LETS (Local Exchange Trading Systems) A contemporary model of globalization counterpractice?

Raff CARMEN, Manchester University

  Setting the scene: Globalization

The world is converging towards a uniform model, aided along by the glassfibre cables and satellite dishes of the information superhighway and the World Wide Web. We are fast approaching a world wide economy: whereas as recently as twenty years ago, two-thirds of the world's workers were cut off from international markets by protectionist and central planning, by the year 2,000 more than 90% of the world's potential labour force will be working in countries with strong links to the global economy (WB,1995). At the same time, there will be increasing technologically-induced unemployment, declining welfare benefits and state pensions.

The Treatise of Maastricht, the GATT and NAFTA agreements, financial institutions with a global reach such as the IMF and the World Bank, wholesale corporate 'downsizing' and 'out-sourcing' of employees, peaks of wealth and power(1) accompanied by massive troughs of poverty, a world where citizens are disenfranchised in the very process of being transmogrified into customers/consumers, all of this rationalized by unproven macro-economic assumptions, are symptomatic of what has come to be known as 'globalization', the assumption that the whole world responds to the same profit-maximization logic.

The 'New World Order's neoliberal economic consensus insists on a deregulated, highly competitive form of market capitalism, guaranteeing maximum 'worker flexibility', wholesale privatisation of public services, and a drastic reduction of the role of the State.

These measures, based on a simplistic and outdated 'free trade' dogma are being pushed through, more often than not, without the involvement of people(2), and not infrequently even without politicians' informed understanding of what the myriad implications and side-effects are. Taken together these changes represent 'the biggest social upheaval since the Industrial Revolution'(Norberg-Hodge,1996:29).

Two to three billion people in to-day's universally monetized world 'live less secure and less prosperous lives than did their ancestors whose livelihoods were predominantly nonmonetized" (Korten, 1996:221).

Smith's and Ricardo's rule of thumb, - 'comparative advantage' -, consolidated by Jean Baptiste Say's principle of 'harmony of interests', decreed that the production of a whole range of commodities for home consumption in the local economy ought to be disccouraged and specialisation and export encouraged. The quantum leap in productivity fired by the steam engine which, for the first time in history, allowed the massive release of the exosomatic energy contained in fossil fuels, promised greater happiness for a greater number of people than ever before.

In his book "The Great Transformation" (1944), Karl Polanyi explains that the modern economy, driven by the dogma of 'growth', relies on the artificial separation, or the 'disembedding', of the Economic from the socio-cultural and ecological dimensions(4). 'The Economy' was, inexcusably and indefensibly, given an autonomous existence. Society came to be seen, and managed, as if it were one gigantic marketplace, or 'an' Economy, in which the ground, the natural resources and the environment are only of interest in terms of their monetary value, or, more precisely, their potential for the accumulation of money. A drastic rift was thereby created between all previous conceptions of a society which always had been thought to consist of people who, among many other (cultural, learning, artistic, political, social) pursuits, are 'also' engaged in economic and production processes.

Limits to Competition (Group of Lisbon,1995)

Competitiveness has undoubtedly been an important ingredient of technological innovation and economic growth. It has contributed substantially to material well-being as well as to a better quality of life. It has been, and still is, the driving force behind new levels of human aspiration and high levels of performance in the political, artistic, cultural and, last but not least, sports arenas. Without the spirit of competitiveness the democratic process, which takes for granted that losers can be winners, and winners losers, would be inconceivable. Within the democratic context, though, conflict is resolved by negotiation, not by the (physical) elimination of the competitor.

For the Group of Lisbon (1995) competition is, in principle, but a modality, a manner in which economic actors behave in the context of competitive markets. In this environment, every actor, in a particular enterprise, rightly and properly looks for competitive advantage. In reality, however, competition has become far more than a mode of behaviour.

>From being a 'way of being' it has become the principal objective, not only of the world of enterprise, but also of the modern state and society as a whole. Enterprises and businesses thus became opposing armies intent on the conquest of markets and the holding of acquired positions. Leaders are described in terms of generals and strategists. Competition is turned into a synonym of 'beating the competition'.

The irony is that the more competition there is, the more exclusion there will be. By the simple mechanism of the elimination of a number of actors from the scene, the more the markets lose in market competitiveness: Africa, for example, is well on its way of disappearing from the world economic map altogether. In other words, the less it is possible for competition to act as a possible mechanism by which those actors may lift themselves out of their predicament.

Fundamental Human Needs and 'Community Economic Development'

Polanyi had predicted that, left to its own devices, the market is capable of shaking, and destroying, the very foundations of society. That is why 19th-century Britain instituted rules and regulations aimed at strengthening the market, on the one hand, and protect society, on the other. These regulations covered child labour, workers' safety and rules organising financial transactions. What Polanyi foresaw was due to happen on a national scale is now in the process of being realised on a global scale. This brings Susan George to conclude that

"paradoxically, if we want to protect the market which renders us so many services, it is urgent, if not vital that we should protect it to prevent it from going into self-destructive spiral which will carry us all in its wake" (George, 1995:23)

A major problem with the global system is that it has become so complex and so vast that very few people are still able to see the outlines of it. The process of globalized markets, globalized economies and industries, has meant a systematic removal of political and economic power from rural populations, resulting in cultural, economic and social alienation. In small communities everywhere in the world people feel they are living on the periphery while power and culture are concentrated 'somewhere else'(5).

The whole of human existence cannot be encompassed by the market place. Nor is the ethics of the market place, geared as it is to the satisfaction of basic human needs of subsistence, universally valid or appropriate. The foundation of the whole of society on Smith's reduced economic foundation is of necessity flawed: besides the need for subsistence (Basic Needs), there are eight other fundamental needs (FHN): Affection, Protection, Understanding, Participation, Idleness, Creation, Identity and Freedom(Max-Neef,1989:31). None of the latter can be satisfied by market dynamics taken on their own. Those who cannot be reduced to the category of 'customers' are ipso facto relegated to the outer orbit of society, written off, 'down and out'.

"I believe that our economic system - facilitated by money - destroys community. The rational economic man of Adam Smith's economics is not a communitarian operator, he is an individualistic competitor [] Recognizing that [those] relations should also include internal, self-generated and self-realized economic relations of production, exchange and consumption moves community development to include the economic, and hence, become Community Economic Development, as distinct from both Community Development and Local Economic Development. It combines the goals of each of them. [] this model is diametrically opposite to the world market economy we now inhabit and seek to enlarge"(Dobson,1993)

The idea of Community Economic Development is not new. Advocates of 'another' ethos in economics and business, as will be described later, have always existed.

The problem with money

Money was initially introduced as a brilliant solution to the problems associated with barter, the previous method of trade. In the monetised economy it is no longer necessary to worry about having something worth trading: everyone takes cash. Thanks to money, as medium of exchange, specialization becomes possible. The arts, trade and other forms of social interchange can flourish. The problem with money, however, is that it is an inherently limited, scarce resource: no one will trade in the absence of money. Exclusion and marginalization for those with restricted or no access to it, loom large.

The charging of interest becomes possible whereever and whenever money is scarce: what is not scarce cannot be subjected to economic control. Scarcity, commonly taken for granted, was - and largely still is - unknown outside of commodity-intensive societies(Illich 1981:123). By dint of the (artificial) limitations placed on the amount of money in circulation, money becomes a commodity in its own right, money markets are created, esoteric forex games, and trade based on astronomical numbers of notional 'derivatives', become possible(6).

