LETS (Local Exchange Trading System)

Every country has its national currency, the money that everyone in the country uses. However, some communities in industrialised countries are also 'making' their own currencies. They have invented a system that helps local people and local businesses. The system is called LETS (Local Exchange Trading System).

The people who join a LETS can do jobs for each other and buy things from each other using credit in their local LETS currency. Each member of the LETS has a trading account which records the credit they earn and the credit they spend.

CREDIT: the money you have in an account.

Here is an example of how the LETS system works.

John lives in Canada. He works in a factory, but recently his working hours were reduced by half. This meant that he only earned half as much money, but he had a lot more time.

REDUCED: made less.

John read in the local newspaper that some people in his community wanted to start a local currency system. They held a meeting and John went.

Everyone at the meeting was asked what jobs they could do for other people or what goods they could supply. Each person was also asked what kind of goods and services they wanted to receive.

GOODS: Things that are for sale.
SERVICES: Providing help for people.

John said that he could cut wood for fires. Susan, who makes pottery, needs a lot of wood for her kiln, so John can cut firewood for Susan.

John and Susan agree how much she will pay him. Susan pays John partly in national money and partly in local currency - for example, 100 LETS dollars.

POTTERY: Pots and dishes that are made from baked clay (a special kind of earth)
A KILN is an oven that is used in making pottery.

FIREWOOD: wood that is burned to make heat

When John has done the work, Susan telephones the LETS office. She gives her name and her account number. Then she asks them to take 100 LETS dollars out of her account and credit that amount to John's account.

John can spend his LETS dollars with other members of the group. The local grocery shop allows people to pay 20% of their bill in LETS dollars, so John can pay for some of his food with the credit he earned from Susan. He simply calls the LETS office and asks them to transfer the correct amount of LETS dollars from his account to the grocer's.

The grocer can buy vegetables for his shop from a local farmer who accepts LETS dollars. And so the system continues.