Tag Archives: mutual credit

Alternative forms of Exchange

Mary Fee of (LETSlink London/UK) gave a brief presentation on “Alternative forms of Exchange” at the LETSlink London Gathering on 3rd January 2015.

These have been set up in response to the systemic problems of Poverty, Ageing Population, and the Credit Crunch, which as Clive had explained is the event result of money being created as a debt to banks. One solution is to mitigate the effects of the system with charitable provisions, such as food banks – Mitigation, another is to campaign for a change to the system (but will this ever happen in our lifetimes?) – Politics, another is to create Complementary Currencies – Alternatives, which work in parallel to mainstream currency, and are not interchangeable in it.

NB recent innovations such as the Brixton pound, are not complementary, because you have to buy them for sterling, they are a voucher which may, however, encourage local trading. Complementary currencies are wide-ranging and take many forms, and over time may result in many of the members simply trading favours, i.e. they naturally move into the informal, “altruistic” mode of trading, which is not zero sum, because when I care about you, “your gain is my gain”.

Mary explained the difference between fiat currency, which is when an authority simply issues the currency – examples were described, and the way in which community currencies, using mutual credit (with members creating currency to pay each other from their own accounts, and the whole system balancing to zero) can be established as a ring-fenced currency within the mainstream economy.

LETS (Local Exchange Trading Schemes) range from the Michael Linton’s original top-down business approach to the grass-roots, more democratic model espoused by LETSlink. Timebanks, based on Edgar Cahn’s Timedollars, which avoid mention of “currency” by using “hours”, are managed by professional staff, and targeted to vulnerable individuals, and can co-exist with LETS in the same communities.

LETSlink has been poorly resourced to support organisers, but with web-based software, groups can become much more creative. The ICC (integrated community currency) model, combines the best of existing systems, using some fiat methods, such as project funds, and printed notes, can cater for members who do not have access to the web as well as those who can communicate and trade online, and can establish bridges into the mainstream local economy. As long as they have an agreed rate per hour, currency can be moved from one group to another via an hour-based regional and national hubs (work in progress). Link to slides – to follow.

There are several websites, to find local groups go to www.letslinkuk.net.

Local Exchange

Following the work already being done on Green Dollars in Canada, Michael Linton came up with the acronym LETS from Local Exchange Trading System in the early eighties and travelled worldwide spreading the concept.  The basic idea was to give people the power, as there was a shortage of bank-created currency, to create their own.  Based on Mutual Credit, it’s a step on from Barter, which is a one-to-one closed exchange, the idea being that a ring-fenced currency can be created by members of a group acknowledging goods and services by means of a pooled system of credits and debits.

Michael Linton saw LETS as a social enterprise, with a top-down approach, registered the name LETSystem in the UK, and the first groups were set up from 1985 onwards. Liz Shephard positioned it in the voluntary sector, in which organisations are governed by a constitution and member rules, founded LETSlink UK in 1991, which supported the development of hundreds of Local Exchange Trading Schemes throughout the nineties. The movement was slow to adopt online systems, and there was a loss of momentum, but there is a new resurgence of the project with appropriate tools based on custom software or open source platforms now available.

Following the retirement of Liz Shephard in the year 2000, LETSlink was relocated to London, where we are developing a London-wide scheme, as well as supporting groups all over the UK. We moderate the [LLUK] and [LLL] discussion lists which are kindly hosted by the LETSystems Trust, and engage enthusiastically with researchers and software developers. To help us respond to your enquiry, whether you want to join locally or are offering support for the project, please explore the weblinks and contact us from the most relevant location:  www.letslinkuk.netwww.letslink.orgwww.cxss.infowww.localexchange.org.ukwww.londonwide.letslink.org