Community Exchange System Australia
What is CES?
How does CES work?
How to trade
Questions & Answers
Alternative Money Systems
The Community Exchange System (CES)
is a community-based exchange system that provides the means for its
users to exchange their goods and services, both
locally and remotely. It could also be described as a global
complementary trading network that operates without money as it is
Unlike the conventional money-based exchange system,
the CES has no physical currency. The idea that such a currency is
required before any trading can take place is an ancient one and increasingly irrelevant in this
day and age of computers and the Internet. Information can replace
currencies and at the same time eliminate most of the problems
associated with regular money.
There are many similar trading systems around the
world, commonly know as Community Exchange Systems, Local
Exchange Trading Systems (LETS), Mutual Credit
trading systems or Time Banks.
Apart from using information instead of currencies to
effect exchange, these exchange systems are community-focussed in order
to build community and keep wealth where it is created. The CES takes
this a step further by providing the means for inter-community trading,
right up to the global level.
As the 'currency' in the above types of exchange
systems is information it does not have to be ‘created’ like
conventional money so there is no need for an issuing authority or for
a supply of it, and none is required to start trading.
‘Money’ in these systems is a retrospective ‘score-keeping’ that keeps
a record of who did what for whom and who sold what to whom. There can
never be a shortage of information as there can be of money, as
information does not have to be created and limited by a third party
(banks or government) in order to give it value. For
this reason the concepts of borrowing, lending and interest are
meaningless in the CES.
There are many different types of complementary
exchange systems (CESs) and they are growing in popularity throughout
the world. Some use ‘hard’ currencies, where notes and coins are issued
by the group for their own use; others use time as a 'currency' rather
than notes; and yet others use a ‘virtual currency' which is the
recording of the values of goods and services exchanged.
Complementary exchange systems foster the real wealth
of communities and rebuild a sense of worth and self-esteem among their
users. Around the world they report an increased sense of vitality in
all sectors of the communities using them. While these exchange systems
might have a slightly different function for each of these sectors,
they certainly have relevance to all.
These systems provide infinite opportunities for
exchanging one's narrow specialisations for the goods and services
offered by others. In this way a complementary exchange system acts
like a supplementary currency, creating an additional stream of value
in a community. By supplementing conventional cash flow with a local
exchange system a community can provide an additional source of
essential goods and services that become scarce in economic downturns
and protect itself from changes and fluctuations in the national money
I help you, and you help another—and someone else helps
me. The recipients of help become, in turn, the providers of help. What
goes around comes around. By helping others you become entitled to
receive goods, services or help from someone else. When you receive
something, someone else is entitled to claim from the community the
equivalent of what they provided.
How does it work?
CES exchanges compile and distribute a directory of
goods and services offered by the users registered with them, as well
as a list of their ‘wants’ or requirements. When a user requires
something advertised in the directory the seller is contacted and the
trade takes place. The buyer 'pays' the seller by signing a trading
sheet provided by the seller or by handing over a cheque-like
trading slip that records how much the buyer is agreeing to be debited
by the seller for the goods/service delivered. The slip is either
handed by the
seller to a group administrator who will enter the amount into the
computerised system, or the information is entered directly by the
seller. Sales are recorded as credits for sellers and as debits for
buyers. The central book-keeping system records
the relative trading positions of the traders. Those in credit can
claim from the community goods and services to the value of their
credit and those in debit owe the community goods and services to the
value of their debit. Traders receive a regular statement of account
that lists their trades and gives their balance at the end of the
period. Information about the trading position of others prevents
unscrupulous buyers from exploiting the system. Newsletters assist in
building links and enhancing the sense of community.
Is this a form of Barter?
No! Barter almost always involves bargaining between
two individuals to establish the relative worth of the goods or
services they wish to exchange. There is no bargaining in the CES as
the receipient is in no way obligated to the provider; you 'pay' for
what you have received by delivering/selling something to another
trader in the community at a later time. Complementary exchange systems are as versatile as
Is this just a tax dodge?
Definitely not! Our motives are noble. Our aim is to
create a more equal society where wealth is distributed according to
contribution, not according to the ability to ‘make money’. In other
countries where these systems have become big, the state has either
ignored the tax angle because it saves state expenditure on welfare
payments, or there is an agreement to provide services to the state.
