CREATING WORK BY WORKING TOGETHER
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
a LETS.
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
area.
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
future.
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.
A $250,000 MINI-ECONOMY
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
furniture.
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.
ATTRACTIONS
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
attractive:
- 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.
LOCAL POSSIBILITY
- 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.