In a recent vigorous debate with a corporate libertarian, Kevin Carson has some eloquent paragraphs defending the importance of local exchange trading systems:

“LETS systems and other alternative currencies are an instrument of individual freedom, a tool for economic independence from the unholy alliance of the centralized state and the centralized corporate economy.

Things like LETS systems, barter, the household and gift economies, etc. (all falling under the category of the “informal economy”), enable participating individuals to transform their skills and labor-power directly into consumption, without being dependent on the vicissitudes of the national boom-and-bust cycle or the authoritarian whims of an employer. Take the example of a small organic truck farmer who lives next door to a plumber or other skilled tradesman. If the farmer barters produce for the plumber’s services, it’s still true that neither the farmer nor the plumber has a market for his entire output. But each has a reliable and stable outlet for the portion of his product consumed by the other; and the two together can be pretty secure in the knowledge that they can meet all their needs for vegetables and plumbing without any worries about fluctuations in the greater money economy. The more trades and occupations that are brought into such a barter system, the larger the proportion of each person’s output will have a reliable and secure market within the system.

Such local currencies were used in the past with great success as local responses to economic depression. By putting local producers in direct contact with each other, they enabled them to translate their skills into consuming power without the need to acquire money from the outside economy. In effect, the local economy was transformed into a peaceful harbor in the midst of a violent economic storm. The greater the size of the market, and the more distant producer and consumer are from one another, the greater the danger that economic dislocations will create both great stocks of unsold goods and masses of unemployed laborers. Local, informal economies create stable ties between individual producers and consumers that can be preserved without fear of macroeconomic disruption.”