"CREATING MORE THAN A TOKEN REVOLUTION"
by Sarah Ryle
Picture#1: "Bank of Exchange Note: Caricature
of smiling plumber
receiving freshly baked pie from granny
for fixing faucet:
Caption: "We promise to exchange goods
or services to the value
of one Bobbin"
Picture#2: "Corner Shop... cornerstone
of successful LETS"
Picture#3: "Disabled access... LETS work
for everyone"
Picture#4: "Drumchapel, Glasgow... LETS
regenerate"
Picture#5: "Old Lady (Bank of England)...
LETS work with main
economy.
"THE HAVES AND HAVE-NOTS"
Graph#1: "The rise of the jobless household:
% of households
without work" Source: Centre for Economic
Performance (LFS)
Graph#2: "Credit card transactions: Number
of transactions,
millions" Source: British Bankers' Association
"ELECTION BATTLEGROUND / Local currencies
gain ground in era of
globalisation"
All sensible people
with homes, jobs or pubs to go to have
spent recent days warmly ensconced and
not at the sales. But
sense diminishes as cash flow or confidence
in credit rises - or
so it would appear from the retailers'
and banks' gleeful reports
of shoppers carrying all before them.
Sooner or later,
the authorities will decide that the fun
has to be paid for. Devotion to low inflation
will trigger a rise
in interest rates, with economists and
the markets betting on
this month, next month, 25 basis points
now or 50-plus later.
Mortgages will become more expensive.
Consumers are
presented with a non-choice: spend now and pay
later, or save any disposable income.
Either way, they have to go
without at some point. The individual's
free will in an economic
context is at best irrelevant.
Changes in economy-driving
factors like communications,
labour relations and financial-sector
reforms have chipped away
at the role of the ordinary person. Globalisation
means that for
many workers, bosses are thousands of
miles away. Electricity and
water services line the pockets of American
firms.
Talk of electronic
money baffles many. In the UK, the
increasing number of jobless households
means the concept of a
bank account and cheque book, let alone
a credit card, is an
alien one.
To top it all,
there is Europe and the single currency which
a large chunk of the public dismisses
as too complicated to think
about. Fear of losing control to Euro-bankers
or to American
companies is pointless. Control of the
economy is arguably more
in the gift of the international money
markets than the elected
government, and what is the difference
between American firms and
home-grown fat cat bosses?
Yet people are
fearful. Some of this trepidation has taken
human form in the New Moral Army.
A more useful
manifestation of the individual's desire to
regain control, the wish to count for
something in this world, is
the explosion of locally run economic
systems.
The number of
Local Exchange Trading Systems (LETS) in the
UK is estimated to exceed 300, with many
starting up over the
past two years. Small groups with big
goals club together to
trade local skills and products ranging
from legal advice to
baby-sitting to organic potatoes. Local
currencies are developed
to tally the transactions.
The aim is to
regenerate local economies and communities
suffering the ravages of unemployment
and income inequality.
Studies have argued that LETS are a godsend
for people with no or
low income, and show they have mushroomed
during past
recessions.*
So far, the jibe
has been that they appeal only to people
who fit the Hampstead Liberal tradition
rather than descendants
of the Jarrow marchers. But schemes have
taken root on some of
Britain's most deprived estates. The fact
that LETS have become
so much more common since the recession
also shows they are a
direct response to unemployment and lower
conventional spending
power. Given that the last recession notoriously
hit white-collar
workers harder than blue-collar ones,
it is not surprising if the
middle classes have been the engine behind
the LETS revolution.
There have been
minor slashes with the authorities in the
shape of the Inland Revenue and the Department
of Social
Security whose local offices have been
known to suspend benefits
for members of LETS. Officials now reckon
one unit of local
currency is equivalent to one pound but
judge scheme members on a
case-by-case basis.
There are cases
of local money systems in America and
Austria becoming so successful that the
central banks felt the
need to crush them (Murray and Collins).
Schemes in America,
Canada, Australia have begun to mirror
the mainstream economy with central computes
monitoring
transactions. The LETS in Nova Scotia
has even experienced
inflation participants began to demand
a bigger percentage of
each transaction in dollars as Maritime
Hours became too common.
In this country,
by charming coincidence, there are two
significant monetary meetings due to take
place on Jan 15. As
Chancellor Kenneth Clarke meets the Governor
of the Bank of
England to debate the macroeconomy and
wangle over base rates,
the Manchester LETS will be examining
the future of the Bobbin.
Manchester LETS
is one of the biggest in the UK, with 700
members who span age and class distinctions.
All transactions are
worth six Bobbins an hour. Although this
raises questions about
the Bobbin's similarity to traditional
money, which yields
information on supply and demand, the
members appear to value
this minimum and maximum wage.
