or justifies a large return. It is the business owner who must address all the issues evaluate what they mean and determine a solution and as said bear all these personal, financial and emotional costs him or herself.
Setting up an egg farm or any other business is a different experience than doing the same thing conventionally. Chickens are assets owned by a legal person transferred to another legal person only after the first receives an asset of corresponding value. Usually this means units of the national currency. In Exchanges individuals possess chickens and other assets but the ownership or final authority belongs to the Exchange. Chickens are assets transferred from one shareholder to another using the equity (represented by the chickens) as a form of currency. The transfer can take place at any time without any conditions being attached. It is not important if the chickens are under the care of Sam or Sally. The transfer of the asset (chickens) increases the equity of the Exchange. The asset is transferred to where the most value will be generated for all members. As assets in an egg production facility the hens increase the equity of the Exchange more than they would have as eggs consumed. Transfers are processed when the equity of the Exchange is enhanced. Chickens as eggs have only a limited value. Putting the chickens to work laying eggs increases the value of the eggs that were chickens. When the eggs were transferred to the egg producer the asset value increased because of the use to which the chickens were put. The farmer is given Preferred Shares to represent the chickens transferred and the egg producer is debited Preferred Shares to balance the asset received.
Assets represent values to individuals. The value of an asset represents what one individual will give another to obtain it. Equity represents value to the community. To increase economic activity and equity is why Exchanges facilitate the transfer of the chickens from the farm to the egg producing facility.
A free enterprise transaction may benefit Sam and harm Sally and the economy will be hit with social costs. In free enterprise, the net benefit of an exchange could be negative. Sally could buy 1,000 chickens and they all die before adulthood. Private ownership makes Sam and Sally combatants. Each business owner fights to gain an advantage over the other. In an Exchange the shareholder shares a common interest in increasing the equity of the community. 1,000 chickens might still die but it would not impact Sally the loss would be an economic loss; absorbed by the Exchange. The egg producer is an asset of the Exchange not a stand-alone proprietorship.
A family provides its members with what they need. Exchanges provide shareholders with what they need for the same reason. When each member of the family does what he or she does best the family qua family is enriched. Family members provide family members what they need because in so doing the family is benefited. It is a dysfunctional family that prevents members of the family from helping each other. There is and can be some ‘from each according to his or her abilities to each according to his or her needs’ in a family but an economy needs a more formal way to exchange goods and services.
A business that transfers a desk from one department to another increases efficiency without increasing risk; the desk is transferred to make the business as a whole more efficient without increasing costs. There is no danger that the receiving department will default on a desk payment and the seller go bankrupt because of the default, because the two departments are part of the same economic entity and the equity of one is part of the equity of all. The department that gives up the desk sees or ought to see a benefit in giving up something underused to make another department more effective for the objective of both departments is to make the business itself profitable. Equitizing assets in an Exchange produces the same dynamic for shareholders.
Builders, equipment makers, chick hatcheries etc. are assets that belong to a community administrated by those who use the asset to benefit the community. Assets can be transferred to where the need is greater. When more chicks are needed to supply egg producers, hatcheries supply more chicks. The buyer of chicks does not owe or pay the hatchery. The cost of the chicks is deducted from the buyers and the seller’s account is debited. The hatchery is not at risk of default by the buyer because it is the Exchange that credits the seller’s account. The buyer is not in debt to the hatchery or to a bank it has an account with the Exchange that is reduced by the cost of the chicks. It really does not matter about the buyer’s credit worthiness because the buyer and seller have accounts with Exchange and together they contribute to earth’s equity, so long as this equity of earth continues to increase the relative earnings of each account is not crucial.
The egg producer’s customers have accounts with the Exchange so those who need eggs can purchase eggs. For small purchases a local currency is used backed up by the customer’s account with the Exchange.
