About the Merit Economy:

The Merit Economy is an information system which allows people to trade goods and services (work) without money. It is more powerful than a simple barter system. The economy uses merits (m) which can be traded like money, but are different from money in key ways. The names merit and Merit Economy reflect the idea that merits reflect a person's merit, whereas money reflects a person's power.

How are "merits" different from money?

• Merits are a record in the system and are not owned by anyone.
• Merits are not legal tender and are not backed by any government, so their use and value is based soley on peoples trust in each other and in the merit economy.
• Merits are distributed in such a way to ensure that each member has equal access to them, unlike money which tends to become concentrated in the hands of a small group of powerful people and corporations.
• Merits lose their value if you hoard them; they cannot be used as a means of storing wealth.
• All transactions done in merits are traceable and viewable by all members; this encourages members to keep their activities legal and honest, unlike money which can be freely used for crime or dishonest business.
• New merits are issued directly to members of the Merit Economy, and without interest, unlike new money which is issued through banks (indirectly through the federal reserve system) in the form of interest-bearing loans.

What are some benefits of using merits?

• Joining and participating in the merit economy is free--we charge no fees in U.S. dollars.
• The Merit Economy promotes equal opportunity by giving everyone equal access to the marketplace.
• Because merits cannot be saved in the long-term, people are encouraged to invest them in physical assets, or to spend them instead of U.S. dollars, thus saving more U.S. dollars, and helping their long-term financial well-being.
• Because it is a self-contained information system, the Merit Economy offers a means for free advertising for businesses who participate.
• The Merit Economy offers powerful tools for analyzing transactions: because all data is public, you can have a wealth of information at your fingertips which can make market research very easy.
• One cannot go into debt in the Merit Economy.

What are some advantages of the Merit Economy as an economic system?

• Unlike bank-regulated economies, the Merit Economy does not need to grow in order to be healthy.
• The Merit Economy overcomes the traditional economic tradeoff between unemployment and inflation.
• None of the currency in the Merit Economy goes towards interest payments to banks, so more of the money and business activity revolves around providing actual goods and services.
• The Merit Economy uses a different mechanism to regulate its currency supply than the system used in most capitalist countries, and the merit economy can provide an excellent insurance policy in the case that the national economy experiences a downturn.

Who would want to use the merit economy?

The short answer is anyone; but the merit economy would probably appeal most to:

• Businesses which can produce additional goods at a low marginal cost.
• Businesses which want an extra edge to compete against giants such as Wal-Mart.
• Any people or businesses who engage in barter and want access to a wider barter network.
• Businesses which are currently using a for-profit barter network and are unhappy with its high costs.
• Artists or craftspeople who want their artwork or wares to reach more potential buyers.
• People or businesses who want to reduce their expenditures and save more money.
• People who are unemployed, underemployed, or who just to find extra work.
• People or businesses trying to dump excess goods or used goods--anything that would be sold on ebay, or at a garage sale or auction.
• People who struggle with debt and/or want to embrace debt-free living.

What is the legal status of the Merit Economy? Is it taxable?

Merits are not legal tender, and thus the merit economy can only be used for transactions when both parties agree to use it. Income in merits is fully taxable (and taxes must be paid in U.S. dollars) for transactions that would normally be taxable (such as business income, wages, or gambling). As you will see when you use the system, you will benefit financially from using merits, even if you pay tax on them in U.S. dollars. In addition, the merit economy encompasses many sorts of transactions which are non-taxable (such as gifts, thank-yous, or transactions for which there is an inadequate supply of U.S. currency). If this sounds like a headache, don't sweat--we have tools to help keep track of your transactions completely painlessly. Just remember: the data is all recorded, and we will gladly provide any of it to the IRS, so you can't use this as a way to cheat on your taxes.

This sounds worth trying. How do I join?

We are in a prototype stage and are not accepting members yet. However, when this changes, we will be glad to sign up, and you can find information on our join page.