1994-12-15 - E-Lets

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From: “Claborne, Chris” <claborne@microcosm.sandiegoca.NCR.COM>
To: cypherpunks <cypherpunks@toad.com>
Message Hash: fb93a15173cb1900000a8c6a69c5b3951f120c5fa8acde681b2417aa9ea3375f
Message ID: <2EF08EA8@microcosm.SanDiegoCA.NCR.COM>
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UTC Datetime: 1994-12-15 20:28:27 UTC
Raw Date: Thu, 15 Dec 94 12:28:27 PST

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From: "Claborne, Chris" <claborne@microcosm.sandiegoca.NCR.COM>
Date: Thu, 15 Dec 94 12:28:27 PST
To: cypherpunks <cypherpunks@toad.com>
Subject: E-Lets
Message-ID: <2EF08EA8@microcosm.SanDiegoCA.NCR.COM>
MIME-Version: 1.0
Content-Type: text/plain

The following article has some unique ties to digital cash and
what some people would like to see.
In summary it is a description of bartering being used in Europe
the removes money and replaces it with "Lets".
Money no good?  May I be the first to coin "E-Lets" :)
From "The European"  23-29 September 1994.
Title: "Money no good?  Try bartering"
... Additional reporting by Betrice Newbery.

The Single Market was launched with the Single European Act of
1987, and with it the vision of a single European currency.  But
while governments seek a future of trading in ecus, people
across the continent are looking to the past - to the days when
bartering was the way of the world.

   Local Exchange Trading Systems (lets) are a form of moneyless
trading, with more in common with 19th century anarchism than
late 20th-century capitalism.

   The inhabitants of Stroud, a village in the west of England,
can now pay for legal advice from a solicitor in "strouds" as
well as sterling.  In Madrid, masseurs and furniture removers
accept both valle kas and pesetas.  In Berlin, talents or
deutschmarks are used to pay for babysitting or carpentry.

   Lets are proving remarkably popular.  In Britain, there are
more than 200 systems involving as many as 20,000 people. In
Spain, the success of the Trueque Lets in Madrid has served as a
modle for similar systems to be created in Barcelona, Alicante
and the Canary Islands.  Switzerland has the Troc de Service in
Onex and Demark has a "Ring of Exchange".

   They could even spread to eastern Europe.  A pilot scheme was
started this summer in the city of Magdeburg in east Germany.
"Because of high unemployment and limited capital, Lets could
help people in the east to use their skills and talents," said
Hugo Godscalk of Paysys, a German constancy firm which
specializes in forms of payment.

   Although the organization of each Lets is discreetly
different they all share a basic tenet: that by tapping local
skills and spending power, it is possible to improve the
economic and psychological health of the community.  They work
by creating a local currency,  the "bobbin" in Manchester, for
example, and encouraging local people and business to accept
that currency in pay-ment, or part-payment, of goods and

   Joining a Lets is a quick and painless process.  On payment
of an initial, one-off registration fee (mainstream money), and
a negligible annual administration fee (local money), you are
issued with an account in the local currency,  a cheque book and
a local directory, which lists the goods an services available.

   You are then free, for example, to start paying for your
gardner or bying your groceries in local currency.  A small levy
is charged on each transaction to cover the administration costs
of the system and to pay the salary of the administrator.
However, there are no interest charges when you go into debt and
no restrictions on credit.

   While their simplicity makes them accessible, the growing
popularity of alternative currencies has less to do with
alternatives then the lack of them.  Recession, unemployment and
the high interest rates have left many people unable to earn,
borrow, or spend conventional money.

   The Trueque (meaning barter) in Madrid was founded in January
by Dan Wagman, an American who has been living in Spain for 16
years.  "The present system of conventional money is not
working too well," he says.  "in Spain, 20 per cent of people
are unemployed.  It is a terrible waste of talent and time.
Lets give the unemployed the chance to use their skills and the
impoverished immediate access to services that they couldn't
otherwise afford."

   Liz Shepard, who runs the national coordinating organization,
Lets Link, in Britain, agrees: "one in six United Kingdom
households were experiencing severe debt problems because of
high interest rates and recession.  An interest-free, non-
profit-making system appeals to them."

   Christine Schoeb and Carlo Jelmini were both students in
Geneva when they set up the Troc de Service in Onex as part of
their course work.  Another ten groups in Bern, Basel,
Winterthur and elsewhere operate their own scheme based on

   One of the founders, Simcha Piwnik, said:  "We get
professional workers advertising a whole range of services, from
electricians to furniture restorers to kitchen-fitters.  You can
buy furniture, bicycles, organic vegetables - anything.  It
almost makes traditional street markets redundant."

   Yet the proliferation of Lets has not been problem-free.
According to Michael Jacobs, an economist at Lancaster
University and author of "Green Economy", Lets must overcome
two main difficulties if they are to survive.  "the first is
common to all voluntary organisations: will enough people join
and remain involved to make them work?  The second is peculiar
to Lets: is there a tendency for people to leave the local
system once they secure employment within the mainstream
economy?  If so, they may well fail unless there is a continual
supply of new members."

   While survival can be difficult, growth can prove equally
problematic.  As they have become more wide-spread, Lets have
attracted the attention of national treasuries who are con
cerned that local currencies could be exploited as a way of
avoiding paying tax.  Moreover, growth has prompted fears among
Lets users that people could accumulate sizable debts and then
leave the community without repaying.

   In August, more than 60 people attended a conference near
Montpellier in southern France to discuss ways of introducing
Lets to that country.  In Dessau, in Germany, a recent
conference relulted in the setting up of six new systems.

   Henk van Arkel, from Utrecht, who runs a series of systems in
the Netherlands, was one of the participants, "We are planning
with the Irish, Flemish and German and probably the UK systems,
for international co-operation across Europe," he said.  "We
do need more exchange of ideas and improvements.  But we are not
going to link the currencies.  The most important part of the
idea is the local aspect."

   There are, however, sign that Lets are starting to encroach
on some of the traditional functions of  conventional money.
Trading between groups, for example, is just beginning in some
areas.  But it will be a long time before they rival the ecu.

                                        ...  __o
                                       ..   -\<,
chris.claborne@sandiegoca.attgis.com      ...(*)/(*).          CI$: 
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