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COGS COMPENDIUM
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Introduction
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.
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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.
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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, see the links page.
The AIM of COGS
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
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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
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How do COGS create ”economic” growth
- COGS may not stimulate growth in legal tender terms, but it will stimulate people to carry out useful activity in the community which is one aim of economic growht, to increase the good for all. The system is always at zero in total credit and debit (right column)– meaning the community is never owing nor lending to anyone. Note that COGS are created by the people using them and not dependent on Governments or banks to create them (FIAT).
- Look at the diagram of some transactions.
 - 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). 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)
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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.
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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.
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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.
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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.
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Becoming a COGS member
Membership is free at this time, just sign up on the web page
The aim of XCOGS
XCOGS is a test bed This test-bed lowers the threshold to getting to understand what complementary currency is and how it can support sustainable development.
To get started all you need is a computer, internet connection and a printer.
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.
During the XCOGS experiment it is hoped we will investigate the tax situation further and get it confirmed by the authorities before launching COGS live.
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Learn more
Getting more information on complementary currencies
To learn more see the links page on this site.
Getting Started
Register your account on the registration page
Start registering
By sending vouchers to people who have given you gifts, and giving people gifts on the understanding they register COGS to you.
Giving feedback
Give us feedback via the form or the forum. The form feedback is acknowledged with COGS.
Involve others
Contact friends and acquaintances and tell them about COGS, get them to join up so you can start exploring how COGS can help your community
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How to use your account
Acknowledge a gift with Cogs
Use a voucher
Print a voucher out, sign it and add the amount and the receiver’s id (or they can fill it in themselves). They can then register the amount on the COGS site.
If they do not have an ID they can register first to get one and then use the voucher.
Use an e-voucher
Fill in the amount in your word processor and an unused voucher number. Attach it to an e-mail. The receiver can register and register the amount on the COGS website.
Direct acknowledgment
Just enter the receiver’s ID and the amount on the COGS website.
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Receiving COGS
Registering a voucher
When you get a voucher go to the registration page and enter the details. Your password is required.
Automatic registration
acknowledgement is done automatically by the registering part
Requesting acknowledgment
If you would like a gift to be acknowledged with COGS just send an e-mail with your user ID number to the receiver or let them have the details another way.
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About the project
Cogs is being developed by volunteers associated with the not for profit association POST CARBON INSTITUTE in Sweden and is currently in the experimental phase, called XCOGS.
Stages
We plan to introduce COGS in stages.
Stage one - DEVELOP THE SYSTEM
This stage, the one we are currently in, sets up a global COGS trial system called XCOGS. You can join up via the web and start immediately using the system via the web interface and e-mail.
Stage two - PROOF OF IMPLEMENTATION
This stage localises the currency in a defined geographic area, using local language. The idea is to develop this into a platform where other communities can build their own COGS versions.
STAGE THREE - LIVE IN SEVERAL COMMUNITIES
This stage releases COGS in different communities.
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STAGE ONE
The XCOGS project stage one is planned in three releases
Release 1A: Formulation and test on paper and via e-mail. XCOGS are ordered via mail and cleared via the web. Volunteers will get a chance to test the concepts of complementary currency on a small scale.
Release 1B: Automation. Creation of vouchers will be automated, as will clearing and the possibility to view your account info. Here we hope to be developing a system that is easy and convenient to use. We will use this feedback to decide on whether to issue notes or introduce other major changes.
Release 1C: Launch preparation. We add new features and explore how to implement in a community. We experiment with using COGS to aid charities in helping their needy.
This is used to create a live COGS system for one community.
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