Letters: Meeting each others needs?
Dear Editors,
As I run a LETSystem in Canterbury I was amused to read Adam Buick’s article “LETS Abolish Money” in your December issue.
Despite Mr Buick’s evident dismissal of the very concept of LETSystem I was amused rather than perturbed, because even with the research that he had evidently undertaken it is clear that Mr Buick simply fails to understand either their ethos or their future potential. This is not at all unusual. LETSystems are so simple that a great many people have difficulty in understanding them.
Mr Buick dismisses LETSystems for being small, or rather for the twin reasons that they are small and that the range of goods and services that they offer is limited. That they are is undoubtedly true, but there is a very good reason for this. LETSystems are a new phenomenon. most individual ones are very young, even the oldest in Britain is no more than four or five years old. I don’t suppose that even Mr Buick was a towering and influential socialist intellectual at the age of five.
Having grown to a membership of 200 in less than twelve months the Canterbury LETSystem is beginning to attract the interest of “high street” businesses whose own involvement is likely to increase the system’s appeal, even to ordinary people (i.e. other than middle-class hobbyists and New Age dreamers).
As the system grows in size it will become more rather than less able to pay people to run it and still be far more efficient than the conventional, money economy which requires approximately 10 percent of its workforce to be employed in “financial services”.
There may well be an optimum size for any given LETSystem, the bigger they are the more services they are likely to offer and the stronger and more credible they are likely to be perceived, the smaller they are the more intimate they are and the quicker will a person’s spending come back to them as earnings. But we do not need to arbitrarily impose limitations upon a system, its natural dynamics will enable each system to find its own optimum size, which may number in the hundreds, the thousands or even the millions.
Beyond these matters, which essentially pertain to the practical aspects of establishing and running a system. Mr Buick’s most striking failure is his inability to understand the long-term potential that LETSystems have for converting the present-day market-dominated society into an egalitarian one where everyone’s needs can be met, their dignity maintained and where the environment can be protected. Trading with a LETSystem is not barter, Indeed, use of cash is actually closer to barter than is use of a LETSystem. The Pound Sterling is derived from an entity of intrinsic value — a pound of Sterling silver. So when you use cash you are exchanging one item of intrinsic value (or rather a paper representation of it) for another, which is precisely what bartering involves. By contrast, the credits that one earns or spends in a LETSystem are purely abstract measurements. That they are given a nominal value, usually in relation to the Pound Sterling, is solely to enable everyone to share a common valuation.
This purely abstract nature of their units of currency underlies one of the great advantages of LETSystems. Whereas if you are exchanging cash for goods or goods for cash you have to have one or the other with LETSystems you don’t. You can spend LETS units before you earn them, even before you are able to earn them. Given the strongly inculcated resistance that most people have towards going “into the red” new members of the Canterbury LETSystem are positively encouraged to spend, spend, spend!, for by doing so they are putting credits into other people’s accounts which will further encourage them to spend and so increase everyone’s opportunities to earn.
Within a LETSystem the sum total of everyone’s accounts at any one moment will always be 0. So for some people to be in credit it is necessary for others to be “in commitment”, this differs from debt within the conventional economy because it is not seen as being irresponsible, it is necessary if trading is to take place.
It is this feature of LETSystems that will enable the market economy to continue to meet people’s needs (or rather be the means by which people will continue to meet each other’s needs) whilst causing it to cease to be a means by which some people can attain power over others.
Mr Buick’s statement that “A hoard of cash is no more useful than a large LETS credit balance” is an extraordinary one to come from anyone other than a contrite capitalist apologist, if some people have a large hoard of conventional money (in whatever form), given that there is a finite amount of it, other people must have little or none, and given that one must have it even to meet one’s basic material needs, clearly those who have the stuff in large quantities have enormous power over those who haven’t. By contrast, given that LETS credits are purely abstract measurements with no limit and given that one can spend freely even with a “negative” balance no one with a large LETS credit has any power over someone else who might, at a given moment, be in commitment.
If, as Mr Buick proposes, the elimination of want is to be achieved by the elimination of the market system whereby people exchange goods and services to meet their needs, how will these needs be met? By a central economic authority with complete power over everyone’s lives? Mr Adam Buick?
