Community Exchange News

No.27, 28 May 2006

Community Exchange News is the Newsletter of the Cape Town Talent Exchange group of the SANE Community Exchange System

Contents:

1. Administration: Transaction levy reduced
2. Milestones: Two million Talents milestone
3. New groups: One Norwegian and two New Zealand exchanges join the CES
4. The Abusers List: Avoid selling to these people!
5. Statistics: Growth of the CES
6. CTTE Group statistics: April 2006
7. Web Site: New features
8. Info: Why sellers and not buyers enter transactions in the CES
9. Tip: Recommendations
10. Theory: Imagine if money had never been invented
11. Administration: CTTE Local Area Co-ordinators

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Back issues

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The Talent Exchange — where your wealth is your talent

1. Administration: Transaction levy reduced to 2%

On the 1st of April this year (no joke!) the transaction levy of the CTTE was reduced to 2% from the previous 4%. This means that on every transaction both the seller and the buyer contribute to the CTTE Administration just 2% of the value of every transaction entered. If the value of a transaction is T100, for example, the seller is effectively credited T98 while the buyer is debited T102. The T4 levy goes out of the system into the CTTE 'Treasury' where it waits until called back into the system by the Admin. Usually this is done on the first day of the month, and the amount accrued during the previous month is transferred from the Treasury account to the Administration account (SANE0000). If you would like to see what is happening with the revenue, call up the CTTE Administration record and look at the statement of account. The Administration account is one of only a few 'public' accounts on the system, meaning that it is totally open to general scrutiny. This is to keep the system squeaky clean and ensure that there is no corruption with 'public money'.

The levy was reduced because revenue was coming in faster than Admin could spend it. When the levy started in May 2004 it was indicated at the time that it would be reduced as the exchange grew. This is not to say though, that it will never be increased! But if it is to be increased it will not be done unilaterally. Users will have a say in what levy they contribute.

Compare this to the conventional money system where you pay taxes to the government and 'services charges' to the bank, which together amount to way more than 2%, probably in the region of 50-60% if you take everything into account. And how often do you get a 50% reduction in taxes? And are the government's (and the banks' for that matter) books open for all to see? Not a chance. With an anonymous money system everything is hidden, and it's obvious that they have a lot to hide.

2. Milestones: We pass the two million Talents mark!

On 24 May the two million Talents mark was breached. The first million was achieved after 27 months, exactly one year ago in May 2005. The second million took just 12 months. How long will it take to reach the third million? Let's try to cut that down to six months; the fourth million to three months, and so on...

3. New groups: A Norwegian exchange joins the CES as well as two more New Zealand exchanges

One Norwegian as well as two more New Zealand exchanges have joined the CES network. The Norwegian exchange is the Moss Byttering Samfunnet and the New Zealand groups are Wellington and Wanaka. The Wellington Talent Exchange (WTE) was set up by Russell Bishop, one of the founding members of the Cape Town Talent Exchange. He emigrated to New Zealand last year and made early contact with the leaders of the active LETS community in that country. The other exchange is the Wanaka Exchange and Barter System (WEBS).

There are now thirteen exchanges in New Zealand using the CES to organise their affairs.

The administrator of the Norwegian exchange is in the process of translating the site into Norwegian, so we will soon have the first CES site in another language. Hopefully in future everyone will be able to choose the language in which they wish to view the site.

We welcome these new exchanges to the CES network.

