Fair exchange is no robbery - it could be a new source of work

The buyer and seller negotiate a price between them. The units of account are an alternative form of money - `anchors' in Greenwich, `strouds' in the Gloucestershire town

Pundits sitting in their offices surrounded by computers or, more likely, in Club class on a plane with their laptop open and a glass of champagne to hand, tend to focus on the glamorous aspects of our changing economy.

It is communications gizmos, the highly profitable entertainment industries, the opportunities for ultra-educated and internationally mobile professionals, the global capital flows, that attract all the attention.

But these form only one aspect of the fundamental changes that are taking place, and the one that is probably of least interest to most people. What they care about is where the jobs will be and how they will make a living. The majority is unfamiliar with the delights of business travel.

There has been a vogue for dire predictions of future social turmoil and upheaval as global capitalism puts increasing numbers out of work. The latest to fall victim to this fashion was none other than the ultra- capitalist George Soros writing in the US magazine the Atlantic Monthly.

The lesson of history is that this fashionable gloom is nonsense. In the 18th Century the Physiocrats, a group of French political economists, predicted disaster as manufacturing took over from agriculture.

They argued that only agriculture was productive because seed generated a whole lot of new corn, whereas manufacturing was sterile because it merely involved the processing of materials. The doomsters who see disaster in the current economic trends will come to seem just as silly as the Physiocrats.

My assertion does, however, demand an answer to the question about where the jobs replacing all those displaced by information technology will be. The most authoritative employment forecasts come from the US Bureau of Labor Statistics.

It sees two main sources of new work in future: the professional, high- flying kind; and "community, social and personal services". Many more people will be employed in this latter category, which covers a huge range of people-intensive services from teaching and nursing through security guards and cleaners to aromatherapists and personal trainers.

An important part of this expansion will turn out to be in what Americans call the "third sector" and Continentals the "social economy". This sector has rather fuzzy boundaries. It includes charities and churches but also organisations such as housing associations, which overlap with the public sector, and grassroots organisations such as credit unions.

One of the most promising avenues for the generation of jobs and income in the social economy takes the form of the local exchange trading system, or Lets. Essentially, a Lets scheme allows people in a given area to barter goods and services.

They can be seen as an extension of the social bartering that most of us participate in - looking after friends' children, running errands for somebody who is ill, in the knowledge that the neighbourliness will be repaid if necessary.

Many of the formal schemes in this country consist of a computer bulletin board, describing the offers or requirements to trade, and an accounting system which records the transactions and keeps credits and debits up to date. The buyer and seller negotiate a price between them. The units of account are an alternative form of money - "anchors" in Greenwich, "strouds" in the town of the same name in Gloucestershire. The US schemes are more likely to have a physical, printed alternative currency, such as "Ithaca Hours" in the town in upstate New York. A swift Internet search reveals a large number of schemes, most in the US and UK.

Lets schemes started as a means of overcoming the constraints imposed by lack of money in a poor community or during a recession. The schemes reduce the need for money and potentially offer a social network and sense of self-worth to the people taking part, often those like the long-term unemployed who have been steadily excluded by the conventional economy.

There is not much hope that conventional economic approaches will provide the solution for these pockets of urban exclusion. In many low-income communities, the little money that enters is often a state payment of benefit, and it will often leave straight away by the payment of rent to landlords from outside the area, or buying food and other essentials from branches of national stores.

The Lets currency, by contrast, has to stay in the area, and starts to boost the local economy through an absolutely standard economic "multiplier" effect, whereby what one person earns is spent in turn on another service.

Many Lets get some support - usually advice and management - from local councils or voluntary agencies. The success record is mixed. A recent series of case studies of UK schemes concluded that there were two main obstacles. One was a combination of a lack of confidence and know-how on the part of the members, and a lack of support from the council or voluntary agencies. The other was the lack of trust - or absence of social capital - in areas such as problem estates with high crime rates.

However, despite these problems, the New Economics Foundation estimates that the UK has some 300 schemes 10 years after they were introduced. Some Lets have grown to impressive proportions. For example, one of the UK's biggest, in Manchester, has 700 members and has created its own credit union.

Paul Glover, organiser of the Ithaca Hours scheme in the US, estimates that transactions in the local currency, accepted in about 300 businesses, have reached a value equivalent to about $1.5m. A time-dollar system in St Louis, Missouri, has about 3,000 participants earning and spending about 50,000 time-dollars. Ed Mayo of the New Economics Foundation argues that Lets do not represent a second-class economy. Rather, they are a logical development in a global economy.

"Lets should not create the impression of a dualistic structure of classical work versus local exchange. Instead they point towards multiple ways of organising and rewarding work," he writes. "Localised approaches to work creation should be set within, rather than apart from, broader spheres of economic activity - the aim being greater self-reliance rather than autarchy." Lets offer one means of growing the third sector without an infusion of public funds.

Indeed, a City economist, Stephen Lewis of London Bond Broking, believes the Internet will allow rapid expansion of schemes that involve the creation of electronic money, whether they are small-scale like Lets or provided commercially.

He says: "The extension of credit, in the form of a store of value, might initially generate a deposit which might then be transferred to other users of the system in payment for goods and services."

One feature of our increasingly weightless economy - to use the telling adjective coined by Danny Quah at the London School of Economics - might well turn out to be the growth of local currencies tied to local jobs.

How long will it be before airlines would accept an alternative currency in payment for a seat?