We can retain the benefits of a market economy whilst removing its current absolute dominance and less benign aspects, we can enable individuals and their local communities to secure greater power and responsibility for their own lives, we can remove the inefficiencies and environmental destructiveness of an excessively competitive society and so achieve the type of society that is the dream of many, whether socialists or not. by the very simple idea that is the LETSystem.
After a myriad of Utopian dreams have come to nought down the centuries we now have the means of creating a just and egalitarian society.
Anne Belsey, Faversham, Kent
Reply:
Your letter illustrates perfectly the point we were trying to make: the exaggerated claims of the benefits and possibilities of LETS made by some of its enthusiasts. You see LETS as a means towards creating “an egalitarian society where everyone’s needs can be met. their dignity maintained and where the environment can be protected”. We are all for creating such a society, but say that LETS schemes will only ever play a marginal economic role.
For LETS to replace “the present-day market-dominated society” they would have to spread out of their present field of personal services, repairs, home cooking and gardening into, and the list is not exhaustive, farming, the generation of electricity. the provision of water, gas. sewage and telephone services. the manufacture of the cookers, fridges, heaters, cars, bikes. TVs. radios, computers (that LETS members merely repair not produce), not to mention the manufacture of the machines and equipment to make these consumer goods and the maintenance of a transport system to move them. They’ve got to take on and beat economically the public utility companies, the supermarkets, the multinationals and Big Business generally. We are sorry to have to break the bad news to you, but LETS schemes are not going to do this. They are never going to spread outside their present restricted field and even there they are never going to predominate.
This is because LETS are essentially an arrangement for conducting multi-sided barter amongst self-employed individuals. This means they are going to be restricted to the sort of things an individual can do. It also means that they have little interest for those in full-time employment with an adequate wage or salary. (For such people it is always going to be more convenient to pay someone to repair their TV out of the money they have earned than to commit themselves to a couple of hours extra work to exchange for this.) In addition, as the article stated, above a certain size LETS schemes become more cumbersome than resorting to ordinary money. This is not a defence of conventional money, merely recognition of a fact of life within “the present- day market-dominated economy”.
Our answer to the market economy is not to reform it as you want but to abolish the market. No, this does not mean some central economic authority deciding what people need. We envisage a self-regulating system of production for use. in accordance with the principle “from each according to their abilities, to each according to their needs”, with individuals deciding what their needs are. On the basis of the common ownership and democratic control of all land and industry, individuals would set the productive system in operation by what they actually took from the common stores to satisfy their needs under conditions of free access; this would then be transmitted to the stores’ suppliers and from them to their suppliers and so on down the line and throughout the whole network of productive units.
Finally, don’t get us wrong. We are not saying people shouldn’t join LETS schemes, nor that they are a complete waste of time within the present economic system. What we are saying is that they are merely one mechanism for surviving within the present system, on a par with housing associations, coops, building societies. Christmas Clubs, etc. People can join them if they want, but they should be under no illusion that they contain the germ for the transformation of society.
For this to happen, the large-scale socially-operated industry where the bulk of the wealth of society is produced today must first be taken into common ownership and democratic control. And this requires society-wide political action, not what our next correspondent calls “practical small-scale change” which leaves the commanding heights the economy in capitalist hands. – Editors.
Simply a knocking job?
Dear Editors,
Debate is useful and I accept that it is wrong simply to accept new ideas uncritically. However, Adam Buick’s contribution on LETS is simply a knocking job. He makes a number of errors in his description of LETS — for examples the recording of transactions is typically already paid (in local currency) not just “voluntary” — but these are secondary in importance. His real concern is to brand LETS activists as “currency cranks”.
Adam Buick’s own vision of a non-exchange economy is described in one closing sentence. Could he write as much on this in terms of practicalities as he did in criticism of LETS? I look forward to reading it. The idea of a non-exchange economy has in the past been based on the abolition of the concept of property or on the common ownership of property. Both ideas have a history.but neither have established any convincing vision of what the pattern of social relations, the model of social institutions and the organisation of production would instead be in such a world.
