previous - ideas - further
ID-9 LETSystems. December 12th, 1985
LETSystems
A LETSystem is a self-regulating economic network which allows
its members to issue and manage their own money supply within a
bounded system.
Essentially, a LETSystem resembles a bank, and being a member of
a LETSystem is as simple as having another bank account.
Members' accounts hold "green" dollars, a currency equivalent in
value to the federal dollar, but no money is ever deposited or
withdrawn.
All accounts start at zero and members can use "green" dollars
only with other members.
The system is thus always exactly balanced with some of the
members in credit and others in debit.
This creates a local recirculatory currency, whose effectiveness
is determined by these arrangements :
- there is never any obligation to trade.
- any member may know the balance and turnover of another
member.
- no interest is charged or paid on balances.
- administrative costs are recovered, in the internal
currency, from member accounts on a cost of service basis.
LETSystems are self-stabilising and can be used with total
freedom from risk of financial loss.
Set-up costs are minimal and the operation can be self-supporting
from the outset even at a fraction of its full capacity.
Costs at full operation are estimated to be less than 0.5% of
turnover.
Administration is simple and requires no special training.
Henry Ford said it was good engineering to "Simplicate and add
lightness."
We consider that LETSystems as described above represent the
simplest and lightest method yet devised to account for the give
and take that is trading in the world.
A diligent exploration will reveal that they handle with total
ease all of the technical difficulties described in ID-7
Landsman Community Services Ltd. ID-9 Page 1
previous - ideas - further