Money comes into the economy as interest-bearing debt, issued by the banks, hence the economy grows. Unfortunately, debt has been growing by 2% per year faster than the world economy as a whole since 1950, and the total debt in the world is now equal to the value put on almost three years of all economic activity, compared to one year in the 1950's. Margrit Kennedy highlights the surrealist implications of exponentially growing interest by pointing out that one penny invested at the time of the birth of Christ at 5% interest would buy today more than 5,000 balls of gold the weight of the earth. Exponential economic growth is an arithmetic as well as a practical impossibility (Kennedy,1987,69).

Cash cropping in preference to food production and competition in preference to mutual support and cooperation - perceived as economically 'inefficient', are two of the more obvious examples of the inherent destructiveness nurtured by the present global money economy:

"if you stop to think about it, concerted action is discouraged by the present economic system: we'd like to do something, but we dont have money: money is scarce and we will try to get as much of it as possible and spend as little as possible. We are also attracted to imported goods produced at third-world rates of pay, using cheap raw materials: these are all the cheaper as they are produced with unsustainable methods. Meanwhile, our local economic activity suffers" (Michael Linton,1995)

In real terms, money ought to have no value. It is simply a measurement of labour or of the value of a commodity. By limiting the amount of money in circulation, the amount of work that can potentially be done is artificially restricted, too: an economically absurd situation, if there ever was one. There are people out there, who are out of work while a plethora of jobs need doing. "Imagine a carpenter not working because he has run out of inches !" (Linton,ibid)

The 'Problem with Money', then, can be summarized as:

i. Money is scarce: credit squeezes, interest rates, inflation, social welfare disbursements and many other contemporary problems can be traced directly to money being de facto a limited resource on which interest is charged. ii. Money has unlimited mobility: it can and does go anywhere, leaving local economies in the lurch. iii.Money is created by institutions: it comes from 'them' and not from 'us'. 'We' do not have ownership and control over money nor of its distribution. iv. Money carries its own inbuilt destructiveness: conventional money tends to seek out the cheapest sources of supply and will therefore drain away from communities that fail to meet the appropriate cost levels. Wholly unrealistic 'debt' levels forced African nations to overuse their fragile soils, thus turning good

lands into deserts. v. Money dictates the difference between 'employment' and 'work': work is currently defined as 'what-one-does-to-make- money', and thus many things are considered work which are negative and destructive to the environment, society and fundamental human values. Conversely, many useful, positive and constructive things that people do are not classified as work because they do not earn money. Most significantly of all, women's work (domestic work) has traditionally gone unremunerated. Even recognized 'work' becomes increasingly rare, due to mechanization and robotization.

Globalization and the 'new global aristocracy of banditry'

Jeremy Seabrook under the title 'You ain't seen nothing yet', says that the Thatcher years in Britain will seem a model of temperance whenever the global market holds full sway. Global economic policies, though seemingly far removed from day-to-day reality, in fact deeply affect our personal lives. In a world where money power rules, mere political power all too readily passes from the hands of nominal elected leaders and into the less scrupulous clutches of drug lords, arms barons, media moguls, property tsars and king makers of industrial empires, referred to by Seabrook as 'a new global aristocracy of banditry': according to activists working in some of the Brazilian favellas, Marx' prediction of 'socialism or barbarism' no longer belongs to some far-off, distant future:

'people are living in barbarism in the daily here and now. [] All of this is well known, but the rich have withdrawn to their gilded retreats behind guarded frontiers, and have abandoned the poor to fight over such resources as remain, after privilege has taken its pickings' (Seabrook, 1996:4)

As for the US and Europe, excesses such as drive-by shootings, child pornography, snuff movies, gang warfare, infant heroin addiction and serial killings, the Hungerfords, Dunblanes and Hobarts(7) of this world, are not mere accidental, passing hick-ups of history: 'the troubled and insecure times we are now living through may, at some point in the future, appear as a moment of peace and lenity, if we continue as we are'(ibid).

As Marc Nerfin already pointed out in his seminal article "Neither Prince nor Merchant, Citizen", the leopard (ie the Prince and Merchant monopoly) will not change its spots: monopolisation of power being at the root of our present societal and development problems, the powers-that-be are unlikely to offer any genuine solutions to the crisis: they are, more likely, more part of the problem than part of the solution (Nerfin, 1987:172). Or, to paraphrase Einstein, the problems we face cannot be resolved using the tools that created them.

Polanyi(op cit), half a century ago, conclusively demonstrated that even though the market and merchants have existed before and in different places, never, before 1830-50, was there an internally integrated market system capable of ruling all aspects of people's lives.

LETS: one small step . . .

The solution, or at least one positive step in the right direction, would be to redefine work. And, in order to do so, money itself may have to be redefined.

LETS (Local Exchange Trading Systems) provide a means by which people can continue trading, and working, 'without having to wait for the social lubricant of money'. We do indeed act as though money needs to be real - a limited commodity that can drain away. This results, as already indicated, directly in unemployed resources - people who want work are not able to find it. Indirectly, and with threatening implications for the environment, there are also misemployed resources - people doing damaging things simply for the sake of money(Pam,1996).

John Vidal, in a Guardian article, vividly describes, how this parallel LETS economy works out in practice:

"Siobhan Harpur cut someone's hair the night before last and 'earned' herself seven 'Bobbins'. She was given a note and her Bobbin account was credited on a computer. It went towards 'paying' for her hall which David Harris painted (very nicely, thank you) some weeks ago for 100 bobbins. Meanwhile her daughter Cara earns bobbins making tie-dyed shirts and young Kelvin spends them on lifts to concerts. The whole family could be deep in bobbin debit - it isn't, actually - but Siobhan Harpur would not particularly mind. "Being in debit could be seen as a social favour" she says "because to be in debit is to create wealth in the bobbin system". Siobhan is serious.[] The Bobbin is a year-old but fast-growing Manchester Unit of currency. You can earn them doing anything that any one of the 330 people in Manchester local exchange trading scheme, or 'LETS', wants. You can spend them on anything they offer. The Pie in the Sky cafe in Withington, south Manchester, now takes Bobbins in part exchange for meals. Otten and Skemp, solicitors(8), encourage them, Lyn Woolry offers her vegetarian cooking, and Mrs Bend bakes bread. "It's a super idea" says Bob Merall, who tiles "I'm inundated with work from the scheme" (John Vidal, 12 March 1994:25)

A local 'prosumer' economy

In a cash-starved economy, normal exchange is inhibited by a lack of cash. One in five British households are severely in debt. Four-fifths of the world population live in poverty. Mainstream economics will not alter these fundamental facts of life, except, perhaps, for the worse.

LETSystems provide an environment in which those who cannot find jobs (and hence money), can reintegrate in society by reclaiming their dignity and start contributing again to their own and other people's well-being. They can and do earn goods and services for themselves, rather than living on hand-outs: 'Who needs money?' Everyone can create their own currency. Local currencies are in many ways 'better than money'. There is undisguised glee at the parallel economies thus being created, Vidal reports(9). Were it really to catch on, on a more massive scale, local communities would be in a realistic position to wrest back some of the monopoly power from unaccountable banks, supermarkets and Chancellors of the Exchequer and the infernal, mysterious supranational economic system. People can continue trading as long as their word is good, thus allowing the local economy to keep moving, even when hardly any cash is available(ibid)

The general idea is that any person's interaction with society includes both production and consumption. Both of these roles are essential to a healthy economic functioning of society. In a local currency environment there is no social stigma attached to being a net consumer, or of being branded, - as the right-wing press continuously does, - a Social Security 'scrounger'; on the contrary, a fairly large portion of society - (the young and the old, as well as students and the sick) - are expected to be net debtors, in order to get the local economy moving.

