Thursday July 18, 1996.
By Rashne Baetz


Some Hamiltonians look at launching a system of locally-traded
work and goods that lets people keep functioning economically
even if they're short of cash

     Uncertainty about the economy is the order of the day.
Doubts about job security and dwindling bank accounts make many
of us wish we could be more independent of the ups and downs of
the global economy.
     Community-based economic systems that work alongside the
mainstream economy can offer us ways to continue functioning
economically even if we don't have much money in the bank. They
can help us to create our own employment opportunities while also
leading to a more vibrant local economy.
     One of the most promising community-based economic systems,
developed in Canada and catching on worldwide, is called "LETS" -
- Local Employment Trading System. Anyone who wants to
participate in a more personal economy, as well as the unemployed
and under-employed, can benefit from the opportunities created by
     Local Employment Trading Systems were invented by Michael
Linton when his small community of Courtenay B.C. was devastated
by the economic recession of the early 1980s.
     Nearly 500 LETS were operating worldwide by 1994, according
to Barbara Brandt, author of Whole Life Economics. Recent
estimates from sources on the Internet indicate that this number
has mushroomed to about 2000 LETS today. Community activists in
Hamilton plan to soon start a LETS in the Hamilton-Wentworth
     So how does Local Employment Trading System work? It can be
started by a number of people in a local community who get
together to trade goods and services. Each person lists what he
or she has to offer, with prices attached, as well as what each
needs from others.
     When people work for others, they get paid in "green
dollars." When others work for them, they owe "green dollars"
that they promise to pay back in goods or services to anyone in
the network of users.
     "Green dollars," while representing the value of a Canadian
dollar, are not printed currency. Rather, they exist as
information on each member's debits and credits. Although it has
elements of conventional electronic banking, there are
significant differences.
     Accounts start at zero and build up to a positive balance
when you do something for others in the system. A negative
balance is also considered desirable, as it shows that you have
employed others and represents your commitment to pay back in the
     There is no interest charged. Money in the LETS is created
by its members each time an exchange takes place.
     There is a simple yet powerful difference between LETS and
one-to-one barter. You don't have to give back to the same person
from whom you receive. You can give back to anyone in the system.
Steve can buy music lessons from Karen and do gardening for Bob.
Bob can buy furniture from Jill who can do dental work for Dave.
     The Canadian Government has ruled that green dollars earned
in the pursuit of your own profession are subject to income tax.
GST and PST is charged on any transaction that would otherwise
involve these taxes in the conventional economy. That is, these
taxes would apply to the business transactions of firms or
individuals that do over $30,000 of business a year.

     The Toronto LETS that started six years ago boasts a quarter
of a million dollars a year of trading amongst its 740 members.
Members there pay an annual fee of $25 Canadian. Negative
balances are limited to $1,000 (green). There is also a limit of
$2,000 (green) on positive balances to encourage members to use
the services of others in the system.
     A vast array of services are offered in the Toronto LETS,
including accounting, computer tutorials, calligraphy, cleaning,
photography, gardening, dentistry and accommodation. Goods
offered recently include a printer, organic produce and
     Mary-Beth Raddon, a member of the Toronto LETS, points out
that because of the nature of the system, it is not easily
exploited. The moral pressure of knowing the people you are
dealing with acts as a strong incentive to be a team player. If a
person does take off without putting back into the system, which
seldom occurs, the whole system is able to absorb the loss.
     Even regular shops can participate in the LETS. In the B.C.
LETS, some shops sell locally-produced goods in greendollars and
imported goods in ordinary dollars. Others accept 90% regular
money and 10% green money so they can cover their costs in cash.
The local dentist gives treatments to LETS members for half
regular money and half green money.

     Economist Guy Dauncey in his book, After the Crash: The
Emergence of the Rainbow Economy, explains the essential
qualities of Local Employment Trading Systems which make them
     - they are simple to operate and compatible with the
existing system of money;
     - they enable money to remain what it is -- information. The
decentralized nature of a LETS attaches the creation of money
directly to its source -- our creativity as people;
     - transactions are personal, sparking connections and
friendships in a local community;
     - they encourage initiative and help build self-esteem;
     - because transactions have to be between members of a local
community, they stimulate the local economy.
     Rather than seeking to replace the ordinary economy, Local
Employment Trading Systems are complimentary to it. They are
essentially useful in difficult economic times. Green money can
keep  flowing when conventional money dries up. When communities
become increasingly self-reliant, they are not as subject to the
upheavals of the global marketplace.
     There is comfort in a time when even national economies, let
alone our individual economic prospects, are caught up in forces
seemingly beyond our understanding, let alone control.

- The idea:
     Local Employment Trading Systems involve local people who
come together to trade goods or services using a system of
credits and debits rather than money for payment.
- The appeal:
     You don't need money to employ someone or buy something and
you don't need a job to put your skills to use.
- Local possibility:
     Anyone interested in starting a Local Employment Trading
System in the Hamilton area can attend a meeting tonight at the
Self-Help Centre, 255 West Avenue North (across Barton St. from
the Hamilton General Hospital) at 7p.m.
     For information on the meeting or the plans, call 383-5484.

Send a comment to John Turmel