4. The Abusers List: Avoid selling to these people!

	Account #	Name	Sales	Income	Purchases	Expenditure	Levy	Balance
1	SANE0991	Oliver Calligan	1	50.00	13	29421.00	1130.00	-30501.00
2	SANE0692	Albert Nel	37	12855.00	217	28924.70	1580.30	-17650.00
3	SANE0783	Magdalene Loots	107	5221.00	167	19014.79	867.18	-14660.97
4	SANE0481	Leroy Al Kata	52	29270.00	167	40482.50	2617.70	-13830.20
5	SANE0919	Bernhard Grabbe	90	1564.00	30	14346.00	620.40	-13402.40
6	SANE0334	Johann Lamprecht	11	660.00	2	12012.00	19.68	-11371.68
7	SANE0541	Fantasy Project, The	1	500.00	13	11186.00	427.44	-11113.44
8	SANE0465	Collen Mkwanazi	0	0.00	6	9220.00	368.80	-9588.80
9	SANE0488	Zuna Visser	1	100.00	5	9350.00	324.00	-9574.00
10	SANE0285	Adam Suzman	59	7840.00	161	15566.90	666.65	-8393.55

* As at 27 May 2006

Again we publish our list of the worst abusers of the Cape Town Talent Exchange. Some members feel that it is wrong to publish this list, but it is our opinion that those who abuse the system should be exposed. This is an open system and we don't believe in hiding the situation. In any case this information is there for all to see, at any time, on the web site.

We urge you not to sell to these people, or with any others heavily in debit. There are plenty of them on the system. When/if you are selling something of considerable value, check the current trading position of the buyer. If they are heavily in debit or have no offerings point out to them the reason why you do not wish to trade with them.

Although it makes no apparent difference to you as a seller to sell to abusers, people such as the above create 'inflation' in the Talent Exchange by not giving back an equivalent amount to what they take. In other words, there are too many Talents chasing too few goods and services and we all suffer the consequences.

It is up to you how you interpret the debit balance of a particular member. Some people are clearly abusers because they are heavily in debit, have sold very little and have no offerings. Others might be heavily in debit but from their trading record you can see that they have done a lot of trading. The current debit balance might simply represent a steep dip below the zero line from which they will recover in time. Many factors need to be taken into consideration. Many people come from disadvantaged backgrounds and have little to offer. This does not mean that we should accept abuse from such people but a person's background should be taken into consideration.

5. Statistics: Growth of the CTTE

There are now (27 May 2006) 5,216 registered users of the Community Exchange System (including the international exchanges). There are 40 separate exchanges in eight different countries. The Cape Town Talent Exchange is the largest with 1,688 users. The following table shows the growth of the Cape Town Talent Exchange:

Year	Users	Trades	Ave/Day	Talents	Ave (T)
2002	10
2003	365	1112	3	132589.10	119.23
2004	576	4780	13	596726.24	117.97
2005	562	5073	14	892362.68	164.05
2006	181	2144	15	382461.14	169.28
Total	1694	13109	11	2004139.16	144.30

* As at 27 May 2006
** The difference between the total users in this table and the figure given above is because some users have left the system.

6. CTTE statistics: April 2006

April 2006 was the all-time best month for the Cape Town Talent Exchange with a total value of T137,053.97 traded in the month. This is some 261% up on the previous month and beats the previous best monthly trade record (November 2004) by a long way, Most of this was due to our gigantic market held at the Novalis Institute on 8 April.

At the end of April 2006:

Trader Statistics:

Totals Total members: 1659 Total traders: 967 % of members who have traded: 58.29 % of members who have not traded: 41.71 Sellers Total sellers: 595 Seller/buyer ratio: 0.67 % of members who have sold: 35.86 % of traders who have sold: 61.53 # of sellers who have bought 512 # of sellers who have not bought: 83 Buyers Total buyers: 884 Buyer/seller ratio: 1.49 % of members who have bought: 53.29 % of traders who have bought: 91.42 # of buyers who have sold: 512 # of buyers who have not sold: 372 Trading Statistics Total # of sales: 12894 Total # of purchases: 12894 Total income: 1948738.70 Total expenditure: 1948738.70 Income/expenditure less levies: 1838205.22 Overall balance: 0.00 Treasury Statistics Total revenue: 110533.48 Transferred to Admin: 105522.12 # of levy payments: 10162 Current Treasury balance: 5011.36

Member statistics:

