One Way Around "The System"

The outlook for most people on this planet regarding economic, political and social freedom and expression is bleak, indeed. And getting bleaker. State militarism in foreign countries and domestically is increasingly being accepted as 'normal'. The only thing that is prospering is violence. Everything good seems to be in decay. But what else could we expect with psychopaths in charge of our institutions and through them our societies, our persons and livelihoods.

It seems impossible to change this because the corruption has got to the point that our institutions are now criminal organisations and are far beyond reforming. The appeals mechanisms (courts) and the reform processes (elections) are in the hands of the same criminals. But all is not what it seems. We have been taught to think in terms of the structure and organisation of our institutions and society as it has been provided for us. The ruling clique in our society rules through our acquiescence to this model (including its appeal processes) that has been provided for us. We have never been taught about providing our own model; our own institutions. This is what this essay is about.


We saw in my last article on economics how classic or laissez-faire economics led to chronic levels of high unemployment through a restricted supply of money needed to buy the full production of a working nation. We also saw how the answer to that problem, Keynesian economics with it's government deficit budgets, was brought to it's knees eventually by the compounding interest owed to privately owned banks charged on the loans that the governments took out to finance these deficit budgets. This crippling interest could have been avoided if the various governments around the world financed these deficit budgets through their own government owned banks. But they didn't because these governments were, and still are, captive to these same private banks. Our societies could have been economically free if we had access to an adequate supply of cost free and interest free money.

As it turns out, our communities have the ability to provide this cost free, interest free money in exactly the amount needed if people know how to go about providing it. Imagine our societies having well paid jobs for everyone and also access to housing and loans without interest for everyone. Just those two readily achievable things would transform our societies beyond recognition. The answers start with LETS systems.

LETS systems have been in operation in various forms over many years. They are a way for a community to provide its own credit to facilitate trade between people (members) without using government printed money or bank created credit, both of which are often kept in short supply regardless of the need. These LETS systems, though, are often seen as having limited success. There are three ingredients that are crucial to them having wide scale success; the sort of success that will bring about major social change.

They are –
One, the currency needs to be denominated in the nation's currency; to be exactly equivalent to it and to be exchanged for it under certain circumstances.
Two, the LETS system needs to be located in a geographical area and be supported by that area's municipal government. And,
Three, it needs the involvement of the personnel from the major community groups and charitable agencies in that area to get the municipal government onboard and also to provide the driving energy to promote and establish the LETS system and the spin-offs from it. It is no small task and it will need a lot of people but the costs are small compared to the cost of not doing anything to change the present situation.

LETS systems allow members to buy goods and services through offering the seller an IOU (which is what a cheque is). The seller then has a credit balance to use to purchase whatever they want from within the system. The buyer has a debit balance and is expected to trade their way out of that debt in time. The total of all the debit balances equals the total of all the credit balances. No interest is charged on debts nor is interest given on credit balances. People are expected to trade back and forth. The 'money' or credit is issued in exactly the right amount to cover the production created within the system. This money is created at the same time as an article or service (wealth) is sold. Therefore it cannot be inflationary.

It is necessary for this credit to be denominated in the nation's currency to make it easy for businesses to incorporate trading in the LETS system without having to run two sets of books. LETS units are treated exactly like ordinary currency for bookkeeping, management accounting and taxation purposes. There's no difference and this is exactly what we want; to expand the nation's money supply, legally! Money, in the form of credit, is legally created by the members of the system when they give IOU's to each other for goods or services. IOU's are entirely legal. IOU's are created, exchanged and cancelled in a multi-member double entry bookkeeping system just the same as happens with a bank. The result is added wealth production and trade for the community without the costs and control imposed by the banks.

LETS systems have operated in the past without the involvement of municipal governments but the horizons are so much wider with their involvement. A municipal government can give ultimate value and credit convertibility to the system. Ultimate value comes about through accepting LETS units as payment for municipal rates. With this option, LETS money will always be of value. A national government does the same thing for the national currency by accepting it exclusively as payment of taxes. So there is a perennial demand for it which equals perennial value.

The municipal government can offer convertibility for members who may have a credit balance but need 'national' dollars to pay for urgent expenses outside the LETS system; hospital expenses or even taxes, for instance. With these two common objections to LETS systems eliminated (the lack of guaranteed value and the lack of convertibility), the system and the community can prosper

A municipal government can start to finance projects in the community using LETS dollars. This use of LETS money can provide services and infrastructure for the community and at no cost to the municipality. This LETS money which is spent into the community by the local council, then further stimulates demand for goods that can be bought with it. By effectively increasing the 'money supply', the community begins to expand economically beyond what it would otherwise.

