The fundamentals of LETSystems

The LETSystem is designed to deal with the problems associated with conventional money, and is defined by three underlying considerations:

      • community,
      • personal and
      • practical.

    Community:

    The principle of community refers to a finite group of people who decide to participate in the system. It also requires that nobody can claim or exert ownership.

    Personal:

    The money created within a LETSystem is personal in that it is created by the promises of the participants. The consent of the individual is required at all times. No third party can have control over the money and the money cannot leave the system.

    Practical:

    The LETSystem differs from other personal money networks by adopting a practical stance. The unit of measure has the same value as the national currency, so allowing the local money to integrate into the mainstream economy where it sets up beneficial cycles within the community.

    Essential Characteristics

      1. A service in the community

        Administrative costs are recovered, in the internal currency, from each account according to the cost of the service. The system operates on a not-for-profit basis.

      2. Consent is required at all times

        There is never any obligation to trade.

        It is the account-holders who have control over the movement of money out of their accounts. The administration can only act on the instructions of the account-holder who is making payment.

        All accounts start at zero, no money is deposited or issued

      3. Key information is available to all account-holders

        Any account-holder may know the balance (the degree of commitment) and trading volume (the level of participation) of any other account on the system.

      4. A convenient measure

        The unit of account is a measure equivalent to the pound sterling.

      5. Your money belongs to you

        Your money is personal, in every way your own money. No interest is charged or paid on balances.

      A personal money network that adopts all the above criteria and agreements is a LETSystem.

      Written by Michael Linton of Landsman Community Services Ltd.

      Version #003 27-7-96