Individuals: 1379 Families: 67 Companies: 97 Organisations: 61 Virtuals: 38 Public: 4 Administrators: 1 Total: 1659

Trading statistics:

Month-Year Trades Talents Average Levy Total (- levy) Total (+ levy) February 2003 3 295.00 98.33 0.00 295.00 295.00 March 2003 8 394.00 49.25 0.00 689.00 689.00 April 2003 9 1768.00 196.44 0.00 2457.00 2457.00 May 2003 21 2802.02 133.43 0.00 5259.02 5259.02 June 2003 80 6091.82 76.15 0.00 11350.84 11350.84 July 2003 113 10493.65 92.86 0.00 21844.49 21844.49 August 2003 194 19949.01 102.83 0.00 41793.50 41793.50 September 2003 263 26404.88 100.40 0.00 68198.38 68198.38 October 2003 179 35284.47 197.12 0.00 103482.85 103482.85 November 2003 151 18504.75 122.55 0.00 121987.60 121987.60 December 2003 91 10601.50 116.50 0.00 132589.10 132589.10 January 2004 316 26223.62 82.99 0.00 158812.72 158812.72 February 2004 269 27392.60 101.83 0.00 186205.32 186205.32 March 2004 633 37249.23 58.85 0.00 223454.55 223454.55 April 2004 204 15041.29 73.73 0.00 238495.84 238495.84 May 2004 464 40575.73 84.34 1443.84 277627.73 279071.57 June 2004 149 29748.50 184.87 2203.60 305172.63 308820.07 July 2004 98 42439.85 404.09 2839.16 344773.32 351259.92 August 2004 184 42674.52 215.70 2984.96 384462.88 393934.44 September 2004 522 58561.65 104.30 4116.94 438907.59 452496.09 October 2004 638 85618.02 124.75 6025.96 518499.65 538114.11 November 2004 705 100041.54 132.03 6962.18 611579.01 638155.65 December 2004 598 91159.69 141.99 6248.20 696490.50 729315.34 January 2005 422 65470.98 144.75 4386.88 757574.60 794786.32 February 2005 178 53361.10 279.40 3627.72 807307.98 848147.42 March 2005 352 51718.68 136.81 3561.50 855465.16 899866.10 April 2005 224 79730.01 336.71 4306.04 930889.13 979596.11 May 2005 528 73327.24 129.19 5113.26 999103.11 1052923.35 June 2005 412 68473.10 155.06 4587.88 1062988.33 1121396.45 July 2005 599 91153.86 141.46 6419.32 1147722.87 1212550.31 August 2005 386 72543.66 175.24 4899.62 1215366.91 1285093.97 September 2005 285 80994.41 264.41 5636.44 1290724.88 1366088.38 October 2005 619 80567.31 121.19 5552.12 1365740.07 1446655.69 November 2005 524 83440.12 148.23 5769.24 1443410.95 1530095.81 December 2005 544 91582.21 156.83 6267.42 1528725.74 1621678.02 January 2006 216 73686.30 318.02 4993.28 1597418.76 1695364.32 February 2006 570 63941.01 104.55 4347.56 1657012.21 1759305.33 March 2006 228 52552.20 216.37 3219.72 1706344.69 1811857.53 April 2006 916 137053.97 144.13 5033.44 1838365.22 1948911.50 Total: 12895 T1948911.50 T151.14 T110546.28     Excluding levy: T1838365.22 T142.56

7. Web Site: New features

Viewing the 'balance of trade' of exchanges

There is a new feature on the 'This Group' page that shows the 'balance of trade' between the various CES exchanges that have traded with each other. This is similar to the 'Member Balances' feature on the same page, which shows the balances of the users of a particular exchange.

As with individual users, some exchanges are 'in the red' and some are 'in the black'. Being 'in the black' means that an exchange is in a 'balance of trade surplus', or has an overall positive balance in relation to the other exchanges with which its users have traded. This means the exchange should 'import' more in order to bring the balance back to zero. Being 'in the red' means that an exchange has a 'balance of trade deficit', or has an overall negative balance in relation to the other exchanges with which its users have traded. These exchanges should 'export' more to the other exchanges to bring their balances back to zero.