However, municipal governments are not generally known for their enthusiasm for innovation, especially economic innovation. This is where the community groups and agencies come in. They are staffed in part by innovative people some of whom are very aware of the limits of finance that are placed on them. They know what is needed as far as services are concerned. Some of them, at least, have an interest in this area and are generally proactive people. As a group, they can make life easy or difficult for sitting council members. They can offer their support by campaigning for council members who are due for re-election if they commit to dropping any political party affiliations and support the LETS system. Alternatively, and probably better, community leaders and organisers can run for council themselves and bring the municipal council onboard that way.

Hugh McKay, an Australian sociologist and economic historian, has claimed that all national economies that have prospered after wars or prolonged economic hardship have done so by a government sponsored housing industry. It would make sense for community leaders to take special note of this and to sponsor local building. Materials should be sourced from within the municipality. If they are not available locally, studies could be done as to the feasibility of manufacturing whatever is needed. The aim is to vertically integrate the whole housing industry within the community.

This opens up business opportunities which could be funded through the LETS system either by outright loan funding or partial equity funding. Businesses would be encouraged to use the LETS system whenever dealing amongst themselves, of course. A Business Incubator could be established to identify opportunities and train business owners and to provide ongoing services such as accounting, taxation and legal services and, of course, finance. With increasing employment, military enlistment and the horrors that come from it would fall. The community wins again and is an active move against supporting war and killing people for profit.

Next, attention could be focussed on State and National politics. With a municipal council onboard with the LETS system and its offshoot business services, an increased understanding of economic and political realities will come to many, many people. This could be further enhanced with a public education campaign about the truth of banking and its subsequent control of economies and politics. The time then would be to have the council nominate from its own ranks, councillors to run for state and federal governments and represent the municipality through their council. These candidates would have the active support of not only the council but all the community and business leaders who are active in the LETS system come campaign time.

There are two big provisos, though. The elected members would not be able to vote freely. They would be required to vote according to the council vote as a whole and would be independent of any “two-party system” and its attendant corruption. It would be a collegiate system. The second proviso is that the elected members can only serve one term before being replaced; the position being rotated amongst the councillors. Again, this is a move to severely limit any corruption getting embedded. Yet a body of continuing knowledge would be built up by the council through these rotated members for the benefit of the newly nominated and elected member.

Centralised systems are tailor made for corruption and hidden, unaccountable control. The collegiate system with control at the lower levels rather than the upper levels becomes much harder to corrupt and control by outside parties.

With this proposed system, you have an elected member whose first loyalty is to those that elected her or him. With the 'two-party' system, the elected member owes their first loyalty to the party that endorses them and, secondly, to the people who provide the funds. These people generally have interests opposite to the electors. This is not representation. This is NOT democracy. No wonder it doesn't work for the electorate. The point is not to waste time trying to reform this 'two-party' undemocratic system; we just go around it and form our own system while remaining within the existing legal framework of the country.

In time, other municipalities will come to see the advantages and want to emulate the economic and political self control of our first municipality. It is not impossible that enough municipal council controlled members of parliament or government would eventually become a majority, at which point a truly representative state government could be formed. All sorts of meaningful reforms would be possible then including a state government owned and run bank resulting in an even more prosperous and humane environment. Who knows where it might end?

If the current system is to be replaced without violence and chaos, then it needs to be achieved by something that can grow alongside the existing corrupt system in relative harmony. The above is a thumbnail outline of one way to go about doing that.

I put this forward as an alternative to going along with the present system either as a supporter or even as a protester and as a way of doing something different. Protesters are still controlled by the system. People who do something different are not.

Complete change won't happen overnight with this system, but nothing else will achieve it quickly, either, though the benefits will start to flow fairly early in the process. Thinking about the time involved, you might look back and ask yourself, “What if we got started 4, 8, 12 yrs ago?” The opportunity cost of being mesmerised by the 'two-party' scam and participating in it one way or another over and over is bleakly evident.

My thinking and reading has extended beyond the minimal details provided in this overview, so questions are very welcome.

