AS POUND SINKS, BRITONS TURN TO ALTERNATIVE 'CURRENCIES'
Wall Street Journal 1993
LETS Article in the The Times and The Wall Street Journal; Interview with Liz Shephard by Gerrard Raven; Story on the Reuters wire February 1993
WARMINSTER, ENGLAND: In this west of England town, second hand cars change hands for Links. A few miles to the north, patrons of one cafe settle their bills partly in Strouds. In Totnes, Devon, some shops advertise 'Acorns accepted here.' Local currencies are proliferating fast in Britain's faltering economy as people struggle to free themselves of the shackles they say the conventional pound imposes on them. Liz Shephard, who runs Letslink UK, the national LETS (Local Exchange Trading Systems) Development Agency in Wiltshire, says the reason is simple - household debt. 'One in six UK households is experiencing severe debt problems because of high interest rates and recession,' she said in an interview. 'An interest free non-profit making system has great appeal for them.' LETS schemes, using currencies with names chosen to give a local flavour, allow people to trade goods and services with each other via a system which avoids some of the problems associated with debt, yet is more flexible than simple barter. A craftsman may offer to service a fellow member's television or repair a car, receiving a 'cheque' which results in a credit in the accounts kept by the local LETS organiser. A few weeks later when he takes his wife out for a meal, he can 'pay' a third member to babysit or provide a taxi service. LETS, she added, is an advance over simple barter where two parties have to find goods or services of an equivalent value before a trade can take place. Payments are agreed between members. In some LETS the basis is that one local currency unit is worth a pound while in others, a unit is worth a certain number of minutes' work. The number of LETS in Britain has mushroomed to 45 with around 4,000 members, from just six in 1990, and many more schemes may be launched soon if the level of enquiries Shephard has been receiving lately is any guide. 'Sometimes the phone just doesn't stop ringing,' she said, switching on her answerphone which plays a message explaining she is deluged with inquiries and asking people to write in for further information. For many people who have joined their local LETS, it is a way out of a crisis. New members are allowed to go into debt immediately, so for an unemployed person, it may, for instance, be the only way to get a local plumber to fix a central heating boiler before the onset of winter. Instead of going into (bank) overdraft and paying a lot of interest, people can use a craftsman in their local LETS, pay in Links or whatever, and then get back into balance when they are able to, said Shephard. For a skilled craftsman, LETS brings in work at a time when it is hard to find, and for someone with a hobby, it provides a way of finding out whether it might be developed into a business. LETS are small - the biggest in Britain, in Stroud, Gloucestershire, has only about 250 members. This means there are ways of discouraging members from freeloading or running up enormous debits. For instance, the Warminster LETS publishes the balance position of each member twice a year. It has found so far that the 'peer group pressure' this produces has been sufficient to persuade members to trade responsibly. Although many members join LETS schemes out of necessity or to improve their own lives, Shephard regards them as a civilising influence in an increasingly impersonal world. 'There is something wonderful about LETS in the sense of rebuilding communities, bringing people together in a way that nothing else does', she said. As an ecologist, she also hopes LETS can provide capital for small-scale 'green' investments which bankers reject as not likely to provide an adequate short-term return on capital. But could LETS ever become a national network under which, say, Shephard could pay for a holiday in Totnes by taking her stocks of Links, converting them into Acorns and paying bills with them? 'Inter-trade between nearby systems can be managed, but we strongly advocate keeping LETS local to benefit local communities,' she said.
Send a comment to John Turmel