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Beyond money: replacing the gold standard with the golden rule.

Beyond Money: Replacing the Gold Standard with the Golden Rule

Elsa Martinez sat up in her hospital bed last December wondering aloud what would happen after she died. Who would take care of her ailing brother? Would the rest of the family stay far away? Doctors had just told Martinez she had a brain tumor. Her eyes were watery, her lower lip drooped. Still, the 64-year-old former garment worker managed a smile when four women entered her room with flowers and faces of consolation. They kissed her and patted her arm softly, a show of affection one might expect from a family member or longtime friend.

But these visitors were neither. Rather, they were participants in Friend to Friend, an unusual program run by South Shore Hospital in Miami. For several months in 1987 Martinez had helped other seniors by shopping, cleaning, and driving them around. For each hour she volunteered, Martinez earned a "service credit," which was logged in a computer at the hospital. Then last year she broke her leg and found herself unable to travel or do things for herself. So she started "spending" her credits by requesting help. Fellow participants in the program - each earning credits themselves - came to keep her company and help with chores. "When you're sick, they come," she whispered from her hospital bed. "Before I was alone." The volunteers kept coming until Martinez died.

Time dollars

As Congress ponders a new $40 billion proposal for care of the elderly, as it moves to spend billions more on day care for children, Friend to Friend and programs like it offer a grassroots complement to such government efforts. On one level, they are simply updates of the old neighborhood baby-sitting club. Help a neighbor, and somewhere down the line a neighbor will help you.

But at the same time the "time dollars" - as the credits are called - represent a radical new approach to the way Americans think about social services, about money, even about economics. Begun in Missouri and Washington, D.C. in 1985, the idea has spread to Brooklyn, San Francisco, Boston, Miami, and several locales in Michigan. These programs began with simple helping tasks, such as taking seniors to the social security office or mowing a lawn. They are expanding slowly to include a wider range of services, such as work in child-care centers and neighborhood law offices.

The response to the idea suggests that Americans are eager for a way to repair the defects of the market economy without erecting more costly bureaucracy. When Ralph Nader advocated service credits on a recent "Inside Edition" segment, he got 30,000 requests for his new primer on the subject. "I have rarely seen an idea that has a higher predictability of sweeping the country," Nader observed recently. This appeal extends to countries treading cautiously into the free-market model. The new government in Poland, for example, is actively exploring the service credit idea.

At first, the notion seems to corrupt the spirit of volunteerism by offering rewards for things people ought to do for free. But in practice, the credits strengthen volunteerism by providing a context of reciprocity that turns service into a real economic force, rather than just a right-wing bromide to avoid facing social needs. Service credits could be the coin of a new economy that rewards service rather than monetary gain, unhinging endeavor from the acquisitive market place and setting it free to do the work that society really needs done. "It uses market-like incentives, but it draws on altruism, a desire to help, a need to be needed," says Edgar Cahn, a professor at the University of the District of Columbia Law School and the leader of the service credit movement. "People society labels as problems, this system labels as resources."

Social disservice

There is a popular notion that Miami Beach retirees all live in condo splendor on the proceeds of their ample stock portfolios. However, the problem of fractured families and communities is particularly acute there. Many retirees live month-to-month on Social Security and modest pensions. They can't afford private nurses or attendants, and they've left their children and friends behind in the North. They struggle to stay out of nursing homes, which many could afford only by "spending down" far enough into poverty that Medicaid would step in. State studies have shown that what seniors need most is not expensive medical care but help - with transportation, chores, housekeeping, and the like. But in Florida, only 4 percent of seniors, and 13 percent of seniors in poverty, get government help with these kinds of services.

The flip side of this picture, however, is a staggering resource: legions of older people with time on their hands and more energy than they are given credit for. In 1985, Cahn proposed legislation to nest a service credit program in the Florida human resources department. The Democratic leadership took hold of the measure, and they were joined by conservatives who loved the volunteerism and minimal government outlay. "This is the first good idea you've had since you've been in the Senate," a conservative Democrat told the more liberal majority leader. Resistance came from social service activists. "The first knee-jerk response was that Ronald Reagan would use it as an excuse to cut" government spending, Cahn recalls. "So they gave us a sit-on-your-hands posture."

