In addition, it could have let the scrip value adjust so that couples were paid more scrip to babysit when the supply of babysitters was small, and less when the supply was large. The cooperative could have made the ratio of scrip to couples fixed, by adjusting the amount of scrip entering the system via new members and leaving the system via couples choosing to leave the co-op. The co-op's problems occurred because of two issues: the scrip's value was fixed, and the ratio of scrip to couples was volatile. In general, the cooperative experienced regular problems because the administration took in more than it spent, and at times the system added too much scrip into the system via the amount issued to new members. As new members joined, more scrip was added to the system until couples had too much, but new members were not able to spend it because no one else wanted to babysit. There was too much scrip and a shortage of babysitting. Eventually, the co-op was able to alleviate the issue by giving new members thirty hours' worth of scrip, but only requiring them to return twenty when they left the co-op. But the measures did not resolve the inadequate demand for babysitting. The administration's initial reaction to the co-op's recession was to add new rules. This illustrates the phenomenon known as the paradox of thrift. As a result, the co-op fell into a " recession". Since babysitting opportunities only arise when other couples want to go out, there was a shortage of demand for babysitting. So they babysat whenever the opportunity arose, but did not spend the scrip they acquired. Īt first, new members of the co-op felt, on average, that they should save more scrip before they began spending. Some of the administration's scrip went to administrators to be spent and some was simply saved. To "pay" for the administrative costs of the system, each member had an obligation to contribute fourteen hours' worth of scrip a year (i.e. ![]() Administrators in the co-op were responsible for various tasks, such as matching couples needing a babysitter with couples that wanted to babysit. To earn more scrip, couples babysat other member's children. Each piece of scrip was contractually deemed to pay for half an hour of babysitting. Members of the co-op used scrip to pay for babysitting. ![]() The co-op gave each new member twenty hours' worth of " scrip," and required them to return the same amount when they left the co-op. You would sell your children for scrip."Ĭooperative system and history The co-op issued scrip, each piece was worth half an hour of babysitting time.
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