Introducing COGS
The Point of COGS
COGS stands for Circle of Gifts, and is a complementary currency specifically designed to help local communities re-localise activities. The aim of re-localisation is to provide inhabitants with the possibility of an acceptable quality of life when traditional economic development fails, or their circumstances are against them.
We believe complementary currencies will become more important as energy supplies dwindle and impact the economic growth so essential for interest-based economic systems of nations.
Ideas behind COGS
When discussing sustainable development, many point to the need to re-localise community activities. This includes growing food locally, small scale renewable energy production and local manufacturing.
At the same time local, alternative or complementary currency comes up as a possible way to support this re-localisation. Although there are many successful local currency schemes ongoing in the world, they are still not that widespread or developed to the extent that it is easy to get a hands-on experience.
And there are not many schemes that are dedicated and focussed on supporting re-localisation.
Because of this we decided to develop our own scheme, and to specifically design it act as a complement to legal tender and to help communities organise activities to provide quality of life for those in most need. Our scheme will start off as a test-bed, open to anyone who would like to join from anywhere in the world.
Our currency is one of the GIFT ECONOMY a “pay it forward” scheme.
COGS is all about being part of the community, giving and receiving in a trusting way to ensure everyone has a quality of life whatever their situation.
This is done voluntarily out of love and respect and is not part of a contract. When you participate in COGS scheme you do it as a community member, not an employee or citizen in a formal sense.
This is completely different from the work aspect of life where you enter into a contract and receive wages and pay taxes.
The diagram below visualises the difference.
How voluntary currency COGS works
History of COGS
COGS was developed by Stephen Hinton of the AVBP sustainable consultancy in 2005 after extensive discussions with POST CARBON INSTITUTE and members of the Stockholm Oil awareness meetup group. A lot of information was gathered from the web as well.
The aim of COGS
To encourage and facilitate:
* Local agriculture and food growing
* Recycle and Reuse of materials
* Development of self help in community
* Local energy production
* Increase in security
* Preventative health services and complimentary treatments
* Local manufacture
* Development of more sustainable lifestyle
*
How do COGS work?
* You do something for me, say bake bread
* Lets us take an example. You bake bread and give me a loaf. I value the gift as ¼ COG for the loaf, and register 0.25 COGS to you in the system. Now my account is ¼ COG minus, yours is ¼ COG plus
* I help my neighbor with their computer (3/4 COG ) and register it.
* I am 1/2 COG in plus
* My neighbour gives you a cabbage he has grown, you acknowledge this to him with 1/4 COG
* And so on
*
How do COGS create ”economic” growth
* Look at the diagram of some transactions.
Account in voluntary currency
* The vertical column is a measure of activity – the more people participate the more the good being done grows.
* So activity grows even if economic activity stagnates, and the community can develop their living standard. The system shows how people are increasingly putting in positive activity into the community
How are COGS values created
COGS are for voluntary hours (see diagram above). These calculations are based on Swedish conditions.
* Under Swedish tax law, all transactions including gifts are valued. We set an average year as containing 1600 working hours and 1040 as “Leisure” time (2-3 hours a day)
* One hour gift is valued at 85 SEK nominally, to be equivalent to a low average hourly wage (SEK 10,600 /month after tax)
COGS and tax
* Tax rules in Sweden allow for gifts to any one person of up to 10,000 SEK
* That means if we have 300 people in the community you can give each 10,000 (total SEK 3 million) before needing to declare for tax. That is 125 COG per person or 37,500.
* If you spend 2-3 hours a day you can donate 1040 COG to the system or equivalent SEK 83,200
* And get back the same, at roughly 7,000 a month
* So it is our belief that COGS are outside the tax system, as are any gifts below SEK 10,000, remembering that you will get back exactly the same equivalent and not make any profit.
How are COGS values determined?
The giver and the acknowledger mutually agree on the COGS equivalent for the gift.
We suggest using time needed to produce the gift as a starting point.
Each person’s time is valued equally. In some cases, like massage, a person needs 1.5 hours to actually produce one hour of massage, so a 1-hour massage would be 1.5 COGS.
How will COGS stimulate re-localisation?
COGS will stimulate the development of Community
* The origin of the word “community” comes from the Latin munus, which means the gift, and cum, which means together, among each other. So community literally means to give among each other. Therefore I define my community as a group of people who welcome and honor my gifts, and from whom I can reasonably expect to receive gifts in return.
COGS are abundant, limited only by the amount of volunteer hours
COGS is a gift currency and as such is not like legal tender, in limited supply. Anyone can give anyone anything, so COGS are created simply by acknowledging a gift by registering COGS.
The aim of re-localisation is for the community to provide the essentials for all its members instead of relying on outside help of governments and corporations. By starting to use COGS, members will help each other more, utilize and develop essential skills like growing food, repairing equipment, producing essential items.
We believe by using COGS people will start to explore the value of giving and taking in trusting relationships as an antidote to the modern competitive, rat-race mentality where only a few can achieve comfortable living to the detriment of the many.
Why do we need an alternative to legal tender?
