LETSystem and what it is eaten with

    In the context of the crisis of the market financial system, I would like to make a short review of one of its alternatives. No, no, in no case will it be a question of a planned economy, feudalism, or something else.

    It will be about one of the systems of division of labor at the local level.
    The first local division of labor system — the local exchange system (MSS) or the local currency system (SME) —was introduced in the Vancouver region of Canada in the 1970s during the mine closure crisis. People simply did not have enough money. In 1976, in West Vancouver, David Weston launched the Community Exchange system, where the measure of exchanges was based on the time required to perform one or another service required by community members. Then a similar system was launched by him on the island of Vancouver. Inspired by this idea, Michael Linton, in 1983, launches a green-dollar exchange system on Vancouver Island with a value equivalent to the Canadian dollar. He calls it LETS (Local Exchange Trading System), creates exchange management software and Landsman Ltd.

    The core of this system is a centralized database, accessible to any member of the LETS network and containing all the information about the account of a particular participant. A loan is earned by providing any services or goods to others, and, subsequently, can be spent with the aim of acquiring other goods / services from other LETS members.
    Three possible states for a particular account:
    • negative balance - For an individual, this is a debt to work (goods, services) that he owes to the community. For LETS as a whole, the sum of such negative balances shows the amount of labor energy available in the system to fulfill the obligations of its members;
    • positive balance - For the individual, this is an opportunity to expect the acquisition of the necessary goods and services in the community in exchange for goods or services previously supplied by him for the community members. The sum of all positive residues would reveal the full expectation of labor energy hidden in the system;
    • zero balance - The individual has neither expectations to be met, nor obligations. In the system as a whole, a zero balance in a separate account does not mean anything (if only not everyone in the system has zero accounts - it would just be a broken SMV).
    LETS - closed systems, their total balance is zero.

    Linton examined the social aspects of poverty and observed that in each local community or region, the level of trade was directly dependent on the flow of official currency. The drop in the amount of available money inevitably led to a decline in business, unemployment and social problems, which we are slowly starting to observe now. Linton also noted that the amount of goods and services that people want to exchange did not depend on the amount of money they have. Often people had enough items and skills to exchange, but there was no medium of exchange. From here came the idea of ​​supplementing money to help local economies. Finding that the absence of maternity money does not allow people to trade. If materials and human resources are available, then why do we agree that there is not enough money, to put them in business? Money in this case is just information, they do not need to simultaneously be a way to save value. If money is just information, and not a certain symbol, equated to real wealth, and even, sometimes being its only a priori expression in the modern world, then they will never be scarce.

    The "system" works very simply. Jenny needs to cut the grass in front of the house. She scans the local newsletter and discovers that Bill offers such a service. She calls Bill and negotiates a price of 30 "beans." After the lawn is trimmed, Jenny calls the coordinator (usually a volunteer), who takes 30 “beans” from her account and credits them to Bill's account. “Beans” exist only on paper, and no taxes or interest are charged on any operations. In a well-functioning system, the sum of all "beans" should be zero (someone in the red, someone in the black). The LETS system is completely autonomous from the state. Each group has its own money: in addition to “beans”, there are, for example, “talents”, “links”, “ecu”, “eddy”. In a more poetic France, there is a currency called "grains of salt" (grains de sel - here is the game on the French abbreviation SEL).

    After the first successes and failures, the system was finalized and slowly began to spread around the world. Local currency systems, including those other than LETS, have appeared in many in the United States, Australia and New Zealand, the UK, France and Japan. In countries of the Third World, approximately from the mid-90s, CMWs were launched in Mexico, El Salvador, Peru, Argentina, Brazil, Senegal, Thailand, and Indonesia. Launched in 1995 in Argentina, the Global Barter (GBS) network has become the largest national SMV in the world with 500 divisions, half a million members and multi-million dollar turnover. GBS is distributed in South and Central America; its units operate in Uruguay, Brazil, Chile, Peru, and Colombia.
    LETS systems are based on five basic principles:
    • cost -effective payment - LETS is a non-profit non-profit scheme with a strong ethical focus. When paying at cost, no member of the system charges a commission or earns a profit. Exchanges are conducted in order to meet the needs of some members of the system for services or goods produced by other members of the system. To pay for the professional administration of the system, its managers are rewarded on a reasonable fixed basis in local currency;
    • consent - Each participant, upon entering the system, undertakes to conduct trade in it and pay with his goods and services the resulting negative account balance. Consent is necessary for each transaction: no one has an obligation to trade with one or another participant. Finally, the consent of the account holder is needed for debiting or lending;
    • information disclosure - The trust of participants in the system and in each other is vital for the operation of LETS. Each participant can request data on the total turnover and account balance of other participants. This partly removes the issue of abuse;
    • equivalence - LETS money is equivalent to national currencies. This facilitates the entry into the system of unprepared participants, and also facilitates the accounting and calculation of taxes to corporate members of the system;
    • interest - free - LETS money exists only to facilitate the exchange. It is unprofitable to store or use them as goods.
    The LETS system keeps records of debit and credit exchanges, evaluating them according to the “unit of account” defined at the local level; only these units are recorded, but currency additions may be agreed upon during the transaction, in particular where cash expenses arise; the central system distributes offers of services of participants, but is not responsible for the quality of these services, the competence of those who offer them, or for problems with paying duties and taxes; everyone can know about the status of each participant’s account. Finally, the balance of accounts, credit or debit, does not cause interest accrual, and participants do not try to have a positive account in order to have access to the service. The emphasis is on the friendly nature of the system, its transparency and the participation of all members of the system in its work. In later LETS that set debit limits, Based on the experience of the first LETS that broke up, there are special committees that are called upon to find “abnormal accounts” (exceeding debit limits) in a timely manner and are looking for ways to put their accounts in order with their owners. There is no central authority: LETS advice is used in practice, but is not forced into anything. Only the agreement between participants in a specific LETS plays a role.
    Sources of
    kf-news.ru/2008/10/16/lets-against-global-currencies.html
    mmm555.narod.ru/ekonomika.htm
    www.contr-tv.ru/common/514
    www.contr-tv.ru/ common / 517

    PS And than Lets is not a Habr.
    PPS Please do not kick much, this is my first post. =)

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