UPDATE - Some further reading for those interested-

James Taris at lets-linkup (h/t APea) expresses very well one way of approaching lets and social/economic interaction. It is similar to Timebanking. It points the way to how a humane society could work in the future. Indeed, the ultimate is a society that operates without money or any recording system at all and where peoples needs are simply organised and fulfilled. Ironically, this would, no doubt, ease pressure on our natural resources. As traditional native societies have shown, when everyone's material needs are met (without money!), people turn to spiritual and cultural pursuits.

But I don't think the system and thinking that James Taris advocates would work on our present society with its present thinking and organisations on a large enough scale to effect change at the level we are aiming for. There is a need to engage and interact with the existing business world and its (our) existing money system while enhancing the freedom for everyone to prosper. There is a need for a transition system. Something that can compliment what we already have and then move on to replacing the corrupt control of it together with some of its more nasty attributes.

Here is another resource for information and even turn-key systems with all the needed software if you want to start a Lets system tomorrow! -
Community Exchange System

Here is a site that specifically advocates using LETS units denominated in the national currency as I do-

There are commercial bartering systems catering for businesses that are similar but charge fees and margins (some large) that a community run organisation doesn't need to. They show what's possible, though-
Barter of America

Wikipedia on LETS



thank you James, for offering up solutions.

With a municipal council onboard with the LETS system and its offshoot business services, an increased understanding of economic and political realities will come to many, many people.

here is a site (run by another James) that has links to various LETS groups around the world:

it looks like from a cursory view they don't use the currency as you describe. is this the key to making the system work on a wide scale?

it looks like from a cursory

it looks like from a cursory view they don't use the currency as you describe. is this the key to making the system work on a wide scale?

I believe so, APea. James Taris at lets-linkup that you linked to (thanks!) expresses very well one way of approaching lets and social/economic interaction. It points the way to how a humane society could work in the future. Indeed, the ultimate is a society that operates without money or any recording system at all and where peoples needs are simply organised and met.

But I don't think the system and thinking that James Taris advocates would work on our present society with its present thinking and organisations on a large enough scale to effect change at the level we are aiming for. There is a need to engage and interact with the existing business world and its (our) existing money system while still maintaining freedom for everyone to prosper. There is a need for a transition system. Something that can compliment what we already have and then move on to replacing it.

Here is another resource for information and even turn-key systems with all the needed software! -
Community Exchange System

Here is a site that specifically advocates using LETS units denominated in the national currency-

I'll update the post with your link and the others

Thanks for the resources James

and for keeping things going,
Surely not everyone will produce as much as they consume... ? So how does LETS account for folks who are never trading back enough to cancel their debits?

I've got some reading to do smiling

debits and credits

So how does LETS account for folks who are never trading back enough to cancel their debits?

hi NJT, members have a debit limit just like a credit card. Good traders with good records receive higher limits. Some systems allow everybody to see others a/c balances and limits online, as well. Remember we need debits to have credits. We need people to be in debt so others can have credit (money) just like our society with our banks, bank loans and money.

An interesting feature with LETS is that if someone decides to leave the system and leave a debit balance, then the a/c can just remain dormant with a debit balance. No one is out of pocket. Properly run banks could do the same thing.

We have been taught that assets have to be seized to repay debts to banks. But they really don't. Unless the system is set up in the first place with the aim to seize people's assets when the banks shrink the money supply making it impossible for everyone to repay their loans.

See how nasty the banking system really is?

newjesustimes's picture


Update: I just updated our site software (since it was giving me a big red warning). I think I have the process down to a science now but please don't hesitate to let me know if anything isn't where it should be, thanks!


I recall, some time ago there was much ado about a LETS system in my neck of the woods.
Unknown whether much came of it?
And I haven't heard anything about it for sometime now.

One problem that would be obvious is a lack of confidence.
If people do not have confidence in the system as they do with the "money" system, then it would not catch on, grow or fail entirely.

"See how nasty the banking system is"

Very nasty. Pretty much responsible for all that ails the globe.


hi Pen,
LETS systems have been around for more than twenty years now but haven't really taken off. They are 'close but no cigar' . . . so far.

The thinking is exactly right but there needs to be three conditions in place for them to work well and i know of no instance where all three have been incorporated . . . so far.

The three conditions are
- denominating the exchange units in the national currency
- the involvement of people from the major community groups in the area
- and the involvement and backing of the municipal government.

With these three conditions, the confidence issue you raise is addressed. LETS units then have guaranteed value and convertibility when needed to dollars or pounds or whatever the national currency is.