* Jobs are increasingly scarce – creating a burden on the state
* Development of sustainable life style is going slower than fossil fuels are depleting, something must give at some point and there is no buffer or emergency plan.
* Economic growth is stagnating
* Modern life brings much isolation – even worse for those with no legal tender resources. Just getting together with neighbors doing stuff is positive.
What about other complementary currencies?
The diagram below shows some comparisons. See http://www.transaction.net/ for more information
TABLE comparison complementary currencies
Becoming a COGS member
Membership is free at this time, just sign up on the COMMUNITY EXCHANGE SYSTEM
Choose “Sweden” as country and “COGS” as the system.
COGS is at an experimental stage. Therefore it can be used by Swedish residents for “real services” and for “virtual” and “internet” services globally. For example, any service that can be done over the internet, like translation, or layout, can be COGS related.
COGS stands for Circle of Gifts, and is a complementary currency specifically designed to help local communities re-localise activities. The aim of re-localisation is to provide inhabitants with the possibility of an acceptable quality of life when traditional economic development fails, or their circumstances are against them.
We believe complementary currencies will become more important as energy supplies dwindle and impact the economic growth so essential for interest-based economic systems of nations.
Ideas behind COGS
When discussing sustainable development, many point to the need to re-localise community activities. This includes growing food locally, small scale renewable energy production and local manufacturing.
At the same time local, alternative or complementary currency comes up as a possible way to support this re-localisation. Although there are many successful local currency schemes ongoing in the world, they are still not that widespread or developed to the extent that it is easy to get a hands-on experience.
And there are not many schemes that are dedicated and focussed on supporting re-localisation.
Because of this we decided to develop our own scheme, and to specifically design it act as a complement to legal tender and to help communities organise activities to provide quality of life for those in most need. Our scheme will start off as a test-bed, open to anyone who would like to join from anywhere in the world.
Our currency is one of the GIFT ECONOMY a “pay it forward” scheme.
COGS is all about being part of the community, giving and receiving in a trusting way to ensure everyone has a quality of life whatever their situation.
This is done voluntarily out of love and respect and is not part of a contract. When you participate in COGS scheme you do it as a community member, not an employee or citizen in a formal sense.
This is completely different from the work aspect of life where you enter into a contract and receive wages and pay taxes.
The diagram below visualises the difference.
How voluntary currency COGS works
History of COGS
COGS was developed by Stephen Hinton of the AVBP sustainable consultancy in 2005 after extensive discussions with POST CARBON INSTITUTE and members of the Stockholm Oil awareness meetup group. A lot of information was gathered from the web as well.
The aim of COGS
To encourage and facilitate:
* Local agriculture and food growing
* Recycle and Reuse of materials
* Development of self help in community
* Local energy production
* Increase in security
* Preventative health services and complimentary treatments
* Local manufacture
* Development of more sustainable lifestyle
*
How do COGS work?
* You do something for me, say bake bread
* Lets us take an example. You bake bread and give me a loaf. I value the gift as ¼ COG for the loaf, and register 0.25 COGS to you in the system. Now my account is ¼ COG minus, yours is ¼ COG plus
* I help my neighbor with their computer (3/4 COG ) and register it.
* I am 1/2 COG in plus
* My neighbour gives you a cabbage he has grown, you acknowledge this to him with 1/4 COG
* And so on
*
How do COGS create ”economic” growth
* Look at the diagram of some transactions.
Account in voluntary currency
* The vertical column is a measure of activity – the more people participate the more the good being done grows.
* So activity grows even if economic activity stagnates, and the community can develop their living standard. The system shows how people are increasingly putting in positive activity into the community
How are COGS values created
COGS are for voluntary hours (see diagram above). These calculations are based on Swedish conditions.
* Under Swedish tax law, all transactions including gifts are valued. We set an average year as containing 1600 working hours and 1040 as “Leisure” time (2-3 hours a day)
* One hour gift is valued at 85 SEK nominally, to be equivalent to a low average hourly wage (SEK 10,600 /month after tax)
COGS and tax
* Tax rules in Sweden allow for gifts to any one person of up to 10,000 SEK
* That means if we have 300 people in the community you can give each 10,000 (total SEK 3 million) before needing to declare for tax. That is 125 COG per person or 37,500.
* If you spend 2-3 hours a day you can donate 1040 COG to the system or equivalent SEK 83,200
* And get back the same, at roughly 7,000 a month
* So it is our belief that COGS are outside the tax system, as are any gifts below SEK 10,000, remembering that you will get back exactly the same equivalent and not make any profit.
How are COGS values determined?
The giver and the acknowledger mutually agree on the COGS equivalent for the gift.
We suggest using time needed to produce the gift as a starting point.
Each person’s time is valued equally. In some cases, like massage, a person needs 1.5 hours to actually produce one hour of massage, so a 1-hour massage would be 1.5 COGS.
How will COGS stimulate re-localisation?
COGS will stimulate the development of Community
* The origin of the word “community” comes from the Latin munus, which means the gift, and cum, which means together, among each other. So community literally means to give among each other. Therefore I define my community as a group of people who welcome and honor my gifts, and from whom I can reasonably expect to receive gifts in return.
