Trading in Local Currencies

This seminar, held on Tuesday 27th January 1998 from 10am to 1pm, followed by a buffet lunch, in The Old Library, a charming wood-panelled and balconied room in Charlton House, London SE7, was organised by the Directorate of Environmental and Consumer Services of the London Borough of Greenwich, one of I believe only two local councils currently employing a LETS Officer as part of its anti-poverty drive. Attended by almost 100 people involved in various council activities and/or local voluntary organisations, this was a very useful seminar, in introducing people both to LETS and to two related initiatives in the Europe, WIR and LIFT, and in the USA, Time Dollars and Ithaca Hours.

Councillor Pete Challis chaired the seminar, and Bob Harris, Deputy Leader of Greenwich Council, gave the welcoming address., emphasising his personal interest in and support for LETS.

Jan Hurst, LETS Officer, L B Greenwich, reported on progress so far in the development of LETS within the borough. Three schemes had already been launched since her appointment abou one year ago(?), Ferrier, BCU (Bexley Centre for the Unemployed), and Middle Park - all these are Council housing estates, which are areas of relative poverty - and in addition, planning for two Greenwich-wide networks, one for disabled people and another for small businesses was under way. Jan spoke about some of the issues which had arisen during the process of setting up the LETS schemes. Fear of strangers was a reality on some of these estates, which had been solved by the use of ID cards and the initial trade being set up by the LETS office. Funds were raised to pay the administrators of the system in local currency by charging a joining fee to the members, also in local. Gigs were used to raise funds for the ËCommunity ChestÓ, a local currency fund from which LETS volunteers could be paid for jobs done for disabled or elderly who were not in a position to reciprocate. Jan can be contacted in the Anti-Povery Unit on 0181-854-8888 x 8263.

Dave Williams, who had been the first ever employee of a Council two (?) years ago, (London Borough of Hounslow ) in order to promote LETS and credit unions, spoke about his experiences in launching and managing the new Cranford LETS scheme alongside the existing volunteer Good Neighbours Scheme, where the volunteers continued to help those whom they perceived as either of a lower status or more in need than themselves, but used the LETS scheme to trade with other volunteers whom they perceived as being on the same level as themselves. In his latest initiative, Local Interest-Free Trading (LIFT) he has been active in helping to launch the WestLIFT project which has been promised £300,000 worth of funding over three years, half from the local council and TEC and half from KONVER (the arms to ploughshares initiative for re-employing those made redundant due to the contraction of arms manufacturing in the west London area). The idea of LIFT is to introduce LETS-style bartering in the small business environment. Dave has been inspired by the Swiss WIR system (Wirdschaft Ring - Trading Circle) which was founded in the 1930s to support small business in agricultural areas and is still going strong today, trading the equivalent of about one and a quarter billion sterling annually, usually with a percentage of swissfrancs in the transactions, which it can also handle in its status as a bank. Dave can be contacted at LIFT on 01895-846-733.

David Boyle, editor of New Economics, Journal of the New Economic Foundation, gave a fascinating exposition of two quite separate initiatives in the USA.

TIME DOLLARS were invented by Law Professor Edgar Cahn in response to the problem of looking after the increasing number of old people, with reducing resources. Time Dollars are an incentive to people helping their neighbours with shopping, cooking, and cleaning etc. An agency links volunteers with those asking for assistance, and credits them with Time Dollar currency equivalent to the time spent on the task. The main idea is that this currency will be available for spending in the future on similar help when they themselves need it. The 200 existing systems constitute a government-approved mainstream network which has been successful in bring people into volunteering who would never have otherwise been involved. In some places the currency can also be used to part-pay for health insurance, food, peer tutoring, refurbished computers, and most remarkably a Youth Court, where youngers sit in judgement on their peers and mete out penalties in the form of social service. Time dollar schemes costs about forty thousand dollars a year to run but this is reckoned to be cost-effective in substantially reducing the costs of social services.

ITHACA HOURS were invented by maverick Paul Glover in response to local economy problems in upstate New York. The agriculturally depressed area was running short of cash, which was disappearing mostly into the growing number of Wallmark stores, a major national chain. The notes, which are beautifully designed and printed in counterfeit-proof inks on special wholemeal papers in denominations equivalent to so many hours work (eg one hour±s work would be equivalent to about ten dollars), are issued in controlled amounts as grants to local projects, interest-free loans, and payment back to advertisers in Paul±s local newsletter. During several years (?) of operation they have gradually gained acceptance, even by the banks for payment of interest, and were stolen, along with the dollars by bank robbers, the ultimate proof of value. Paul still manages the system, and is grant-funded to do so.

Arising from Dave and David±s talks there was much useful discussion on the reality of currencies. It emerged that since the UK came off the gold standard many decades ago, sterling currency has no physical basis and its acceptance is merely a matter of convention. Thus there is no reason why LETS schemes if properly managed and approved of by the authorities should not gain acceptance and find their place in supporting local economies. The tax position was relatively well-understood, ie that major trades in ones professional area should be accounted for and included in tax calculations, although the fact is that the majority of trades are not in this category, and are much more in the nature of neighbourly exchanges. The benefits position is much less clear in that the legislation is contradictory and subject to differing interpretations by local offices, so that whereas in practice there has been very little problem, benefits offices are left in a position where they cannot positively promote LETS to their clients who are the very people who could gain most benefit from them. LETSlink UK is currently tackling the problem by lobbying parliament to re-write thelegislation in such a way as to discount LETS from having any effect on benefits.

I would like to thank the London Borough of Greenwhich, not only for funding a LETS Officer to give professional time to work on LETS during regular hours - most schemes are managed by already overworked activists in their spare time - but also for funding this conference so that people could attend free of charge, in order to gain access to high-quality information about these important social developments.