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ID-9-4 Notes on Definition. December 11th, 1985
Notes on Definition.
The bookkeeping function of the LETSystem closely resembles that
of a credit-union whose members can use the currency only in
trade with other members.
Hence credit transfers between accounts and the issuing of
periodic statements are the only necessary accounting procedures.
This can be done by hand or computer, as appropriate.
The currency unit used in the system should be recognized as
equivalent in value to the regional legal tender so that
valuation between members is customary and the LETSystem can
associate accurately with the existing economy.
It has to be clear to all participants that the internal currency
of the system has no intrinsic value.
It is never issued and cannot necessarily be cashed.
The size of the system, and the activites undertaken within it,
will thus tend to be naturally limited by members' appreciation
of mutual interest and confidence.
The distribution and development of LETSystems will generally
therefore reflect natural geographic regions and economic
communities.
Accounts can be positive: when a member has earned more than
spent to date; such accounts are "in credit".
Equally, some accounts must be negative: to date the member has
received more than has contributed; in which case the account is
considered to be "committed".
Clearly, only those accounts in credit risk loss if the currency
should devalue.
The economy is thus always balanced, the total value of green
dollars held in credit being matched by the commitment of the
members in debit.
The individual member effectively issues money into the community
by spending and redeems it by earning or selling.
All transfer from a member's account is on that member's
authority, and may not be enforced otherwise.
Landsman Community Services Ltd. ID-9-4 Page 1
ID-9-4 Notes on Definition. December 11th, 1985
Neither can a commitment be invoked.
The commitment is to the community as a whole, not to any one
person, so no member can ever demand performance from another.
However, a member who is reluctant to earn or receive "green
dollars" will find it progressively difficult to spend them.
A negative bank account is a private matter, but a negative LETS
account is an issuing of promises in a community, and is thus, de
facto, a public act.
The LETSystem offers a facility, and proposes an ethic, that
services can be exchanged on a "cost to provide" basis (including
reasonable profit).
It is appropriate that its own service is offered in this way.
The constitution of LETSystems as non-profit agencies paying
administrative staff at current market rates will obviate
tendencies to profiteering.
Landsman Community Services Ltd. ID-9-4 Page 2
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