Developing the LETS model

(1) A conventional Time Bank system helps to include the most vulnerable members of society, those normally excluded, marginalized or isolated, but is expensive to run because of the high security overheads. It is a purely =time system and is unambiguously disregarded w.r.t. benefits and taxation.

(2) A LETSystem ("conventional LETS") is a zero sum, interest-free, mutual credit system useful in times of low circulation of national currency to assist the temporarily-inconvenienced by freeing up lock-in resources. It is not as well suited to assisting the excluded or marginalized (although it has done so in some cases). It can be managed at a much lower cost than a Time Bank.

In the UK, trading using a LETSystem my be taxable or affect benefits - the position being ambiguous and often open to local interpretation of the rules. The essential model can be modified so ...

(3) A timeLETS (using 1=1 time as its units) will not affect benefits or be taxed.

(4) A "model 2" timebank (time network, as pioneered by the Wales Institute for Community Currencies) can better assist a different group of excluded or marginalized - more at community level than individual level.

It is difficult to compare the costs of running such a system with those of running conventional time bank; the former requires a rewards system to stimulate collective activity while the latter requires a brokerage system to match (carefully) individuals. The costs are incurred in very different ways, and may be met in very different ways.

(5) Specialized, time-limited voucher systems may stimulate economic activity or assist in the fair allocation of limited resources.

(6) Localization/ decentralization may be increased by SHARE-like systems (although these have not been well adapted so far for use in the UK) or "loyalty card" systems.

Many variations are possible on the way payments are made and recorded.

Many variations are possible on the way resources are matched to needs.

The effects of any "money" system are very much dependent on the nature of the "money" itself - e.g. 1=1 hours systems (where the system defines everyone's time to be of equal value), negotiated value systems (such as those we're most used to - the value being attached arbitrarily to a unit by supply, demand or other factors affecting the relative position of strength of each party involved), energy-based systems (good store-of-value properties), and so on.

A few of the possibilities are mapped out in www.esrad.org.uk/projects/CCS/tile.php (but this is an incomplete 2-dimensional map). One of the missing dimensions would be the cost of running the system, e.g. from conventional "arbitrary value" money (low cost management in the equivalent form of cash, information-poor) to "high cost" systems to meet necessarily but unprofitable objectives (high running costs, information-rich systems).

No one system is anywhere near adequate to meet all needs, but the complexity of managing an integrated system seems to demand a gradual introduction via one path or another. For some the best starting point may be a time bank (to assist marginalized individuals), for another it may be a time network (to assist in community repair), for others it may be a LETSystem (to free up locked-in resources in times of slow cash circulation), for others a SHARE-like system, and so on.

It seems to me that only by working TOWARDS a fully integrated system (built from all the variants listed above, and more) can a long-term sustainable economy be developed to minimize waste and maximize involvement and community cohesion. At the same time it is clear the such systems can only be built and managed from the ground up, by those closest to the needs being addressed and perhaps easily discourage or intimidated by both complexity and technology. From these assumptions I conclude that only by developing a shared framework to support both the rapid development of ad hoc systems and the subsequent integration of those systems into a more complete framework can long-term resilience be a realistic objective, and this requires maximization of flexibility, local autonomy and resource-sharing. This in turn requires the development of a metasystem - a gradual process, but built upon experience and an already well-developed theoretical structure.

Another notable point (imho) is that currencies based on any particular measure allow easy movement between one resource-to-needs matching system and another. A notable example is time: it should be possible to spend an hour earned in a time bank (brokered) within another time-based system such as a time network or a timeLETS (each of which can be managed in a different way with different costs). A large & complex system can be built up from many small & simple systems, and no assumptions about which such systems will provide the seeds need be made at the start. However, by building structures able to guide and nurture their development it will (I believe) be possible to minimize wasteful competition, duplication and disconnectedness.

The incipient Robert Owen Community Time framework is being developed with exactly these objectives. The currently visible website (www.roct.org.uk) is out of date, background development having moved on quite a bit. For the first time, software with sufficient flexibility to allow this is being developed (by Matthew Slater) and this will be integrated into the next version of the ROCT website. (In due course I'd like to be able to integrate parts of Geoff Chesshire's "Regenerosity" system which provides a useful map of emergent social capital, helping to complete an important feedback loop.)

John Walker: 17th August 2009: I'd be happy to discuss this structure if anyone would like some clarification.
I can be contacted on: home: 0845 458 0626 • mobile: 07848 008039 • Skype: jethro_swan •John Waters