What happened next is like a parody of the credentialed social-service mind

at work. Cahn's original idea was that the state provide bookkeeping and technical support to grassroots programs. Instead the bureaucracy tried to remake these programs in its own image. The social work professionals had visions of untrained hordes lumbering into their realm of "client-provider interaction." Hoi polloi without master's degrees in gerontology might perform such technical tasks as cooking lunch for a bedridden man! To forestall such impending "disasters," Margaret Lynn Duggar, the head of the state human resources agency, made a series of decisions that would have been hilarious had they not strangled the program.

First, she mandated that service credits be tallied on a Burroughs computer data base; unfortunately, none of the participating community centers had Burroughs computers. Next, according to Duggar's lawyers, state law required that the program purchase expensive workers' compensation insurance in addition to low-cost volunteer insurance. Since there were no "experience ratings" for this new job category, the volunteers were dumped into the high-cost assigned risk-pool.

And what about those scheming oldsters who might enter a sickly woman's apartment to steal the dishes under the pretense of washing them? Duggar and the legal staff said the state would have to perform a police check on each volunteer. (Eventually she was persuaded that fingerprinting 70-year-old grandmothers might not be necessary.) Finally, there was a prolonged struggle over the question of credit glut. What would happen if someday there weren't enough new participants to pay back the credits people had already earned? After much wrangling, the state solemnly agreed to "guarantee" the credits.

The department finally gave a green light to local programs on May 6, 1986. There was only one problem: the legislation had authorized the program only through June 30, 1986.

Service credits in Florida expired without ever having started. Naturally, the department's next move was to spend $20,000 in leftover funds on program evaluation. Since the bureaucrats couldn't study how it did work, they surveyed state agencies on whether they thought it would have worked. The agencies responded that of course it wouldn't; who would volunteer for such drudgery as cleaning house for a bedridden person they didn't even know? Cahn believes the bureaucrats' real concern was that people actually would volunteer. "If this program really starts to work, someone might ask if you really need all this money" for social programs, he says.

Florida's destruction of service credits turned out to be a blessing. Forced to search for private help, Cahn approached the Robert Wood Johnson Foundation, which specializes in pilot projects in the social service area. In 1986, the foundation issued about $1.2 million in grants to start experiments in Brooklyn, San Francisco, Miami, and Boston and to expand incipient programs in Washington D.C. and Missouri.

Nothing for money

The basic mechanics of these programs are quite simple. A church, hospital, or other organization establishes a computer record of volunteer work, acting in effect as the central bank. Volunteers report their hours and get credits they can draw on later. When someone needs help, they call a program manager, who then assigns a volunteer interested in performing the task. Programs are as diverse as the communities they serve: the South Shore Hospital in Miami refers its frail senior patients to the program when they're discharged. In Brooklyn, the service credits program is run by an organization called Elderplan, a nonprofit Health maintenance organization. Often the elderly are forced into expensive and degrading nursing homes, not because they are hopelessly infirm but only because they need help with everyday tasks - washing dishes, cashing the social security check, or cleaning the bathroom. Service credits have enabled Elderplan to help more seniors sustain themselves, making their lives better and, as a bonus, helping keep insurance premiums under control.

Etta Goldsmith of Ocean Avenue in Brooklyn has to take care of all the shopping because her husband is very ill. But she's having problems with her eyes and shopping is a challenge. Frank Vuolo, on the other hand, a retired dockworker and dry-cleaning shop owner who loves to keep busy, has strong eyes and a humming Pontiac. Elderplan matched him with Goldsmith, and now every Thursday morning, Vuolo loads her shopping cart into the back seat of his car and drives her to the Key Supermarket in Sheepshead Bay. "I had a hard time," she confided one day last winter, fishing coupons out of a rumpled envelope in the checkout line. "If it weren't for you," she told Vuolo, "I'd be lost."

Through 100 volunteers like Vuolo, Elderplan keeps the annual HMO premium down to a very affordable $440 a year by providing help that otherwise would fall to social work professionals or wouldn't get done at all. Participants can cut their health insurance costs further by using service credits to pay up to 25 percent of the annual bill. In turn, the volunteers themselves feel younger and healthier because they are active helpers, rather than declining objects of concern.