A debit balance with the Exchange is a debit balance covered by Exchange assets. The debit column is decreased when goods and services are obtained (cash decreases). Cash is spent or the member’s account with the Exchange is reduced. A debit account is buyer equity and a credit account is seller equity. Remember all we are dealing with are equity accounts. When a buyer purchases goods and services his equity account or cash account or account with the Exchange is reduced, credit increases. Consumption action is recorded in the credit column. The seller’s account is credited. The Exchange credit is transferred to the debit column in the sellers account books.
The accounts of the Exchange tend towards zero. The higher the debit account the more credits are pushed by the community members. The higher the credit account is the greater the pressure to increase debits. This simply means the more cash or credit a person has with the Exchange the more the person has to spend.
If the amounts of eggs being produced are no longer required assets from this market activity are transferred out of egg production. Assets moved from one account are credited. Accounts that receive assets are debited. Prares serve as the Exchange unit of account.
Suppliers are not dependent on the egg business producing enough eggs at a high enough price to produce a profit so any liabilities the company has can be liquidated. The Exchange serves as a store of value that sellers can access when wished. The egg production facility provides eggs to those who need them because this creates more value for the economy than to not sell eggs. No one is concerned about the credit worthiness of a community member any more than a family member is worried about the credit worthiness of someone in the same family. Transfers of assets is just a transfer within the same economy and does not impact the over-all financial health of the community, what is important is the financial health of the community.
If the price of eggs is inadequate as the facility continues to increase debits the economic activity will increase the price of eggs and consumers will buy fewer eggs as the price of eggs increases. The Exchange will transfer assets into egg production or elsewhere, depending on what increases the equity of the Exchange the most. The business is part of the equity of the Exchange and all shareholders find it in their best interest to do whatever it takes to increase the equity of the Exchange.
If one thinks of the Exchange as a family or a group of friends working together on a project, it is easier to understand how an economy composed of not for profits works.
The free enterprise system is composed of privately-owned capitalist businesses that compete against each other. Each business tries to use what it owns in an efficient way to make more money than competing businesses. But people stranded on an island would not allow competition in the way the private enterprise system does. In a closed economy such as exists on this planet, where costs cannot be externalized the group is not benefited if one or two individuals shift costs onto the rest of the group. On an island or in any closed economy, if 70% of the population work and 10% benefit while 20% are destitute the ones in charge are likely to be metaphorically voted off the island.
Exchange accounts are always in balance. The debit accounts of some equal the credit accounts of other members. Debits always match credits and credits are always equal to debits.
If the accounting department of a large corporation decides to separate the tracking of income from the recording of expenses the income tracking office does not have to purchase what it needs from the accounting department. The assets are transferred from one part of the business to the new department. The costs may accrue to the new department and the assets transferred may be recorded as a credit to the department supplying the assets, but these are simply paper costs and do not create any additional risk for either the business or any of its constituent departments. The business is not going to push its Accounts Receivables into bankruptcy because it missed a payment. This scenario reflects the process used to create a new business using Exchange accounts.
The costs of setting up a new department are not a liability to the organization. Set-up costs do not pose a risk to a new department in the way they do to a business that is setting up using conventional methods.
When a child wishes to put on a play and needs props and costumes she takes clothes and other articles freely from family members – her need she feels is sufficient to justify them being pressed into service. If additional materials are required, the family purchases them but the child does not incur a debt at least not in the formal sense though a sibling pressed into service may believe he or she is owed a favor in return. The child does not make a profit and the family does not suffer a loss. There is no risk in the venture and thus no need for anyone to be compensated. Yet, a benefit is produced for all the members in the family even as all contribute in varying degrees to its success. Even being part of the audience is considered part of the project. All of this takes place without the profit motive being present and indeed specifically because it has been rejected. To put a monetary on the service and demand compensation is to destroy the very value that would otherwise have been created.
In the same way one member of a family may hand down clothes to a younger sister, members of an Exchange may give prares to another investor. Investing using prares is a good way to promote economic activity. There is no risk as prares are part of an Exchange’s equity and are always spent on products and services available through an Exchange. Giving away prares creates business for the shareholders of an Exchange. Prares are a perfect way to invest in future economic activity or pay economic development forward.
It always benefits the Exchange when investors spend or gift prares because this generates business activity.