LETS

Definition

From the main Wikipedia article:

"Local Exchange Trading Systems (LETS) and Schemes are local, non-profit exchange networks in which all kinds of goods and services can be traded without the need for money. A LETS network uses an interest-free local credit or currency so direct swaps do not need to be made. A LETS member may earn local credit by doing childcare or computer work for one person, and spend it later on food, hiring equipment, plumbing, or carpentry with another person on the same network. A LETS is sometimes also referred to as a Mutual Credit system." (http://en.wikipedia.org/wiki/LETS)

Much as P2P-systems, LETS is based on transparency, see the concept of Participation Capture.

Discussion

LETS as an `honor' system

"The LETSystem units are information about an individual's position within a trading community. All accounts begin at zero, but nobody needs to earn before spending, because accounts can have unlimited negative balances. This information is disclosed in the network. If someone goes away leaving a negative balance nothing happens. But people could refuse to trade with that person until he or she has put his/her account into better shape. That is why balance and turnover details are available to all the other people who hold an account in that LETSystem.So LETSystem can be considered an honor system. Most of the other complementary currencies (with the exception of Ithaca HOURS) work in a similar way." (http://www.kuro5hin.org/story/2003/8/26/172939/637)

Local Exchange Systems vs. non-reciprocal Peer Production

Comment by Michel Bauwens:

"How are the Local Exchange Trading Systems, through which people can trade services and hours of labour, related to peer to peer. Peer production is essentially non-reciprocal: anyone contributes voluntarily and use is open to all. This works fine in spheres of abundance. LETS scheme belong to the gift economy and are a form of exchange. But unlike the market, labour hours are considered equal, and thus the exchange is based on the idea of partnership and sharing. Such peer-informed forms of exchange are ideal for services and probably also for the surviving non-capitalist traditional economies. They will not replace the market however, in the sense that equal labour does not take into account the amount of investment needed to achieve some types of particular labour. Such pricing can take place in a market only."

Key Books to Read

Book: The LETSaholic Twist. By James Taris. 2005

More Information

Websites:

• LETSystems: http://www.gmlets.u-net.com/
• International LETS Groups Directory http://www.lets-linkup.com/
• LETS at transaction.net http://www.transaction.net/money/lets/