It is difficult to determine if all the positive balances added to all the negative balances would sum to zero, as it is not possible to add the different currencies in the different exchanges for the same reason that you cannot add Rands to Dollars.

To view this feature click on the [This Group] button at the top, after logging in. You will see two 'Balance of Trade' headings. One shows you the balance of trade of all exchanges worldwide, the other the balance of trade among exchanges in this country.

8. Info: Why does the seller and not the buyer enter transactions in the CES?

Most newcomers to the CES find it difficult to understand why the seller enters the transaction information and not the buyer. This seems counter-intuitive, for we have grown up with the idea that buyers pay sellers. If we have internet banking with a conventional bank we can pay our 'beneficiaries' (sellers) but under no circumstances can we credit our own accounts against our buyers. The very notion seems absolutely absurd!

This is the main difference between your CES banking account and the one that you might have with a conventional bank.

To understand why the seller enters the information and not the buyer, you need to understand that there is no tangible money in the CES and therefore there is nothing to go from buyers to sellers. After a sale has taken place all that needs to happen is that the transaction information has to be entered into the system so that the seller gets credited and the buyer gets debited.

Who is going to enter this information? The options are: (1) the buyer; (2) the seller; (3) a neutral third party.

If it was up to the buyer to enter the information the system would not work very efficiently. It is not in the interest of buyers to enter the information as that debits their accounts. Sellers would become very frustrated with the delay and they would have to spend all their time chasing their buyers to enter the information.

If the sellers enter the information it usually gets done straight away because it is the sellers who benefit. If a seller delays the entry or never gets around to it, the buyer is not going to worry about it.

If a third party enters it then it will be done on behalf of the seller (as it is with the conventional banking system when you give your cheques to the teller).

In any trading situation where there is no hard cash involved, this is the only way it can be. Think about it. When you go to the supermarket and come to pay for your groceries at the checkout, and you hand the assistant your credit card, it is the shop (the seller) that enters the transaction information. Your credit card is not money; it is just an ID. Imagine if it was the other way around and the supermarket allowed you to take the groceries home and then waited for you (as the buyer) to enter the transaction through your internet banking account. It would be total chaos and many customers would simply 'forget' to credit the supermarket. The supermarket would need a massive team of debt collectors chasing after their customers!

Some CES members have argued that by placing the prerogative on the seller to enter the information, the wrong information can be entered by mistake and thus the wrong member can be debited. While this is true, buyers can also enter incorrect information. The difference is that we don't like to be incorrectly debited but we don't mind if we are incorrectly credited!

Mistakes do happen but at least it is possible to correct them in the CES. Sellers have ten days to correct or delete incorrect transaction entries themselves, or thirty days through the administrator. In the CES you can select your buyers by name. Compare this to the conventional banking system. If you are entering a transaction through your internet banking account, the system does not allow you to actually select your beneficiaries. All you can do is enter the account number and hope for the best. It is very easy to make a mistake but very, very difficult to get it undone.

Another argument against sellers entering the information is that they can enter an increased amount or simply credit themselves against their buyers. Again, buyers could reduce the amount they should enter or simply never enter the transaction at all.

In the CES it is difficult to cheat in this way, as an email notification is automatically sent to the buyer when a transaction is entered. Everyone also receives a full statement of account at the start of each month. Of course some people will simply ignore the transaction notifications and never look at their statements, but nothing can be done about that.

The very big difference between the CES and conventional banks is that we trust you, whereas the banks don't. We assume that you are honest and innocent until proven otherwise, whereas the banks assume that you are wicked and will cheat given half the opportunity. The CES is designed to promote honesty and on the whole does so. There are a few abusers but we prefer to deal with them in a personal rather than an aggressive way. We give everyone the benefit of the doubt and hope they will learn to be fair and honest, and unlearn the bad habits they have picked up from the other money system.

