Local Economies

• Local Economies Basics
• Green City Local Economy Models
• Local Economy Links

 

Local Economies Basics

To boost local economies, many places have implemented a program called the Local Economic Trading System (LETS or LET System) which creates a local currency that exists only in bank accounts and which is generated through the work of local members.

The currency (generally set be equivalent to the regional currency - US dollars, for example) has no meaning outside of the local community, which means that the money keeps circulating within a local area, and can allow for full employment, as goods and services are traded without the need for hard currency.

The following description was taken from the Australian Earthlink website:

A LETS System has the following essential characteristics:

1. service in the community - non profit motive where only administration costs are recovered from internal currency.
2. Consent is required at all times. There is no obligation to trade. Account holders have control of movement of lets units in and out of their accounts and all accounts start at zero. No money is deposited or distributed in accounts.
3. Key information is available to all account holders so that any account holder may know the balance (degree of commitment) and trading volume of another account on the system.
4. The unit of currency is normally seen as equivalent to national currency. This is guidance only and the units are not linked to the currency or transferable for it.
5. Your money belongs to you. There is no general disclosure to people outside the system (data protection act).

LETS - The Additional Economy

LETS is the additional economy. People can continue to trade and work without having to wait for the social lubricant of money because everyone creates their own currency. There is a further need to provide for those that consume more than they produce. This may be the poor, large families, the sick, the young, the old, or those with different skills such as philosophy.

The Advantages of the LET Systems

The advantage of a LET Systems is that repayments of debits do not require a direct exchange at the time of purchase as does bartering. The monetary system serves those with money rather than the community in general. The LET Systems allows individuals to make a contribution to the economy and have that contribution recognized.

Initially it can be hard for an individual to see how a LET System can benefit them. It is not the usual competitive edge gained at the disadvantage of others. The advantages include more self employment opportunities, more opportunities to use all their skills, opportunities to develop new skills through training, greater flexibility with personal finances , and being part of a community (The advantages of LET System compiled by Andy Blunt 1/95 version 6 p.1).

Models of Local Economics

Ithaca, New York has a very successful local economic trading system, a program that was initiated to strengthen their local economy.

The following information was taken from the Ithaca HOURS website:

Creating Community Economics with Local Currency

by Paul Glover

Here in Ithaca, New York, we've begun to gain control of the social and environmental effects of commerce by issuing over $63,000 of our own local paper money, to over 1,300 participants, since 1991. Tens of thousands of purchases and many new friendships have been made with this cash, and millions of dollars value of local trading has been added to the Grassroots National Product. We printed our own money because we watched Federal dollars come to town, shake a few hands, then leave to buy rainforest lumber and fight wars.

Ithaca's HOURS, by contrast, stay in our region to help us hire each other. While dollars make us increasingly dependent on transnational corporations and bankers, HOURS reinforce community trading and expand commerce which is more accountable to our concerns for ecology and social justice. Here's how it works: the Ithaca HOUR is Ithaca's $10.00 bill, because ten dollars per hour is the average of wages/salaries in Tompkins County. These HOUR notes, in five denominations, buy plumbing, carpentry, electrical work, roofing, nursing, chiropractic, child care, car and bike repair, food, eyeglasses, firewood, gifts, and thousands of other goods and services.

Our credit union accepts them for mortgage and loan fees. People pay rent with HOURS. The best restaurants in town take them, as do movie theaters, bowling alleys, two large locally-owned grocery stores, our local hospital, many garage sales, 55 farmer's market vendors, the Chamber of Commerce, and 300 other businesses. Hundreds more have earned and spent HOURS who are not in the HOUR Town directory.

Local Economy Links

The Peterborough LETS exchange
Potteries LETS
Ithaca HOURS
Carlisle LETS
The Blackwater Valley LET System
E.F. Schumacher Society Local Economics Quarterly
A Sustainable Local Economy (Britain)
The LET System Design Manual
Project LETS list - list of LETS programs across the globe