How Many Gum-nuts is Your TV Worth?

LETS is an acronym meaning Local (Energy) or Exchange Trading System and they are most usually set up by small communities who wish to have a cash-less way of trading amongst themselves. LETS schemes have some rather unique features and are quite unlike the cash economy most of us more familiar with.In fact one might say they are more democratic than the usual cash economy as you set the value of what it is you have that another member is currently seeking dependent upon how much you believe its value is at the time someone wants it.

For instance Member C might want you to transport them on an excursion because they are car-less and you have a car. On Monday they ring you up to ask if you have time and are prepared to take them shopping. After consideration you offer your services in return for 30 gum-nuts (the local exchange unit). A transaction is agreed to and duly recorded in the central recording office. On Thursday Member C may ring you once again to see if you can again take them shopping and after taking into account the impact you feel taking such time out to take Member C shopping again you decide to charge 40 gum-nuts this time and if Member C agrees to this transaction it is also duly recorded. On Thursday you may decide to charge more because of personal factors such as you have to organize a babysitter for a couple of hours etc.

So in other words the value of services allows

you to consider pertinent factors that you consider influence its value at the time of transaction.

The gum-nuts you acquired by providing services to Member C you may now spend on anything else you might need from within the whole community. In fact if you want something for an amount you do not yet have in credit this does not matter either. You may transact with any member of the community. All that is required is a central recording system for transactions.

Now perhaps some of you who are a bit devious, overly greedy or acquisitional with a personal inclination towards oligarchy, monopoly or other forms of corruption or you indeed think that everyone else other than you might be could well be forgiven for thinking that these schemes could offer an opportunity to get rich quick with little effort need to also consider that there are other important features about LETS systems that distinguish them from the cash economy. Stockpiling or owning thousands of gum-nuts by having provided goods and services at overly inflated values becomes a completely worthless activity to engage in. You can only use and provide a certain amount of goods and services and oligarchy and monopoly become useless assets within such a scheme.

In the cash economy if you buy something you pay the supplier direct; in other words if you go down to the local hardware shop to buy some paint then you give the shop keeper money and he gives you paint. The price of the paint is set and whoever buys it pays the same price (approximately).

At this point in time we need to realize that we are not using a barter system; LETS is not a barter system. A barter system depends upon two people agreeing to exchange goods that have identical agreed value. A barter system also requires that if you want goods or services that Mr. or Mrs Hypothetical has on offer to you that you need to be able to exchange your own goods and services to enable and bring the trade to completion. So in order to transact it requires that both parties have goods or services of personal value to the other party of trade.

In the LETS scheme this is not so. You may negotiate goods or services with Member C without Member C desiring any of the goods or services you have on offer.

Now this is the point where understanding the intrinsic nature of a LETS scheme becomes curly in many peoples' minds. And the currency exchange does not need to be gum-nuts; it could be called honky nuts, goannas, crocodiles, strawberries, carrots, clouds, bears, raccoons,planets or whatever your Committee decides to call your local currency unit.

In the cash economy you may buy something expensive that you cannot afford to pay for in one lump so you enter into a credit arrangement with the seller of the goods. At this point we won't get too complicated by adding on the fact that the store owner often on-sells credit etc. So now you are placed in debt for a period of time and the seller to whom you are indebted (being that he has already supplied the goods) now owns an asset; that being the debt you own him. So much of his asset base may be monies owed to him that may or not be paid. But you owe money directly to him; you have transacted and you have the goods and you owe him money for them. Two individuals have traded; you and the store owner.

In this system the individual is important; what you own, what debts you have, what the seller has to sell and what the seller is owed are all matters of individuality. The cohesion of the system relies on individuals or on individual organisations, companies, affiliations etc and in this manner the collective worth (GDP) of a nation can be totted up measuring a collection of individual units.

In such a system many people have skills that are left untapped and hence never become quantified whilst at the other side of the spectrum there are people who desire goods and services but cannot afford them. In the cash economy model referred to above such factors have no value and are rendered completely worthless whereas in a LETS scheme they become valuable community assets.

So when you receive goods or services through the LETS scheme of which you have become a member you owe the whole community; not a particular individual. In a LETS community the level of indebtedness is shifted away from individuals and indeed becomes an important community asset and the more that individual members transact between themselves the stronger and more resilient the economy grows. Currency units are owed directly to the scheme and individuals just get on with providing whatever goods and services are required and requested by members.

All that is required is that, in some way or other you inject your own goods and services into the Scheme up to at

least an equivalent value of your indebtedness. You need never to fear an aggressive debt collector threatening to cut of your toes. Conversely there is no advantage in stockpiling goods as you cannot easily dictate to your market as there is no point in owning little more than you can

personally use.

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