It might be interesting to find out what is happening with the LETS system in your area. smiling

Hey James did a quick search

Hey James

did a quick search and it still seems to be alive

Secretary/Treasurer - Lorne WHITE
905/835-5506 BusFaxRes
Get what you need without spending hard earned cash.
Contact LETSNiagara to learn how.

Oddly, I can't access this site?

the message is forbidden

the message is forbidden can't access on this server?

McJ's picture

Interesting tidbit

I thought this might be an interesting tidbit to add here.

Wyoming Narrowly Defeats Measure to Prepare for Apocalypse

"The bill, rejected on a 30-27 vote by the state House of Representatives, would have allocated $16,000 for a panel of legislators and emergency managers to study various measures, including a new state-issued currency, for handling a range of apocalyptic scenarios.
The bill would have funded contingency planning to guide Wyoming through "a situation in which the federal government has no effective power or authority over the people of the United States," as well as disruptions in food and energy supplies."

boardrooms a-twitter

Hi McJ, good find! I'll bet that caused some consternation in a few boardrooms!

I like how the article is oriented by the opening paragraph-
"(Reuters) - In a sign of rising consumer confidence prevailing over go-it-alone pessimism in the Cowboy State, Wyoming lawmakers on Tuesday narrowly defeated a "doomsday bill" to help the state prepare for a total collapse of the U.S. government and economy."

and ends with -
"The state has billions in permanent savings and is expected to end its current budget cycle this July with more than $1 billion in its Legislative Stabilization Reserve Account, dubbed the "rainy day fund" by lawmakers." (that's like $16 to a millionaire)

Yet they claim to being prudent in saving $16,000 (or $32,000 originally asked for) rather than plan for the obvious. Then, I guess that's the problem; it's obvious.

McJ's picture

Tweeting as well

I am sure there was some tweeting going on as well along with all them twittering boardrooms. smiling

The Governor and the department of Homeland Security apparently have the preparations for the obvious covered all ready, eh!

"I just didn't see allocating $16,000 from the state's general fund to basically cover what the governor and his director of homeland security are already doing," he said."

Somehow, I don't imagine issuing a state currency is included in those plans. And I am not sure what they were going to be able to do with $16,000 but interesting nevertheless that this almost passed the legislature.

"I guess a lot of people think if you're trying to prepare for a disaster, it makes you seem crazy," co-sponsor Kendell Kroeker said. "I was interested in it mainly because I don't think there's any harm in being well-prepared."

It seems the opponents of this bill were focused on the "makes you seem crazy" part.

crazy vs afraid

It seems the opponents of this bill were focused on the "makes you seem crazy" part.

yeah and now Kroeker is covering his arse by downplaying it. Wrong move in my book. He should have called them on it and pointed out their craziness with the discrepancy in the money amounts - 16000 vs 1billion. And asked the question as often as possible, "What could they be afraid of that 16000 would do?"

The Daily Reckoning on Greece


I think the people who wear ties to bed and those that may not are beginning to have common thinking. A person could be forgiven for thinking that James of Winter Patriot could have written the following. (Subject to his corrections, of course, whatever they may be)

"That conclusion is simple: what’s going on Europe has nothing to do with solving a debt crisis and everything to do with preserving a corrupt system based on limitless debt and growing government power. The sooner you understand that fact, the sooner you’ll be able to prepare for what happens next. There are two options for what happens next, and we’ll get to those shortly.

Read more: What the Greek Rescue is Really About

This blog resides on the same blog space supplier (Agora) as Chris Floyd. Coincidence? Wires getting crossed on the server? Sense of outrage seeping through partitions? Good.

Hey IC!

Good to hear from you smiling

That chapter from Marx gives an interesting historical perspective. Like, nothing changes!

That's a very good article you linked and quoted from, IC. This latest economic war started in the early eighties with Reaganomics and targeted the working class. The nineties saw the middle class take their turn and it has been steadily moving up the socio-economic scale ever since. Now we see the ranks of the elite getting thinned. This is what the tussle over Strauss-Kahn and his position was all about. The New York bankers won that one and this is the result.

But whoever wins these internecine wars amongst the elite, it doesn't matter to the rest of us. We get shafted anyway. And it's all because we believe in an abstract concept called 'money'. And we limit what we will do because we don't have enough of this abstract concept. And people die. Beyond weird, isn't it?

McJ's picture

Hi ICGreen

Hi ICGreen smiling

How you been going? Nice to see you commenting.