The CES is an open system. You can see the balances of all other members at any time and see exactly how your levies are spent. Members trade in a spirit of friendliness and trust. It is impossible to steal and there is little incentive to cheat because you can simply go into debit. Compare this to the conventional money system where it is dog eat dog, where cheating and corruption are rife and the environment is more like an armed camp encircled by barbed wire and alarm devices.

9. Tip: Give someone a recommendation

If you are impressed with someone's offering, be it goods (such as yummy food) or a service, give that member a boost by submitting a recommendation. If someone is impressed by what you provided them then ask them to give you a recommendation.

A recommendation is the best form of advertising you can get. Not only does the recommendation appear on the 'Recommendations List' for everyone to see, it also appears on your personal detail sheet.

To view the 'Recommendations List' click on '6. Recommendations' under the 'Buyer Actions' sub-heading on the start page of your account. To give a recommendation, click on the [Give Recommendation] button on this same page. To see if a member with whom you want to trade has any recommendations, click on the [Members] button at the top. Find the member using one of the various search functions on the Members page. Finally, click on the 'View Recommendations [Go]' button on the member's detail page. This will list all the recommendations received and given by the particular member.

10. Theory: Imagine if money had never been invented

Imagine if money-as-we-know-it had never been invented. It seems like an impossible idea, but imagine if gold had been an extremely rare substance on earth and thus the idea of using it as an exchange medium had never caught on, and no other substance on earth had become the unquestioned medium that everyone would accept in exchange for the products of their labour. Perhaps people would have bartered things in the beginning and certain commodities would have become 'money' in the sense that most people would accept them in exchange even if they had no direct use for them. But as trade expanded and commerce became more complex, instead of there developing a universally acceptable exchange commodity such as gold, people just granted each other credit and kept a record of it. In other words, instead of swapping commodities to get what they wanted, people just kept a record of what they delivered to others, and those who received the goods kept a record of what they owed.

Well, this is not such a extraordinary idea. In fact it is an idea that is as old as the hills and was probably in use long before the invention of 'money'. Barter was never a very good idea because it seldom happened that there was a coincidence of wants between traders. Those wanting to sell but who couldn't find buyers offering what they wanted, could either accept something else that they knew they could swap for something they wanted from other sellers, or they could grant 'credit' to their buyers. That is, they would give the buyer what they had for sale and simply keep a record of it. The record would constitute the note of credit, which represented what the buyer owed the seller. The seller could either wait until the buyer had something with which to settle the debt (such as food at harvest time), or the seller could trade the debt.

This means the creditor (A) of the buyer (B) could receive something from another seller (C) and 'pay' for it by transferring B's debt to C. B could then deliver some goods or service to C and this would settle B's debt to A. For this to happen on a larger scale there would have to be a system of recording these credits and debt transfers.

The ancient Egyptians had a money system a bit like this. Farmers would bring grain or other produce to a central warehouse and be given a receipt for what they had delivered. These warehouse receipts (notes of credit) served as money and could be traded for goods and services. The receipts could ultimately be redeemed for produce from the warehouse.

The ancient Incas had no coins or anything else normally associated with money, yet theirs was a complex society and great public works were carried out. How did they manage it without money? It seems that they had some kind of centralised accounting system that recorded what citizens contributed to the common wealth and what they could take from the social product. Despite having no writing system they had a highly developed information and accounting system using knotted cords called Quipus. It was a decimal-based system used to record huge amounts of information for the Inca state, which extended over vast areas of South America.

Let's get back to our imaginary society where there is no tangible money, only the recording of credits and debt transfers. How would such a society organise its economic affairs without money? How would homes get built, how would roads get built, how would health institutions get built? What would keep people active without receiving anything tangible that they could use to acquire their needs?