The unit of exchange in Manchester is the 'Bobbin' - (re, the expression 'bits 'n bobbins', bobbins were used in the local cotton industry), - Totnes has its 'acorns', Exmooth its 'cockles', Southampton its 'solents', Bath has its 'olivers', Scunthorpe its 'pigs', Swinton its 'dons', Portobello (in London) its 'bellos' and Reading . . .its 'readies'(10). A local currency stays local: it cannot leak away from a community or be used to bring imports from across the globe. Neither can it be used for money-market speculation. It is moreover an incentive to shop locally. Hence the immediate interest for commerce and industry, too.

A modern parallel economy: 'digging' for the roots

LETS is not an isolated, wholly new phenomenon. There are antecedents. Local currencies have existed for millenaries and are favoured by communities faced with external disturbances such as wars or economic downturns. LETS is just one of the many possible types of local currency. As a matter of fact, local, rural and city-regional currencies were the rule until last century, when banking and the global money monopoly took over. The vast wealth of the renaissance city states in Europe was built on local and city currencies: a local currency served the purposes of local trade while a variety of international currencies were used for the purposes of import and export, thus strengthening internal economic security and cohesion as well as allowing for mercantile trade.

Robert Owen's 19th century 'Trade Notes'

Robert Owen (1771-1858), the nineteenth century social reformer, proposed the formation of a Labour Exchange principally for the benefit of the unemployed and partially employed. Labour was to be accepted as 'the natural standard of value and the principal source of wealth'. Wealth resides, not in money, but in 'the combined manual and mental powers of [people] called into action'. Owen argued that if the producer is also a consumer, some intelligent effort should be made at least to produce as much by the labour of the unemployed as would enable them to live, without injury to others. To facilitate the process, Owen devised national 'labour exchange' or 'trade' notes, in denominations of 1, 2, 5, 10, 20, 40 and 80 hours. The money value of the raw materials used was calculated by appraisers according to the market price of the day ane then converted into Labour Notes. A Labour Exchange Bazaar was set up in London on Gray's Inn Road. Materials were brought in, purchased with money loaned by Owen, who was the Bazaar's external/internal financial broker(Paul Ekins,1986:197ss)

Warren, Fourier, the Diggers, Scott Bader, Schumacher and the 'Kabouter' Movement in Holland

Josiah Warren, an early 19th century anarchist, made Owen's 'labour for labour' formula his own. He inlcuded a measure of flexibility which allowed to account for the fact that one person's work, irrespective of time, can clearly be more arduous than another's. He started his first experiment - a 'Time Store' - which he hoped would enable him to 'recruit supporters willing to take in his plans to found a chain of mutualist villages based on the idea of 'exchange, based on labour'. Goods were sold at cost price in exchange for notes promising to donate time at their own occupations(Ralph Ruddock,1994:97).

When his ideas became known through his publications, he was able to enter on 'the final stage in his carefully planned scheme of action'. He and his disciples founded the 'Village of Equity' on land purchased in Ohio in 1834. Six families 'built their houses and operated a co-operative sawmill on a labour-for-exchange basis', the first de facto anarchist community in any country since Winstanley's venture on St George Hill almost two centuries before. The settlement was on low-lying land and there was malaria among the settlers, and, finally, a flu epidemic which brought the community to an end. The labour exchange system 'had hardly had time to prove itself'. Warren was also the founder of 'Modern Times', on Long Island, 'which also maintained its mutualist character for at least two decades, eventally turning into a more or less conventional village with cooperative tendencies'(Ruddock,ibid)

According to Warren's contemporary, Francois Marie Fourier (1772-1837), in France, society was to be redistributed into social called 'phalanges', comprising 1,500 people each, housed in one common dwelling, representing every trade and profession required for self-sufficiency, and receiving a minimum wage with the surplus distributed between labour, talent and capital. There was to be a continual change in occupations and a radical redraught of social institutions such as marriage. An attempt was made to found a society in 1832, but without success, although Fourier himself had, to his death, a number of devoted disciples.


The Quakers, aka 'The Religious Society of Friends', have survived for more than 300 years as defenders of an anti- authoritarian model of society. Under the powerful influence of their charismatic founder, George Fox, quakers sought for truth within their individual experience. Personal and group reading of the Bible led towards every variety of interpretation and practice. Reading (the Bible) for oneself and in group led to a high degree of literacy and a wide variety of social practice: there were the Ranters and Antinomians, who rejected all moral prescriptions.

There were the Levellers(11) and the Diggers(12), who found in the Bible inspiration for radical social programmes. Many of the Diggers' leading spokesman's writings, - Gerald Winstanley's -, for example, are uncannily reminiscent of those of Karl Marx (Ruddock,ibid).

Diggers & Kultuur Kabouters

Although the Diggers did not succeed in their goal, their ideas have survived over three hundred years to resurface again, in remarkably similar form, in the San Francisco of the mid-sixties, where a hippy culture grew out of 'a give-and-take between the New Left and the old beat generation hippies'(Forman,1967). These same tendencies coalesced, in 1960's Amsterdam, around Roel Van Duin's 'Kultuur Kabouters'('Culture Gnomes'), echoed in the 'provo' movement across Europe. The Kabouters - (Dutch for 'gnomes'), in deference to the need for a 'new urbagrarian citizenship' composed of 'intellectual gardeners and altruistic egoists'(van Duin,1969:93) - were very much inspired by Peter Kropotkin's ideas on cooperative labour and his narodnikian- sarvodayan vision of the village community held together by mutual aid: 'out of the village grows the polis of free citizens'. Unlike Ghandi, Kropotkin saw in the industrial society a key to leisure, an avenue to creativity and liberation. The 'Witte Fietsen' - ('white bicycles' - bikes painted white and put at the disposal, free of charge, throughout the city) became one of the hallmarks of 'kabouterism' in Holland.

These ideas had been abandoned after the first world war in favour of narrow nationalisms and aggressive fascisms of pompous charlatans of Hitler's and Mussolini's ilk. 'We have to turn ourselves into 'Culture Gnomes' because there is an urgent need for us to get in touch again with nature'. Rather than dragging society back to the Middle Ages, van Duin wants this generation 'to set a step into the future. After five centuries of imprisonment the 'nature gnome' in us has to be liberated again so as to be enriched with all the creativity made possible by modern thought. The only condition for this optimistic perspective on the future is that the modern Gnome be a playful ('ludiek', in Dutch) technologist living in harmony with nature' (van Duin,ibid).

Scott Bader

The Scott Bader Operating Company, which also originated I.C.O.M (Industrial Common Ownership Movement), has been in business for 72 years, and became a cooperative Commonwealth in 1951. Severyn T Bruyn in "Quaker Testimonies and Economic Alternatives' Pennsylvania, 1980, in a chapter on 'Quaker\ experiments with common ownership', says that Scott Bader "was organized formally to reflect the principles embodied in the socialist tradition of Robert Owen and the religious tradition of Friends" and membership was open to all employees after a probationary period. . "all members were equal with one vote at the General Meeting, and all employees became salaried and were given a greater income equity than is customary in the orthodox firm"(Ruddock, ibid:79)

It is claimed that more than 1,000 companies have since followed the Sott-Bader model. It is perhaps no coincidence that Fritz Schumacher, whose 'Small is Beautiful' found such a fertile ground in the seventies and has been a great source of inspiration for green parties ever since, was one of Sott Bader's early directors.

