[About] [Statistics] [Vouchers] [Draft Guidelines]

This is my homebrew economics experiment. It’s inspired by LETS, complimentary currencies like the Ithaca Hour, and the use of scrip in times of hardship.

I know a few people in our town who are interested in a LETS scheme or the idea of a complimentary currency. I started issuing a few “one hour vouchers” to explore the idea of a LETS type system without the need for much of a central organisation or administration. I hope a few other people might join in this experiment, and it might just evolve into something useful.

How this is different from LETS
LETS (Local Exchange Transfer System) are a form of mutual credit. They involve maintaining a central set of ledgers that track all transations within the scheme. When Bob buys something from Ali for twenty pebbles in a LETS scheme, Bob’s account goes twenty pebbles into arrears and twenty pebbles are added to Ali’s account. Read the wikipedia entry for more detail on how LETS systems typically operate.

There are several criticisms of LETS that I hope this experiment might address. The most fundamental issue is the legder. In a system of mutual credit, all participants have to have an account, and all transactions need to be recorded against these account. If this ledger fails for either technical reasons or because of volunteer burn out (due to the labour involved), the system collapses.

This “hours” project (which I am yet to give a cool name) is a deccentralised system of promissory notes. There is no central issuer, and no central record of transactions.

Instead of trading in “pebbles” or tokens which are notionally valued at one dollar, my project proposes trading in privately issued promises of one hour of labour. These promises can be redeemed, or traded. Each “promise” is represented by a piece of scrip (the voucher).

Vouchers have an expiry date. LETS tokens do not. I must confess this was a bit of deliberate social engineering on my part. An expiry date will (I hope) encourage people to use rather than hoard vouchers. If unused, the voucher will ultimately be worthless.

An expiry also free participants up from long term obligation. If I issued vouchers today that were never redeemed, I might still have to be concerned about them in five years time. Because the vouchers have an expiry date, I will be able to ‘write off’ the promise one year after it was made, and I would be free to issue new vouchers!

How this system works
I propose a system of individually issued promissory notes, valued in labour. If Ali helps Bob build a shed, Bob pays Ali in vouchers for Ali’s time. Ali might then use these vouchers to buy some veggies off Susan, and Susan might later redeem these vouchers by getting Bob to help her renovate her vegitable garden.

Anyone can issue vouchers promising an hours time to the bearer. The voucher will only be worth something if other people accept it. My proposed LETS type system would consist of a group of people who recognise and accept eachothers vouchers, and have agreed on a set of guidelines to ensure that vouchers are honoured.

Anyone who wants to accept the vouchers issued by participants in the system would be able to use and redeem them.

At present this is an experiment, and I am the only person who has issued vouchers.

Further reading: DIY Money in The Little Book of Money by David Boyle.

Right Now

Over the next few months I will be giving a few vouchers out, offering goods and services for sale that can be bought with these vouchers, and (hopefully!) offering compensation in vouchers to people who help out on projects I’m working on.

I will endeavour to keep a certain number of vouchers in circulation at all times, enough that some get used, but not more than I can reasonably accept redemption on in a month. I am still considering what the optimum number of vouchers to have in circulation is.

I will make all reasonable efforts to honour vouchers I have issued, with a couple of provisos. The voucher is for my labour power, it does not cover the costs of deploying my labour power, or the cost of anything that you may want me to use during that time.

If this experiment interests you, if you want to know more, or perhaps if you want to join in, get in touch.

Kieran Bennett
0430509913
kieranbennett@gmail.com