Let's answer these questions by taking a simple example of a school that wants to build a new school hall. What would happen under the current money system? The school would first of all get a quote from a builder or architect indicating how much the desired hall would cost. Then the school would organise fund-raising events such as fetes, raffles, cake sales and generally cajole parents into contributing additional money over and above their fees. Eventually the money would be raised and the hall would be built.

It seems absolutely normal that if something like this is wanted then the money should be raised first. That way there can be certainty that the builders will be paid when the job is done and the school won't be left in a position of debt.

But what is really happening here? Why should a school have to go to all the bother of organising markets and events to raise money. That is not the job of schools, nor of parents. It also requires a lot of effort and the expenditure of energy to raise the money. What is wanted here is not money but a school hall.

Why should the school board not call in a builder and architect and ask what is required: how many bricks, how much cement, how much wood, how many doors, how many windows, how many people to assist in the construction and so on. After the requirements have been determined the builder would go to the community and obtain what is required. At each stage a record would be kept of what was acquired from others. The materials would be brought to the site and the building would commence. Those assisting would not be paid with little packets of money each week; instead a record would be kept of the hours they spent on the site and this would determine what they could claim from the community in terms of goods and services.

What has happened here is that the school has received credit from everyone who has contributed to the building of the hall. The school is now in debit to the community and needs to give back to the community services to the value of the school hall. The school hall itself could become the means by which the school reduces its debit. By renting out the space and facilities it could in time clear its debit. The debit could also slowly be cleared by temporarily raising fees or simply from the existing fees.

The important decision the school would have to make before deciding to build the hall is whether it would be able and how long it would take to eliminate its debit to the community. If the period of debit elimination was too long it would have to opt for a lesser hall.

This simple example demonstrates how things can get done without money-as-we-know-it. This does not mean that 'money' is not involved, but it is a completely different concept of money. It is the kind of money that we have in the Talent Exchange. We don't have a supply of cash so nothing can ever be paid up-front. And because the seller credits him/herself it is impossible for suppliers to be left in a situation where they are not rewarded for their efforts.

It is possible to accumulate Talents in order to acquire 'big ticket' items without incurring a debit, but there is no real need for this as it is possible to obtain credit from the community without any additional expenditure (interest). In other words, there is no price attached to credit and it is freely available. The Talent Exchange does not currently have any mechanisms to control the taking of credit. If the Talent economy were to grow to a scale where people were building school halls and houses there would have to be some mechanism to control the taking of credit. Buyers (takers of credit) would have to demonstrate that they were in a position to reduce their debits within a certain period of time. This would be a bit like taking out a bond with a bank, which is a promise to reduce your debit by regular amounts over a fixed period of time. The difference in the Talent economy is that you would not pay for that hall or house three or four times over through usurious interest payments.

As the Incas showed, and the Talent Exchange is beginning to show, it is possible to organise our economic affairs without a tangible, supplied, countable, limited, existential money. Money is that which organises our relationships in the economic domain. This can be done much, much more efficiently using computers and keeping a record of who does what for whom than by having a kludgy supply of 'stuff' that we exchange with each other in order to obtain the goods and services that we need and want. The idea that one thing has to exchanged for another is prehistoric. It is time to move into the 21st century and take advantage of computers to do what has never been possible until now. By eliminating money-as-we-know-it we will eliminate most of the social, economic, political and environmental problems that currently beset us.

11. Administration: CTTE Local Area Co-ordinators

The following is the current list of CTTE Local Area Co-ordinators or 'branches' of the Cape Town Talent Exchange. If you have a problem accessing your account, do not have regular access to a computer or just hate the internet, then contact your nearest co-ordinator who will help you interface with the Talent Exchange. Co-ordinators will provide you with everything you need to participate, as well as enter your trades for you. We hope to 'recruit' co-ordinators in the sub-areas not listed below. If you would like to assist please write to the Administrator at the address at the bottom of this Newsletter.

SANE CES Administration
Email: ctte+at+ces.org.za
Web: www.ces.org.za

The SANE Community Exchange System is an initiative of the South African New Economics Network