Guernsey, Salta, Gesell and Woergl town money

That LETS-type local currencies oiling the wheels of the local economy through mutual aid and cooperation have deep roots in social history is, again, demonstrated by the fact that they still survive in some form, in isolated places as far apart as Tokyo, Singapore and Guernsey. Guernsey Notes were first issued in 1819 as interest-free local government bonds which helped to finance the island's entire infrastructure. The local currency of Salta, Argentina, where the governor decided to print promissory notes as a remedy for inflation and deficit-riddled balance sheets, was responsible for a local boom: "by 1986, the local bonds had revitalised the economy and represented 60% of all the money in circulation" ('The LETS Info Pack', n.d.:2)

'Stamp scrip(13)' currencies, an invention of Silvio Gesell, a German businessman living in Argentina, were introduced in the depression-ridden 1930's by local governments in Austria, Switzerland, Denmark, Canada and the USA: they spread like bushfire and resulted in a radical reduction of unemployment whereever they went in circulation. Instead of appreciating by gaining interest, Gesell's local money depreciated: much as in the game of musical chairs, people could not get rid of it quickly enough, which boosted circulation manyfold. Keynes once predicted that the future would have more to learn from Gesell than from Marx. He might still be proven right, yet.

The most famous example of the success of 'stamp scrip' is the Austrian town of Woergl which suffered, like everywhere else, from the thirties' mass unemployment. The 5,000 interest-free local shillings, originally issued by the mayor of Woergl, had, within a year, circulated 463 times and local unemployment had fallen by 25%: in all, 2.3 m. shillings worth in goods were created, and major improvements to the town implemented. When 300 other Austrian communities were set to follow suit, the Austrian State Bank stepped in and had the whole experiment stopped in the courts. As so often in the past, principles of democratic, local, autonomous development, taken seriously, far from being 'impossible or unfeasible', are simply 'not allowed'. . .

Barter networks and Trade Dollars

Barter networks flourished in both the USA and Germany during the great depression. By 1933 there were 159 barter organizations involving 1 million people in 127 USA cities. A common feature was the central issuing of tokens, by each organization, either as loans, or in payment for services rendered. The downside of the system resided in the fact that it continuously risked being dragged down by inflation in case more tokens than the value of goods they represented, were issued. This would result in a psychologically damaging loss of confidence among the participating public. In Germany, though, their success was so phenomenal that, following the Austrian precedent, they were artificially stopped in their tracks through court intervention. By the time the war ended, people had forgotten about these experiments.

>From Community Exchanges to the first LETS (Comox Valley, Canada)

LETS, as non-profit, interest-free systems serving the local community, are definitely social, not commercial, in their inspiration(14). 'The 1960's and 70's saw the emergence of community-based networks and a revival of the pre-war cooperative social experiments(15). Skills exchanges were common, especially amongst unemployed people in many of the larger cities of Britain and North America. The Link Opportunity Scheme run by Age Concern in most cities, involved the issuing of tokens ('Introduction to Lets', n.d.:7)

Michael Linton, a bodywork teacher and business school graduate, who emigrated

from Britain to Canada in the seventies, founded Landsman Community Services Ltd in Courtenay, a mining town in the Comox Valley near Vancouver in Canadian British Columbia. It is important to note that all present LETSystems derive from and are patterned on this original 1983 Comox model. Linton had analysed the relationship between poverty and social and environmental issues and noticed that, in every community, the level of trading was directly dependant on the flow of national currency through the internal economy. He proposed the use of a 'green dollar' as an alternative basis for exchange. Landsman was Linton's own exchange initiative ('LETS' was also coined by him). The model subsequently spread to several other communities on Vancouver Island, while others preferred to use their own system with their own rules.

Unlike David Weston's Green Dollar Exchange system, the impact of which was local, Linton's LETSystem venture was joined by several businesses and was publicized widely. In the first 20 months of its existence it traded about 100,000-worth of 'green dollars'. Another pluspoint was the production of software for computerised LETS accounts, which could be disseminated easily and widely (and variations of which are effectively used widely all over the world). Within 2 1/2 years, however, the system collapsed, due to an overall lack of confidence amongst some of the main traders. The consensus was that the system had 'soured'(16)

Permaculture in Australia, LETSgo in the UK and worldwide LETS networking

With the addition of some of the safeguards copied from the Green Dollar Exchange system (a.o the introduction of cheques and publication of members' balances) - and put on a more cooperative and practical footing, LETS took root in Australia, where it thrived. The generic name of 'LETS' stuck: by 1991, 45 systems were known to exist in Australia and New Zealand. By 1994 'Blue Mountains', with its 1,800 members and trading in the equivalent of $ 40,000 a month was believed to be the world's largest. Instrumental in that transfer was the local Credit Union. Credit Unions(17) (operate in conventional currency) have subsequently always proven to be an excellent combination with the LETSystems.

Visionaries such as Bill Mollison support LETS as a working example of the 'permaculture(18) economy', a term he coined. There are dozens of active LETS groups in Australia, the most notable among them Maleny, in Queensland, where a community Credit Union was opened in conjunction with the LETSystem. LETS combined with a Credit Union, which also is based on the principle of a 'common bond', are usually an excellent combination

In Britain, a number of seminars on the concept of community- based currencies had been run from 1985 onwards, by David Weston, under the auspices of 'The New Economic Foundation'(NEF)(re: Ed Mayo/Paul Ekins). Norwich (1985) is the first known LETS group in Britain. Another one was launched in Totnes in 1987 but got sidelined with the development of computer software, rather than of its membership (Anonymous,Introduction:10). But LETSystems have been spreading rapidly since 1990, unlike the pioneers, fully equipped with computer soft and hardware.

Letslink UK, created by Liz Shephard, also of NEF, was the main spur behind the mushrooming of LETS throughout Britain. The link promotes LETS nationally in the media, acts as a contact address for enquiries, publishes a quarterly magazine called Lets-Link and provides starters and existing schemes with support in the form of start-up material, computer software, information on specific issues like taxation or data protection, and other assistance when and where needed. It also acts as a co-ordinator for all national networks throughout Europe and the Third World. Media interest is generally very high and national co-ordinators receive numerous enquiries from people interested in joining or setting up a scheme. LETS have meanwhile spread rapidly over continental Europe: there are an estimated 100 groups in 16 countries from Norway to Spain and from Poland to Belgium.

New systems are also being set up in Africa, in Latin America (eg La otra bolsa de valores, Tlaloc, Tlaxpana, Mexico) and in various other third world countries.

Back to Manchester: GmLETS (Greater Manchester LETS) and LETSgo

Manchester LETS was initiated by Andy Rickford and his wife, who had first heard about LETS during a conference on abundance at the Findhorn Foundation (Scotland) where the Australian LETS promoter Jill Jordan presented had the concept. They soon talked to friends and acquaintances and linked up with others who knew about LETS through books, articles and newsletters, etc.

They formed a core group of eight people during the summer 1992 and started looking for others who would equally be interested. A pilot scheme was opened in November 1992 with fifty members. Manchester LETS proper was launched on 24 April 1993 and the Bobbin became the local currency. Manchester LETS is promoted mainly by word of mouth and at the occasion of the bimonthly LETS Trading Fairs. Manchester gained national and international notoriety by various articles in the national press and exposure on national TV. The Manchester LETS office is homed by a member of the core group who acts also as the contact address. The Core group is in charge of developing and operating the system; each of its members, who are paid six Bobbins an hour, donates six hours of work for every two-month period (see also Appendix: 'LETS: 'How it works').

