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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.
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