Rebuilding the Nonmarket Economy

Last March, The New York Times carried the

story of John Knigery of Portland, Oregon. The eighty-two-year-old victim of

Alzheimer's disease was found abandoned near the men's room of a dog-racing

track in Coeur D'Alene, Idaho. A picture showed him in a wheelchair, clutching

a teddy bear, as attendants loaded him onto an airplane for the flight back to

Portland and whatever arrangements awaited him there.

To seniors, John Kingery's story is their worst nightmare; to baby-boomer

adults, it is a dread picture of a future not as distant as it once seemed.

According to the American College of Emergency Physicians there are over 70,000

cases a year of this "granny dumping"--and many more to come, if

current trends continue.

The plight of people like John Kingery has become a kind of ideological

Rorschach. To those on the left, it suggests Reagan budget cuts and the decline

of social services. To the right, it suggests a society so benumbed by

government programs that people neglect family obligations. There are elements

of truth on both sides. But the roots of this problem go deeper than these

hackneyed cliches of the conventional debate.

A basic function of a society is to bring needs and resources together. But in

America today, vast needs exist alongside vast resources of unused time,

particularly of retired people and the young. The first impulse might be to call

this a failure of economics, since the market is how Americans generally believe

that needs and resources come together. But the failure here is greater, and

more basic--that of the informal safety net upon which a market economy depends.

Grandpa used to move in with Aunt Millie or one of the kids. Neighbors would

check in to make sure he was okay. James Thurber's riotous accounts of his

childhood in Columbus, Ohio, recall those extended family arrangements.

Of course, this system hardly worked for everyone. Many of the elderly were

left in dire poverty, which is why we needed Social Security in the first place.

But families and neighbors--most often women but children and retired folks as

well--did provide a lot of care for those who could not provide for themselves.

The political right loves to evoke such ties as a lost Eden. But they have no

real ideas for rebuilding that Eden, largely because they are not willing to

face up to what pulled those ties apart. In the first instance, it was not

government programs so much as the modern market economy that disrupted the

extended family--that led family members to work and live far from each other,

that brought commercial influences into the living room through the media, and

that turned the neighborhood into an carport. It is not welfare programs,

moreover, that separate young people from old but rather an age-graded society

that isolates the generations from each other and provides few crossroads where

they could meet or even come to appreciate each other's needs. In both cases,

the market was turning things people used to do for one another into things they

had to buy for money. For the most part, government programs merely continued

this process, trying to address damage already begun.

Today, the need to repair the informal safety net is not a mere figment of

nostalgia but a hard budgetary fact. The federal government is spending enormous

amounts for the care of the sick, the elderly, and children. Yet as needs grow,

resources can't keep pace--if resources continue to be defined in terms of

services bought with money.

But quietly a new kind of community-building has began to appear across the

U.S. It is based on the principle of the blood bank, except that people

contribute time. Help a neighbor and somewhere down the line a

neighbor--probably a different one--will help you. These networks, called Care

Shares or Time Dollars, have turned neighborhood organizations into communities

of reciprocal self-help. They have turned people the market defines as

useless--retirees, the young, and "disabled"--into a productive

community resource. They have spread rapidly to over a hundred localities, and

to such countries as Sweden and Japan as well. The U.S. Administration on Aging

is funding service banks under the Older Americans Act, and Florida has embraced

this dynamic to try to rebuild community cohesion in the rubble of Hurricane


To be sure, such efforts are not free of difficulties. They require money to

start; and with people working longer hours, not everyone has free time to

contribute. But they illustrate the need for new social inventions that lie

outside both the government and market realms and that can take the

much-heralded "traditional values" and give them traction in the real


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In the past year, I have talked to older people across the United States about

the kinds of neighborhoods they grew up in. They recalled a world that is

rapidly disappearing--the local grocers who carried the family on credit until

the paycheck came, and the neighbors who brought home-made soup to people who

were ill. "On the farm, if you ran short of help, they come and give you a

helping hand," a lay preacher in Maryland recalled of his boyhood neighbors

in rural North Carolina. "They weren't relatives, but just like relatives."