Members are welcome at Core Group meetings. They receive an account statement and updated directory every two months as well as the Manchester LETS Newsletter called 'Loose Threads'. LETS does not rely on voluntary work from its members: the directory and the newsletter regularly propose work to be performed for the scheme at the rate of B 6.00 an hour (organisation of the trading fairs, printing of the directory, etc.)(Seron,ibid)

LETSgo: "trade locally, network globally"

'LETSgo' is a major project in LETS development, entailing high costs. It is intended to introduce a sustainable community support cycle which benefits businesses, people and the third sector (charities, community projects, etc), alike. Businesses willing to join have to make a contribution to the community with the guarantee that what they donate will remain within the system and will eventually come back to them. Within the parameters of the 'cost of service' principle a small percentage of the donation is sufficient to recover development costs.

LETS have thus far mainly flourished in small rural areas, where a community spirit is said to be intense. Landsman, who worked on a large-scale dissemination programme for many years, wanted to demonstrate that the concept can work on a large scale in any location, including urban centres. Manchester was chosen to host 'LETSgo', primarily because, with a population of 4 million-plus, has still a clear city centre(19) and identity. Local interest in LETS is high, and the Manchester City Council can be said to be a pioneer in exploring sustainable development through economic, social and environmental issues.

The Manchester WWW electronic host, "Virtual Manchester", as part of the ongoing Telematics initiatives, has included LETS in their development strategy of community computer resources. The European Union is funding local sustainable community economic development ventures. Manchester was also due to host the post-Rio second Global Forum(20) on "Cities and Sustainable Development", and associated events, such as the International Peace Festival.

LETSgo Manchester was launched in April 1994. The recruiting of people with various skills began in early May and offices were set up and equipped. The priorities were to contact other organisations and to promote the programme in order to attract trainees. There have been advertisements, including one on Granada, the local network of ITN television, and meetings with the Manchester City Council Economic Initiatives Department and the Resource Procurement Department as well as with resident groups and Hulme Regeneration Ltd(21).

Sustainability and employment issues have been discussed with the North West Focus, the Centre for Employment Research and Manchester Metropolitan University.

The Manchester Small Business Network (SBN)

LETSystems have a double function: to provide individuals with a means of trading among themselves, and thus creating space for a revitalization of the local economy. Local money has to be spent locally, which is very interesting for local businesses because they have a chance to gain new local customers who might otherwise trade outside of the communit. As not every business is a member, this is an incentive for account holders to come back regularly rather than shopping around. Moreover, increasing the proportion of local suppliers and customers helps save travelling time and telecommunications costs.

LETS are designed for all the economic actors in the community, but it does prove sometimes difficult to attract businesses. Those joining LETS tend to be pioneers - representing a tiny minority, usually with a strong social or environmental ethos.

The initiator of Manchester SBN is Steven Knight. He initially sent out an information sheet to businesses in which the advantages of being a member were put forward. The prospect of legally increasing profit, easing cash flow and developing business without cash enticed professionals to enquire. An inaugural conference and exhibition were held in 1994. The Manchester group has managed to attract Business partners, creative people as well as the unemployed. It is now one of the largest in Britain.

Charlie Baker, of the Manchester 'Work for Change' group, maintains that the local currency will mean that young or fragile businesses have immediate access to credit. They can trade on the system, into debit, and they will thus not have to worry so much about their rent. "I think that this scheme holds in it the answers to some problem inner-city areas like Hulme. People just cannot get access to credit, and this is undoubtedly the prime cause of poverty"(BBC2 TV,1994)

A Manchester Case Study: Creative Living LETSystem, N.Manchester

The Creative Living Centre, Prestwich, North Manchester, is a partnership between 'Mind North West' and of 'Salford National Health Services'. Mind North West, in response to persistent comments from thealth service users that conventional mental health care failed to live up to their needs, wanted to see a much wider choice of therapies introduced, including access to more holistic approaches.

Salford Health Services themselves had already been exploring along those lines for a certain time. A conference was organized in May 1994, where local associations could get the benefit of first hand experience of a range of creative therapies including art, music, dance and drama-therapy.

This highly successful May conference subsequently brought a number of health services users and representatives of art-based therapies together in a future-based planning exercise. The vision towards which the Creative Living Centre at present is working is the establishment of a garden, a food shop, a cafe and a space for complementary therapy and creative Art facilities to be inaugurated at a launching party on. . . Sunday the 26th of July 1998. The garden, to be located next to the current project building in the grounds of the present Health Services facilities (made available by Salford Mental Health Services, together with seed money), will be divided in an area, including a greenhouse, for the growing of plants for sale in the shop and at trading events and medicinal plants for use in the cafe and the creative arts. The other purpose of the garden will be simply for recreation and enjoyment, with flowers, trees, shrubs, flowing water and a children's play area.

One important aspect of Creative Living is that it will provide a space for exchange and trade, blurring the distinctions between giver and receiver: that is where LETS comes in as an integral part of the project philosophy, which sees people as individuals with mind, body and spirit. 'People ought to be able to define their own needs and make their own informed choices as part of a process towards taking responsability for themselves'(Creative Living Info sheet,1996)

The self-build element of the project is intended to foster a sense of ownership while the LETSystem and horticultural gardening takes on board people's individual skills and the contribution they themselves can make as part of the community. Holistic health relies on the self-healing capacities of the body. LETS 'is' people: there are very few structural boudneries (as in Credit Unions, for example): "LETS are like 'glue' which binds community of relationships together: LETS is embedded in a culture which is continuously created and recreated. Some people end up saying: let's do away with cheques, why bother with cheques!"(Siobhan Harpur).

Creative Living LETS local currency is the 'Link': 'with 'links' we can afford to buy things. And members not only get benefits of trading, we also meet new people in our area. By using 'links' we are helping ourselves and each other. As one member said: belonging to LETS is like having a hundred friends'(ibid).

A globalization counterpractice aided along by some of the key instruments of globalization (global networking): a Global LETS Yellow Pages

In view of the threats posed by the rapidly encroaching world-wide economy the quicker we get around developing a parallel economy, the better.

As it happens, only a proportion of the official money-labour force will be required to produce all of the hardware and the mass services in tomorrow's world. A great deal of useful potential activity and services can therefore spill over in community and environmental initiatives.

At the moment, the average activity level of unemployed people in local LETS is of the order of 10 per cent, where it, unfortunately, tends to stick. This would suggest that a facility whereby those credits can be discharged somewhere - anywhere -, would be of considerable benefit. If persons with excess government-issued money (cash) to spend go into a large modern shopping mall, they are likely to find products from every exporting country in the world. Or they can buy a package holidays to almost any country in the world. A LETS individual, stuck in a small currency area, cannot do that. Keith Hudson (from Bath LETS, UK) therefore proposes a global LETS yellow pages facility, advertised on the Internet. Those who are not Internet users themselves can nevertheless have access to that database, possibly for a modest fee. People with accumulated LETS debits but with skills or services that are a bit too specialized for the locality, might possibly also find an outlet here.


LETS Global Yellow Pages are just one example of the multifarious possibilities contained in the LETSystem: local trade and (inter)action is, no doubt, its great strength. As LETSgo and Global Yellow Pages prove, it need not necessarily be its weakest point, too.

