Each community must have a system of exchange or barter in order to facilitate distribution of goods internally within the community. 

The first purpose of such a system is to convey the need for and supply of particular goods or services to other community members in a timely way.  In some cases a particular need will take time to fill. Specific crop production is partly based on what is needed or desired within the community, and anyone can step forward to fulfill a particular need. This may take time, and therefore planning is also required.

Many community members may continue to have assets or liabilities outside the community. This is not a problem since on a collective level we will continue to need local currency for taxes, as well as particular goods from outside the community. But everyone does not require money, because the community can act as a “clearing house” in a barter system, and the property taxes, utilities, and in fact all monetary transactions needed for goods outside the community can be paid via the cooperative or community.

So for example, if someone needs a refrigerator, they can purchase it through the community in exchange for whatever they produce within the community. The only time this will not work is when the community coop or “bank” has a shortage of cash, and this is not expected to be a problem because the later phases of the Master Plan (when fewer residents may have cash) are designed to bring cash into the community by offering tours, education, and similar services to the general public.

The second purpose is to facilitate the exchange of unequal volumes of goods. Equal exchanges may be rare, and an easy method to “keep a running tab” is needed.

Community Store and Market

Anything can be bartered with anyone else in the community at any time and place (including with the cooperative itself for communities that use that model.) This includes food, services, labor, commodities, water, electricity, use of land, living facilities, use of cows or horses, etc. Therefore each community needs a Community Store, and a Marketplace which will make such transactions more public and easily available. There may be times when a reliable witness is needed in a transaction, and the community store exists to perform this public function.

The Community Store also exists to coordinate needs and get volume discounts for goods or services from outside a community. The store can directly barter and exchange with anyone, and everyone will have an account. Notice boards can be used to post exchange rates as well as list goods and services available or desired. Barter exchange rates can change based upon supply and demand.

The Community Market can be used by anyone who wants to sell their goods personally rather than go through the store or the exchange system. The Market would also be used when there is no demand for a particular item within the community.

The US dollar can be used in any of these exchanges, but as each community develops it should become less dependent upon dollars as an exchange medium. The more people produce goods and services the more barter will become predominant. Every person should have an account with the Community Store, and each person's balance may fluctuate a bit with each exchange. The Community Store therefore acts like a clearing house to aid in the bartering process which would otherwise work for equal exchanges only. Particular communities may want to separate this function completely from the Community Store, effectively establishing their own internal Community Bank or Trading Post.

Currencies

The value of a national currency is based partly upon the value of goods and services that might not be considered valuable in our communities.  National currencies are controlled by various governmental entities, large corporations, powerful people, as well as a global forces, and thus individual citizens and local economies are subject to fluctuations beyond their control which may not be desirable.

The United States began to depart from the gold standard in 1933, and there was a later system that partially fixed the price of gold until 1971. In 1973 the US gave up all attempts to peg the dollar to gold. Since that time the dollar has not been connected to any commodity. (Interestingly enough, the former Federal Reserve Chairman Alan Greenspan advocated a return to the gold standard, and even described how to do it, although after taking office he completely departed from his former position.) Since the powers-that-be will never do this, the eventual outcome should be clear to anyone who understands finance. With nothing backing the paper, the government simply prints more money - actually they have to borrow it, our government can no longer even print it's own money - and the dollar gradually becomes worth less and less. This is called inflation, and it is intentionally created. Additionally, since 1913 the government has to go into debt for every dollar that is created, and therefore the national debt can only increase - due to the system itself. Eventually the debt is so large the government cannot pay even the interest on it. (We are almost to this stage, which is why they have set interest rates so low for so long.) At some point the only thing the government can do is monetize the debt, (which means printing more money) and because of the structure of the system, more money printing simply means more debt. In the history of the world, this cycle has always ended in exactly the same way - more and more inflation due to more money in circulation, and finally: hyperinflation. The dollar becomes worthless. 

Every single country that has ever been in the boat we're in now has always done this - monetized the debt. (The only other alternative is to default on the debt, which no politician will agree to.) Argentina and Zimbabwe are recent examples. The result is eventually hyperinflation - which means 100%, 200%, 500% inflation in a year. Grocery stores stop putting prices on anything because the price has already gone up by the end of the day. Money becomes worthless. People burn it to stay warm in winter.

There was no federal income tax  before 1913, no federal deficit, and no federal debt - except for a prior period where the banks had similarly gained control of the money supply and put the government into debt. They were later ousted but again got control in 1913.  Despite the countless trillions of dollars collected in federal income taxes from 1913 to the present the government has managed to go approximately $15 trillion dollars in debt since that time - and that is not counting the unfunded liabilities of social security and medicare which are estimated to be around 70 trillion dollars.

All this is a huge problem for communities attempting to become self-sufficient. Of course it will be a much bigger problem for anyone who does not join a community that has solutions.

Local Currency

The US constitution allows for local currency. There are many networks around the country and even internationally where local currency or a barter system is used. Some better known networks are Ithaca Hours and ITEX, and Time Banks is an international network in 22 countries. Each community may want to join one of them, and especially consider starting their own currency. If land is selected close to a town then barter and a system of local currency could be set up in cooperation with those residents.

To achieve even a moderate degree of self-sufficiency requires a community that produces most of what it consumes, and which arranges for methodical bartering for goods and services within the community. To this end each community should have a Community Store, a Community Market, and possibly a Community Bank, and perhaps even establish their own local currency as the need arises. 

See also the pages on Alternative Financing and Financing Summary.

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