The Community Economy

The relationship between poverty and social and environmental issues is well established, but it is not yet generally recognised that a major cause of the problem lies in the particular form of conventional money itself, nor that an effective solution is immediately available.

Communities everywhere depend on flows of national currency to support their internal economy. That currency, however, continually drains out of communities, particularly from those most in need. This is inevitable, since conventional currencies all exhibit three characteristics :

    • money exists in limited supply,
    • it goes anywhere, and
    • it is issued by centralised authorities.

Hence communities often lack money for internal economic activity; people are unemployed, resources are idle, business declines and the tax base is reduced.

To maintain their internal economies and pay for imports, communities typically pursue the short term cash crop demands of the external global economy, to the detriment of their long term interests. They do what the external money demands, generally at heavy cost to the local environment, culture and economy, in a pervasive pattern of decreasing self-sufficiency and increasing poverty.

Money, however, is fundamentally nothing but information, so it is always possible to create local money to finance local needs. The only relevant considerations are the stability and viability of such a currency, and the practical aspects of its implementation.

The LETSystem is currently the most advanced form of local currency. Variants of the primary system, first developed in 1983 in British Columbia, are already in use in about 500 communities world-wide. Second generation LETSystems are presently in development in the Comox Valley.

LETSystems provide conditions for full employment, with an inherent preference for those sectors of the local economy that apply local labour and local resources to meeting local needs. They are of particular benefit to those presently marginalised by the cash economy - women, youth and others whose skills are undervalued.

Wherever implemented, LETSystems can directly, and virtually immediately, eliminate monetary poverty, and, by more effectively deploying local resources, increase the overall capacity of the community to support secondary manufacturing and reduce material poverty.

Systems can operate on scales ranging from less than a hundred participants, up to (theoretically) several millions, and can be implemented in situations ranging from a Third World village to a First World high tech context.

LETSystems support a modern, individuated and familiarly monetized means to recreate tribal or village, communitarian economics. They create patterns of trading comparable to gift exchange networks, within our present communities, within our present urban realities, and alongside our present economic structure.

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Version #002 27-7-96