A (now retired) colleague here in Manchester University who studied and taught for many years the educational implications of local democracies - from the ancient Greek city states till the present - confessed that he had virtually given up on the future of self-governing local community trading schemes such as credit cooperatives and LETS. He is duly impressed and pleasantly surprised about the rapid exponential growth of LETS worldwide in recent years.

By some quirk of history, it would appear that the very mechanisms and tools which make globalization such an irresistible and seemingly irreversible force, can become the very instrumen which allows the reclamation of economic ownership and control by the local community/ies, and open up again the closed road towards responsible, accountable and sustainable cooperative democracy. The destructive virus, the all pervasive fungus has been turned into a powerful medicine.

For the purposes of this article, I did find a lot of information on LETS through local contacts, but I found at least as much, if not more up-to-date 'stuff' on the pages of the Internet: from info packs on LETS, handbooks, discussion groups to articles and entire dissertations. This, while the local University Library, including the supposedly 'specialised' Lewis Economics and Manchester Business School (MBS) libraries are virtually sterile of that information which is such a boon and so fundamental for local economy initiatives: "trade locally and network globally" has now become a technological feasibility, too. ------------------------------------------------------------ Raff Carmen, Manchester 28 May 1996/up-dated June 1996/Dec1997 ------------------------------------------------------------

N o t e s

(1) The world's 500 largest industrial corporations, which employ only 0.05 to 1% of the total world population, control 25% of the world's economic output. (2) TOES (The Other Economic Summit), an independent, international initiative seeking to develop and promote a New Economics, is a notable exception, bucking this trend. (3) Smith and Ricardo would be very surprised indeed if they found out that British capital would, one day, be exported to invest in Taiwanese or Venezualian enterprise. The law of comparative advantage only operates with capital within national borders. [] Once it leaves the national borders, comparative advantage becomes absolute because capital will always seek out the most productive workers at the lowest possible cost, the cheapest raw materials, the minimum possible reglementation wherever on the globe these may be available" (Susan George, 1995:23) (4) "Labor and land are no other than the human beings themselves of which every society consists and the natural surroundings in which it exists. To include them in the market mechanism means to subordinate the substance of society itself to the laws of the market" Polanyi, 1944:71

(5) After 17 years of privatizing 'Great Britain plc' in the name of the market, we are now faced with a situation of "more than 5,500 Quangos (unelected governing bodies composed of political appointies of the ruling Party). These faceless quangos employ over 60,000 people: that is twice the number of elected (local) Council representatives. They spend a total of 50 billion Pounds, ie one fifth of the total public expenditure. Quangos are big news" (Will Hutton, 1996) (6) As a matter of fact, not so 'possible': re the recent case of the collapse of the commercial Barings Bank (7) All equally notorious now as localities where mass shootings took place. (8) "The first case I did for Bobbins involved a landlord and tennant who was being evicted. I represented the tenant, an when I gave him the bill for stlg 170 plus VAT, he paid me stlg 99.00 in cash and 100 in Bobbins" (Sollicitor Guy Otten) (9) To the discreet consternation of the Inland Revenue, who watch developments closely (10) Some Australian local currencies are called by the imaginative names of 'acorn', 'prosper' (Armadale), 'echo' (Bridgetown) 'pearl' (Broome WA), '$tinger', 'freo'(Freemantle), 'gems' and even 'Snugglepots'. Green Dollars in Denmark are known as 'kurrabaps', and a local currency in Amsterdam in known as a 'noppes' (ie a 'nothing', in local dialect, a bit reminiscent of the Manchester 'Bits 'n Bobbins'). Louvain (Belgium) trades locally in straightforward 'lets'. Belgian LETS are, at the moment, being spearheaded by 'Aktie Strohalm Vlaanderen'. The Flemish Folk Highschool ('Volkshogeschool') organizes courses around LETS. Pierre Pradervand, author of 'L'Afrique en marche' in a new book called "Les vraies richesses: pistes pour vivre simplement" describes a.o. the LETS movement in France. The Mexican Journal "La otra bolsa de valores", in an article on local economic power (March, 1996:24), reports on the progress of the local currency, the 'Tlaloc'. (11) After a group of radical dissenters who insisted on the levelling of all ranks and who advocated a completely democratic form of republican government c 1647 (12) After a small group of men who dug up the Commons on St.George's Hill in Surrey, in 1649. (13) 'Scrip' (from 'subscription' - receipt): a provisional certificate entitling the holder a fractional share of stock or of other jointly owned property. (14) Compared for example to the expansionist and aggressive drive of International Barter Networks which are highly regulated and almost wholly commercialised (15) It is, again, symptomatic of privatized 'Britain plc' of the nineties,(see note 5) that almost all the 'Mutual' and 'Friendly' societies (eg ancient Mutual Building Societies such Abbey National, the Halifax etc) which used to belong, originally, to the humble factory workers, have now been virtually all been converted profit-seeking Commercial Banks, quoted on the Stock Market, in which any outsider or foreign Company can buy (and sell) shares. (16) Among the reasons given for the collapse were: i. The system was operated and depended on one person ii. One participant had run up a debt of $14,000 green dollars iii. The system was not seen as accountable and depended too much on (blind) trust. There was a strong disincentive against checking other members' accounts as this could be relayed to the trader concerned iv. Two businesses went bankrupt: they ran up large amounts of credits which they subsequently could not spend v. Michael Linton was unrealistic in his view that the system would spread rapidly and massively and in expecting the local system to bear the cost of this effort (Introduction to LETS:9) Openness of accounts to all members has become, since then, one of the major safeguards in the LETSystems (17) Mainly because Credit Unions are far older and more established, LETS often originate in areas where there is an existing Credit Union and local activists. Quite uniquely Manchester LETS has started up a Credit Union, the main reason being that a lot of LETS initiatives do need (some) hard cash starting-up capital anyhow(conversation with Steve Knight, Manchester LETS, Dec 1997) Credit Unions are cooperatively owned financial money saving and lending institutions. A group of people, often of very limited means, join together to pool their savings for the benefit of all. From the outside, a Credit Union looks much like a bank. However, members all share a common bond, go through a process of preliminary and continued education and charge a modest interest on loans which are covered by other members standing as securities. Grameen in Bangladesh is a locally grown form of Credit Union. The study of the Credit Union would demand a completely separate paper. (18) Permaculture, according to Bill Mollison (re: "The practical guide to Permaculture"), consists of the harmonious integration of landscape and people providing their food, energy, shelter, and other material and non-material needs in a sustainable way. (19) At the moment these lines were being written the IRA exploded a massive 1 1/2 ton bomb. 1 1/2 year on, the centre of town still looks very much as the bombsite it is and in the process of total reconstruction. (20) The second Forum planned to be held in Manchester in 1994 was intended to be a major international event but was beset with financial and organizational problems and ended up as a relatively minor occasion, compared to the major international event it had been planned to be. The ambitious multimillion LETSgo business recruitment plans, including an ambitious training programme and a plan for the eventual setting up of Community Banking and small Community Trust Funds, had subsequently to be toned down to more manageable levels. (21) Hulme, one of Manchester's most deprived inner city areas, gained national and international notoriety in the eighties as a school example of grandiose 1960's city renovation plans gone to pot. 'Le Corbusier'-style (in reality, nothing of the sort!) crime and drug-infested high-rise flats (the infamous 'Crescents') of the sixties were all pulled down and are now being gradually replaced by 'normal' living accomodation, coordinated by 'Hulme Regeneration'. Had the Hulme communities been left intact, and their existing houses modernized and upgraded in the sixties, a lot of suffering and damage would have been avoided in this architectural 'coming full circle' process. The last persons to be asked for their opinion in the sixties, however, were Hulme residents themselves! In the new scheme of things, tenents will be able to pay 10% of their rent in 'bobbins'. This not only cuts their outgoings in cash (Sterling), but also brings the prospect nearer of bobbins becoming hard currency.