It is set to
become the first LETS in the country to start a
credit union, linking the Bobbin to sterling
and - according to
one of the scheme's founders, Siobhan
Harpur - increasing its
durability in a post-recession economy.
The credit union will
offer loans to help establish micro-businesses
which will pay
interest in Bobbins. The administrators,
too, will be paid in the
LETS currency.
There are 11
LETS in Suffolk which are also discussing a
credit union - membership of a LETS fulfills
the legal
requirement that all participants of credit
unions must have
something in common. But according to
the LETS coordinator, Sally
Moxon, it will be run along conventional
sterling lines rather
than using their currency, the Talent.
The aim is to
stimulate business and offer personal loans to
low- or no-income households who would
otherwise visit
loansharks.
LETS aim to help
the growing number of households without
access to sufficient conventional money,
but also to embrace
other people who are on the margins of
the mainstream economy.
These include mentally ill and physically
disabled people. The
social aspect of LETS is almost as important
as their use as a
tool of the economic regeneration.
Enthusiasts have
a long way to go if they want to convince a
family living in poverty that earning
LETS currency is worthwhile
when it cannot be used to feed a gas or
electricity meter.
But the bigger
they become, the more relevant they will be.
The Manchester and Suffolk schemes are
investigating the
potential to link LETS to local authority
taxation.
This has been
done in other countries and the security it
provides has attracted a wider range of
business ventures into
the the schemes, anchoring LETS as crucial
to the local economy.
Councils could extend already-established
municipal cards which
give discounted use of facilities and
other bonuses.
Ultimately, it
may be the fact that LETS are small, and
manageable, that sustains them. When all
the power in the world
is being distilled into the hands of fewer
and fewer players, the
human need to assert individuality and
local identity is stronger
than ever.
* "LETS on low-income,
New Economics Foundation, and Local
Money and Community Economic Development,
Robin Murray and Keith
Collins
"BRIXTON BUILDS COMMUNITY ON BRICKS"
by Charlotte Denny
In Brixton there
is a butler available for hire (has own
uniform, can do silver service) who takes
payment in the local
currency, the Brixton Brick.
Silver service
might not appeal much to the 20 percent of
the area's inhabitants who are unemployed.
But for Ann Parnell
McGarry, who is disabled, the services
she can buy with Bricks,
the currency of Brixton's Local Exchange
and Trade Scheme (LETS),
have made a real difference.
"I discovered
the scheme a year ago and now I use it for
paying a cleaner, a chiropodist, a driver
and someone to fix my
computer. I cannot imagine now how I would
do without Bricks. It
means I can pay for all the things which
social services do not
provide anymore."
Brixton's is
one of many local exchange schemes, or systems,
in the UK which allow members to trade
without using real money.
The idea is to stimulate local economic
activity in low-income
areas. For someone like Ms. McGarry, whose
disability prevents
her from taking on full-time work, Bricks
mean she no longer has
to ask friends for favours.
"It is very hard
to keep up your self-respect when you are
always asking for help. When you can offer
Bricks you don't have
to be grateful because it is a proper
exchange and you know it is
helping them as well."
Her cleaner uses
the Bricks she earns to buy child care from
someone else within the scheme.
Ms. McGarry makes
gin and lemon marmalade, offers advice on
fund-raising and hires out her computer
scanner to earn Bricks.
She sees LETS as a way of using all her
talents: "I am a jack of
all trades but if I were in a job I would
only be using a few of
my skills." She advises people new to
the scheme to think
carefully about the things they are good
at which might provide
business opportunities and make use of
them all.
New members'
needs and wants are listed in a regular
newsletter and directory. Entries in the
most recent directory
range from plumbing to psychic healing.
New members have
to make some Bricks before they are issued
with a cheque book. Once they have cheques,
they can pay for
goods and services in Bricks. The cheques
are sent to one of the
organizing group who enter the debts and
credits on a computer.
Members are not
charged interest if they run up overdrafts
but if they get too far into debt, the
organizing group will send
a warning letter, and may ultimately withdraw
their cheque
books.
Ms. McGarry says
that LETS are easier to organize in rural
areas and villages where people know their
neighbours. In
Brixton, LETS provides a sense of community
"without the
downside, the lack of privacy."
There are not
many unemployed members, even though Brixton
has a large number of people out of work.
According to Ms.
McGarry, many people join because they
believe in community or
green politics rather than because they
need the income.
Some local businesses
have joined the scheme. But at the
Cafe on the Common, Leah Hargreaves, one
of the three women
running the establishment, says that it
has had mixed results.
The cafe lets people pay for part of their
meals in Bricks, with
a Brick being equal to a pound. The problem
came when they hired
people to do building work through the
scheme.
"We only pay
ourselves four Bricks an hour but the people we
hire through the scheme sometimes charge
10 Bricks an hour. We
have to pay for our food and other bills
in pounds, so it can
prove quite expensive."