COGS are abundant, limited only by the amount of volunteer hours
COGS is a gift currency and as such is not like legal tender, in limited supply. Anyone can give anyone anything, so COGS are created simply by acknowledging a gift by registering COGS.
The aim of re-localisation is for the community to provide the essentials for all its members instead of relying on outside help of governments and corporations. By starting to use COGS, members will help each other more, utilize and develop essential skills like growing food, repairing equipment, producing essential items.
We believe by using COGS people will start to explore the value of giving and taking in trusting relationships as an antidote to the modern competitive, rat-race mentality where only a few can achieve comfortable living to the detriment of the many.
Why do we need an alternative to legal tender?
* Jobs are increasingly scarce – creating a burden on the state
* Development of sustainable life style is going slower than fossil fuels are depleting, something must give at some point and there is no buffer or emergency plan.
* Economic growth is stagnating
* Modern life brings much isolation – even worse for those with no legal tender resources. Just getting together with neighbors doing stuff is positive.
What about other complementary currencies?
The diagram below shows some comparisons. See http://www.transaction.net/ for more information
TABLE comparison complementary currencies
Becoming a COGS member
Membership is free at this time, just sign up on the COMMUNITY EXCHANGE SYSTEM
Choose “Sweden” as country and “COGS” as the system.
COGS is at an experimental stage. Therefore it can be used by Swedish residents for “real services” and for “virtual” and “internet” services globally. For example, any service that can be done over the internet, like translation, or layout, can be COGS related.
Add a Comment
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Comment by Stephen Hinton on October 8, 2009 at 7:19pm - Thanks for the comments! Of course you are welcome to use all ideas in your own systems!
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Comment by Chris Caston on October 8, 2009 at 2:29am - I just wanted to say that I really like this as well especially the points about a return to local manufacturing. I think the way you look at tax is pure genius. Do you mind if I copy some of your ideas to use on my exchange?
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Comment by John Rogers on October 5, 2009 at 9:17pm -
Hi Stephen
Like your ideas!
Take a look at my website for some basic design methodologies and key questions for groups developing new systems: www.valueforpeople.co.uk
Best wishes
John Rogers
Value for People
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Blog Posts
Introducing COGS
The Point of COGS
COGS stands for Circle of Gifts, and is a complementary currency specifically designed to help local communities re-localise activities. The aim of re-localisation is to provide inhabitants with the possibility of an acceptable quality of life when traditional economic development fails, or their circumstances are against them.
We believe complementary currencies will become more important as energy supplies dwindle and impact the economic growth so essential for inter… Continue
COGS stands for Circle of Gifts, and is a complementary currency specifically designed to help local communities re-localise activities. The aim of re-localisation is to provide inhabitants with the possibility of an acceptable quality of life when traditional economic development fails, or their circumstances are against them.
We believe complementary currencies will become more important as energy supplies dwindle and impact the economic growth so essential for inter… Continue
Posted by Stephen Hinton on October 5, 2009 at 9:00am — 3 Comments
Mobilising The Real Wealth of Community - An Article by Alana Tobin
People around the world are increasingly concerned and even fearful about the present state of our economy and the real possibility of a recession turning into a depression. Having grown dependent upon an economic system which has increasingly failed us now our economy is in a rapid state of decline. As a growing number of people are losing their jobs and homes, many are finding themselves in rather precarious and even dire circumstances. Should the economy significantly worsen none of us likes… Continue
Posted by Alana on September 15, 2009 at 3:18am
US National Debt Clock: Real Time
Have a look at this. Quite incredible: http://www.usdebtclock.org/
Posted by Tim Jenkin on July 31, 2009 at 3:45pm — 1 Comment
The Method by which the Federal Reserve creates money out of nothing;
The Method by which the Federal Reserve creates money out of nothing; the concept of usury as the payment of interest on pretended loans; the true cause of the hidden tax called inflation; the way in which the Fed creates boom-bust cycles.
Interested? Read more here.. http://www.freerepublic.com/focus/f-news/888963/posts
Interested? Read more here.. http://www.freerepublic.com/focus/f-news/888963/posts
Posted by Richard on July 30, 2009 at 7:30pm
Credit and Debit Limits
Credit and Debit Limits
What are credit and debit limits and why do we need them in a community of givers and receivers promoting the notion of abundance? Surely limits create a shortage of the currency, taking us back to debt-based conventional money where those of us who are short of the stuff have to borrow it from those who have a surplus?
Credit and debit limits are absolutely essential for the health of an exchange. In the CES we do not impose 'hard' limits where the system stops… Continue
What are credit and debit limits and why do we need them in a community of givers and receivers promoting the notion of abundance? Surely limits create a shortage of the currency, taking us back to debt-based conventional money where those of us who are short of the stuff have to borrow it from those who have a surplus?
Credit and debit limits are absolutely essential for the health of an exchange. In the CES we do not impose 'hard' limits where the system stops… Continue
Posted by Tim Jenkin on July 28, 2009 at 11:35am — 2 Comments
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