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Just Don't Call It Funny Money

A BC brainiac reinvented cash. His idea might hit Olympic gold.

By Michael Boxall 9 Feb 2006 | TheTyee.ca

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Money minus government

Need money? Make your own. Creating a currency is easy. And while the belief that only governments can issue money is deeply ingrained, it's also wrong. Anybody can.

"I've seen people get physically sick listening to this idea," says Michael Linton. "It confounds their understanding. It's like believing the world is flat. 'I know the world is flat. If the world was round we'd be sliding off the edge all the time.'"

Linton is a former computer analyst with UBC's TRIUMF sub-atomic physics project. Twenty-three years ago, he devised a currency called LETS. Like ninety-five percent of Canada's $800 billion federal money supply, LETS dollars don't exist as notes or coins, but as computerized records of credit and debt.

LETS has since been adopted by about three thousand communities around the world. Some are geographic. The Australian government, for example, asked Linton to set up a nationwide network of LETS cells.

It works just as well for groups with a common interest.

"I'm thinking of setting up a currency for Harley-Davidson riders," Linton jokes. "Its basic unit would be the hog."

But he's not joking about his current project. Linton is going for the gold: he has set his sights on the Olympics.

'Olympic money'

"London, 2012. Mayor Ken Livingstone said he would have the Olympics if they were paid for and they developed northeast London. They're going to pull two billion pounds out of the lottery funds. But what does that do for children's aid, for heritage support, for all those other things the lottery supports?

"We think there should be Olympic money, not just for London, but for the community of people who are interested in the Olympics worldwide."

Simplicity and ease of use put LETS in pole position for this job.

Basic LETS has a Brancusi-like elegance of line. Person A does something for Person B for an agreed-upon sum in LETS dollars; that amount is credited in a database to A's account and debited from B's account. When A has Person C do something, the amount is credited to C. Essentially, the money is a promise by members of the community to do things for others. There is no interest charged and no administration fee. And it grows from nothing.

"If everybody starts with a certain amount, pretty soon some have accumulated more and some have accumulated less," Linton says. "If we start at zero, then when I spend the first forty dollars, I'm minus forty and someone else is plus forty. The sweetness of that is that I have issued money. There is no longer an institution that says we are creating money and you will get some of it, which is a pernicious piece of politics. Our system is, 'here you are -- go!'"

LETS began in Courtenay, on Vancouver Island, in 1983. Once the commercial hub of the Comox valley, Courtenay was going broke as fishing, mining and logging declined. Linton leased time on the town's first microcomputer and set up LETS as an accounting package. Within a few months, some two hundred and fifty people had joined. A year later, about twenty such systems had sprung up around the Lower Mainland and in other parts of Canada.

Money in motion

Yet, many regarded LETS with deep suspicion. You must be crazy. There's got to be a catch. It's got to be illegal. It'll never work. It can never be stable. You can't trust people. Who's behind all this? What's in it for you?

"The leftwing [people] thought it was rightwing and the rightwing people thought it was leftwing," Linton says. "The religious people thought it was godless."

If opponents hampered the growth of LETS, so did its supporters.

"We said any fool can do this and they've proved us right. They're all over the bloody place. Only about three or four of them are operating even by the principles of the process. They just don't use the technology or the administrative model." Linton compares LETS to a bicycle. It runs fine when it's in motion. But many LETS users, uneasy with its simplicity, sought reassurance in complication. They set credit limits and got picky about who could join and what they could trade. They formed supervisory committees. They charged fees.

"Some LETS systems have said, 'Heck, this money's made up so we'll just create a staff and pay it. The administration account will just go negative five thousand, twenty thousand, three hundred thousand dollars. It doesn't matter because it's only funny money.' But it does matter."

Another problem, Linton says, is that people have tried to impose a single currency where a basket of sub-currencies would work better. In the case of Vancouver -- still without a LETS system despite repeated attempts to start one -- this would mean one each for Kitsilano, the east side, North Vancouver and other areas. The Chinese, the Italians, the gays and lesbians would also have their own money. Like Internet usegroups, each subculture would have space inside something larger.

Down to business

For LETS to really catch on, it has to be accepted by businesses. To help them get used to it, Linton has devised a system called Community Way. This is a fundraising program for non-profits and its goal is to show companies that they can do well by doing good.

Businesses make donations in community currency -- which costs them nothing -- to the local school or hospital or church, which top-up wages or pay volunteers with it. The recipients then use it in partial or even full payment at the businesses. (A grocery store might take twenty percent in local currency, a theater; one hundred percent.) Or they exchange it for federal dollars with people who can use it. For their part, the businesses can buy local products or increase staff wages. They also get to support local groups and build customer loyalty. The community groups have a powerful new source of funding. And the general population can support the non-profits without losing buying power.

"Community Way raises a bucket of money from nowhere," Linton says. "It pulls an imaginary rabbit out of an imaginary hat."

He's confident that Community Way will do for LETS what profit-and-loss calculations did for spreadsheets: become the application that makes the software indispensable.

Beyond Air Miles

Community Way is also at the heart of his pitch to the Olympics committee. Linton has linked up with architects who have contracts to build a total of 12,000 housing units. He sees Community Way as the means to turn new concrete into communities.

His confidence is boosted by the presence on the London organizing committee of Keith Mills, creator of Air Miles, perhaps the most widely-used, non-governmental currency yet devised.

Linton's already stirring up more buzz about LETS. There's a flurry of websites, including Wildfire, which explains Community Way and how it's being promoted. And at http://game.credguard.com, you will find LETSPlay, the online version of a game he devised twenty years ago to show the dynamics of community currency.

He believes strongly that after all these years, LETS's time has finally come.

"In the next six months you're going to see it crack open like an egg," he says.

Michael Boxall is a Vancouver writer.  [Tyee]

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