June's floods took the village of Clonakilty by surprise. Two inches of rain fell in just a few hours, pushing a flood of water through the main streets of the town. The cost of repair is estimated at more than €10m. A relief fund has been set up to help the residents cope.
Homes and businesses in the town were washed out, with property damaged and inventory destroyed. In the days that followed the floods, as the water receded, everyone needed help to restore the town. Help came from an unlikely source.
In this column on April 3, I wrote about the Clonakilty Favour Exchange. The favour exchange works as a sort of directory, helping to connect people who will do things for one another, and have those activities credited through a time bank. Essentially you just register your name, describe your skills, and then people who want those skills contact you.
I give you an economics grind for an hour; you clean my gutters for an hour, that sort of thing. Members can also bank time from a series of favours and recoup that time from others. The exchange stores who is in credit, and who is in debit, at any time.
It is a potentially important idea: you could meet people's needs through the service and build up goodwill in the community as a positive spillover.
As I wrote in the article on April 3: "The favour exchange in Clonakilty also creates a valuable positive spillover, as it connects two perhaps previously unconnected neighbours, strengthening the social fabric of the community."
Since April, the exchange has expanded, with lifts being a very common favour, as well as a book exchange and more members, each of them with a range of skills and favours to offer.
Then the floods came, and the nice idea became a crucial resource to help locals respond to the crisis. The speed of the flooding took everyone by surprise, so no defences were in place. This increased the damage, and the requirements to restore normality.
The organisers of the favour exchange set up www.clonflood.com, on the same model as www.clonfavour.com, with the same exchange system in operation. The flood exchange is now hosting offers of help and requests for help to deal with the crisis. The system is the same; only this time the focus is on repair, carpentry, plumbing, drainage, and the like. Offers of help include providing temporary accommodation, cleaning, free storage space, vans for transport, counseling, and more. No one is being paid; people just want to help. This is Irish community organising at its best. The social fabric of the community I wrote about on April 3 is very much on display.
What the people of Clonakilty have created is a bank that really helps people. Imagine if we had more of these across Ireland, and not just for emergencies.
The form of the favour exchange is malleable enough to meet a range of needs. Experimentation with the idea of favour exchanges and time banks will give us vital information on what aids local development, and what doesn't.
The theory of social capital as developed by Partha Dasgupta of the University of Cambridge and others suggests that an individual's wellbeing is enhanced through building up social cohesion and personal investment in their community.
You build up social capital by increasing the trust you have in others, and they have in you. Some institution has to exist to allow people to build up this trust, however. When people can build up a store of this capital, and have some means to spend it, the benefits can be enormous -- as Clonakilty is discovering.
Rather than simply being a local Golden Pages for favours, really the exchange is an engine for increasing and exchanging mutual empathy. Once the crisis has passed, and people return to their normal lives, the goodwill built up does not dissipate -- at least not entirely.
Where to go from here? The favour exchange model works, and works well, not because it is particularly innovative -- essentially it takes advantage of a pool of people who are willing to help one another anyway -- but because the exchange allows a means to connect these people together. What the exchange does is help form a real-world social network, instead of one just on Facebook. And this network, like all networks, can change, react, and adapt when things go wrong.
The people of Clonakilty have a lot of work to do to restore the walls, roads and bridges of their town. With the help they are giving themselves through the clonflood.com site, and with adequate state support, they can move that restoration on much more quickly. They've shown us that social capital can be saved up and invested if the right bank exists. We should follow their lead.
We had similar challenges like this, here in Australia last year. The flooding as you might have heard in the World News was extremely debilitating for thousands of people across the state.
What the entire county witnessed next the magical part of a united spirit. Donations flooded in from even the smallest of children. People flew to these regions on their own money and pitched in to help those in need.
Social good is alive and kicking, where you let expect to find it.
Ehm...as someone with a smattering of economics I find it amazing to see that an economist is proposing a barter economy as a solution to the problem.
Apart from mentioning all the disadvantages of barter as a medium of exchange, I must really comment that if barter is the solution you're proposing then the flooding isn't the biggest problem that Clonakilty or Ireland has.
Hi,
I sent this letter to the Indo. Since there's only an offchance that they'll publish it I thought I'd put it here too..