------------------------------------------------------------ R e f e r e n c e s

Anonymous "The LETS Info Pack" Letslink U.K. Edition January 1994 Anonymous "The Creative Living Centre Info Pack" Prestwich, Manchester, May 1996 BBC2 TV "The Money Programme" Nov 1994 Benson, Roger "From Organization . . .to Organism. A new view of Business and Management" Findhorn Foundation, Forres, Scotland, 1987 Carmen, R. & Lubelski, M. "Whose Business is it anyway? The question of sustainability" in: Davies, P. "Current Issues in Business Ethics" Routledge 1997 Dauncey G (1989): "Beyond the crash: the emerging rainbow economy" Greenprint, London. Dobson, Ross V.G. "Bringing the economy home from the market" Black Rose Books, Montreal: 1993. 235 pp. Duin, van, Roel "De boodschap van een wijze Kabouter" (The message of a wise Gnome),Meulenhoff, Netherlands, 1969 Ekins, Paul "The Living Economy. A New Economics in the Making" Routledge & Kegan Paul, 1986 Forman, Alex "San Francisco style: the diggers and the love revolution" in Anarchy 77(Vol7 No7) July 1967 George, Susan "Le danger d'un chaos financier general" (The danger of a general financial chaos) in:Le Monde Diplomatique. July 1995 - - - - - - - & Sabelli, Fabrizio , 1994 "Faith and Credit. The World Bank's Secular Empire" Westview Glover, Paul "Hometown Money: How to Enrich Your Community with Local Currency", 78pp. "http://www.pegasus.oz.au/~gmorris/uni/arp01.html"> Group of Lisbon (Riccardo Petrella) 1995 "Limits to Competition" M.I.T. Press Massachussets, USA Harland, Maddy & Harland, Tim "LETS: green money or community building?" in Conrad 1996 Hart, Keith "Constructive Economic anthropology" posted on http://www.mailbase.ac.uk on 19.11.1995 Hudson, Keith "A Global LETS" posted in the Internet <@bbcnc.org.uk> 5.12.1995 Hutton, Will "False economy. The price of Power. The damaging consequences of a 15-year crusade to privatise the British State" Channel 4 Independent TV, 18 June 1996 Illich, Ivan "Shadow work. Vernacular Values examined" Marion Boyars, London, 1981. Kennedy, Margrit "Towards an ecological economy: Money, Land and Tax Systems" in Benson 1987 Korten, David C. "When Corporations rule the World" Berrett- Koehler Publishers, 1996 Kropotkin, Peter "Mutual Aid, a factor of evolution" translated from the Russian, McClure & Co New York, 1902 LETSgo Manchester "Design Manual" posted on the Internet electronic publishing (LETSgo 26.04.1996) http://www.gmlets/designmanual/dml^4.html> Linton, Michael 'Communication posted ow www' Mon, 15 May 1995 - - - - - - - - & Soutar, Angus: "LETSYSTEM Design Manual" Landsman Community Services Ltd, Version 1.1 April 1994 Nerfin, Marc "Neither Prince or Merchant: Citizen" Development Dialogue, Uppsala, 1987 Norberg-Hodge, Helena "From the Global Village to a Globe of Villages" in Conrad 1996:29 North, Pete "LETS and Communes", in "Diggers and Dreamers 96/97" Diggers and Dreamers, Winslow 1995 Pam, Andrew "The additional Economy - Introduction to LETS" posted on www April 1992 Ruddock, Ralph "Democracy and Learning" Manchester Monographs No35 1994 Vidal, John "Take a few pigs along to the Pie in the Sky cafe and watch payment go bob-bob-bobbin' along. John Vidal on how local trading schemes with their own currencies are sweeping the country" in The Guardian, UK 12 March 1994, p. 25 World Bank "World Bank Development Report" Washington DC, USA, 1995

------------------------------------------------------------ APPENDIX: "LETS: HOW IT WORKS" ------------------------------------------------------------

All it takes to join a LETSystem is to be willing to trade in personal (local) money. New members fill in a form and pay a small fee (currently stlg 10.00 in Manchester). In return the new member gets:

i. An account number and 'Cheque Book' (see below) ii. Regular Statements, which show the payments received or made (including description) and iii. A Directory listing the goods and services 'Offered' and 'Wanted', including the new member's own. The LETS hold regular trading events, with stalls, where members can meet, talk, and trade.

The local currency is the Bobbin, after the long involvement of Manchester with cotton mills and the cotton industry. One Bobbin is subdivided in 100 'threads' ("Loose Threads" is the title of the local Newssheet). Each member starts with zero Bobbins in their account and can, if they wish, credit other members immediately. A bi-monthly 'Trading Statement' with their bi-monthly trading balance sheet is sent out to each member.

There are no penalties for negative Bobbins balances: members can issue credit irrespective of the current balance of their account (subject to the limits set by the Core group). The principle that members have the right to know other members' balance accounts, which are regularly published is the best guarantee against a theoretical temptation for abuse of the system: "Experience of LETSystems to date shows that many people actually leave credit balances when they leave" (Seron). The community, or the Core group acting on behalf of the community, can, moreover, seek an explanation from a member whose activities appear contrary to the common interest and has the power to suspend, or, in extreme cases, to remove a member from the system.

Buying goods and services

i. Contact the person offering what you want, usually by getting their phone number in the LETS Directory ii Agree with them exactly what you want, and the price. iiiWhen the trade is completed the account is settled with a LETS cheque(below). This amount will appear as a debit in the buyer's next statement and as a credit in that of the seller. iv The cheque is sent on to the local administrators, where it is entered on the LETS computer.

A Bobbin can be regarded as the trade equivalent of stlg 1.00. Many members use 6 Bobbins an hour for services rendered as a basis for negotiation. In many cases a combination of LETS and bobbins will be agreed.

A page from the Manchester Chequebook

+------------------------------------------------------------+ | : | | : Date______19___ | | : | | : Credit to:eg Anne Other_________AccNo_1235____ | | : +----------+ | | : Amount:eg Sixty-two bobbins_______ | B 62.50 | | | : +----------+ | | : For: eg__Decorating__________ | | : | | : From Acc no 6774 Signed______________ | +------------------------------------------------------------+

Community Groups use LETS

An example of a community group which has used LETS over many years is the Manchester DEP (see Appendix2). Operating through the local LETS results in

i An increase of local groups' purchasing power (they often operate on a shoestring) ii Allows them to share resources: community groups are geared to help each other: LETS offers them a rainbow of ready-made contacts and resources. iii Extra support: LETS income can come from donations, letting rooms, a stall selling donated goods etc

. . and so do Businesses

Joining LETS brings the following benefits for businesses:

i Reductions in costs: the more a business uses personal money for its purchases, the more sterling will be available elsewhere in the business. Sterling debts can be reduced. ii Start-up of (a) new Business(es): the use of bobbins reduces the total amount to be borrowed, gives access to advice of experts and reduces personal cash needs. iii Boosts sales: more sterling as well as LETS currency comes in. iv Marketing benefits: bobbins can be included in business prices in many ways: as a percentage of the total price, a local voucher offer etc v Interest-free, colateral credit: people may, for example, invest personal money through a CapitaLETS

Interest, Spending limits, Taxes, DSS etc

Local currency does not earn interest, nor do negative balances 'owe' interest. Interest-free money has the remarkable quality of diminishing in value if it is not used: there is no incentive to 'save' or accumulate money: the value of local money derives from the fact that it . . .'rolls', that it is in circulation and thus keeps the gears of the local economy greased.