These seniors were talking about an informal safety net that turned their

neighborhoods into a kind of extended family. Now that they need its support,

they feel the loss acutely. "We knew everybody on our street, and everybody

looked out for each other," says Esterlene Colbrook, a retiree in Miami, of

her old neighborhood there. "If you had to go to the store, you didn't have

to worry about baby-sitters. You just called across the street and said, 'Watch

out for the children.' That was my raising. That's what I was used to. Everybody

on the street was kin to each other."

It is common today to dismiss such memories as nostalgia. But though the good

old days were not always so good, there was probably more social cohesion--an

element in the "standard of living" omitted from official definitions

of that term. The nation counts Fritos consumed each month, to the last bag. But

no agency tracks the plight of neighborhood culture and informal exchange. The

decline is clear enough, however. A recent J. Walter Thompson poll, for example,

confirmed what many Americans sense: almost three out of four Americans do not

even know the people who live next door; and two-thirds said they never give

time to community affairs. There are exceptions, of course, such as the way gays

have formed networks of support with people with AIDS. But these draw attention

today for the very reason that they are so different from the disjointed norm.

The right has seized upon the nation's brooding

sense of disconnection and turned it into an emotive political fable. Once there

were happy families and solid neighborhoods. Then came the government with its

social programs. Crime, decay, and moral dissolution were the inevitable result,

or so they say.

Of course, the decline of traditional ties hardly began with the Great Society.

The bonds of family and community have been eroding in America almost from the

day the Pilgrims landed. The early settlers tried to build cohesive communities

on the old-world pattern by clustering homes around a commons. But with empty

land beckoning to the West, it was not long before the sons were setting out on

their own. To some degree, the westward migration consisted of whole

communities, rather than individuals. But the centrifugal pull of the frontier

could not be resisted for long.

It is a familiar story, yet one somehow forgotten in the political

mythologizing on the right. Great successive waves of technology shattered the

isolation and necessity that had held together settlements in the wilderness.

With railroads, telephones, cars, and radio and television, locality counted

less as a constraint, or as a support. Step by step, the function of culture was

turned upside down: to promote things new rather than to preserve and protect

things old.

In this new world, Americans could continually redefine and reinvent

themselves; the Lone Ranger, not the townsfolk, is the bearer of our national

myth. Strangely, the recent presidents who tried to claim the banner of "traditional

values" in fact were exemplars of the process that helped tear these apart.

Ronald Reagan left his small town in Illinois to seek his fortune in the

Gomorrah of Hollywood. George Bush left his patrician Connecticut family to try

to reinvent himself in the Texas oil business. Few industries had more to do

with the upheavals of traditional values than did movies and oil.

What Dan Quayle says about "Murphy Brown," for example, used to be

said about the automobile. Near the dawn of the automotive age, a juvenile judge

cited in Robert and Helen Lynd's classic study

Middletown called the new vehicle "a house of prostitution on

wheels." Of thirty girls brought before his court on sex crimes, the

location in nineteen had been a car.


Such trends were primarily the product of the market, which disrupted many of

the basic rituals of family and community life. The family dinner table became

McDonald's while visits on the front porch became a VCR. Television is probably

the prime example of the disruptive effect of the market upon traditional social

bonds. Lost in the fracas over "Murphy Brown" is TV's biggest impact:

the time it consumes. The hours that Americans spend in front of the tube each

day are hours not spent coaching little league, helping with homework, attending

PTA meetings--all the things conservatives say would flourish if government got

out of the way. When televisions were shown at the 1939 World's Fair, a

skeptical New York Times writer wrote that "the average American

family doesn't have time for it." Now there's time for not much else.

While conservatives bemoan the breakdown of traditional authority, they

curiously omit the effect of the commercial invasion of family life. "We

didn't have the radio and TV," Esterlene Colbrook says of her childhood

home. "So you would love to sit next to your grandmother so she could tell

you the old stories. When you came in at night to go to bed, you would always

cling to grandmother, because that was the best entertainment."

Grandparents had something children wanted desperately: stories and information

about the adult world. Today this generational tie has been displaced. "Now

it's the TV and [the kids] don't have time [for us grandparents]," Colbrook

says. "They don't even see you. And then we feel real lonely. It's the gap

between us now."

