Organisational Model: LETS in the
UK are usually run as unincorporated associations. The original
LETSystem was modelled on commercial barter, and fees were
commission-based, but these systems have not endured in
the UK. Some schemes have picked up the idea of "brokering"
as one of the administrative tasks in a well-managed scheme
but this would tend to have a "pastoral" rather
than commercial motivation in most LETS groups.
Counting Members' Time as Equal in Value:
Many LETS members prefer to work for an equal rate of pay
and many schemes are either constituted on this basis or
suggest a standard rate to be used "when members wish
to trade on an equal basis". The idea of a standard
rate is crucial to the notion of a central hub for intertrading
between schemes. On the basis of the standard rate, currency
to be moved to another scheme is translated into hours at
the standard rate for that scheme, and when received by
another scheme, it is translated back into currency at the
standard rate for that scheme.
Supervision of Traders: The proposition
of the original LETSystem was that transparency and community
pressure would prevent people from taking advantage of the
system. The earlier paper-based models did not give feedback
often enough to the members, but web-based systems which
instantly show members' balance of account and also allow
for qualitative feedback provide more sensitive management
tools, and many groups are now taking advantage of LETSlink's
programme of hosting online systems for member groups.
Keeping Trade going: The problem
of high earners failing to spend is also a challenge, and
the idea of "demurrage" whereby currency not used
actually shrinks, by means of a sort of "reverse interest"
has often been mooted by theoreticians. To work properly
the fees taken would have be proportional to the amount
saved, and this could be built in as a configurable option
in web-based systems. Meanwhile, continuing to charge administrative
fees to fallow accounts achieves much the same result, although
in less equitable way.
Working in the Community: Many well-developed
schemes have a community fund in order to take care of needy
members of the community. Members can donate into this fund,
and/or it can be supported by the system account. This principle
is now recommended to support community-based volunteering
and activist projects. This enables organisers to "drive"
the scheme in a positive way, to counteract the tendency
for formal trading to lapse in mature schemes, when members
become well-known to each other and tend to adopt "altruistic"
For further discussion on these themes
see Archived Papers.