As neoclassical economics is pushed towards its logical conclusion, the global economy is entering a phase of massive deleverage and deflation, which means literally not enough money to pay off debts, to invest, to employ.
With a better understanding of money itself we can show how the economy went off the rails by confusing a balance sheet entry with value-in-itself. We might also despair at how entrenched this worldview is amongst the elites who decide these things often it seems, in their interests rather than the majority.
Many things are happening and many alternatives are being proposed and tried. Bitcoin’s release shortly after the financial crisis in 2008 created a vibrant new discourse around disintermediating banks, open payment protocols, and the nature of money itself. Bitcoin has many problems and isn’t really a solution, but our collective learning from it has been huge. This paper proposes a new bottom up monetary infrastructure, the Credit Commons, which already exists in fragments, and better reflects and supports the values and structures of the ‘solidarity economy’
The suggestion is not principally that ‘we’ can ‘change’ the money system and hence the economy, although there is some truth to that. But more importantly to point out that such a thing as a ‘solidarity economy’ cannot be built on the current globalised debt-money system; and the kind of money needed for a more beautiful world can be assembled without permission of states, without legal force, and without high running costs.
The Credit Commons allows for a multitude of alternative or experimental models to coexist. It puts the credit issuing power in the hands of value creators. There are many existing micro-economies which could easily plug in using an open protocol and open source tools.
In economics as in sex, there is nothing new under the sun. The credit commons draws on many intellectual precedents (though this is not a history paper) to revive ideas and principles neglected the main stream. This paper touches on speculation-proof currency, payment without money, money as a relationship rather than a commodity, ecological design, and aspires to a financial system founded on radical principles like voluntary participation and reciprocal trust.
This is the first of 3 proposed papers. The second will explore technical implementations, and the third, a socio-technical approach.