Mutual Credit Systems and the Commons Problem: Why Community Currency Systems such as LETS Need Not Collapse Under Opportunistic Behaviour

This paper analyses theoretically how the Mutual Credit System (MCS) is affected by the Commons Problem. The MCS is defined as a pure accounting system of exchange, of which the Local Exchange and Trading System is a real life example. The Commons problem is caused by the incentive of members to issue units without the intention to repay this ‘debt’. This can potentially cause an MCS to collapse. It is found that eight institutional design principles for overcoming the Commons problem can also be applied to the MCS. Moreover, the dynamic interaction of economically motivated members of the MCS is analysed. This yields the conclusion that the MCS can provide a robust and stable alternative to the Central Money Supply System, whilst preserving its important special feature of an endogenous supply of money.

Jorim Schraven Volume 5(2001) 4

IJCCR Vol 5 (2001) 4 Schraven

To cite this article: Schraven, J. (2001) ‘Mutual Credit Systems and the Commons Problem: Why Community Currency Systems such as LETS Need Not Collapse Under Opportunistic Behaviour’ International Journal of Community Currency Research 5 <www.ijccr.net> ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2001.002

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The Role of the Third Sector in Paving a ‘Third Way’: Some Lessons From Local Exchange and Trading Schemes (LETS) in the United Kingdom

Despite declarations that the third sector is to play a prominent role in paving a Third Way, there remains much confusion about what constitutes this Third Way and the role of the third sector in bringing it about. Evaluating Local Exchange and Trading Schemes (LETS) as a prominent third sector initiative, the aim of this paper is to analyse its effectiveness in fulfilling various roles being assigned to it. This reveals that although many view the role of the third sector in paving a Third Way to lie in its ability to create jobs and improve employability in order to achieve ‘full-employment’, these initiatives are most effective at facilitating community self-help and thus means of livelihood beyond employment. We thus conclude that for the third sector to be used effectively and the Third Way to become a distinct and radical departure from the past, there will need to be a shift from both an ’employment-ethic’ to a ‘work ethic’ and a ‘full-employment’ to a ‘full-engagement’ vision.

Colin C Williams, Theresa Aldridge, Roger Lee, Andrew Leyshon, Nigel Thrift and Jane Tooke Volume 5(2001) 3

IJCCR Vol 5 (2001) 3 Williams et al

To cite this article: Williams, C.; Aldridge, T.; Lee, R.; Leyshon, A.; Thrift, N.; Tooke, J. (2001) ‘The Role of the Third Sector in Paving a ‘Third Way’: Some Lessons From Local Exchange and Trading Schemes (LETS) in the United Kingdom’ International Journal of Community Currency Research 5 <www.ijccr.net> ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2001.003

On LETS and Time Dollars

A comparative analysis of LETS and Time Dollars seeks to identify their distinctive strengths and shortcomings, makes a plea for collaboration. The piece argues that most of the differences stem from their purpose: LETS is seeking to create an alternative economy to market; Time Dollars are seeking to rebuild what is termed the Core Economy, rooted in family, extended family, neighbors and civil society. While both seek to build community and counter the external costs of the global economy, LETS seeks to do so by returning the world of commerce to a local basis, while Time Dollars expressly seeks to do so by rebuilding the Core Economy, purged of the elements of subordination, discrimination and exploitation that characterized the functioning of that economy in the past. Both have important contributions to make and the challenge is to make sure that future relationships are in cooperation rather than competition.

Edgar Cahn Volume 5(2001) 2

IJCCR Vol 5 (2001) 2 Cahn

To cite this article: Cahn, E. (2001) ‘On LETS and Time Dollars’ International Journal of Community Currency Research 5 <www.ijccr.net> ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2001.004

Commodity Currencies for Fair and Stable International Exchange Rates

For the greater part of the history of money, we humans have used commodities as the basis of our currency systems. In 1971 the world went to a fiat currency system and the problems have increased. During the last 30 years the United States has seen a previously unheard of rate of bank failures. Since the early 70s labor wages have stagnated, corporate taxes have been shifted onto the individual, and the gap between the rich and the poor — countries and individuals — has escalated at similarly unheard of rates. This paper shows why fiat currencies are unworkable, why commodity currencies have also failed and how mutual credit systems may be the answer.

J. Walter Plinge Volume 5(2001) 1

IJCCR Vol 5 (2001) 1 Plinge

To cite this article: Plinge, J.W. (2001) ‘Commodity Currencies for Fair and Stable International Exchange Rates’ International Journal of Community Currency Research 5 <www.ijccr.net> ISSN  1325-9547 http://dx.doi.org/10.15133/j.ijccr.2001.005