Michael Linton on LETS Systems | Local Currencies in the Twenty-First Century (2004)

The Schumacher Center for a New Economics is dedicated to creating a just, regenerative economy, promoting tools to foster more regional economic production and trade and community stewardship of land and other shared assets. During the weekend of June 25-27, 2004, the Schumacher Center convened a conference “Local Currencies in the Twenty-First Century: Understanding Money, Building Local Economies, Renewing Community.” Over 300 people gathered at Bard College in New York State to join what participant Pete Seeger called, “the best conference I ever attended.”

In today’s global economy, national currencies have had the effect of centralizing ownership of wealth and of widening the gap between rich and poor–all the while undermining local communities, devastating indigenous peoples, and polluting the environment. Decentralized regional currencies represent a counterforce. A local currency defines a regional trading area, favoring independent businesses and resilient, regional marketplaces. They promise to aid a redistribution of wealth more broadly while supporting unique regional identities, cultures, and communities, rather than faceless global corporations and domineering nation-states.

Michael Linton founded the first LETS program in the early 1980s on Vancouver Island in Canada. LETS programs were created as a simple debit and credit system, denominated in national currency. Consumers wishing to purchase goods or services offered through the LETS program would simply phone in a transaction to a central coordinator and their LETS account would be debited and the seller’s account credited. Producers would then spend their credits with other members in the system. The system was essentially self-regulated, with members issuing their own line of credit at the point of making a purchase.

LETS programs were by far the most popular local currency systems throughout the world, spawning various adaptations. LETS development has been slow in the US, however. IRS law recognizes LETS programs as barter systems, and as such requires system managers to report the total value of transactions for each individual to the Internal Revenue Service. This kind of management had proven costly and burdensome for start up systems, discouraging broad replication in this country so far.