Thanks for the excepts from Marx. I was just reading some Scottish history the other day about the Highland clearings and the destruction of the Clan System with their communally held properties stolen to make way for large sheep farms owned by the likes of the Duchess of Sutherland. She was quite the horror! So, your link was timely for me.

Interestingly, most Canadians of Scottish heritage are here in Canada as a direct result of those clearings. 'My' clan, (my ancestors) communally held large tracks of land along the River Sprey in North Eastern Scotland. Most of that was stolen, particularly after the Battle of Culloden during the 1745 Jacobite uprising. Much of the clan was reduced to 'cattle thieves' and driven south and west until many eventually emigrated to North America. My ancestors arrived in Canada penniless and with a large family to support.

"If you want to put it in simpler terms, let’s say that Europe’s banking system is full of rotting meat. Some investors bought that meat thinking they were going to get prime rib. But they can smell the stink of the meat from a mile away. They want to be compensated for the bad meat. The ISDA, which owns the freezer in which the meat went bad, says, “Well, we’ve decided the meat isn’t bad after all. And you have less of it than you thought anyway, as of now.”

I love this analogy. The Evil Fuckers as owners and hawkers of freezers full of rotten meat is an apt description and we can all smell the stench that has arisen from their actions.

Here is a short clip of Bill Abram talking about "growing up during the depression in Alberta Canada, before describing Canada's experience of debt-free money issue from 1935-1974 and its barely perceptible effect on the national debt. At the end, he waxes philosophical about the source of true wealth in society". Abrams has talked extensively on the subject but I don't have a link to any of that off hand. I thought this clip was interesting because he comments on the source of real wealth.

Will Abrams

thanks for the video, McJ. I really like his closing comment, too.
It's all so maddeningly simple! If only people knew . . . .

For those who may not be aware, the Bank of Canada mentioned in the video is the government owned central bank of Canada. The rise in national debt marked the end of government control over it, though.

It is still theoretically possible for the Canadian govt to take back control of the Bank of Canada and usher in prosperity and well being for all in Canada. But for that to happen, people would need to take back control of the government (see above!) and ban political parties forever-more. They pervert then 'shanghai' democracy.

The same applies for Australia, too.


Hi Back!
Will Abram's use of the term "well-being" just struck a note. I finally got around to reading John Ralston Saul's A Fair Country: Telling Truths about Canada.

He makes the weighty observation. I'll just quote a book review on this:

Start quote
Saul argues that the famous “peace, order, and good government” that supposedly defines Canada is a distortion of the country’s true nature. Every single document before the BNA Act, he points out, used the phrase “peace, welfare, and good government,” demonstrating that the well-being of its citizenry was paramount.
End Quote

By welfare (he could compare French versions, a handy thing to have two languages) it meant joy of life, happiness, joie de vivre, etc. Just before the BNA act, the Family Compact (bullshit name) stepped in, decided to start offing the natives and make sure that everyone remained orderly employees of the Hudson's Bay Company and miniatures of Brit culture instead of visionary citizens.

So when Will Abrams says "well being", it rings some bells. First, the John Saul reference and secondly, another Family Compact move in 1974 which sounds a lot like what Saul was talking about a century earlier. So they move in centuries and decades. Replace joy with order. Debt-free with debt. And now they're working on cyber-space. Maybe it's the model that they put something out there... like farming techniques, a colony, money, information, and see where the value shakes out. Then position themselves to take advantage of that value and make sure that others continue to create value, but don't get to keep it. Maybe further... when you "stare into the vacuum" of Harper's eyes, he's literally the latest of the rotating power heads vacuuming wealth into the soul-less Compact Cannister where abundance is destroyed.

OK. Maybe that was a little much. But still.

Well said,

Well said, IC! The common welfare is why you have a society. And a society is the face of a social system. To have 'order' is to impose someone else's will and it must necessarily lead to exploitation. So it becomes anti-social which leaves us with an anti-social social system. And this is exactly what we have because it is exploitative of the vast majority. Most of the wealth and the well being that would come from it are taken from us.

It is also insane to sane minds to have an anti-social social system and that this exploitation should not only happen but that it is praised and held up as model behaviour. Exploitation is destructive and it is this that is at base of all the social ills we have.

To counter this, the perpetrators constantly tell us that the victims of this insanity, us, are in fact the perpetrators of our own ills and unhappiness. People with sane reactions, such as depression, to an insane and exploitative society are pathologised and the insanity grows another layer.

I could go on!

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