From AshevilleLETS

Some questions adapted from a FAQ by Warwick Rowell.

What is LETS?

A LETS is a locally initiated not-for-profit community organization which provides an information network to facilitate indirect trading among its membership. LETS record transactions of members exchanging goods and services by using the unit of locally created LETS Credits. The LETS Credit does not involve coins, paper money or tokens of any kind but rather acts as a scoring system, keeping track of the value of individual members' transactions within the system. It is simply a community information system attached to its own market-place.

How do LETS work?

LETS works a little like a baby-sitting club, where members earn credits by baby-sitting other people's children, spending whenever they need a baby-sitter. Unlike a baby-sitting club, however, LETS extends the range of services to whatever is available locally. A successful LETS can provide members with food, clothing, housing, transport, health and legal services, repairs, equipment, business services, entertainment and much more, at a reduced or no cost in dollars, through the operation of a community-based credit economy. It is available to anyone who is a member of the community and who joins a LETS. Individuals, families and collectives can use it to advertise goods or locate what they want, either by telephone, email, mail or in person.

Information is updated regularly, added to or deleted at any time, and circulated regularly to members.

Upon paying a small registration fee, members choose a Member Name which acts as a license to trade. On joining, members also list goods and services they are prepared to offer to, or request from the LETS community.

Why start LETS?

When ordinary money is in short supply, needed community projects are put on indefinite hold, local businesses fail, people become unemployed, and individuals and families suffer, not because they have nothing to offer, or because they lack skills and abilities, but simply because there is not enough money to go around.

LETS help develop and free local markets by operating like a community bank, in which members open an account. Unlike a bank, however, it gives interest-free credit, generated at the point of sale, to facilitate trading with other members. In this way, LETS acts like a supplementary currency, creating an additional system of value in a community. By supplementing conventional cash flow with a local currency, a community can maintain full employment, and protect itself from changes and fluctuations in the money supply.

What are the benefits of LETS?

There are many benefits to LETS. Some others include:

Mobilizing the Real Wealth of a Community: The knowledge and skills of its people is the real wealth of a community. A local currency keeps this wealth working in the community, even while conventional money drains away, generating employment and income for all involved. People who have accumulated a wide range of skills and abilities suddenly become once again highly valued members of the community.

Helping Community Groups: LETS help other local community organizations by giving them access to resources to extend their services to customers or clients currently not gaining access. Volunteer burn-out is reduced as LETS helps organizations recognize and acknowledge donated time and effort, allowing volunteers to meet their own needs while meeting the needs of others.

Fostering Self-Reliance & Self Esteem: In our communities, unemployment is growing at the same time increasing numbers of people are unable to get their needs met. Supporting single-parents may need baby-sitting or other services for their children. Elderly pensioners also need a range of specialized services, or may simply require company to combat loneliness. At present a person's ability to access these and other services is proportional to their purchasing power. LETS break this bottleneck, by making it more possible to match someone's need with another's available labor. People are no longer dependent upon welfare or charity, and everyone's self esteem benefits.

Increased Personal Savings & Disposable Income: Because members can get local goods and services through a LETS, members can substitute LETS for dollars. The disposable income in dollars, available after basic needs are met, actually increases. For those involved who are regularly trading in LETS will find they have more money left in their pockets at the end of each week. The rate of community savings, and therefore of community investment capital generation, and with it the quality of life of everyone, will improve.

Creating Local Economic Control: LETS helps to plug the leaky bucket of the local economy, by creating a local currency that cannot leave the community, thereby reducing uncontrolled and activity limiting capital outflows. As LETS credits only have value in the community in which they were generated, they stay circulating to create more wealth for everyone. LETS gives community members a powerful new tool with which to "steer" the local economy in directions which benefit everyone.

Support to Buy Local: At present, economies of scale, transfer pricing, and capitalizing on cheap Third World labor or raw materials enables larger multinational and interstate manufacturers and retailers to tip the so-called "level playing field" in their direction, to the detriment of local skill and resources. LETS provides a dollar discount to those using local skill and resources.

Building Community Support Networks: Because LETS plugs members into a local information network, it provides new or isolated residents living in a local community with an instantaneous community support system, which avoids the difficulties of introductions to strangers. Through the LETS network all members have a ready reason for calling for support or help. Elderly pensioners, unemployed youth, supporting parents, new arrivals, and single-income families can all build firm friendships on relationships established through a LETS connection.

Fostering Social Justice & Equality: Because the value attached to one's time and commitment is set individually amongst the participating members, a LETS equalizes the wage differential that exists in the value attached in the conventional economy to the work of women as compared to the work of men. This greater equality helps to prevent the polarization of the community between those that "have" compared to the "have-nots". There is no value in accumulating LETS credits, as they cannot earn interest. It is only by putting them to productive work that the individual or the community benefits. LETS fosters local participation in the community at all levels.

Helping Community Projects: There are many worthy and worthwhile community projects and activities that languish for lack of money. By donating LETS credits to a community chest, major community initiatives for local improvement or charitable work can be generated, without putting a severe strain on one's dollar income. Because the local LETS credits remain in the local community, the wealth donated will circle back to the donor as a form of long-term "money back guarantee", to generate demand for the goods and services they are providing to their community.

Building a Sense of Community: The increasingly transient, temporary and mobile lifestyle in the United States has greatly damaged our sense of belonging to a meaningful community. Because a LETS builds local relationships it is a powerful means of regenerating a sense of trust among members, a necessary component to the health of any community. As communities become more self-aware and self-reliant as the result of a LETS, community isolation, fear and loneliness diminishes and everyone benefits.