Community Economic Sturctures

1. Find at least two organised non-cash systems operating in your region and describe how they function, what sorts of people are involved in them and who benefits from the operation. Who initiated the system?

I’ve managed to find two systems in the local area, to be frank I expected to find more in Sussex. They are Bright Exchange (http://www.brightexchange.org.uk/index.htm) based in Brighton and Common Cause Cooperative (http://www.commoncause.org.uk) based in Lewes.

Brighton Exchange acts the same as any LETS system, “It is a localised network of people who trade skills, services and goods on a cashless basis. People’s time is valued at an equal rate, be it walking someone’s dog, giving a head massage or stripping wallpaper. The health of the system depends on the frequency of trade and exchange amongst members. The more people trade, the more vibrant the system is. The scheme also allows for the loan of useful items.” – The Bright Exchange website. “What makes a LETS system work is peoples’ willingness to trade. Only offer things you really want to share with the community, and please say yes to telephone enquiries whenever possible. Let people know what else

you offer and be open to suggestions. You can offer any amount of things not entered in the directory, as long as it’s legal. It is space that is limited in the directory, not your imagination and creativity! Trading is the responsibility of each member. We do not vet anyone and it is up to you to check people out yourself. Before trading with a new person it is recommended that you ask them for names of other members they have traded

with. This is advisable before handing over children or having a massage.” - http://www.brightexchange.org.uk/brightsguide.pdf the simple answer of who benefits is, its members! I couldn’t ascertain from the lovely admin people who initiated the system, it was started in 1991 but they advised that the systems strength is in its decentralism.

Common Cause, like Bright Exchange was started in 1991 as a LETS trading scheme, but they have expanded into a number of different areas over the years, including, a housing cooperative, delivering permaculture courses, organic food trading scheme and a local allotment project too.

I found some information on who benefits from such a system, “Individuals can benefit through greater access to goods and services; through more affordable training and education; additional employment; starting a business - there are many possibilities. In addition there are more intangible benefits which also improve the quality of life, such as the widening of social networks. A business would use a LETSystem for a number of reasons and in a number of ways:

to attract customers - by accepting part cash and part LETS money, the goods and services are more affordable and the fact that the customer may be short of cash is less of an obstacle.

• to increase cash income - although the cash portion of the sale is now lower than the full price, total sales go up and cash income is the same or higher than before. In addition, local money has been earned which can be spent or, if desired, given to charity.

• to encourage customer loyalty - customers with LETS accounts like the deal and they come back again.

• to ease cash flow - if suppliers of goods and services (book-keeping or advertising, for example) accept part payment in LETSystem money, then the harder-to-earn cash is available to help with other bills.

• to gain a higher profile within the community - making donations to local projects in LETSystem money is a more affordable way of gaining good PR within the local community. Because the LETSystem money cannot leave the system, it tends to come back, even when it is given away.

Because LETSystem money is easier to earn, it's also easier to give away. Voluntary associations which accept donations in local (LETSystem) money can use it to reward volunteers and to pay for essential services without using up their cash budget.

Donations to charities in local money can be offset against tax in the usual way. This provides further opportunities for fund-raising. Voluntary associations may also use LETS directories to obtain more services and to gain a higher public profile.

LETSystems provide a framework for people to value activities which are not normally valued in the conventional economy. Many people who have difficulty gaining paid employment can nevertheless participate in a LETSystem.

Those who are so seriously incapacitated that they are unable to offer anything can benefit from gifts made through the LETSystem. For those of us who are active, it is a lot easier to give LETSystem money than it is to donate hard cash.

Benefit claimants should obtain specific advice from their nearest LETSystem development group before trading. This is to ensure that they do not jeopardise their entitlement to benefit.

LETSystems work for everyone who uses money and could use some more.

The state of a person's bank balance is not as relevant as the ability to trade. Does (s)he have time available? Is (s)he willing to devote skills and energy to trade with others?

Of course, there are often costs that cannot be met on the system and will have to be paid for with cash in the normal way. Replacement parts for repairs, for example. Even then, you should find it possible to make your cash go further.

LETSystems cannot easily address economic problems caused by a total shortage of cash. We have now reached the position where virtually the whole economy of the UK has become monetised. The Welfare State is the last resort of many people before the onset of total destitution and disempowerment.

In the longer term, LETSystems will help to build community economies in which everyone will be able to buy and sell goods and services. This will lead to less dependency on state benefits. Until then, any reductions in state benefits for people who use LETSystems would be damaging and counter-productive. For those who claim benefit, the fear of losing that money is a key factor when considering whether or not to trade on a LETSystem.” - http://www.gmlets.u-net.com/faq.html#individuals


2. Information provided by the LETSystem (English website) states that the only serious threat to an established LETSystem is loss of confidence by the participants (a threat common to all monetary system). The main contributing factors to confidence in a LETSystem are:

a. Balance of offers and requests – can I spend what I earn?

b. Trust in the efficiency and accuracy of the account recording process

What will happen to the positive and negative accounts in a LETSystem that ceases to function?

“Nothing, provided that the rest of us carry on trading with each other. Absconders can't take the LETSystem money with them, because it always stays in the system. This is one of the most frequently asked questions and it reflects a justifiable concern about cheating within a co-operative activity. If someone leaves like this, they are basically a dead loss. They have taken more goods and services from the trading community than they have given. But they have turned their backs on a useful support system and will have difficulty if they want to return.

People can, and do, play these games, but it's a bit like cutting your nose off because you want to cheat your face. Once account holders know that the risk is there, but it is not catastrophic, they play their part in looking out for cynical behaviour and act to nip it in the bud before it becomes a big problem. This is one reason why we agree to our balance and turnover details being available to all the other people who hold an account in that system (disclosure). Then you can say that you'd like to trade with a particular person, but you'd prefer to wait until they have put their account into better shape.” - http://www.gmlets.u-net.com/faq.html#leaving

What happens when an individual incurs a LETS debit balance and subsequently leaves the region?

“LETSystem money can only circulate within the system. It cannot be taken out.

No one can force anyone else to transfer or exchange LETSystem money. (In technical language, the units are not redeemable). However, individuals are free to transfer LETSystem money from their account in exchange for cash from another account-holder. And if they have an account in another LETSystem, they can transfer units between systems with the assistance of another account-holder. But the integrity of each system is still maintained. (In technical terms, all transactions must be recorded as double-entry).” - http://www.gmlets.u-net.com/faq.html#transferable