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
and
"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,
“Poverty is created scarcity”
Wahu Kaara, point 8 of the Global Call to Action Against Poverty, 58th
annual NGO Conference, United Nations,
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 or two ) 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 about 50.000 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 may be chosen by the Project Coordinator until the LETS structures of the Cooperative New Horizons for Kiogoro
are in operation. The tank-commission level LETS system coordinator is chosen
by the people referring to the tank commission. The locally elected LETS
coordinators make up the well-level 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 well-level LETS management commissions will each elect a
member to the project level LETS commission. The project level LETS commission
will nominate a small LETS system management and control its activities.
The
fortnightly/monthly reports for members in each tank commission area are in
principle 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
lists published may, at the choice of the tank-level commission, be nominal or
by code number or eventually by using a personal alias for each user to respect
members’ privacy.
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.
Next file :
04.16
The effects of inflation on the Cooperative Development Fund , and gift content.
Back to:
04.14
Taxation of transactions within the local money LETS system built up.
