Local exchange and Trading Systems (LETS)
The true wealth of our communities lies in the skills and resources we have, not the amount of cash available. Local Exchange Trading Systems (LETS) are innovative trading networks in which people use a local currency to pay for goods and services offered by other members.[1]
LETS schemes have achieved recognition as valuable and effective networks through which regeneration can be fostered. The ‘Community Enterprise – Good Practice Guide’, published by the UK Office of the Deputy Prime Minister describes their operation succinctly:
LETS schemes are a means of encouraging economic activity in an area by creating credit which members of the scheme can use as a currency when trading among each other. The units of account used usually equate to the Pound, although names are different, so that prices and quotes will be familiar. The face value of Bricks used, for example, in a scheme in Brixton is 1 pound – if the going rate for a job is 10 pounds, the quote will be 10 bricks. The essential features of LETS are :
- A web-site, directory or bulletin board, which contains brief descriptions of offers and requirements which participants in the system wish to trade.
- An accounting system which records transactions, crediting or debiting units to and from accounts.
- Periodic statements to the LETS participants, listing their personal transactions and the balance of their account.
In some cases, payment for a service is in a mixture of LETS credits and money. A decorator may be prepared to have his LETS account credited for his labour, but will need cash to buy the materials.
LETS have the potential to combat social exclusion by offering residents of an area the opportunity to re-enter or enter the world of work on a small scale, building up their skills, self reliance and networks. Existing LETS are well used by unemployed people. For a partnership, there will be broader benefits in forms of re-cycling resources within the community, building capacity and community cohesion.
Local currencies, as history demonstrates, offer one of the most effective and immediate solutions in areas affected by high unemployment. Local currencies, based on sound economic practices of the past, enable people to carry on trading their goods and services locally, whether or not there is money.[2]
A response to endemic unemployment, the economic decline experienced by many local communities in the West and the consequent shortage of money to facilitate economic activity, LETS are at the forefront of efforts to empower local communities in the post-industrial West to find solutions to the social and economic challenges they face. In many ways they are derived from local barter systems used in traditional ‘less developed’ societies.
Principles of non-profit are at the core of the system, as are those of community participation and accountability. LETS are therefore invaluable tools in empowering local people to become economically and socially productive, evading the barriers of apathy and dejection experienced by many in the deprived and run-down areas of both the developing and developed worlds.
One of the principal advantages of the LETS scheme is that no interest is charged on a participant’s balance, overcoming many of the problems experienced by people when they need to borrow money and ensuring that the currency is only created by the trade of goods and services. They are local, participatory and self-managed by the people they serve, ensuring that wealth is generated by and stays in the local community.
Complementary Currencies
A development of the idea of a LETS scheme is that of creating a local ‘complementary currency’ to facilitate economic activity within the deprived community of Jamestown where access to national currency – the Ghana Cedi – is sometimes limited. Such complementary currencies have been developed in the UK and elsewhere to promote economic regeneration during times of recession and depression, most notably in Worgl, Austria in the 1930s.
A local currency for Jamestown would be issued and administered by the Jamestown Synergy Centre. Workers and volunteers at the Centre would be paid / rewarded in part in local currency units (LCUs) which would be used to pay for goods and services at the Centre. Such services would include entrance to events, payment for training, payment for food and drink, hire of equipment or for onsite accommodation.
[1] “Manchester LETS”, published by LETS Solutions, Manchester
[2] “LETS info. Pack” published by Letslink UK.