In Miami, where Friend to Friend, the largest service credits program is based, the Little Havana Activities and Nutrition Center delivers 1,600 meals daily to fragile seniors. Government funds cover the cost of the meals, but before service credits, the center did not have the resources to offer additional services, such as escorting or telephone follow-up. But Friend to Friend recruited volunteers who now deliver these services along with the meals. The service credits program has doubled the number of volunteers at the center. Countywide, the Friend to Friend program has recruited 847 volunteers who contribute 8,000 hours of service each month.

While the first Miami program was suffocated by bureaucracy, this one remains limber and efficient. In Miami the volunteers are supervised by one full-time coordinator, one part-time official, and 10 VISTA volunteers - all senior citizens themselves. (The Miami program got the VISTA slots in part because the Cuban community was well connected to the Republican White House.) Including overhead, the Miami programs deliver services for a monetary outlay of about $1.31 an hour, a fraction of the cost of similar services in the private sector. There is little need for training because most services are neighborly and simple. Also, participants draw effectively upon intuition and common sense. Daisy Alexander, a 73-year-old volunteer in Miami, helps slow-learning children grasp vowel sounds through simple songs. Asked how, she giggles and starts singing. "I want some pie! Oh my, oh my. I want some pie. Oh my! Oh my."

The program goes far beyond simply providing a source of cheap labor for social service groups. The credits can also help break down barriers that isolate individuals. Friend to Friend has encouraged an unusual level of cultural mixing in a racially tense and segregated city. In Miami, as elsewhere, the practice has been for black churches to help needy blacks, for Hispanic groups to help their own, and so on. Friend to Friend, by contrast, starts by assigning stranger to stranger. Blacks and Hispanics who never communicated in their own housing projects are now bringing each other lunch every day. The only thing Bolous Chamoun, a stocky 70-year-old Lebanese man, would seem to have in common with Eleuteria Alfonso, a 4-foot-tall 82-year-old Cuban-American woman, is that neither can speak English. But Chamoun's face brightened when Alfonso visited him at the hospital last December. Not long before, she had delivered a lunch to his apartment and found him collapsed on the floor. Now, as Alfonso leaves Chamoun's hospital room after another visit, she whispers to a friend, "I get so worried about him." On her way out, she turns back to wave goodbye.

Clearly, volunteers can't perform every function that a professional can; they are not trained to give medicine, for example. But often what people need is something fairly simple. An elderly woman in Brooklyn was struggling with Lou Gehrig's disease and her husband was attending to her round-the-clock. They qualified for publicly funded home care, which would have helped with everything from cooking meals to making the bed. But they declined it. Dorothy Gochal, a Brooklyn housewife who be came an Elderplan volunteer after her husband died several years ago, undestood how disruptive such "help" can seem. "when a couple take care of one another, they get used to that routine," she says. They cook eggs a certain ways, for instance, tuck in the sheet a certain way. "Somebody else does it differently, so they reject it." To the elderly, social workers preset another problems as well. "They don't want to talk some young girl in her thirties about the death of their husband," says Gochal, who realized that the couple had a much simpler but urgent need: to have company. So she did what a professional social worker usually doesn't have time to do - "I did nothing," she says with offhanded self-effacement. "I sat and watched soap operas with them, like a friend. They didn't have a circle of friends they could call on."

Queen of aides

But is Dorothy Gochal really a volunteer? She is, after all, receiving a form of pay. "We feel that one of the basic tenets of voluntary service is not receiving a quid pro quo," said an official of the American Red Cross in congressional testimony against the service credits approach. This is perhaps the most frequent reservation about the service credit idea. Leaving aside that paid professionals in such organizations as the Red Cross get their quid pro quo in the form of salaries, it is a legitimate question. At first blush, the answer is a paradox: the part of service credits that looms largest to the economic mind - the credits - does not seem awfully important to the people involved. "For me the credits don't mean nothing at all," Frank Vuolo says. "It's my pleasure, my enjoyment, if I can help somebody in need." In fact, seniors aren't even cashing in their credits. Of the roughly 96,000 credits earned in Miami, only 3 percent have ever been spent.

