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Local Exchange Trading System - "Green Money"  

Every time a pound is spend in a branch of a national, or multi-national, chain store, only some 20p of that pound stays in the local economy. This is mainly the wages of the workers. The other 80p goes straight out to pay for goods, transport, interest charges and profit.

But if that pound is spend with a local person making goods out of local materials the position is reversed, with only 20p going outside the community to pay for materials, tools or fuels not available locally. 80p stays in the local economy to be spend again.

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When a Local Exchange Trading System, (LETS), is set up in an area, it provides a framework in which people are encouraged to trade locally. The currency, which is only spendable locally. It doesn't exist as coins and notes because that would be illegal. Each member has an account, which is debited or credited every time a transaction takes place.

The more money circulates locally, the more power goes to the local community and the less to the faceless institutions.

We are more able to see how what we are buying has been produced, and what use is being made of the goods and services we are supplying others. It becomes possible to have a face-to-face relationship with the people we are trading with.

Any kind of goods and services can be offered, from baby sitting to legal advice, from homemade jam to housing. When the goods or services involve national currency expenses, transactions can be in part LETS and part national currency. An example is a taxi service, where the driver's time could be paid for in "green money" as it's often called, but not the fuel.

One great advantage of LETS is that you can start spending before you start earning. This was one of the most important features in the original LETS system, which was started up by Michael Linton a community activist in a former mining company town in Canada in the early 1980's.

When the company pulled out everyone's earning capacity went with them. People still had skills to offer, but no one had the money to pay for them. It was a vicious cycle; the introduction of LETS broke this cycle.

Indeed it's essential that some people go into "commitment, because the system has no cash, so the very first transaction can only be paid for by someone going into "commitment". This expression is used instead of "debt", because there is no stigma attached to having a minus balance in a LETS system.

There are now thousands of LETS schemes worldwide and over 400 in the UK. Some of the main benefits of setting up a LETS scheme are:

  • Develops a greater community spirit,
  • Increases regeneration of the local economy.
  • Enables people to have more control over the goods and services they obtain;
  • Improves social contact and lessen social isolation;
  • Bolsters confidence and self-esteem of people not in paid work;
  • Enables people to use existing skills, and acquire new ones.
  • To have a good time and improve the quality of life.

For further information contact  North London LETS 020 7281 0919.

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