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        ID-9-1          Theoretical context.          December 11th, 1985

                              Theoretical context.          


        A LETSystem is a facility which allows its members to generate 
        and manage their own currency system independent of and parallel 
        to the federal monetary system.  

        It offers communities everywhere the tools to stabilize and 
        support their local economy without diminishing their 
        participation in the whole.  

        It allows members of the local community to exchange goods and 
        services on a "green dollar" basis when federal dollars are 
        scarce or unavailable.  

        This appears to be the first effective application of network 
        concepts, as distinct from hierarchical structures, to economic 
        theory and practice.

        What is new about a LETSystem is that it is not a bank, or a 
        credit card barter system, but in fact, an independent local 

        Conventional currencies have many inevitable structural problems, 
        such as instability, management of volume, reserve backing, and 
        administrative costs.  

        LETSystem handle all these issues and many others.

        LETSystem can be cheaply initiated anywhere; basic equipment 
        needs are met with a home computer and telephone.  

        This is an innovation which has already, in its first three years 
        of operation, clearly demonstrated both its value to the 
        community and its financial viability.

        Landsman Community Services Ltd.              ID-9-1    Page    1

        ID-9-1          Theoretical context.          December 11th, 1985

        Theoretical Context

        Money is an information system we use to deploy human effort.   

        A LETSystem supplements the conventional monetary system to bring 
        underemployed resources, people, equipment, land, and energy into 
        effect as they are needed by the community.

        Conventional  monetary  systems involve the issue of money  to  a 
        population by an authority.  

        The amount of money issued hopefully matches the productive 
        capacity of the community.  

        The management of the money supply is the major problem of 
        current economies.

        The expedient of allowing the individual to issue money ensures 
        that the money supply reflects the needs of the community.  

        This is impractical in a paper monetary system, but can be easily 
        administered by a computer network.

        Most communities, and many nations, are excessively dependent 
        upon imports and exports and have little internal structure and 

        When exports lag behind imports a currency shortage develops and 
        people lose their livelihood.  

        This is often unnecessary, since it is, generally, only the money 
        that is missing.  

        People, tools, energy, and materials are often all at hand and a 
        local currency can almost invariably return any community to full 

        The management of such a currency can, of course, be problematic 
        if conventional paper money systems are used.  

        The volume of money in circulation, its initial distribution and 
        tendency to accumulate, the question of backing, inflationary 
        tendencies, problems of fraudulence and loss, and the simple cost 
        of maintenance are all serious problems;  so much so that most 
        governments have chosen to legislate against local "scrip" issue.

        A  rigorous  examination of the LETSystem concept  however  shows 
        that none of the above issues are problems,  and further that the 
        operation  of a LETSystem contravenes no existing legislation  in 
        Canada or the U.S.A.

        Landsman Community Services Ltd.              ID-9-1    Page    2

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