An exploration of how neighbourhoodd development can profit from local units of currency, ‘time banking’ and co-operatives, new style. .

1. Ellen Holleman
Banking in the neighbourhood: creative and steadfast
At a time when ambitious urban development has come to a standstill because of
a lack of investment capital, and when government is increasingly disengaging -
innovative forms of collaboration are arising out of necessity. New developments
are becoming visible which give reason for hope - there seems to be more room
available for self-organising systems which are based on trust. In theory and practice
worldwide, alternative economic systems are being worked on which strengthen local
communities and make them more resilient. These various economic models have in
common that they regard economic and social capital in a different way and appeal
to reciprocity and a sense of community. What are these inspirational, promising
models? And can they also be used as tools in twenty-first century forms of urban
development? This is an exploration of local units of currency, ‘time banking’ and co-
operatives, new style.
In our society, the system of state-organised trust has gradually been replaced by a system of
state-organised distrust. In a well-reasoned article, Dorien Pessers writes that the public interest
has always been the business of politics, but with regard to how that interest should be served,
government places too much trust in the market and the distrust of the citizen is provoked as a
consequence. Pessers: ‘Every society knows, grosso modo, two moral registers, both based on the
principle of reciprocity, but in diverse forms. Reciprocity is the ethic of enduring ties and solidarity
[…] in which indeterminate obligations on parties are fulfilled back and forth in the expectation that
there will be a settlement [of any moral or other debt, tr.] in due course. Trust is here the key word.
Mutuality is, on the other hand, the ethic of the short-lived bond of the market in which goods and
services are delivered within the strictly defined terms of a contract between two strangers. Here,
distrust is the key word.’ 1
This shift in society, from trust to distrust, also has huge consequences for urban development,
where, since the end of the 1980s, the philosophy of the market has taken the lead and the citizen
has increasingly been seen as client and consumer. The dominant economic reality means that even
in urban development, failure can deliver more - financial - profit than the fulfilment of a contract
or social objectives. The demolition of a building (or even whole neighbourhoods) can, according
to a peculiar, unrepeatable, book-keeping logic, generate more profit than the preservation and
reuse of that selfsame building, despite all the social upheaval and the problems which necessarily
accompany it. In urban development in particular, it is not only that the citizen’s distrust is
encouraged, but also the passivity of the ‘consumer’, who expects that government or the ‘market
participant’ will solve any problem that presents itselve as part of the agreed contract.
A city is not a tree which is made up of branches which do not cross each other. A city is a network
A city is not a tree2
made up of multiple relationships between various functions. It consists of complicated systems
of finely woven structures which criss-cross and overlap each other, where functions and services
Ellen Holleman Banking in the neighbourhood: creative and steadfast

2. Window display of The People’s Supermarket, London
foto: mermaid99 via Flickr (CC BY-NC-ND 2.0)
continually support each other. Jane Jacobs describes this in fine detail and argues that failed city
areas are mostly areas where this sort of complicated reciprocal support is lacking.3 She bases
her approach on the principle of the reciprocity that exists between organisms: where one feeds
from the other or serves as an environment for the other. If good use is made of this reciprocity,
neighbourhoods can increase resilience and the value that is created can reinforce itself.
The principles which the New Economics Foundation (NEF) promotes in its Ten Steps to Save the
Cities are also partially based on this approach.4 Briefly summarised, NEF advises that, in order
to restore local economies, the ‘leaks’ from which money drains away in neighbourhoods need
to be repaired. In other words, you have to make sure that money and capital (including human
capital) remain circulating as much as possible within a neighbourhood. This can be achieved by
ensuring that there are distinct functions and sufficient diversity in a neighbourhood. It is therefore
important, per region, per task, to diagnose the situation precisely: what is lacking, what are the
niches, but also: what is the capital (including social capital) in a neighbourhood, district or larger
area, and how can it be employed to best advantage? Reuse of rubbish and waste products, but
also the intelligent deployment of the knowledge and experience that is present already, can not
only ensure the retention of capital, but also the creation of value, surprising solutions and new
enterprises.5
Banking in the neighbourhood: creative and steadfast Ellen Holleman

3. ‘Launch new forms of money’, is one of NEF’s recommendations. All over the world, there are
Alternative economic models
already successful models which ensure that local means and resources stay circulating locally and
communities thereby gain a certain degree of independence6. They offer cheap or free credit which
supports the local economy.
A local currency encourages more spending in local shops. Money remains circulating within
a community and is thus invested in a sustainable economic network from which the whole
community can benefit.
A particular example where there was an explicit attempt to make the social significance of
economic transactions within a community visible, was the introduction of a local currency in
Amsterdam-Zuidoost, the ‘Bijlmer Euro’. In this project, artist Christian Nold employed technology
which made it possible to follow the movement of the Bijlmer Euro through the area in a real-
time visualisation. By following these movements, connections and relationships which form the
basis for social cohesion within a local community such as the Bijlmer, were made visible from the
perspective of an economic network.7
Another form of an alternative monetary system is ‘time banking’. Edgar S. Cahn devised the Time
Dollars™ in 1980 as a new currency that would offer a solution at a time when there was very little
money available for social programmes. He worked his concept out and developed the timebank,
a formula where time is used as a currency instead of money. Services are offered in exchange for
another service. Walking the dog for an hour has the same value as expert advice. Time banking
aims to offer an alternative way of providing services and a way to work on social cohesion in a
neighbourhood. There are now countless time banks of various types for diverse interest groups.
A timebank encourages people to be active in their neighbourhood and it contributes to social
cohesion and security and the generation of social capital.
A specific, new form of time banking is the ‘Creative Timebank’. A creative timebank is a cash-free
platform that facilitates the exchange of skills between creative people and groups. The facilitation
and formalisation of an honest, free exchange of knowledge and talent encourages a sustainable
and active community. Leeds Creative Timebank is a good example where time banking on the
scale of the creative community in Leeds works very well. Talent development, work experience
and even making large-scale productions possible, are unexpected side-effects of this time bank and
these aspects demonstrate how it can be said that there is an increase in value within a timebank
community: the knowledge present within the group increases with time.
Precisely because contact within a time bank is not driven by conventional sales practices,
unexpected collaborations and ideas arise. Coupled with good local knowledge, innovative
initiatives and enterprises arise which can diversify an economy and make it resilient. The
significance of a timebank at a local level and its application in the development of a specific
geographic area is dependent on the particular sense of connection between participants within the
timebank community. As soon as the community gets too big and spreads out too far geographically,
this may well be of increased value for the individual participant, but there is less value to the
specific, local community.
Co-operatives have been in existence for a long time and in various forms. The co-operative is a
Co-operatives 2.0
form of self-organisation for producers or users aimed at economies of scale and an increase in
economic power. Generally, a part of a business’ activities (most often marketing) is carried out
for the benefit and at the risk of the group as a whole, whilst maintaining the independence of the
Ellen Holleman Banking in the neighbourhood: creative and steadfast

