They have been described as the New Alchemists. The people who take something worthless and turn it into something of great value.

Is this magic? Is it a scam? No, it is a reasonably straightforward process involving people and releasing their potential. Words like social capital are bandied about and many people are unsure of the meaning of this.

One way to look at it is to say "There is so much work to be done and so many people underemployed - why don't we bring the two together to sort out the problems." The use of people to solve problems is the use of Social Capital

Money tends to be the sticking point. We haven't got enough! Yet there is many times more money in the world than there are things to buy with it.

So let's invent our own! Why not? It's not illegal - despite what people might think - so long as you don't try and pass it off as sterling (or dollars or whatever).

In Ithaca, New York State Paul Glover invented the Ithaca Hour. A printed note worth one hour of anyone's time (or $10 if you wanted to buy food/bicycles/jumbo jets). People started to accept them and the local farmers accepted them for food and paid their casual labour partly with "hours." This took off and now hundreds and hundreds of people in the area use "hours to get extra work done or buy extra food or whatever.

In the UK we have had LETS (Local Exchange Trading Systems/Schemes) since the 1980s. A LETS is a club where the members agree to accept points instead of money from one another. One person keeps a record of all the accounts and all the members receive a list of the other members and their skills. Everyone also receives a "cheque book" with which to pay for goods and services.

Some schemes link their points to the pound (1 point = £1) while others link the value of the point to time (5 points = 1 hour's labour) while some schemes make the best of both worlds saying 1 point is £1 and have a standard rate of 5 or six points per hour.

Having done this we have then abandoned the idea of shortage. The rules say that members can go overdrawn so you can start spending straight away. The commitment you must sign up to is that you will balance your account from time to time and the only way of doing that is to do something for one of the other members.

LETS are doing particularly well in Australia (the Blue Mountain region has seen a lot of LETS activity), New Zealand, Canada and now several european countries with the UK taking the lead.

Hungary has launched their first LETS with help from the British Council and UK LETS advisors.

Other similar schemes include Time Dollars in the US which was invented by Edgar Cahn. This is a system which provides caring support for disabled and marginalised people without spending huge amounts of money. It has developed in a variety of ways even to the point of young peole being able to earn computers for activities such as helping younger students or even turning up for a course which was normally skipped.

Once money is in the hands of the people they do with it what needs to be done.

The Williams Window

David Williams a UK based LETS adviser created a model to explain how to analyse the different methods of payment we already use.

The Williams window is a diagram which looks like an old fashioned window made up of 4 squares which, when put together, make up one big square.

Across the top of the top left box is written "National" across the top of the top right box is written "Local"

Down the left hand side of the top left box is written the word "General" and down the left hand side of the bottom left hand box is the word "Specific".

Williams says that however you pay for something will fit somewhere into this matrix.

If a group of people empty their wallets or purses of everything that is in them there will be a lot of interesting methods of buying goods and services. Credit cards, library tickets, bus passes, milk tokens, credit notes from shops, supermarket points cards, football season tickets, Gym membership cards, gift vouchers, free offer coupons, cash, school dining cards, debit cards, iou's and so on.

If you took just the things listed here and started to put them into the matrix of the Williams Window you would see that things fit into one of the four categories.

"National/General"

This is Cash, credit cards, debit cards, cheques and so on. The things that are acceptable just about everywhere (Nationally) for just about anything (General).

"National/Specific"

These are the methods of payment you can use anywhere in the country but for only one (specific) good or Service. Milk tokens are valid across the country but you can only use them for buying milk. Shop points from a national store can be used to buy products from that store anywhere in the country (but we'll talk more of that later). Postage stamps can be used to post a letter anywhere in the UK.

"Local/Specific"

This is the stuff that you can only use to get specific things in your local area. A bus pass gives you travel on buses in the local area. A library ticket allows you to borrow books from the local libraries. Baby sitting tokens can buy you babysitting from a samll group of people in the club and so on.

"Local/General"

If you have been following this so far you will see that the top right hand box is still empty. We seem to have covered everything already and we pretty much have. However LETS (or other local trading system) is something that you could put into this box. The Local Exchange Trading Scheme may aim to provide a wide range of services to local people in exchange for a locally produced currency.

The Williams window partially completed

Williams is concerned that this may be a step too far for newly developing trading groups. He suggests that they stay within the bottom right hand box in the initial stages with members offering just one common good or service so that they know why they are joining and have to get used to trading with one another before making more exotic offers.

If a group starts off offering baby sitting to all of the members everyone knows why they are joining. They want to swap baby sitting time with each other. The group may thrive and grow and then someone - say a single parent - may want to join who needs babysitting but can't offer it in return. She would, however be willing to make soft toys for children and accept baby sitting points for them. On seeing the toys the group decide to let her join and every so often she makes a teddy bear or rag doll for one of the other families and they give her some of their hard earned baby sitting points.

Over time different skills may be introduced - car sharing, book/video/music exchange. The group expands the range of goods and services but only for goods and services the group wants.

When this starts to happen the system starts to move higher in the box (towards the empty Local/General category) but it is doing it in the same way as store points are moving up from National/Specific to National/General as you can exchange the points for hotel accommodation, flying, holidays, meals out and so on.

We are all using several ways to pay already. LETS is another one and it is generally the most ethical.