Yet the credits clearly do make a difference. Volunteers flock to the programs, and dropout rates are only about 3 percent, compared to about 40 percent for conventional volunteer programs. How can earned credits be both key to the program and seemingly unimportant to the volunteers? Ana Miyares, Miami's dynamic program coordinator, explains their role by mimicking a fisherman casting a line. "Service credits provide the hook, but once people are here, they love helping." Dorothy Gochal has become so energized by her experience in Brooklyn that she took a special course that Elderplan has started, to learn to help those with serious emotional problems. Today she has the poise of a veteran and a peppy enthusiasm for her work. "I'm really enjoying it," she says. "I intend to keep it up."

For some, the credits do serve as a kind of reward - a pat on the back for helping others. That's one reason they have the potential for producing more good than purely voluntary programs. You become rich (and therefore worthwhile) not by earning lots of money but by doing lots of good. Cassie Mae Brown, a Miami volunteer, earned low wages her whole life as a nurse's aide. But now she is the Donald Trump of service credits, playing a game she can win. During a typical day in December, Brown rose before dawn to drive one man to his dialysis appointment, visited another woman who called for companionship, and stopped by to see Elsa Martinez at the hospital. Last year Brown earned an honor equivalent to making the Forbes 500: she won the Service Credit Volunteer of the Year for racking up 570 hours. The credits, she says, "make me feel like I'm somebody."

Many volunteer programs offer certificates of recognition for the hardworking. So what's wrong with a certificate that entitles the bearer to receive help in times of need? Cassie Mae Brown actually has 570 hours of service coming to her. And because the credits have worth, the volunteer can feel not only more valued but less of a burden. Volunteers often point out that accruing credits will enable them to be more self-sufficient later, less dependent on their children. "We are like an insurance policy you take out," says Terrie Raphael, director of Elderplan. "Except you don't pay with your money; you pay with your time."

At the same time, the credit system helps give recipients a sense of dignity. Instead of receiving charity, they are undertaking an obligation that they will pay back if they can. "You don't feel like you're infringing on anybody," Herbert Kilby, a 65-year-old participant in the Washington, D.C. program, told The Washington Post. Kilby had earned credits in part by driving another senior to the airport. When he recently had to undergo heart surgery, he told the program managers, who checked their computer and found a volunteer who could drive him to the hospital. "I've been on both sides of the fence," he says. "You help somebody; they help you."

This all adds up to the kind of social accounting that used to occur naturally in stable, small-town settings. People kept rough tallies of who had pitched in when needed and dealt out their own efforts accordingly: Sally helped at the church picnic, so Marge takes charge of Sally's cub scout den one afternoon. But that doesn't happen so much in an age in which people move all the time and relationships tend to be contractual and financial rather than personal. Service credits are a formal way of bringing back that kind of long-lost informal fellowship. Frank Vuolo puts it another way. "Makin' like a family," he says.

Infirmity: father of invention

Edgar Cahn first started thinking about this approach in 1981 during the first months of the Reagan administration while he was lying in a hospital bed, recovering from a heart attack. For the first time in his adult life he was totally dependent - "relegated to the role of a consumer of services," he recalls. The role did not sit well with him. A quietly eloquent man, he had spent the previous two decades on the front lines of legal reform. Back in the 1960s, he wrote the article for the Yale Law Journal that lay the conceptual groundwork for the National Legal Services Program, which he helped establish with his wife, Jean Camper Cahn. Then they started the Antioch Law School (now the D.C. Law School), the first dedicated entirely to training public interest lawyers.

These experiences made Cahn wary of bureaucratized solutions to social problems. Public defenders fought the legal services program, for example, arguing that any new public funding should go to themselves. Like most entrenched service providers, they resisted encroachments on their turf. Then Antioch Law School became ensnarled in internal debates about hierarchy, pay, and similar matters. Cahn began thinking about market dynamics as an antidote to such institutional self-absoprtion and entrenched interest.

