Economic Overview

Assets

When you move into the house, your outside assets are off limits. These assets can grow in value and you can be given more, but you can't spend them while you live here (except by special permission of the community).

Why? A central goal of our economic system is for the community to provide for the needs of all its members. If people could rely on outside resources, then we would have no way of judging if the the community was actually living up to this obligation.

We also try to reduce our participation in capitalism, reduce our consumption, and maintain a somewhat similar level of consumption. All these are served by limiting access to outside assets.

Income

Our economic system is based in hours and the principle that an hour of one person's life is worth an hour of another person's life. As you probably know, this is not how capitalism works. It is not particularly easy to treat all labor equally when no one else does, so we have created a lot of complex spreadsheets and programs such as the “Labor Swapping Gizmo.”

Without getting into the details, we can discuss the general idea pretty easily with a simple example:

Emma's monthly quota is 100 hours. In other words, she must work 100 hours of labor for the community to meet her obligations.

She has decided that she wants to split her hours evenly between Income Quota and House Quota. This means that she will work 50 hours doing labor around the house, in the garden, and on house projects. For the other 50 hours of quota, she will pay the house whatever (after tax) income she makes in 50 hours of work.

Emma's job is half time, so she is paid for about 80 hours per month. Since 50 hours of income are going to the house, she keeps whatever money she earns from the remaining 30 hours.

Debt

We divide debt into two types: the good and the bad. The house assumes full or partial responsibility for good debt. Bad debt, however, is the responsibility of the individual.

In general, good debt includes student loans, health care expenses, etc. Bad debt includes credit card debt and other debt incurred for personal consumption.

If the good debt is incurred while living at EGFS, then the community assumes full responsibility for paying it back. If good debt was incurred prior to moving in, then the community assumes responsibility for paying back the debt in proportion to how much of your income is contributed to the community (i.e. the percentage of hours you work at a job which are counted toward your house quota).

Consumption

After you have met your quota obligations, it is likely that you will have money left over. For the first $4000 of this private income (per year), you can do whatever you want with it. After $4000, we have a spending cap. All income above the spending cap is loaned to the social justice fund to be used to create more communities. When you move out, you get the money back at a rate of 10% over ten years.

We have a spending cap for two reasons:

To generate money for the social justice fund. Purchasing land is very capital intensive, so we need has much money as possible.

Tto decrease the inequalities in consumption possible under labor sharing, where some might have considerable private income, while others might have very little.

Membership Document #5

2005-07-25T13:58:17