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        ID-16           Systematic Essentials.        January 8th,   1986

        Any LETSystem with more than two members can be shown to offer 
        to those members some real advantage over reliance on the present 
        common expedients of cash or barter.

        Cash systems threaten community and direct barter is inflexible 
        and only occasionally effective.

        However, the full advantages of LETSystems will increase as does 
        the variety of different goods and services available.

        At full operation, any local expenditure should be available for 
        part cash and part green, the proportion of green being dependent 
        upon the amount of locally added value in the item.

        A LETSystem is not however an unlimited growth system.

        The most specific reward of a LETSystem is not primarily the 
        ability to spend.

        It is actually the ability to earn, to give service in one's 
        community and to be acknowledged for that service, which 
        underlies and maintains the ability to spend, to receive the 
        products of others.

        The ability to earn green is strongly related to the system size.

        In a small system the rate at which my expenditure generates 
        demand for my services is higher and generally more dependable 
        than in a large.

        For this reason, larger LETSystems will tend to have lower 
        activity rates than smaller.

        As a LETSystem grows there will be increasing activity generated 
        in smaller derivative LETSystems comprised of subsets of the 
        members of the larger.

        The larger system will not lose its relevance, but the activity 
        and the range of credit and committment will lessen.

        The process of reformulation into smaller decentralised nuclei is 
        similar to those by which natural organisms manage their relation 
        to their environment.

        Whereas each dollar on the credit side of the LETSystem is 
        balanced by one on the committment, it need not be that there are 
        an equal number of members on each side.

        In terms of the ability to spend green easily and the consequent 
        experience of value, it is clearly preferable that there are many 
        members willing at any time to accept green.

        Landsman Community Services Ltd.              ID-16     Page    1

        ID-16           Systematic Essentials.        January 8th,   1986

        This is most likely if the majority of accounts are in committment.

        This can be easily established if a few large positive accounts 

        It is useful to arrange that some of the initial members be 
        willing to accept green and limit their spending for a while as 
        the system develops momentum.

        If commercial memberships entry fees are billed in green and cash 
        then the LETSystem administration account can itself fulfill this 

        These deliberate biases will enhance early system development.

        The contrary arrangement, with several large negative accounts 
        and a consequent majority of positives, is only acceptable in a 
        mature system, where experienced members will be willing to earn 
        green dollars although they already have some.

        In a new system, most members with positive balances will be 
        properly concerned to spend those they have earned, probably 
        their first few transactions before earning again.

        Hence early large negative accounts will have a depressing effect 
        on progress.

        While a large temporary or even permanent negative account is not 
        ultimately critical to the system, it is likely to be a cause of 
        concern in the early stages and will inhibit trading.

        Some care should be taken to avoid these conditions, and the 
        assumption of such large committments by those closely involved 
        in the establishment or administration of the system is 
        particularly contra-indicated.

        However much such persons are actually committed to the benefit 
        of their community, it had better be expressed through the 
        acceptance of green from others rather than the issue thereof.

        Now that the essential development work has been done, and 
        programs, administration procedures, business accounting packages 
        etc., are freely available, there need be no great expenditure of 
        time or effort by any person to initiate and promote a LETSystem.

        LETSystems must be understood by all as community facilities 
        which can be run with absolutely minimal administration.

        The initiator of a LETSystem will derive sufficient benefit from 
        the expansion of the economy within which he/she can earn green 

        The administration of a LETSystem is a part-time occupation.

        As the work load expands it should be shared by several members 
        on a part-time basis.

        Landsman Community Services Ltd.              ID-16     Page    2

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