Some Thoughts on Starting a Local Exchange Trading System (LETS) for the Talossan Republic

For those new to the concept, Wikipedia defines a LETS as a local, non-profit exchange network in which goods and services can be traded without the need for printed currency. In some places, e.g. Toronto, the scheme has been called the Local Employment and Trading System.

It is further identified as having five main criteria:

1. Cost of service — from the community for the community
2. Consent — there is no compulsion to trade
3. Disclosure — information about balances is available to all members
4. Equivalence to the national currency
5. No interest charged to accounts, loans, etc.
   

I think that most of these are easily achievable.

Points one, two and five are really more statements of philosophy than actual criteria and are enforceable in a straight forward manner.

Point three, the disclosure requirement, will take some significant public record keeping. I think it would have to be a “sign and countersign” procedure, where the seller would report the transaction to a central, civil service-style agency, much like our Secretary of State. Then the central authority would have to confirm the sale with the buyer and record the public change in the accounts. In order to assure privacy, the nature of the transaction would not be reported or recorded. As the economy and use of stars grow organizations and other entities could have accounts as well.

Maybe in future a more automated solution could be found.

Point four should be easy. I would suggest as a starting point that each citizen at the time of program inception be given 50 LETS credits (to be called whatever the public desires, but for ease of writing, I’ll call it a “star”). Each star will be fixed at $5US. Some may argue for a floating value, i.e. the star would be whatever the market will support, but I would argue that it should be fixed for at least a year to give the public some pricing guidance.

Citizens newly created thereafter would receive whatever amount would be determined by law.
After the rules, reporting system and currency structure are complete, then we must create an online marketplace, with one area for buyers and another for sellers and we must strive to populate it with real offers as soon as possible.

More money would be infused into the system by the government posting request for proposals (RFP) bids and work for hire on the marketplace, payable in stars, instead of asking for volunteers and by paying a nominal salary, in stars, to its officers. As well, the government could force the initial flow of credit by instituting taxes and fees, (for things like registering for candidacy, renting space on a publically owned server or having a link to your personal website placed on a public web site), payable in stars. The government would be given a one-time fund of say 1000 stars to use as it sees fit to stimulate the nascent economy.

Just some thoughts. If the government declines to take it up, it could be a purely private venture.