The Ultimate Barter

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What prevents counterfeiting?

HOURS are printed on heavy colored recycled paper, with a second color overlay. Also, red serial numbers are stamped deeply and can be felt.

Since the HOUR is $10, won't it sink if the dollar goes down?

Our plan is to gradually develop a catalog of HOUR prices, which will eventually allow the HOUR to serve independently of dollar values.

Is barter income taxable?

Exchanges of nonprofessional goods and services are not taxable. Exchanges of business goods and services, however, are taxable. The "fair market value" of goods and services received is calculated by the barterers. I should mention that Ithaca HOURS does not record transactions, so barter value must be reported by the barterers.

Are Ithaca HOURSlegal?

They are a form of scrip often issued during money shortages. They are not illegal; the government's main concern is tax collection.

BILL MYERS (LEFT)

"Our credit union starts out by saying that some people are dollars rich, while others are time rich. Time-rich people access HOURS through the use of their skills and time."

Meet Community HOOKS Users:

Dave Wharton, Professor of Economics at Cornell University

When Paul was in the early planning stages of setting up the HOURS system, he came up to Cornell looking for someone to talk to about it. So he and I sat down and started talking about the philosophy and logistics of the system, as well as some of the economics.

I think that to a certain extent, Ithaca HOURS extends the economy to people who are marginally or fully on the fringe of society—people without money to disperse. I'm not quite sure why you can't sell your services for dollars if you can sell them for HOURS, but for some reason there are people who seem to get left out of the dollar network. Most important, HOURS help develop a sense of awareness and trading among community members.

In a sense, increasing the multiplier in a local economy—encouraging spending of any form in a local economy—encourages money to stay within the community.

Dollars vs HOURS

Ultimately, there's some kind of insulation that a local trading mechanism can provide. If our entire banking system collapsed, there would still be this mechanism, and we wouldn't have to resort to pure barter. So there's that protection. But right now the HOUR is tied both implicitly and explicitly to the dollar. If we have gradual inflation of the dollar, and everyone keeps taking an HOUR for $10 worth of work, there will be the same kind of inflation for the HOUR. So eventually I would hope that it' could stand on it's own, but I think it takes a long time for that faith in the system to occur.

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