Democratic Money and Capital for the Commons

One of the more complicated, mostly unresolved issues facing most commons is how to assure their independence when the dominant systems of finance, banking, and money are so hostile to commoning. How can commoners meet their needs without replicating (perhaps in only modestly less harmful ways) the structural problems of the dominant money system?

Fortunately, there are a number of fascinating, creative initiatives around the world that can help illuminate answers to this question – from co-operative finance and crowd equity schemes to alternative currencies and the blockchain ledger used in Bitcoin, to reclaiming public control over money-creation to enable “quantitative easing for people” (and not just banks).

To help start a new conversation on these issues, the Commons Strategies Group, working in cooperation with the Heinrich Böll Foundation, co-organized a Deep Dive strategy workshop in Berlin, Germany, last September.  We brought together 24 activists and experts on such topics as public money, complementary currencies, community development finance institutions, public banks, social and ethical lending, commons-based virtual banking, and new organizational forms to enable “co-operative accumulation” (the ability of collectives to secure equity ownership and control over assets that matter to them).

Money and sustainability. Image by 401(K) 2012 on Flickr, CC-by-SA 2.0

I’m happy to report that a report synthesizing the key themes and cross-currents of dialogue at that workshop is now available.  The report is called “Democratic Money and Capital for the Commons:  Strategies for Transforming Neoliberal Finance Through Commons-Based Alternatives,” (pdf file) by David Bollier and Pat Conaty.

You could consider the 54-page report an opening gambit for commoners to discuss how money, banking, and finance could better serve their interests as commoners.  There are no quick and easy answers if only because so much of the existing money system is oriented towards servicing the conventional capitalist economy.  Even basic financial terms often have an embedded logic that skews toward promoting relentless economic growth, the extractivist economy and its pathologies, and the notion that money itself IS wealth.

That said, commoners have many important reasons for engaging with this topic.  As we put it in the Introduction to the report:

The logic of neoliberal capitalism is responsible for at least three interrelated, systemic problems that urgently need to be addressed – the destruction of ecosystems, market enclosures of commons, and assaults on equality, social justice and the capacity of society to provide social care to its citizens. None of these problems is likely to be overcome unless we can find ways to develop innovative co-operative finance and money systems that can address all three problems in integrated ways.

To continue with the Introduction:

A key driver of these pathologies is debt-driven growth and deregulated finance, which are central elements of the neoliberal economics introduced by Thatcher and Reagan in the early 1980s as the successor to the Keynesian paradigm.  This shift was marked by the abolition or relaxation of legal interest rate caps in most countries, which has resulted in usurious rates for many conventional loans and rates as high as 5,000% for payday loans.  While such predation was once mostly directed at the poor, precarious workers and the global South, it spread under other forms to middle-class Europeans and Americans in the 1990s and in the 2000s.  Over-indebtedness has become a ubiquitous condition that has, deepened since the 2008 crisis, strangling economies all over the world and inflicting great social injustice.  Yet business-as-usual continues and mainstream politics has no interest in fundamental reforms.

Fortunately, new opportunities to pursue systemic change are arising. As the internal contradictions of capitalist finance become more evident and more damaging, insurgent critiques of the money system are gaining ground as is the development of practical alternatives.  Near-forgotten historical models of cooperative finance are being rediscovered as new technologies enable novel DIY credit systems, alternative currencies and cooperative organizational models.  One might say that a post-capitalist vision for finance and money is fitfully emerging.

But can the eclectic jumble of piecemeal solutions – alternative banks, currencies, lending systems, cooperative digital platforms, policy proposals, and more – be synthesized into a coherent new vision?  Can the various projects and players in this sprawling realm find each other, initiate deeper collaborations, and attract wider support?

This was the goal of the Deep Dive. You can download a pdf version of the 54-page report here.

My co-author Pat Conaty and I wish to thank the participants of the Deep Dive for sharing their profound wisdom on so many important topics, and for helping us refine the text of the final report.

To give you a better idea of the material covered, please read the remainder of the Executive Summary

The summary of research findings is authored by David Bollier and was partly reproduced here with minor grammar edits.

Posted on: February 7, 2016, by :