Our approach is that when the CES becomes big, the state should become
a user of the CES and participate in the normal way. In this way the
state could credit itself through the services it provides to all user
and debit itself by purchasing the services of CES users.
Can I only trade with members of my own
The CES is an international trading network with
exchanges in many countries. Credits earned in one exchange can be
spent in another, or if you are visiting another area you can trade
with local CES traders. New exchanges are starting in new areas all the
time, and existing ones are growing steadily
other benefits are there in using a community exchange system?
One of the reasons why we took the initiative to launch
this project is that it is in line with our New Economics thinking. New
Economics is about rebuilding society using alternative/sustainable
economic policies and practices. Complementary exchange systems fall into
this category because they are instrumental in:
- Mobilizing the Real Wealth of a Community:
The knowledge and skills of its people is the real wealth of a
community. Conventional money drains away while a local exchange system
keeps this wealth moving about the community, generating economic
activity and providing access to the common wealth for all involved.
People who have accumulated a wide range of skills and abilities
suddenly become once again highly valued members of the community.
- Fostering Self-Reliance & Self Esteem:
In our communities unemployment is growing and increasing numbers of
people are unable to get their needs met. Single-parents may need
respite care or other services for their children. Elderly pensioners
also need a range of specialised services or may simply require company
to combat loneliness. At present a person's ability to access these and
other services is proportional to their purchasing power. The community
exchange system breaks this bottleneck by making it easier to
match someone's need with another's offerings. People are no longer
dependent upon welfare or charity, and everyone's self esteem is
- Increased Personal
Savings & Disposable Income: Because CES users can acquire
local goods and services through their local exchange system, this
reduces their need for national currency. Disposable income in
conventional money, available after basic needs are met, thus
increases. Those who trade regularly with complementary exchange systems
will find they have more money left in their pockets at the end of each
week. The rate of community savings, and therefore of community
investment and capital generation, will improve. This will result in an
improvement in the quality of life for everyone.
- Creating Local Economic Control: Complementary exchange systems help to plug the leaky bucket of the local
economy. By creating an exchange system that reduces the leakage of
wealth from a community, uncontrolled and activity-limiting capital
outflows are reduced. As wealth generated by users of a local exchange
system only has value in the community in which it is generated, it
continues circulating to create more wealth for everyone. They give
community members a powerful new tool with which to "steer" the local
economy in directions which benefit everyone.
- Building Community Support Networks:
Because the CES plugs its users into a local information network, it
provides new or isolated residents with an instantaneous social support
network. This avoids the embarrassment of introductions for strangers.
Through a CES network all users have a ready reason for calling for
support or help. Elderly pensioners, people with disabilities,
unemployed youth, supporting parents, new arrivals, and single-income
families with partners trapped in a dormitory suburb can all build firm
friendships on relationships established through a functioning network.
- Fostering Social Justice & Equality:
Because the value attached to one's time and commitment is set
individually by participants, a complementary exchange system equalises the
differentials that exist in the conventional economy between the work
of women and the work of men. This greater equality helps prevent the
polarisation of the community "haves" and "have-nots". There is no
point in accumulating community credits as they do not earn interest.
It is only by spending them back into the community that the individual or
community benefits. Local exchange systems foster participation at all
levels in the community.
- Building a Sense of Community: The
increasingly transient, temporary and mobile lifestyle in the world
today has seriously damaged our sense of belonging to a meaningful
community. Because a local exchange system builds relationships it is a
powerful means of regenerating a sense of trust among community
members, a necessary component to the health of any community. As
communities become more self-aware and self-reliant through the use of
a local exchange system, isolation, fear and loneliness diminishes and
- Keeping Wealth Where it is Created:
National currencies always leak away to the 'money centres' creating
money deserts and the dwindling of local economic activity. Local
exchange systems, on the other hand, are community based and so
keep wealth where it is created. Where previously economic activity was
stagnant, the local exchange system can stimulate trade and permit
happen where formerly there was no economic activity due to a lack of
money. By being community focussed the entire community becomes
self-sufficient and does not
have to rely on 'imports' and external businesses to provide what is
- Bringing the 'Money Power' Back to the
Commons: The money we use in our daily lives is provided by
the corporate financial system as a profit-making enterprise, not by
the government as a public service to the community. As such, the money
we use does not belong to the commons and so we have little control
over how it is spent and who it benefits. A local exchange system is democratic because it brings
the 'money power' back to the people. Its users can decide how
that power is exerted.