The ties between generations were part of an economy--the nonmarket economy of

family and neighborly exchange. It is America's hidden rustbelt, its decline

overlooked in the computations of economic growth and gain. Even as America and

other industrial nations endeavor to revive the growth of their market

economies, they need to find ways to rebuild the nonmarket sector that growth

has tended to displace.


Elderplan is a health maintenance organization (HMO) for seniors in Brooklyn

that has found a way to reinvent the nonmarket economy in a conventional health

care setting. Elderplan began as an experiment, one of several so-called "Social"

HMOs funded by Congress in 1985. The original idea was to tack social services

onto the HMO model, thereby preventing medical problems and reducing costs. (Old

people often stay in hospitals much longer than necessary because they have no

care at home.) But Elderplan soon ran up against the familiar wall. Social

services cost money too, and there just was not enough money to meet the need.

So it decided to enlist its members in taking care of one another, thereby

turning service recipients into service providers through a form of time barter

called Time Dollars or Care Shares. For each hour members spend helping one

another, they get a credit in a computer bank on which they can draw when they

need help themselves.

Herbie Fine is a member who took hold of this new system with a passion. A

widower and retired movie-film developer in his mid-seventies, Mr. Fine devoted

much time to caring for other members in their nineties. He would take them to

hospital emergency rooms in the middle of the night, do the shopping, call or

visit almost every day. He called these partners "boychiks," a Yiddish

word of affection. Then Herbie fell ill and was confined to his apartment.

Elderplan members came to visit every day and made sure his needs were met. "What

is [Elderplan]?" Herbie says. "It's helping one another out. Like a

family." Not many Americans would describe their insurance company in such


There are thousands of Herbie Fines today, involved in networks like this

throughout the country. In the barrio of El Paso, impoverished Mexican

immigrants are paying for medical care at a local clinic by helping in public

health projects and providing rides to the clinic. In the old Cuban neighborhood

of Miami, retirees are staffing a day care center for working mothers, gaining

credits that they can use to obtain help from the parents on weekends.

Increasingly, these programs are expanding to build bonds between generations.

In Washington D.C., for example, high schoolers are doing yard work and the like

for seniors; then they donate their credits to other seniors in need.

Historically, people have often resorted to barter in times of need. During the

Depression, a few men living in a sewer pipe in Oakland, California, started a

system called the Unemployed Exchange Association (UXA) that grew into a

statewide barter network involving over 100,000 members. But such networks

generally decline when the money economy revives. The New Deal and cash-paying

jobs provided by the Works Progress Administration brought the UXA system down.

Service banking is different, because it is not a substitute for the market

economy. Rather, it replicates the social bonds that once flourished outside

that economy--in the nonmarket economy--by functioning as the informal memory

bank of small towns in which good deeds are recorded and eventually returned.

(For this reason the IRS, in two regional rulings, has classified the Time

Dollars as tax exempt.)

At the simplest, most practical level, the service bank multiplies the care

that Elderplan can provide. Human liabilities become productive assets, when

freed from the economist's money-centered way of defining these. The service

bank also cuts costs by enabling members to stay at home, instead of nursing

homes and long custodial stays in hospitals, both of which are horrendously

expensive. (Some three-quarters of the federal medicaid program goes to the

elderly, much of that for nursing homes. Those expenditures will practically

double between 1991 and 1997.) Elderplan passes along this benefit in a tangible

way, by allowing members to use service credits to pay one of their four

quarterly HMO premiums.

The service bank improves the quality of care as well. A major problem in the

social service field is that seniors don't want social workers or other

professionals in their homes. The problem is especially severe for women living

alone. "They don't want to talk to some young girl in her thirties about

the death of their husband," says Dorothy Gochal, an Elderplan member who

understands because she lost her husband too. "Most psychologists in the

field are men," she adds. "For women, that turns them off--they think

of them as grandsons."

Through the service bank, many seniors become more receptive of care. Someone

like Gochal can enter the lives of fellow members because she approaches them

not as a professional but as a friend. The service bank dynamic also removes the

stigma of charity because members who receive help undertake an obligation to

repay, if they can. (Even housebound seniors can provide "telephone

reassurance"--friendly calls--to shut-ins.) At the same time, people our

society defines as passive consumers of professional services suddenly become

active participants, with all the benefits to health and outlook that brings.