As Cahn lay on his hospital bed, his frustration with bureaucratized well-doing meshed with his new sense of helplessness. He was getting a taste of what millions of Americans experience when they are tossed aside because they are old or because a factory closes and there is no other market for their skills. Their time just sits there, like an enormous reservoir of oil just a few feet below the ground. Yet there are equally enormous needs for such time, as a stroll through virtually any nursing home, homeless shelter, or inner-city high school reveals. And these problems will almost certainly become worse. The growth of the elderly population, for example, has coincided with dramatic escalations in the cost of medical care. How do we put these unmet needs and unused people together?

Conventional free-market thinking treats this gap as an afterthought. A need doesn't become economically valid - doesn't become "demand" - until it brings dollars to the table. Donald Trump's desire for a 282-foot yacht constitutes "demand"; Elsa Martinez's need for companionship does not. Instead, it slips into the economic netherworld for someone else to take care of. And that's usually no one.

"The real wealth of a society is not money," Cahn says. "It is the time of its citizens. Why couldn't we create a new kind of money to pay people," he asks, "money not controlled by the government or the politicians and used to pay people to meet the needs of society?"

The political right makes much of how the federal government supposedly has weakened the American family. But the market economy has done at least as much to undermine the ability of families and communities to solve their own problems, finding ways to sell people things that they used to do for themselves - turning life functions into commodities bought with money. Sometimes the result is comic. An example is a popular item at exercise clubs called the Stairmaster. This is an electric device that replicates the exertion of walking up stairs. It makes for a fine workout, yet stairs are hardly in short supply across the land.

The results are more serious when the functions in question are the human interactions that provide families and communities with their cohesive strength. When people get their meals at McDonald's, their entertainment at the video store, their child care at Kindercare, their sense of safety from burglar alarms - when they have to resort to lawyers to settle disputes with their neighbors - then human connections suffer an important loss. The process has gone way past the point of legitimate convenience and is instead a destructive force in American life today. The market economy "cannibalizes" - in Cahn's word - the life functions of families and communities, corroding the connective tissue that would enable them to deal with crime, drugs, and other problems. Liberals have tended to fixate on solving these problems by taxing the market economy and using the proceeds for government programs. Although there are plenty of social ills that require continuing and larger infusions of tax dollars, it's a mistake to think that only dollars will help. At bottom, that line of thinking is just another form of money dependency - one that has inspired a widespread public resentment of taxes and bureaucracy that the right has skillfully exploited.

For years people have been trying to devise alternative economic systems - new forms of money - to avoid the dysfunctions of the free market. The agrarian populists of the late 19th and early 20th centuries devised sophisticated proposals for wresting control of the medium of exchange from the big city bankers. And in 1936, Upton Sinclair ran for governor of California on a "production for use" platform, advocating that unemployed workers be put to work in idle factories and vacant fields, to be paid in the form of vouchers redeemable for the fruits of their labor. Even today, billions of dollars worth of goods and services are exchanged through barter arrangements. A young lawyer we know, for example, helps struggling artists in exchange for paintings for his foyer.

But the problem with barter has always been that it requires what economists call "a double coincidence of want." The optometrist who helps the blacksmith must happen to need some metalwork or else the repayment is unfair. In To Kill a Mockingbird, Atticus Finch was repaid for his legal help with a bushel of potatoes. But what if he didn't like potatoes? Service credits improve upon the barter of volunteer services in the same way the creation of money improved upon the barter of goods. As a fungible currency, credits enable a volunteer to be repaid with a service that he or she actually needs. They help reclaim claim the territory that the corporate economy has absorbed, and to rebuild the social affinities that economy has eroded. "Turning strangers into neighbors," Cahn says. Moreover, they escape one of the most vexing characteristics of straight barter: how to value each good or service. How many potatoes equal one court case?

Service credits assume that one hour of endeavor to help someone in need is equal to any other hour of endeavor to help someone in need. Period. Where standard dollars are ultimately controlled by the bankers on the Federal Reserve Board, time dollars are limited only by the desire of citizens to be helpful. What's more, they are inflation-proof (hours don't get shorter). Where conventional money is morally neutral and knows no loyalty to organization or even country, time dollars are a cohesive force that can hold communities together in a web of reciprocal service.

