by Tom J. Kennedy

A new economic idea which supplements our ever diminishing money supply is flourishing. The technique, called the Local Employment and Trading System (LETSYSTEM), is the progeny of Michael Linton, an electrical engineer from Courtenay, British Columbia. This innovative approach to generating economic exchanges within local communities has proven to be a real winner since it was launched on Vancouver Island in the Comox Valley in January, 1983. LETSYSTEMS have spread far and wide since these first small-scale, self-contained economies were set up in various communities on Vancouver Island. This practical concept is coming of age as it continues to gain popularity and acceptance.

The LETSYSTEM has now expanded to approximately 4000 communities throughout Canada, the United States, Europe, Australia, and New Zealand. The progress of the LETSYSTEM as a miniature self-regulating economic network which allows its members to issue and manage their own money supply is being monitored by various groups of enterprising people who recognize the benefits of acquiring goods and services using an interest-free currency rather than our traditional interest-bearing cash.

The LETSYSTEM is really "better than barter". It is a trading system which allows members to use an interest-free currency of credits and debits called "greendollars" or various other names given by any local community such as "ecodollars," "shedollars" "sandollars" etc. This interest-free trading currency is used to exchange skills, talents, services and goods when ordinary interest-bearing dollars are scarce or unavailable.

Bartering is defined as a "one to one exchange" of goods for goods or time (services) while a LETSYSTEM is a "full currency system" or a "unique trading or bartering system" which, according to the founder, Michael Linton, allows members to transact business and receive general value.

The LETSYSTEM operates like an interest-free bank. Members with skills, talents, services, used or new products for trade open accounts at a central office in the local community where all transactions can be recorded in something as simple as a three ring binder or something more sophisticated like a computer - which is more practical for keeping records in this modern age of high-technology.

A computer maintains an efficient system of accounts in the local "barter currency" for each member. Most LETSYSTEMS charge a small service fee but no interest when any member's account has a negative balance.  Any member is permitted to know the balance and the turnover of any other member at any time. Michael Linton describes this interest-free barter currency as a simple "promise to return value" by another member of the community. It is this promise that gives any LETS currency its unique value. Since accounts are open to all members of the LETSYSTEM, defaulters or abusers quickly cut themselves off from the honest traders.

When members join a local LETSYSTEM, they are registered on a local database, usually on a computer with a version of the LETS software and assigned a LETS account number. Usually new members start with a balance of zero on their LETS account, however some local LETSYSTEMS which have issued a local currency give new members a small advance of this local paper currency which shows up as a negative balance on their LETS account.

A file is created for each new member which lists a description of any talents, skills, services and/or goods "offered" and "requested" for barter. Sometimes the price for products offered is listed while at other times the price is negotiable often for a portion of cash and a portion of the local LETS currency.  Listings are updated monthly and sent to each member. The local LETSYSTEM usually charges a small fee for sending the list and another small fee for each transaction recorded by the computer. Members can pay to advertise information in the monthly newsletter.

Examples of a local LETSYSTEM clearly explain how the concept is "better than barter."

                                                 Example 1 

John cuts firewood . Peter is a welder. Peter wants wood but has no money. John doesn't need any welding. 

Since John and Peter are members of a local LETSYSTEM, John simply sells wood to Peter and contacts the local LETSYSTEM office to report the transaction. 

John's account increases by 85 dollars while Peter's account decreases by 85 dollars. Later, John employs a carpenter. The carpenter then gets a haircut, purchases some winter clothing from a local seamstress and some produce from a neighborhood farmer. The farmer needs the welder and Peter's services are required." 


Example 2

Gerry an accountant has low management costs of twenty percent, therefore, he elects to offer his services for payment of eighty percent "Green dollars" and twenty percent in cash. Many enterprises require some cash to meet tax commitments (sales tax and income tax) and other cash costs of the respective trades. The local LETSYSTEM allows transactions in partial "Green dollars" and partial federal dollars. 

Michael Linton and various other LETS activists frequently tour Canada, the USA, Europe, New Zealand, Australia and other countries all around the world to meet with various enterprising people who are ready and anxious to launch local LETSYSTEMS. The time has indeed come to expand computer-based trading networks that use this interest free unit of currency which only exists as a debit or credit on a LETS software program in a computer.

The psychological and social aspect of changes which can be wrought by altering the nature of money is noteworthy indeed. When the individual creates money instead of the bank, the individual is liberated and no longer is charged interest on an account in "debit" within the LETSYSTEM. Neither is interest paid on an account in "credit." This is the significant element that will cause the LETS concept to prosper in the 21st Century.

Part-time enterprisers have a distinct advantage over wage earners with the implementation of local LETSYSTEM. They have access to products or they provide services and use their talents in a creative way. Wage earners are therefore urged to develop a skill and establish a part-time enterprise so they can reap the maximum benefit of participation in any local LETSYSTEM.

LETSYSTEMS are attracting considerable worldwide interest simply because the benefits are not only "economic" but also "social and psychological." One member, a single mother, relates:

Without this system our Christmas would have been very bleak. The children were given handcrafted toys, and other family members were given pottery, jewelry, and candles. All of my own and my children's clothing now come through LETS. We also get some of our food through LETS. 

I feel that I am valued in the community for the work I provide. I like to have my small children exposed to this alternative monetary system; they now check if goods are available for green or federal dollars. I have met many new people through the LETSYSTEM and feel that our sense of the community in the Comox Valley has greatly increased. 

I have also found that people have skills which they haven't used or thought about in years, and it is all being drawn out and interest re-kindled. People have started to value themselves differently and come alive. 

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