Director,
T.E.(Terry)
Manning,
Schoener 50,
1771 ED Wieringerwerf,
The Netherlands.
Tel:
0031-227-604128
Homepage:
http://www.flowman.nl
E-mail: (nameatendofline)@xs4all.nl : bakensverzet
Incorporating
innovative social, financial, economic, local administrative and productive
structures, numerous renewable energy applications, with an important role for
women in poverty alleviation in rural and poor urban environments.
"Money is not
the key that opens the gates of the market but the bolt that bars them"
Gesell, Silvio The
Natural Economic Order
Revised English
edition, Peter Owen, London 1958, page 228
Edition 12: 02
November 2006
The local exchange trading (LETS) system foreseen will be set up during
Moraisian organisational workshops.
The following texts, drawings and graphs form
an integral part of this project proposal. They indicate the type of structure
which can be expected to come out of the workshops.
DRAWING OF INSTITUTIONAL
STRUCTURES.
DRAWING OF LETS
STRUCTURES.
HOW A LETS
TRANSACTION WORKS.
A simple
introduction to local money systems.
Information package
LETS LINK UK.
In principle, (one, two, three or four ) local
LETS currency systems will be set up (according to clearly definable operating
areas. )
All adults within a system should be registered
as members, but use of the system with exceptions for goods and services
necessary for the project itself, would be voluntary. Any member may usually
freely choose whether to conduct a given transaction in the local currency
system or within the formal currency system.
The LETS group(s) will have (30.000) registered
adult members. Bearing in mind the recommendations of the international
convention on the rights of children, children under the age of (14) will not
be registered. They will become registered members of their local LETS systems
upon reaching the age of (14). The members of each group will be coded so that
their and tank-commission and well areas can be identified and the cost of more
local, optional, initiatives such as PV lighting for study purposes debited to
the members directly involved rather than to the whole project area.
A "catalogue" of goods and services
is prepared periodically in a form which can be understood/read by the group
members. Which goods and services are
available in the project area and who provides them is already widely
known at local level.
The reference value of the local money system
will be decided with the local population. It will probably be based on the
perceived value of an hour’s work. (Since the local LETS currencies will have
the same reference value, they can be transferable from one to another.
However, not all goods and services will be transferable between the different
systems, as this could lead to a drain of resources from one system to
another.) LETS systems work best when the financial resources remain balanced
within each system. The LETS coordinators and the members will decide which goods
and services are "exportable". Gypsum composite products made in
group A, for instance, could be exportable to group "B". Cloth made
in group "B" may be exportable to group A. Crops and vegetables not
grown in one group could be importable from the others.
Assume that a gypsum composite product is sold
by a group A member to a group B member. The transaction would be in local
currency A. The gypsum composite product manufacturer would be credited in
local currency A. The coordinator of group A would advise his counterpart in
group B of the debit for the group B member and separately credit group A with
the same amount in group B currency. The group B coordinator would debit the
group B buyer in local currency B, and, separately, debit group B with the same
amount in group A currency. Goods and services supplied by group B to group A
would be registered the other way round. The group A and B coordinators then
simply eliminate the respective debits and credits by pairing value units one
for one.
The following fully automated registrations take place:
1.
The group A producer would be credited in local
currency A.
2.
The coordinator of group A would advise his
counterpart in group B of the debit for the group B member.
3.
The coordinator of group A would credit his group A
with the same amount in group B currency.
4.
The group B coordinator would debit the group B buyer
in local currency B.
5.
The group B coordinator would debit his group B with the same amount in
group A currency.
6. Goods and services supplied by group B to group A would be registered
the other way round, following the procedures described in steps 1) to 5).
7. The group A and B coordinators then simply eliminate the respective
debits and credits by pairing value units one for one.
8. In case of a (large) remaining credit balance of one of the two groups
at the cost of the other, the coordinators will take whatever steps necessary
to bring the balance of the accounts as close as possible back to zero as
quickly as possible. There are many ways of doing this. Allowing extra goods
and services to be exported from the debtor system to the creditor system is
one way. Organising markets or fairs with debtor area products in the credit area
is another. Organising tourist outings of creditor area residents in the debtor
area is another.
The processes broadly follow traditional
balance of payments transactions but the objective is to maintain a balance in
imports and exports. A large debit balance between one LETS group and another
would show resources are being transferred from one group to another. The
coordinators would then have to take steps to correct the imbalance. They
could, for example, temporarily extend the range of goods and services the
debtor group can export to the creditor group, such as by arranging a special
market.
It is a key to the success of the system that
the imports and exports of each group remain balanced, their sum tending to
zero.
There will be an elected local LETS coordinator
in each tank commission area. The LETS coordinator will need to be literate and
will be responsible to the general LETS systems coordinator. The local
coordinators will help those members unable to write/sign their cheques (or
deal with other methods of payment), arrange distribution of chequebooks (or
other payment forms)to the LETS users, collect the used cheques (or equivalent)
deposited in the LETS POST box near the local water tank and take them to the
LETS systems coordinator at well-commission level for registration. The local
coordinators will also display the monthly or weekly reports on the LETS NOTICE
BOARD near or above the LETS POST box, advise illiterate members of their LETS
balances, call a fortnightly or monthly meeting where the users can discuss the
operation of their LETS system, make special requests (such as, for example,
increasing the debt limit for sick members or for those making special
purchases), and discuss ways to use the goods and services of those with high debts
so as to help balance their trading accounts. The local coordinators will also
discuss with the members selected proposals for allowing export and import of
goods and services into the local LETS system and report back to the general
LETS coordinator.
(The first general LETS systems coordinator
will be chosen by the Project Administrator.) The LETS system coordinator and
the locally elected LETS coordinators at well-commission level will make up the
LETS MANAGEMENT COMMISSION. The commission will meet at least once a month to
discuss particular problems and to decide on actions needed to balance the
export/import accounts amongst the various local LETS currencies.
The fortnightly/monthly reports for members in
each tank commission area are in the public domain. They will be published on
the local LETS NOTICE board and discussed at a general meeting of the local
members. The report will show, for each member, the previous balance, the
current balance, the total number of plus transactions and minus transactions
conducted. Lists of plus and minus transaction since the previous report can be
supplied on request..
The cheque (or other transaction form used)will
have three parts. Each part will have the member's name and LETS number
pre-printed on it. The SELLER'S cheque is used in each transaction. The BUYER’S
name and system code are filled in on the cheque, with the assistance of the
local coordinator where necessary, as well as a description (with LETS code) of
the goods or services sold. Finally the cheque is signed by the buyer
and deposited by the seller in the LETS post box. The amount credited to
the seller must always be exactly the same as that debited to the
buyer(s). The second “slip” is a memo
for the buyer. The first “slip” is a memo for the seller.
Payments for LETS services provided by members
to their communities or to specific groups such as clubs will be debited to a
special LETS code for the community or club. When the community or club debt
reaches one LETS currency unit (or other agreed amount) for each member, each
member will be debited with that amount. The community or club LETS code will
then be credited by the same total amount. This system allows collective
communal property to be involved in the LETS transactions. For example, the
sale of wood from communal land can be registered as a credit to the LETS group
involved, and then transferred from there to individual group members.
Forward: effects of
inflation.
Back: taxation and the
local money systems.
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