LETS as a foundational part of an emergent mutual social contract

By Paul Wildman

The basic principles that enable LETS are mostly the same as those that govern equitable currency systems.

Barter and equitable currency-money systems such as LETS depend mainly on the ethics of:

  • value
  • credit
  • equity and fairness
  • reciprocity
  • transparency.

Essentially, barter requires fair trade, exchanging something of value for an object of like value, determined by mutual agreement. Fair trade is not-for-profit exchange, generally transacted with notional credit of monetary value.

Money: a belief system

Money is not simply an abstraction of barter. Money is a belief system, a vital part of the “social contract” between the nation-state government and its citizens, enabling transactions with symbolic tokens, notes or scrip (currency), measures denoting symbolic value, financial wealth and credit. That enables basic transactions, contracts and records.

Equitable money systems, however, require stable currency and trust, requiring a well-known standard of fixed values. Otherwise, without a stable currency, ethics and fairness itself, fair valuation, fair trade and equitable monetary transactions are impossible.

Currency as commodity

National currencies are now used as commodities, with ever-changing valuation (for the sake of speculation, profit, special interests and unfair advantages), often being manipulated by financial corporates, thus making equitable exchange impossible.

Consequently, an important part in our “social contract” is breaking down.

So what then? How can anyone use this fiat money of variable/managed value for a fair exchange?

That question, and the answer, highlight the true value and importance of stable, un-inflatable, non-profit (thus untaxable) local/regional currencies and credit exchanges, such as LETS. These are a form of mutual social contract, and are a foundational part of the emerging global community currencies, and thus enable green living.  So much so that LETS can run parallel to, yet distinctly separately from, our present debt-based formal economy.

Paul Wildman paul@kalgrove.com (Brisbane) with background material from
Michael Monterey michael@michaellucasmonterey.com, USA

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