Seniors in particular get something that America generally denies them: a sense

that they are useful and needed. "When you give to someone, you get so much

in return," says Ray Hughes, a retired merchant seaman in the program. "You

want to keep going."

Critics of service banks have come mainly from the ranks of traditional

volunteer agencies and social service professionals. The prospect of self-help

among what they call their "client populations" can throw such people

off stride, but they often cast their opposition in terms of purity of heart

instead. These networks violate the spirit of volunteerism, they say, by giving

a "reward" for deeds that ought to be done for free. "We feel

that one of the basic tenets of volunteer service is not receiving a quid pro

quo," an official of the American Red Cross proclaimed at congressional

hearings on service banking.

Of course, such professionals enjoy a generous quid pro quo of their own, in

the form of salary and benefits, and nobody claims it sullies the purity of

their work. But leave that aside. What's so wrong with a system in which good

deeds are returned? Wasn't that the premise behind the barn-raisings and husking

bees on the frontier? Volunteerism is fine for the affluent. But people who

live, say, in the black precincts of Miami have needs as well as time. "I

had experienced other forms of volunteerism but none of it paid back the

individual," says Carrie Meek, Florida's first female black senator, who

helped start a thriving network in Miami and who was recently elected to the

U.S. Congress. "Many of [my constituents] are so poor, and times are so

hard, the only way they can exist is by sharing."

There is a subtle sexism to the argument that volunteers should never be

rewarded. The nonmarket economy traditionally is the realm of women, and one of

the reasons it has been invisible in American life--and ravaged so casually--is

that women's traditional roles have been chronically devalued. Carolee DeVito, a

professor of community health who oversaw the service banking network at South

Shore Hospital in Miami, put it bluntly. "Most volunteers are women,"

DeVito told a critic at a gathering of the American Public Health Association. "And

it is sexist to trivialize all this work by calling it 'volunteer.' Service

credits legitimatize the worth of that time."

In practice, most participants do not worry much about the credits, and many

hours go unreported. In fact, the service banks provide a case study in the

limitations of narrow economic reasoning premised on the notion of

profit-seeking individuals. Money, it turns out, can be a disincentive as well

as an incentive. Members are emphatic that they wouldn't do for money what they

are eager to do for the satisfaction of helping. "I would be a lousy

doctor," Herbie Fine says. "I wouldn't charge anybody nothing. I'd

say, `Call me anytime.' My name is Fine. I want to keep it fine."


No legislation is needed to start service banks. They are a grass-roots mode of

exchange--an amplified version of the neighborhood baby-sitting club--that can

work in virtually any setting. In the Anacostia section of Washington D.C., for

example, a retiree used a service bank to turn her senior citizen's building

into a bustling community of care. It does take money to run a large-scale bank,

however, and most of the early networks were launched with help from state

governments or foundations.

The experience to date provides a cautionary tale. Right-wing ideologues need

to realize the importance of what lies outside the market and that government

can help rebuild this nonmarket realm. But social service professionals must

realize that some of their proclivities can be destructive in this regard. Such

professionals often show an instinctive affinity for institutional solutions and

expert "interventions" that can cause them to disparage any model

based on self-help.

Florida provides a case in point. In 1985, Senator Meek gained enactment of a

bill that required the state's Department of Health and Rehabilitation Services

(DHR) to conduct a one-year experiment in service banking. Florida has a highly

developed bureaucracy for the aging that saw this initiative as both a nuisance

and a threat. What ensued was a grim parody of the bureaucratized social service


First DHR tried to stymie the bill with an inflated fiscal impact statement.

When that didn't work, the agency literally buried it with paper: ten-page

questionnaires for participants, with thirty pages of instructions; criminal

checks and fingerprinting for elderly participants; prohibitive workers'

compensation requirements. The service bank was required to plug into a clunky

and outdated state computer system, and there was endless worrying over who

would "guarantee" the credits that volunteers earned. The agency

insisted on a "means test," of course, to guard against the

unthinkable possibility that a senior might provide some help to another who was

not, by the official definition, "truly needy." All this to enable

seniors to drive one another to the supermarket or provide some help around the

house--something people used to do without a second thought.