Mass appeal

A happy feature of service credits is the breadth of their appeal. Since the idea does not parse out along conventional ideological lines, both the left and the right have reasons to claim it as their own. To date, virtually every group that has adopted the idea is a liberal-style social service agency. Yet conservative legislators have responded warmly as well. In Washington, Cahn has heard not just from Senator Al Gore, but also from the "points of light" team at the Bush White House. It almost seems an answer to Republican prayers, a way to show compassion without raising taxes or adding to a bloated and politically hostile public bureaucracy. Service credits make human helpfulness look more like a marketplace - more like economics - and hence more congenial to the conservative mind.

Not surprisingly, this is why liberals are suspicious of the idea. A smokescreen for more budget cuts, they say. Many on the left feel cheated if any solutions come about without the sturm and drang of class conflict. And liberals have to worry about their constituents among the public employee unions and social work establishment, both of which can feel threatened by the idea.

But these groups can relax. There's plenty of work to go around. Service credit programs won't replace professional social workers but rather enable them to do what the taxpayers pay them to do. A study in England found that paid home-care workers spend 80 percent of their time shopping and going to the post office for their clients' benefit checks. Such professional caretakers should be freed to perform tasks volunteers really can't do, like administering medication and dealing with severe emotional problems. The result would be more effective programs (and even more status for those professionals).

A valuable investment

Creating a brand new currency is bound to entail some difficulties. That volunteers are not cashing in their credits - not demanding their quid pro quo enough - is an enviable problem to have but it is a potential problem nonetheless. Some volunteers don't even bother to log the hours they've worked. Others just don't like to ask for help, even when they've earned it. Miami volunteer Adelaide Roach, age 69, for example, complained that when she became sick recently, no one visited her. "They have my number," she said with a pout. "They could have called." But there was a reason no one came: Roach never asked. If people don't spend their time dollars, the service credits don't function as an alternative economic system.

The key is to stimulate the supply side. The more services available, and perceived as available, the more people will spend credits. The economists call this liquidity. But people with needs will call it help. Supervisors of the Missouri program have encouraged credit spending by actually creating new services. Mostly, though, they continually remind volunteers of what their time dollars can already buy. "Many of the old are so afraid," explains Richard Gram, executive director of Grace Hill Neighborhood Services in St. Louis, which runs the state's program. "We've had zero-degree temperatures and they'll walk through the cold to the store. We say, `Look, there's nothing wrong [in spending the credits] to get a ride.'"

This year the Grace Hill Service Credit Program will take the most important pump-priming step of all: expanding to include participants under age 65. A young couple who help a senior citizen shovel snow can use their credits to get a baby-sitter. On such an expanded plan, even people who are not sickly will have cause to spend their credits. Miami will soon try a similar experiment. Seniors will help staff legal service offices in exchange for free legal help. (Here's a pleasant surprise: The IRS has declared such exchanges tax-free because they aren't undertaken for profit and hence are not what the tax code calls "commercial barter.")

Once one really begins to think of time dollars as a currency, the possibilities seem endless. College students could use them to pay their tuition. Homeless people could build up credits through work at shelters. Public housing tenants could pay off part of their rent by providing services in their buildings. Seniors could use credits to buy insurance, the way members do at Elderplan. Local governments could develop programs to encourage more involvement from citizens: people who volunteer to patrol the subway at night, for example, could get subway passes in return. Eventually, individual programs could link up their computers as banks do now, only this time to establish a state or national market in good works.

But there is a wonderful difference between this new currency and the one we're used to: Bankruptcy is not much of a problem. If Elsa Martinez had been paying for a nurse, she would have been abandoned once her bank account emptied. But when her service credit account ran dry, the women who originally came to call on her as anonymous volunteers did not stop visiting. They continued to call on their friend until she died and then mourned at her funeral. Service credits, it turns out, even earn interest and pay dividends.

Jonathan Rowe and Steven Waldman are contributing editors of The Washington Monthly.
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Title Annotation:service credit exchange program
Author:Waldman, Steven
Publication:Washington Monthly
Date:May 1, 1990
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