What is a LETSystem?

A Local Exchange Trading Scheme (or "LETS") is a trading network supported by its own internal currency. It is self-regulating and allows its users to manage and issue their own 'money supply' within the boundaries of the network.

The key points include:

co-operation: no-one owns the network.
self-regulation: the network is controlled by its users.
empowerment: all network users may 'issue' the 'internal currency'.
money: money, as a means of exchange, is an integral feature.

Is a LETS a type of barter system?

LETS use their own type of 'money' - they are money systems.

Barter is a type of exchange where we swap goods and services without using money - I give you a loaf of bread and you give me two cabbages. You fix my car and I'll cook you dinner. But you may not like my cooking.............

Money overcomes the limitations of barter. I give you money for your goods and services and you can spend it elsewhere. In a LETS you can use your account to buy what you want from one person and then sell what you can to another.

What does LETS stand for?

The word "LETS" was chosen to highlight an invitation (let's) and a culture of consent. LETS embodies the 'Law of Two Feet' - "If you like it, you walk in. If you don't, then you walk away".

Eric Frank Russell, the story writer, expressed this as "Freedom I will, Freedom I won't" - everybody has choices.

LETS supports trading which results in win-win outcomes. This is to be contrasted to the more coercive types of behaviour often seen in communities which are short of money - "I've got the money, so you have to work for me." In LETS, there is never any obligation to trade.

The use of LETS as an acronym was an afterthought. The most common rendering is 'Local Exchange Trading Scheme'.

What is the basis of LETS?

LETS is based on the value of the individual within the community. This involves both freedoms and responsibilities. We can outline the main criteria:

consent, nothing happens without it.
no interest to be charged on account balances.
common ownership, resulting in cost-of-service provision of support services.
disclosure of information - to ensure the informed action of users.

What are the particular features of the em as a trading unit?

The em (written "M") is roughly equivalent to a pound. This means that transactions are straightforward, particularly if there are formal accounting requirements, as is the case with a business.

Although account-holders use the same measure as the legal tender, ems differs from conventional money.

Ems can only be spent in the system on which they are issued.

The units themselves are information about an individual's position within a trading community. They represent promises made by those who issue them. But those promises cannot be 'called in' as if they were a debt. They are not 'redeemable'. They are not material property. It follows that they have no intrinsic value until they are spent.