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REA-10 Existing facilities. January 8th, 1986
Existing facilities.
It is a conventional understanding that almost any new venture is
essentially competitive.
Either in competing for a share of an existing market, or by
creating a new market sector drawing business from all others,
and within which other competing ventures will arise.
By contrast, a LETSystem is essentially a non-competitive
organism, neither competing with existing institutions nor
inviting competition against itself, but simply realizing
community resources.
(The only significant exception to this is discussed below.)
An orchestra can play different music with a different score or a
different conductor, without having to change the instruments.
The LETSystem itself should represent this idea as fully as
possible, making use of whatever facilities are already available
in the community rather than seeking to establish its own.
Most people in business are acutely aware of their competitive
position, and especially sensitive to the idea that they might
lose something, like business.
Whatever computer facilities are used, perhaps even established,
to support LETSystem administration, should be independent of the
LETSystem itself.
All printing etc, should be subcontracted in preference to empire
building.
At the same time, responsibility to membership requires that the
administration use minimal cash in managing expenses.
Where a monopoly situation on, say, printing or publicity, is
being exploited, all efforts should be made to establish
comparable facilities operating as green as can be.
The cashflow advantages of operations of any sort that will take
green in part will generally ensure the viability of such
initiatives.
Landsman Community Services Ltd. REA-10 Page 1
REA-10 Existing facilities. January 8th, 1986
Many people will look on a LETSystem as though it is some sort of
club, to which they might in some way belong, which offers
certain exclusive privileges and a protective environment.
Yes and no.
For example, there is no limitation on the number of plumbers, or
car dealers, or whatever, that may participate in any LETSystem.
Let things sort themselves out.
The LETSystem must be clearly understood to be entirely different
from such organizations as the tradesmens' groups which guarantee
performance, restrict membership and provide publicity services.
Landsman Community Services Ltd. REA-10 Page 2
REA-10 Existing facilities. January 8th, 1986
The particular exception to the rule that a LETSystem presents no
threat to anyone is the commercial "barter" network.
These systems are prevalent in North American cities, and are
developing to a greater or lesser extent all across the world.
In their own best interests, it is imperative that the people who
are currently operating these systems appreciate that it will
soon be entirely impossible for them to do so without essentailly
becoming LETSystems.
The only significant exceptions to this, for the meantime, are
those major agencies which manage large asset exchanges and often
act themselves as intermediary traders, or otherwise guarantee
the trading credits they record.
The current level of performance of the smaller operations can be
far excelled by LETSystems at a fraction of the costs and charges
typical throughout the industry.
All these operations are impeded by their stance as quasi-banking
institutions and their insistence on cash commissions.
Most compound their problems by insisting that all trading must
be in their credits only, a ruling that makes useful trading
extremely difficult for any business that needs hard cash for
direct costs that cannot be met in trading credits.
Major costs in sales and maintainance are necessary to even hold
the minimal percentage (usually only 1-2% of businesses in
number, and a minute proportion of business in $) of the
potential market.
LETSystems will quickly be able to provide better information
services, through a vastly expanded trading community at a
fraction of the charges currently levied.
This in itself might not pre-empt competition.
It is arguable that cash profit extraction could possibly be
maintained by a very slick operation competing with a LETSystem
not offering a LETSfund program.
Sufficent of the funds extracted could be returned, like lottery
winnings, to keep people willing to throw away their money.
But if a LETSfund program is available, offering cash capital
lending in unprecedented terms, its performance will diminish to
virtually nothing the profits available from the private
exploitation of the community resource.
People will prefer not to give away their cash needlessly,
particularly when they are paying for the management of their own
money in the first place.
Landsman Community Services Ltd. REA-10 Page 3
REA-10 Existing facilities. January 8th, 1986
This creates a very interesting situation.
There is a definite debt of gratitude owing to those who have
pioneered the development of such personal money systems.
It is only a pity that some of them did not some time ago realise
what they were in fact doing.
Nonetheless, they represent a very considerable resource in
themselves.
In addition to the management expertise, data processing and
general administration already in place, their client body might
provide an excellent nucleus of experienced traders around which
a full LETSystem could more quickly emerge.
Any member of such a system who is in good standing and can make
it work, will find it much easier and more valuable to use a
LETSystem, no matter what their business.
To be sure, some existing systems, and some members, will be poor
starting material, but on the whole it is likely that some
mutually beneficial arrangements can be made.
Landsman proposes that all LETSystems beginning operations in
communities where such commercial systems exist, should attempt
to interest the ownership in adopting LETSystem procedures and/or
becoming the service agency itself.
As I understand the current situation, few people make very big
money out of such operations.
If they ever show any great success, they are apt to generate
their own competition.
The opportunity now exists for them to put their skills and
experience to work in a far larger operation, with a far greater
significance in the community than their current operations could
ever offer.
Landsman Community Services Ltd. REA-10 Page 4
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