Finally, after almost a year of inventive inaction, the agency finally got

around to issuing a small grant of $3,000. (Most of the $50,000 appropriation

for the program was used to produce red tape.) But by then, only a few weeks

were left in the fiscal year, not enough to even get the experiment off the

ground. So the department took its remaining money and funded a consultant's

report on why the concept would not have worked, even if it had been tried.

Without intending to, the report articulated the bureaucracy's aversion to the

concept of self-help. "Volunteers are least suited to the types of services

required for [service bank] programs," the report solemnly intoned, "specifically

personal care, homemaker, health support, and in-home services in general"--precisely

the kinds of neighborly supports that members of Elderplan and other service

banks are providing for each other every day.

Today the consultant's pronouncement sounds ludicrous in Miami. With a

foundation grant and some VISTA volunteers, a number of community organizations

there decided to go it alone. As director, they hired a former international

banker, Anna Miyares, who took a big pay cut to become a banker of good works.

She built the program from nothing to over 1,000 participants, who are recording

over 10,000 hours of service a month (and serving many more). So dedicated is

Miyares's staff that when the VISTA grant expired, they decided to stay on

without pay.

Miyares combines professional management skills with a lyric vision of the

traditional Cuban family--"going back to the roots," she says, "where

neighbor used to help neighbor, where neighbors used to trust neighbors."

Today she's with the Washington, D.C.-based Time Dollars Network, organizing

service banks nationally, while moving the Miami program into a new expanded

phase. The Dade County Public Schools are planning a day care center for

teachers and teenage mothers, staffed with retirees earning Time Dollars. The

Miami Office on Aging is giving bonus points for grant proposals that include

service banking. And in the wake of Hurricane Andrew, Miyares is organizing

neighborhood patrols, clean up crews, and day care centers, based on the service

bank model. In a time of triage of social programs, the people involved in Miami

and other service banking networks have the buoyant sense of being in on

something new. "I'm excited for this program," says Esterlene

Colbrook, one of the VISTA workers, whose office is now the trunk of her car.

Bureaucratized social service is just one obstacle to this kind of

community-building. Others come from Republican budget-cutting and corporate

short-sightedness. Missouri and Michigan, for example, both launched service

bank efforts on a decentralized model. In Michigan, local programs were linked

through a kind of statewide automated teller network; you could help an elderly

neighbor, for example, and transfer the credits to your parent in another city.

In Missouri, the Human Services agency didn't even bother to issue regulations

the first year.

Despite promising starts, Republican administrations axed both experiments in

budget-cutting exercises. In San Francisco, meanwhile, the budget cutters were

corporate. The Pacific Presbyterian Hospital there was running a Time Dollar

bank at its senior center in the city's Mission district. Participants were so

enthusiastic that they were recruiting new members on city buses. Employees at a

local bank were volunteering and donating their credits to needy members. But

when the hospital was sold, the new owner promptly pulled the plug.


Reciprocal exchange is a natural social mechanism, not an invention of the

policy schools. As such, it can bring to community building the kind of

spontaneous growth dynamic usually associated with the economic marketplace.

Labor unions could use it to expand their services to members and add a

dimension of organizational cohesion to the monetized benefit packages they now

bargain for. HMOs, neighborhood medical clinics, and senior citizens buildings

can follow the Elderplan model and become communities of care.

The next frontier is local government. Some years back, a few local governments

enabled low-income people to pay off part of their property taxes in service

rather than money, and there is no reason why this concept cannot include the

whole population. Lawyers could provide legal help for the needy, accountants

could help struggling nonprofits, and so on down the line. In the tradition of

the volunteer fire department, passive taxpayers would become active citizens,

and local services would become something to get involved in, not merely

something to pay for.

At the federal level, the equivalent is national service, which could function

as local service. Congressman Dave McCurdy of Oklahoma and Senator Sam Nunn of

Georgia have sponsored a National Service Bill that would convert student loan

programs into public service programs. Instead of going out into the world with

huge debts, young people would do public service work (including military

service) for a set number of years and get their educations for free (Bill

Clinton supports an optional version).

