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.
        

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