In the light of the banking crisis, we can learn about banking and money from Local Exchange Trading Systems (LETS) and, above all, from Bartercard: how a private currency can be created, how it is administered in a bank, and how it is used in the pocket of individuals or companies.
‘Trade pounds’ is the international currency used by Bartercard, a company originating in Australia, that facilitates trade between businesses.
‘Links’ is the London-wide currency between LETS groups of individuals in local communities, who are trying to make local currencies work as a complement to national currencies.
As the founder of the first LETS in London in 1989, I learned about
- creating money or issuing currency by accounting for transactions between members
- agreeing on prices between mutually consenting adults
- valuing activities, services and people over products and consumption
- appreciating local community and mutual help
- mutual credit and commitment to the community as the basis of contracts and agreements between people.
Today, LetsLink London manages accounts in ‘links’ as the London-wide currency that can also be used in different local LETS groups in London. LetsLink UK is the overall agency trying to establish good governance and practice, while organisers are grappling with what it means to operate a banking service for its members.
Bartercard is one of thousands of professional barter companies that focus on facilitating trade between businesses by using a private currency.
IRTA is the International Reciprocal Trade Association committed to “promoting just and equitable standards of practice and operation within the Modern Trade and Barter and other Alternative Capital Systems Industry.”
Bartercard operates as a bank by controlling the credit limits of its members. It operates as a trade facilitator by enabling members to exchange goods and services with each other. It operates as a business by charging franchise, membership and transaction fees.
All in all, we are talking here about what Nobel Peace prize winner Dr. Muhammad Yunus calls social business. Usury-free banking is the activity, ethical accounting is the practice.
May bankers and politicians learn from LETS and Bartercard as much as ordinary people!