LETS provides a means by which people can continue trading, can continue working, without having to wait for the social lubricant of money: they indeed 'create' their own money and they can continue trading as long as their word is good, thus allowing the local economy to keep moving even when hardly any cash is available.

Equally, or possibly more important than the interchange in goods and services is the occasion for mutual help, cooperation and social contact a LETSystem, almost as an afterthought, allows. Community Economic development transcends the parameters of conventional 'Community Development' (CD) in that it is rooted in real, tangible exchanges (of goods and services) which are an occasion and an incentive for other, social exchanges. A practical illustration of this is the newly started up 'Creative Living Centre', with an emphasis on a positive mental health approach and having a LETSystem at its core. According to a LETS member: "It is like having a whole lot of new friends"

A LETSystem is self-regulating and no spending limits are set. A person whose account is in debit has, in effect, issued personal money backed by their commitment to provide goods and services to other account holders. No interest is charged on balances. In order to cover the running costs of the system, members may be asked to pay a small fee in Bobbins or Sterling (1 Bobbin a month in Manchester).

As with any kind of work, jobs, whether or not done on the LETSystem, should be declared by people on (unemployment) benefit. In Britain, more than 16 hours of work a week will stop income support or unemployment benefit. Those who are unemployed should make it clear that they are actively seeking work and should make arrangements with LETS customers able to take up a job offer.

The DSS (Dpt of Social Security) Offices have a degree of discretion in these matters: some may treat LETS jobs as self-employed earnings, to be deducted from benefits (after expenses). Others, again, may not. So far, there have been no particular problems in the Manchester area.

For tax purposes, there is a clear difference between a builder doing building work as part an on-going business: whether paid in sterling or Bobbins, or a combination of the two, taxes are owed on the total amount. But if a builder digs another LETS member's garden, whether for LETS or for cash, this activity is not taxable

Keeping things 'in balance'

It is not necessary to earn money before being able to 'spend': anyone with a member's number and chequebook can start trading, including buying goods and services. The important part is that the local economy gets moving. "Debt", in the conventional sense, does not exist in the LETS economy. Instead, recognizing that economic activity is a dynamic process, made up of spending and earning, creating and doing work, debits and credits are dealt with in an even-handed way

Competition vs mutual support

The world of the money economy there are (some) winners and (many) losers. In the LETS economy no-one is ever short of money: the money cannot leave, so whatever is spent will come back. Everyone can be a winner. Not infrequently buyers are seen haggling the seller's price upwards, offering more than the asking price, ie, a complete inversion of the money economy rules


"ltsystem.html#home12""mailto:[email protected]">[email protected] sgo.u-net.com</A></address> 05-01-95 Compiled by Andy Blunt of <A HREF = "../users/tml/tml.html">The Missing Link</A></address>

LETSystem administration

A LETSystem is a free association of individuals - the users (also called account holders).

. The account-holders agreements sets out the relationship between account-holders and also with the LETSystem administrators.

. A Steward takes responsibility for the overall operation and integrity of the LETSystem. The Steward delegates the responsibility for the administration of accounts to Recording Co-ordinators.

. A group of account-holders acts a board of Advisors to the steward and recording Co-ordinators.

Only the Recording Co-ordinators are paid and only in local money.

The Steward and Advisors are unpaid. -----------------------------------

Account-Holders' Agreements

A LETSystem is based on the free association of individuals (the users) who take out accounts on the system. The LETSystems Registry provides a service which allows account-holders to exchange information to support trading, and maintains such accounts of that trading as users request.

The account-holders delegate the maintenance of these accounts to Recording Co-ordinators.

The account-holders also delegate responsibilities to Stewards as stated in this agreement.

. Account-holders shall be willing to consider using their accounts to trade with each other.

. Recording Co-ordinators will transfer money from one user's account to that of another only on the authority of the account-holder making payment.

. LETSystem Stewards may instruct the Recording Co-ordinators to decline to record an acknowledgement considered inappropriate.

. The unit of exchange of local money is a measure equivalent to the Pound Sterling.

. An account-holder may know the balance and trading volume of any other account-holder.

a. Accountability for taxes incurred by users is the obligation of those involved in an exchange; the LETSystems Registry and its agents, including the Recording Co-ordinators and Stewards, have no authority nor liability nor obligation to report to taxation authorities or to collect taxes on their behalf.

b. No warranty or undertaking as to value, condition, or quality of the items exchanged is expressed or implied by virtue of the introduction of users to each other.

c. Account-holders agree to the recording of any information they supply and to the holding of all such information on computer.

. While all information, excepting balance and turnover of accounts, is considered confidential, neither the LETSystems Registry nor its agents can guarantee that confidentiality, or necessarily be held liable for any breach of it once it has been legitimately disclosed.

. Recording Co-ordinators are authorised to levy charges on users' accounts in <I>local money</I> at rates assessed by the Registry Stewards in liaison with the Recording Co-ordinators. The advantages of LETSystems

LETSystems offer benefits to all sectors of a community without exception. Currently, our societies are characterised by increasing division. This is due, in part, to our use of a monetary system that ultimately serves those with money rather than serving people in general and in particular. LETSystems value the contribution made by individuals to a community and acknowledge that contribution.

Initially, people usually have some difficulty on seeing how the use of a LETSystem may benefit them personally, but once the imagination is fired up, and one starts thinking through how LETSystems and the use of local money within one's own personal and community circumstances, then the real possibilities become visible.

We can only scratch the surface here of how the use of LETSystems can offer substantial advantages to each sector of communities. Those advantages are not a 'competitive edge' gained at someone else's disadvantage. They are brought about by intelligent co-operation and collaboration, creating mutual benefits.

To paraphrase Rousseau:

> "No problem can withstand the onslaught of sustained thinking."

For individuals:

. more self-employment opportunities, . more opportunities to use all their skills, . opportunities to develop new skills through training, . greater flexibility with personal finances.

For communities:

. enhanced community spirit and co-operation, . a stronger voice in the planning and implementation of community initiatives, . creating better housing together, . building better community facilities and personal health care, . improving local environments resulting in less crime and vandalism.

For businesses:

. lower operational costs, . easier cash flows, . higher employee motivation and lowered absenteeism, . lower security costs, . enhanced local competitiveness, . the development of closer links with local communities.

For non-commercial organisations:

. availability of local money from local businesses as investment,

. reduced cash dependency, . increased cash funds for expenditure on volunteers and beneficiaries.


Written by

Raff CARMEN (dr) Adult Education, Literacy and Community Based Development(AELCBD) The University School of Education Centre for Adult & Higher Eduacation(CAHE) Oxford Road Manchester M13 9PL

Tel (a/phone): +44 0161 275 3451 Fax : Please note new fax: NOT +44 0161 275 3519 BUT: +44 0161 275 3528 email : <[email protected]>

hrl : http://www.man.ac.uk/education/cahe.htm#/literacy : http://redtips.org/tips/forum/sid/tema3.htm