By Andrew Gaydon
A discussion on Facebook commented on the brisk BrisLETS trading that happened in 2016, 2017 and 2018 (see graph).
But our trading figures for the first six months of 2019 are down, at just 13,930 Units.
Why did this drop occur? Was it the functions, or was it the people involved? What happened over the three-year period from 2016? Maybe it was Barter town or the NENA conference. I can only speculate.
Is the gift economy influencing trade?
One possibility is that the gift economy is affecting the figures. When people give things to one another, this transaction is not recorded. Yes, it’s a form of trading. But if it’s in the gift economy, then the value of the exchange is zero units, as far as BrisLETS is concerned.
When I say that a gift has 0 value, its value is actually infinite, but we can’t record that.
I continued to speculate about the value of the gift economy versus the unit economy.
A foot in both camps
Part of the problem, I believe, is that we want to live in both universes, one of gifting and the other of putting a value on an exchange. But a conflict will arise when two people can’t agree whether an item or service should be a gift, or have some arbitrary value attributed to the trade to record the transaction.
The gift economy is OK; it’s great that people can give their time freely, and this works well with friends. When you’re exchanging things among people you have a relationship with, you aren’t really expecting a gift in return―although you probably will receive something in some way in the future, because that’s what friends do.
But I see a problem arising when you trade with a stranger. You don’t have that same trust or relationship as you enjoy with your friends. In this case a score is kept, the value is recorded somehow: in our case, in the CES system, or in the $ economy as cash or a bank account. You can then trade with other strangers using this value for goods or services that you can’t get with your friends in the gift economy.
Here’s the thing: in our exchange, we seem to be trading in both universes. Some people offer their goods and services as a free gift, and expect others to do the same.
It’s wonderful that people have time and talent to give away for free. But while those trading in the unit economy can trade in both units and gifts, those who trade solely in the gift economy can only do so with other gift-economy folks. It can become a problem for them.
Gift economy vs units economy
As an example, let’s apply this to BrisLETS, the organisation that provides these (and several other) services for its members:
- It has taken steps to become (and stay) incorporated.
- It updates members via regular monthly newsletters.
- Its website is updated and maintained.
- Its account books are maintained.
- It has appointed a person to carry out the CES admin.
- It performs other functions, like promotion, trading days, to the benefit of members, through more opportunities to trade.
BrisLETS offers numerous services and products, and has many members … but not many want to gift their time or are unable to do so.
Let’s imagine that there there is a new job that needs to be done, one that will provide members with another useful service, but nobody is available to undertake it.
This leads to two alternatives:
- A person offers to do the job for 0 units a month, that is, as a gift
- A person offers to do the job for 35 units a month.
What happens with alternative #1?
Say the organisation is unit-poor; certainly, everybody likes free things; so they take up the offer. But after 12 months this generous person has zero units to spend as they please. (0 – 0 (4% Transaction levy) = 0)
Unfortunately, this person leaves because they can’t afford to keep working for nothing. They need to get back into the $ world. So the role’s tasks remain undone.
The outcome of alternative #1 is this: The member has zero units for the work they have carried out; no service is currently being performed. Nobody is happy.
What happens with alternative #2?
The association decides to pay a person 35 units a month because the job is considered worthwhile and necessary. How does it raise enough units to pay for it? Let’s say we have 200 members, so we ask each member to put in 0.175 Units each per month to cover the cost, because the work benefits the whole organisation. (35/200 = 0.175u)
After 12 months this person has 403 Units to spend as they please. (35*12 = 420 – 16.8 (4% trans levy) = 403.2)
The outcome of alternative #2 is this:
- A service is performed and all members are happy.
- The service-provider has 403.2 units in their account, and can spend it how they please.
- The insignificant cost per member is 0.175 Units per month. (This is called economies of scale)
Let’s scale it up
Say several members are now providing necessary and worthwhile services for the organisation.
To help cover costs, each member would need to contribute 35 Units per year.
So what happens now to the person in alternative #2?
Income: 420.00 Units
Trans levy: 16.80
MRP levy: 35.00
Levy Total: 51.8
Balance: 368.2 Units
Effective levy % = (51.8/420) x 100 = 12.33%
This person picks up some more work from the organisation and from other members, and manages to double their income to 840 Units. Let’s do the sums.
Income: 840.00 Units
Trans levy: 33.60
MRP levy: 35.00
Levy Total: 68.60
Balance: 771.4 Units
Effective levy % = (68.6/840) x 100 = 8.16%
Suppose the organisation has successfully promoted itself and doubles the membership, so it has doubled the amount of income received through contributions. Admin decides it would like to double the stipend of the person in alternative #2 because it now takes 2 hours to do the task. Let’s do the sums.
Income: 1260.00 Units
Trans levy: 50.04
MRP levy: 35.00
Levy Total: 85.04
Balance: 1174.96 Units
Effective levy % = (85.04/1260) x 100 = 6.74%
Now I hope that I didn’t lose you in the above scenario(s) and I hope that I have illustrated, how by offering stipends to the people performing services for the organisation, can be beneficial all round.
We are a trading organisation, people trade their goods and services, we keep count using the CES system.
Why should this not apply to the organisation itself?
People gifting their time are noble and it is appreciated, it is also great that they can offer their time for free, however it limits their ability to trade in the unit economy.
As a part of the Membership Rewards Program there is a proposal to raise income through a 35 unit contribution from members to help cover costs that the organisation incurs to provide the services that are required. (The need for these services is debatable-negotiable, but that is another discussion.) Here is a revised MRP budget [CLICK HERE], please note it is an PROPOSED budget subject to change.
Two questions now arise:
1. As a member, are you able to afford an extra 35 units per year to support the people performing tasks for the organisation and yourself?
2. If not, why? There are many ways to earn 35 units. Some options:
- There are numerous jobs that need to be done, check them out [CLICK HERE]
- Put your hand up and be an events coordinator at one of the trading days.
- Look up the wants list and see if somebody needs help.
- If you still can’t earn 35 units, due to illness or for whatever reason, talk to us and I’m sure that there is a solution.
Talk to me at a Q & A to discuss this further.
Thanks to Josephine Brown for the excellent editing of this article.