LETS UPGRADE _Overview_ What LETS most needs is finance brokers, underwriters and secondary finance markets to organize larger scale industries. For the unsecured free local credit the local LETS acts as the underwriter for its members [and can for brokered trade]. Because it is non profit in the issuing of securities secured only by the expected income, it should be able to compete in the issuing of external securities with other groups, entrepreneurs, brokers etc. However, to keep competition in non-member securities efficient and fair it needs an interLETS underwriting system. Then it will be diverse enough to compete on a large scale with the mainstream.
LETS introduces capitalism to the state regulated area of financial reputation. Unsecured loans are made by banks, public companies [shares] etc. Because they use an extremely liquid currency it is easy for thieves to steal large amounts and launder the money. Consequently credit ratings are available only to large organisations that can't easily disappear. With the introduction of limited liability corporate laws these companies mostly aren't secured by personal reputation at all. So, how can an individual compete for scarce credit with these reputable giants? We can't if we are using a large scale liquid currency. If on the other hand our personal reputations are underwritten by a small scale local currency our personal reputation can be worth much more. Being very social animals this is automatically self policed by guilt and shaming. One problem is that being on a small scale LETS lacks enough building blocks to build industries that can compare with the mainstream economy. The other problem is its insistence on non-profit credit. If loans brokers could arrange credit, larger organisations could be funded by only those who wanted to underwrite them via the broker. The brokers themselves could be underwritten by individuals who aren't interested in the details of every loan. This coordination and supervision of credit projects is needed for large scale organising. But this is how the means of production are funded. If this funding is profitable it will become how the means of production are owned. Ownership of the means of production allows control of them. This has no necessary basis in merit and is counter to workers control which has a necessary basis in merit. The true rate of profit [the money you make just from having money, after risk, inflation etc.] is around 2% p.a. and encourages people to invest rather than just consume. This however is the basis for how the rich get richer. Every 19 years savings double in value. Those who's savings are spent on surviving, children etc just stay at the same level. So its best to keep the real rate of profit no higher than is needed to keep credit circulating. Non profit credit issuers will keep the real rate of profit to the minimum needed. Unfortunately LETS is a local monopoly issuer of their local credit. This means the local LETS must provide all financial/credit services that are needed for their currency. No speculative financial trading is allowed because it is too hard to stop other financial service providers from getting more than is needed to cover their labour. Or is it too hard? If the local LETS could underwrite a raft of financial services [especially large risky credit brokering] then any others who did the same thing could only do it if they were cheaper or willing to provide something different. In many economies today there is an ideological movement for governments to avoid competing in the market because they are too powerful and can hide inefficiency with subsidies. LETS are not that big or rich. Being decentralised they can compete fairly. Being the foundation of the currency they can always refuse to supply credit if they want to stop unfair dealing in their currency. However credit brokers would want to work between groups to get the range and quantity of services required for large projects. Before this could be allowed InterLETS would have to be able [if not willing] to provide the same services. Otherwise capitalists could divide and rule interLETS. Having bigger service providers and thus a much wider range of services would encourage in professional tradespeople. Coordinated tax/fees, subsidy and barrier policies are needed federally for LETS to coordinate intraregional competition. An Allocation Planning Commission [APC] using charges, subsidies, zoning, licensing, regulation, re/certification etc. would be useful to iron out the bugs in competition. Licensing to minimize competition is OK temporarily. Interregional Industry Associations [IIAs] under the APC can supervise and represent their members. Vital IIAs are for the overlapping areas of ecology, training & childcare [for equal opportunity] and intralocality trading. This is the best way to balance flexibility and control. I.e. one large confederal structure. So what's to stop it being a monolithic bureaucracy like all the rest. Well, why have just one confederation? Locality based federations are useful to avoid structural inefficiencies resulting from Local LETS competing with each other. Apart from that the pure LETS capitalists may want to federate separately to LETS communists. That's good. Preferential trading is encouraged by locality in LETS anyway. Why not have a Society of Friends who overlap LETS and want to support each other. Works for all the varieties of old boys club, lesbians, greens, Rotary the Masons etc. The diversity keeps mainstream interLETS competitive. In the USSR they found that tying 30% of a managers wage to sales volume was needed this could be used for the in-house intragroup LETS brokers. If LETS ever starts being taxed it should immediately go underground. Paying for national military to protect our economy should be an option if there are alternatives [mainstream taxes would then move to goods and land and away from services and wages]. It is easy to do. Decentralised registers of services and accounts that continually update each other are common on the internet now for file sharing software. They are maintained by sysops known to each other but with full deniability. I'd recommend piggybacking on FreeNet for its end to end encryption. Not having a computer needn't be an issue either. Account numbers could be a public key that is used to generate a matching private key for a set amount. Numerical travellers cheques valid for one use only. Any computer can then become a cash withdrawal machine. To transfer the virtual cheques into your account and check on any other members details a phone menu system can be set up fairly easily. Just like paying bills over the phone. _________________________________________________________ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com
