Local Exchange Trading System - History

History

Michael Linton originated the term "local exchange trading system" in 1983 and for a time ran the Comox Valley LETSystems in Courtenay, British Columbia. The system he designed was intended as an adjunct to the national currency, rather than a replacement for it, although there are examples of individuals who have managed to replace their use of national currency through inventive usage of LETS.

LETS networks use interest-free local credit so direct swaps do not need to be made. For instance, a member may earn credit by doing childcare for one person and spend it later on carpentry with another person in the same network. In LETS, unlike other local currencies, no scrip is issued, but rather transactions are recorded in a central location open to all members. As credit is issued by the network members, for the benefit of the members themselves, LETS are considered mutual credit systems.

The time-based currency mentioned in United Nations Millennium Declaration C6 to Governments was a UNILETS United Nations International & Local Employment-Trading System to restructure the global financial architecture.

A number of people have problems adjusting to the different ways of operating using a LETSystem. A conventional national currency is generally hard to earn, but easy to spend. To date LETSystems are comparatively easy to earn, but harder to spend.

LETSystems often have all of the problems confronting any voluntary, not-for-profit, non governmental, community based organisation. LETS organisers often complain of being overworked, and may suffer burnout. Many schemes have ceased operation as a result. Many of these problems can be overcome through effective community organization and development and effective use of software.