Local exchange trading systems are an alternative form of economic exchange: locally initiated, grounded in democratic principles, and based on an independent currency.
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Problems and Purpose
Local exchange trading systems (LETS) are alternative marketplaces which allowing for the exchange of goods and services using a locally created currency. LETS were developed as a way to allow trading between those who are not able to acess or participate in traditional economic structures.[1]
Origins and Development
Participant Recruitment and Selection
How it Works: Process, Interaction, and Decision-Making
LETS members are issued a chequebook and trade using a unique currency, the value of which is set by System members. Transactions are digitally recorded, allowing individuals or member organisations built up credits or debits. Credits can be 'cashed' with other members within the system and debits redeemed by providing goods or services. All market activity is subject to the agreement of both parties of a transaction.[2]
Local Exchange Trading Systems contain the follow four elements:
- Tools to allow participants to make their offers and wants known to others in the marketplace
- Search mechanisms for buyers to connect with sellers; for people to find what others are offering, and to offer goods and services in return
- Secure and reliable ways for people to transfer units of the LETS currency amongst others in the network
- A reliable, centralized method of recording transactions.[3]
The following is an illustration of LETS in practice and comes from the Bradford LETS, established by Tariq Shabeer in the mid-1990s:
Each member was issued with a LETS chequebook and traded with other members in BRADS and FORDS. The value of the BRAD was set at £1, the FORD, being a hundredth part of a BRAD, was worth 1p. Transactions were recorded in the computerised Directory at the Bradford LETS office and individuals or member organisations built up credits or debits. They could 'cash' their credits with anyone within the system (subject of course to the agreement of the person concerned) and likewise could redeem their debits by providing goods or services to anyone within it. He had recently bought a pair of glasses from John Robinson worth £100, which he paid for with £50 sterling and 50 BRADS. When this transaction reached the computer John’s account would go up by 50 BRADS, and Tariq’s would go down by the same amount. He could pay this back by, for instance, giving lifts to a number of other people until the debit was redeemed. Similarly John could spend his credits elsewhere, perhaps by getting LETS members to distribute leaflets on housing estates about his business or for his campaigns as a Green Party candidate. The charge for joining the Bradford LETS was minimal: £5 for those in work, £2 for the unemployed. This was to cover running costs - producing the Directory, postage and so forth.[4]
LETS have been established all over the world. One example is the Puma Local Exchange Trading Scheme which has been used in the marginalized Pumarejo neighbourhood of Seville since 2012 as a way to reduce vulnerability and exclusion resulting from the economic crisis of 2008.[5]
Influence, Outcomes, and Effects
Analysis and Lessons Learned
See Also
The Puma Local Exchange Trading Scheme Alternative Currency (Pumarejo, Spain)
References
[1] Dil Green, “LETS Marketplace from a Feature ‘Phone,” Digital Anthropology (Digital Anthropology, April 24, 2017), https://digital-anthropology.me/2017/04/24/lets-marketplace-from-a-feature-phone/#more-1431.
[2] Tariq Shabeer "Chapter 15 - Local Exchange Trading System," in Challenge to Nonviolence, ed. Michael Randle (Online: Department of Peace Studies, University of Bradford, Issues in Peace Research 2002), https://civilresistance.info/challenge/lets.
[3] Green, “LETS Marketplace from a Feature ‘Phone.”
[4] Tariq Shabeer "Chapter 15 - Local Exchange Trading System."
[5] Prado, Cristina Medina. Our Money: Our Place - Exploring ‘Puma LETS as a Micro-Political Tool in the Context of Economic Crisis.’ Institute of Social Studies, 2014. https://www.academia.edu/10083428/Our_money_Our_place_Exploring_Puma_LETS_as_a_micro-political_tool_in_thecontext_of_economic_crisis_.
External Links
UK Local Exchange Trading and Complementary Currencies Development Agency: https://www.letslinkuk.net/
Bradford’s Local Exchange Trading System: https://civilresistance.info/challenge/lets
Notes
Lead image: North London LETS, https://goo.gl/2KuDpE