4. individual participants. Co-operatives have played an important role in the economic emancipation
of large groups of people, particularly at the end of the nineteenth century and the beginning of the
twentieth centuries.
The model of the co-operative is being reinvented in various places and given a modern twist. It is
a development that has already been going for some time in the world of energy companies, where
one energy co-operative after another is being set up. The concept of reciprocity is key: energy that
has been generated sustainably by private individuals does not just meet these individuals own
energy needs, it is supplied to the network which ensures adequate distribution as well. Where
time banking organises an exchange of services, the People’s Supermarket in London and the Park
Slope Coop in New York provide discounts on products in exchange for work. They are co-operative
supermarkets where the members work a number of hours in the shop every month (time!) in
exchange for a discount on the purchase of products. In contrast with the principle of charity (like
at a food bank, for instance), this principle of reciprocity ensures that members/customers not
only enjoy financial benefit, but that they also improve their self-esteem and gain a form of training.
The co-operative also encourages the relationship with local suppliers and contributes to the local
economy.
What can we learn from the examples above and how can we make them productive within a
Entrepreneurial urban development
strategy for urban development? Cities that have been affected less by the economic recession
are often cities where local economies flourish and where there is less dependence on capital
from outside. They are often places where entrepreneurship is encouraged and local chains
are established. Successful neighbourhoods are familiar with the principle of reciprocity. These
examples illustrate how independent initiatives can lead to the creation of value and an increase
in social capital within a community. Such a complex system of reciprocal support cannot be
imposed from above but it can be encouraged. This is an argument for an adaptive, flexible
and, above all, entrepreneurial form of urban development; a strategic approach that is capable
of assessing the value of new collaborations and DIY initiatives properly, of facilitating and
integrating neighbourhood development, and of harnessing the energy and knowledge that is
in a neighbourhood. With this approach, places of significance within neighbourhoods, hubs
and economies based on skills and the exchange of knowledge, services and goods, can grow.
Alternative, bottom-up models such as time banking can play a valuable role here, working at
the local level on the creation of flexible networks in which entrepreneurs and local residents can
exchange their knowledge, talents and skills. The rise of online social networks offers abundant
opportunities to make intelligent connections between local residents and entrepreneurs.
In this form of urban development, the task for government, but also for ‘market participants’ and
housing associations, is to support initiatives or to facilitate social confidence thereby realising a
certain degree of reciprocity and solidarity - and doing so without wanting to control the process.
They need to have the confidence that their efforts will gradually lead to an increase in social capital
in neighbourhoods, and will deliver them ‘a return’ in time, as their investments increase in value.
Banking in the neighbourhood: creative and steadfast Ellen Holleman

5. 1. Dorien Pessers in NRC Handelsblad, 23 September 2006
2 Christopher Alexander, ‘A city is not a tree’, Architectural Forum, 122 (1965) 1, p. 58-62 (Part I),
122 (1965) 2, pp. 58-62 (Part II).
3 Jane Jacobs, The Death and Life of Great American Cities (New York: Modern Library, 1961)
4 David Boyle, Ten Steps to Save the Cities (London: New Economics Foundation, 2011)
5 A redefinition of economic value opens the door to new possibilities. A good example is a mushroom farm which uses
the La Place restaurant chain’s kitchen waste (crab) as a substrate for mushrooms. La Place is also a customer for the
mushrooms. The establishment of such chains generates a win-win situation for many.
6 Worldwide, there are about 2,500 experiments with local currency systems.
There are also local units of currency that can be exchanged for national monetary units. Some succesful examples are
LETS (Local Exchange Trading System), Time Dollars and Ithaca Hours and the introduction of the ‘Gelre’ is currently
being workd on in the Netherlands.
7 http://www.bijlmereuro.net.
The original Dutch version of this essay was published in Balkan in de Polder, Naar organische
gebiedsontwikkeling in Nederland? (Balkans in the Polder, Towards organic area development in the
Netherlands?), 2012 Mondriaan Fonds Amsterdam, ISBN 978-90-76936-34-5
www.mondriaanfonds.nl
Ellen Holleman 2013 (CC BY-NC 3.0 NL)
english translation: Terry Ezra
Ellen Holleman Banking in the neighbourhood: creative and steadfast

6. Banking in the neighbourhood: creative and steadfast Ellen Holleman