Right Livelihood

Social enterprise

Legal and Financial Issues

Making Money Our Servant Rather Than Our Master
What Money Is and How We Can Make It Work for Us	Experiments With Locally-based Investment and Currency Systems

“Money is an information system we use to deploy human effort” – Michael Linton, creator of LETS

LETS Systems

Local Exchange Trading Systems, generally known as LETS, originated in Canada in the early 1980s, the brainchild of Michael Linton. LETS allow people and organizations in a locality to trade among themselves without the need for printed currency. They can be classified as mutual credit systems.

A directory of members is published regularly (generally monthly) by each LETS group, listing all of the participants in the group together with the goods and services that they have to offer. This enables members to ‘shop’, within the network, buying from and selling to each other.

Example

For instance, a member may earn credit by doing gardening for one person and spend it later on childcare provided by another person, who may in turn, spend their credit on a haircut – services all provided within the network of participating members.

The value of each transaction is negotiated between the buyer and seller using a notional currency – ‘unit of transaction’ may be a more accurate name since no paper money is involved. The names of ‘currencies’ used often reflect some local flavour. The currency in Oxford, England, in which many people ride bicycles, is called Spokes, while in Maleny, Queensland, Australia, the LETS ‘currency’ is called bunya, named after the local nut of the bunya pine.

The ‘currency’ is generally set at parity in value to the national currency (that is, one bunya equals one Australian dollar) so as to provide a measure to guide members in setting prices for their goods and services.

Details of transactions are recorded centrally – there are now cheap and easy-to-use computer software programmes for this. Details of members’ accounts – how much they owe or are owed by the system – are generally included in the monthly directories.

Generally, LETS groups encourage all members to personally include transactions undertaken with LETS in their tax declarations.

There are today thousands of LETS systems worldwide. In the United Kingdom, an estimated 40,000 people are now trading in around 450 LETS networks in cities, towns and rural communities. LETS systems are also common in the United States, Japan and Latin America: in Ecuador alone, there are estimated to be around 140 systems.

While LETS systems have enabled many people who are time-rich but money-poor to increase their participation in economic life, many have suffered from two related weaknesses. First, those signing up as members in many cases do not represent a cross-section of society. That is, there tends to be a disproportionately large representation of people who recognize the problems of the mainstream economy and who are community activists – among whom are many self-employed therapists, craftsmen and women, gardeners and so on – and a relative shortage of blue-collar workers and other more conventional professions.

Second, as a result of this imbalance, where shops and other more formal businesses participate in LETS schemes, they can find themselves with large volumes of credits that they are unable to spend, because the goods and services they require are not available within the system.

LETS webpage - Click on image to enlarge

South Carrick LETS
Click on image for more info about LETS software

“The LETSaholic Twist”