Learn More - Background

Learn More

Local Exchange Trading Schemes are community support networks with a special feature which is having their own local currency. There is a long and rich history behind this idea and this recent wave began when Canadian Green Dollars were brought to the attention of radical economists s at a Conference called TOES - The Other Economic Summit, planned in 1983 and held in 1984. Michael Linton, based in Canada, introduced the acronym LETS and developed the LETSystem based on the methods of business barter, while in the UK Elizabeth Shephard developed a grassroots model calling it a LETS scheme, using the "unincorporated association" constitutional model as being more appropriate for the voluntary sector.

Technically, LETS is based on a systemof "Mutual Credit" which means that instead of having to borrow money at interest from a bank, members can credit another with a virtual currency from their own account for goods or services; this currency can be used by that member to get things they need from other members, so that "exchanges" do not require a direct swap to take place. LETS currency works in parallel to sterling, and can be used in part-payment. People who wouldn't normally charge for using their skills, which are often home-based activities, can thus get some credit enabling them to access services which may be useful to them. Groups have their own named currency and In Severn LETS it's called Shrews.

Some groups adopt a standard hourly rate, but it's best for this not to be rigid, because some jobs are more complicated or strenuous than others and could justify a higher rate per hour but LETSlink UK advises groups to to adopt a "median" rate for when members do want to trade on an equal basis, which for Severn LETS has yet to be agreed as the scheme is revived. As trading goes back and forth the currency that arrives in the "payee" account is balanced by the same amount being taken from in the account of the "payer", so overall the accounts all balance to zero.

In the earlier paper-based system, the members were provided with cheque books, and when cheques are handed in, the transactions were done by an administrator, using a spreadsheet or database. The core group also had to print membership lists and a directory of Offers & Wants. With the online system, which is based on a MySQL database, transactions and updates can be managed by the members themselves, accessing their own accounts online. In case some members don't have access to the internet, one of the Core Group tasks is the LETS administrator, who can do all these transasctions and updates on behalf of members.

Welcome | Learn More | next Severn LETS | Catchment Area | Agreement | Constitution | Joining Form