However, there isn’t a lot of point in dialogue if you’re going to be dismissed a crank. Yes. Fritz Schumacher, among others. said that a crank is a small, metal tooth that makes revolutions but this wasn’t what was meant.
Get your facts right on LETS. Accept that the mainstream will regard both of us as cranks. Explain your own ideas rather than leave them to the last sentence. Decide whether you are interested in practical, small-scale change as a seedbed for wider transformation. And then we can have a useful discussion.
Ed Mayo, New Economics Foundation.
Reply:
We did get our facts right.
Your “correction” — to the effect that LETS members normally have to contribute to the scheme’s running costs — strengthens not weakens our argument that such schemes are strictly limited as to the size they can attain without becoming too costly to run.
We never said that members of LETS schemes were “cranks”, only that currency reformers of one kind or another had latched on to these schemes as a way of promoting their cranky ideas, in particular that of a new kind of money that can’t be accumulated and can’t yield interest.
In response to your request for more information on how a society of common ownership and production directly for use without buying and selling could work we are sending you a copy of the new edition of our Socialism As A Practical Alternative pamphlet. Hopefully, after you have read it the dialogue can begin. — Editors.
Allowing for the placebo effect
Dear Editors,
Adam Buick states that “aromatherapy, holistic massage, acupuncture, tarot reading and other such new age fads” are “not normally needed by the unemployed”.
There are a great many things which people do not need but which they want. Does Adam Buick mean that socialists believe in people only receiving what they need? Or is it acceptable for employed people to get things they want but don’t need, whilst unemployed people only deserve the bare necessities of life? If unemployed people want aromatherapy, tarot readings or massage, why not encourage systems which make these more readily available?
The arguments in favour of local trading systems, although technically these would apply whatever currency was used, are ignored by Adam Buick. These include:
1. The closer the physical proximity of buyer and seller, the less energy (fossil fuel, etc.) will be consumed in the production/retail process: and
2. It enables buyers to keep a closer eye on producers, eg. growers of food, which is miles better than buying from dodgy multinationals.
As for acupuncture, if Adam Buick has evidence that, allowing for the placebo effect, it is ineffective he should say so. If it does work, he should start asking why it is not available on the National Health Service (clue: start thinking about drug companies . . .). Calling it a “New Age fad” is no help to ordinary people who may want to use it.
Katharine Gilchrist, Canterbury, Kent
Reply:
Don’t be silly. Obviously we weren’t saying that unemployed people shouldn’t have access to acupuncture, etc. if they want to. The point the aside was trying to make was that, in contrast to the claim that LETS schemes can help the unemployed satisfy their basic needs without money, a disproportionate amount of the services on offer in actually existing schemes were of the type mentioned (and were actual examples from a scheme in Kingston. Surrey).
The aside wasn’t really commenting on whether the various types of alternative medicine were effective or not (though clearly tarot reading is a load of rubbish). That is another issue altogether.
To return to the main point, we note that you confirm that Lets schemes are just a rearrangement within the buying and selling system. – Editors.
LETS all not get excited!
Dear Editors,
I read with interest your article on the LETS scheme. This was first brought to my attention several years ago when, as I understand it. the system was in its infancy. (It would seem, incidentally. that it has done little growing up since.) I was attending a dinner party of sorts with a group of friends who do their views and ideas no justice by clinging to their ’60s hippie image whilst expecting to be taken seriously as local and national political figures (Green Party, etc.).
Anyhow, they were raving about this revolutionary “no money scheme”. Obviously I listened with anticipation. My heart sank, and they could not understand when I said simply “For LETS read pounds sterling”. They had convinced themselves of the wondrous nature of the system and seemed under the delusion that, although accumulation of credit, book-keeping and cheque books were all relevant factors, by changing the name of the currency they had abolished money. The final shot in the foot for them after several hours of debate was that in order to initially join the scheme you paid a fee in sterling. This was to cover costs of operation of the scheme.
So intense was their belief in the system that they could not understand my scepticism. It is sometimes upsetting that the indoctrination of society is so deep that even those with good and honest intent cannot throw away the shackles of capitalism.
Neil Pettitt, Bristol
Thanks. We were beginning to need a bit of support. – Editors