H
___________________
Sir,
You published a most astonishing article on July 10th, where Stephen Kinsella from the University of Limerick praised the Clonakilty "Favour Exchange" and supported the idea that the scheme be expanded. While I too hope that Clonakilty recovers quickly from the flooding, advocating a barter economy as a solution suggests that there are even worse problems for them to face than mere water.
Barter is a dreadfully illiquid and very bad medium of exchange. Money was invented as a medium that everyone could use and which makes a market (of favours or anything else) far quicker and easier to organise than having to find people each of whom wants the thing that the other has.
Of course the problem nowadays is that, with a money based market, the government takes 20% in VAT plus anyone receiving money is liable for income tax at up to 50% or so. That's a dreadful chunk to take out of the value of the work that people in Clonakilty need to do for each other to help the town recover and a huge disincentive for people to do anything on the books.
Instead of reinventing a bad old idea like barter or local currencies to get around the tax burden - for that's essentially what the clever people of Clonakilty are doing - perhaps we should look at a good old idea like lowering taxes. Then people can figure out the best ways to help each other without having to resort to techniques that were obsolete before the Babylonians.
Regards
Hugh Sheehy
The letter got published.
http://www.independent.ie/opinion/letters/trade-winds-3174185.html
I need to use fewer commas.
Hi Hugh
Just back from a week's holidays, so I missed this, apologies for the late reply.
You say:
"Money was invented as a medium that everyone could use and which makes a market (of favours or anything else) far quicker and easier to organise than having to find people each of whom wants the thing that the other has."
But this is wrong. You're promulgating a textbook view that turns out to be wrong. I've done it myself, but only in ignorance of the historical and anthropological record.
The anthropological evidence is that money did not emerge as you've said, in fact credit came first. David Graeber's history of debt collates the evidence excellently. There's a summary of his argument here: http://www.nakedcapitalism.com/2011/09/david-graeber-on-the-invention-of-money-–-notes-on-sex-adventure-monomaniacal-sociopathy-and-the-true-function-of-economics.html
Barter turns out to have worked only when trust was high, or when moments of crisis struck.
Your solution-lowering taxes--wouldn't work in a crisis. Whether nails are 20% cheaper or not, you're not going to solve a crisis through the price mechanism in the first weeks of that crisis. Maybe lower taxes will help longer term, especially with weak domestic demand, but right afterwards in a crisis they won't help at all.
I'm a card carrying economist, so I'm all for the market mechanism when it works well, but all the evidence is that when it comes to the crunch, that doesn't help.
Anyway, thanks for reading my work and commenting.
Dear Hugh
The Independent have taken down the comments posted in response to your letter – and never posted this one below.
You misunderstand how the Clonakilty Favour Exchange actually works and also miss the fundamental point of what it is about. First and foremost CFE is a community building project aimed at creating a support network for our community that does not require money - a commodity which is in short supply right now, as you might know. It is a simple, organised, good-neighbour scheme.
For the Favour Exchange, goodwill is our currency, measured out in time and skill exchanged in a spirit of mutual support and sociability. As well as providing useful, practical support, members of the favour exchange are having terrific fun making new friends and swapping things as diverse as ukulele lessons, website building, accounting advice, carpentry, gardening and therapy. Contrary to what you claim, there is great flexibility in the scheme precisely because no money is involved - and direct swapping with others is not necessary - you can redeem any favours earned from any member. It is not about barter at all in fact, it's about something much more important than that. Everyone’s time is of equal worth within the scheme so administering it could not be more simple.
As a point of interest, however, more traditional barter schemes are in fact flourishing in Greece at the moment - there is one in Volos that has 800 members and it has been a terrific boost to the local economy there.
It's not clear from your letter but you appear to think the Favour Exchange is a response to the recent flood in Clonakilty. This is not so, however, along with many other residents of the town who came out to clear the devastation, the Favour Exchange was able very quickly to coordinate effective support from 35 members who spent the day filling sandbags and assisting the Civil Defence wherever it was needed. Another group of members descended on the library the following day to help staff and council workers dispose of the destroyed books, carpets and other items. We are also providing ongoing help with cleaning out shops and homes - yesterday the grass was cut for an elderly person whose house and garden were ravaged by the flood - including the loss of their lawnmower and many other items.
CFE members are now also part of a wider volunteer group offering fundraising support and renovation labour to businesses and individuals affected by the severe flooding (www.clonflood.com if you would like to donate!).
Miriam Cotton
Outreach Coordinator
Clonakilty Favour Exchange