The right calls this servitude. Yet that's a description of the current system,

which turns students into an indentured army for the corporations and investment

houses of the land that pay salaries high enough to meet the payments on student

loans. National service would change that pecuniary relationship into one of

shared social experience. It would bring a measure of reciprocity to our

national life. Moreover, by exposing thousands of young people to the actual

workings of government, it would do more to bestir civic involvement than any

campaign reform that the Congress could devise.


What people value, they keep track of. It is revealing, therefore, that for all

their lecturing about traditional values, the Reagan and Bush administrations

offered no ideas for keeping track of the realm of social interaction that

actually embraces these. The government could tell you all about the money

supply but nothing about the traditional modes of exchange they say they care so

much about.

The federal government should develop indicators for the nonmarket economy the

way it charts the GNP. Then it should require nonmarket economic impact

statements for new and existing laws, similar to the economic and environmental

impact statements currently required. Such analyses would make legislators and

regulators think about their actions in a new way. They would begin to see how,

up and down the policy spectrum, America rewards mobility and social disruption

rather than cohesion and staying put. The tax laws are a prime example. There

are deductions for moving expenses but not staying expenses, for example.

Accelerated depreciation rewards turnover in real estate rather than patient


Why not have decelerated depreciation that rewarded investors who were in for

the long haul? Similarly, homeowner deductions could increase or at least stay

even the longer the property is held. Better still, there should be a homeowner

(and renter) allowance that is geared to income rather than to the price of a

house. The current system gives most to those who have (and borrow) most, which

is both unfair and destructive to the nonmarket realm.

A whole range of proposals would appear in a new light. Family leave

legislation, for example, would be seen as a way to rebuild the nonmarket sector

by encouraging family care instead of professional social services. The right

takes great pleasure in chastising Sweden as a welfare state. Yet it is actually

ahead of the United States in seeking to revive the informal channels of care.

The family leave law is a key part of this effort.

Perhaps most important is something the nation doesn't even have-- a

neighborhood policy. The right speaks often about family policy; it pushes

industrial policy in the form of enterprise zones. But neighborhoods--the area

in between--is where the social glue either holds or doesn't. For twelve years

the Reagan and Bush administrations have acted as though the problem doesn't


The status of the nonmarket economy is much like that of the environment before

Rachel Carson's Silent Spring. Just as the nation once assumed the

natural habitat had an infinite capacity to absorb the effluents of a

consumerist culture, so too we have assumed that the nonmarket economy could

absorb forever the toxicities of the monetized economy--in both its commercial

and governmental forms.

For many years, this degradation could be papered over with monetized services

provided by government and by the growth that provided the needed revenue. But,

in the future, this may be neither possible nor wise. The chronic budget

shortfalls in both state and local governments are not just the result of tax

cutting and recession. They reflect as well a growing imbalance in the need for

monetized services and the capacity of the economy to spin off revenues for

these. Even nations with healthy market economies and unusual degrees of social

cohesion--Sweden and Japan, for example--feel that they are reaching the limits

of their ability to make up in cash services for the erosion of traditional

social bonds.

The nation isn't going to return to the Norman Rockwell days. Nor, on balance,

would most Americans want to. But there is a need to revive some of the

qualities of that world--the informal exchange and neighborly help and care.

This is much more than volunteerism, more too than Points of Light. "A

million points of light, or whatever he's talking about--there's nothing practical

about it," says Rebecca Peters, a participant at Elderplan. "With

[Time Dollars], people might actually be able to do what he's talking about."

Restoring the informal networks of exchange requires

public policy. After all, market economies don't just happen; they need a matrix

of complementary institutions, both public and private, as the Poles and other

Eastern Europeans are now discovering. The nonmarket economy is much the same.

Community is not hydroponic. It does not grow in the gaseous air of political

speechifying about values. Nor does it arise from enterprise and ownership

alone. Community requires particular kinds of enterprises; it requires

neighborhoods that have a real function and don't just serve as loci for


In the nineteenth century, the invention of the corporation enabled the nation

to mobilize enormous resources for the industrial age. Ambitious programs of "internal

improvements" provided the physical infrastructure in which the market

economy could flourish. That same attention to social infrastructure is

now needed in the arena of neighborhood and community life, and Time Dollars are

a promising example.

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