Thinking of finance as a commons

Our monetary system is not controlled by government as a representation of its citizens, but by private institutions, hell bent on getting the greatest return on investment for the shareholders.

Banks in Australia happily charge plus 17% interest on credit card fees when the current rate is around 2%. Yet if you hold a superannuation account, some of your money is likely to be invested in the banking system, with your best future outcome being a higher return on investment on your portfolio. To complain about the high interest on your credit card while you love receiving the high return on your Super is a fool’s game. We cannot have our cake and eat it too.

The catch cry of many start-ups and entrepreneurial activities is “we cannot fund it”. To even speak these words is to give evidence that you are caught in the trap that the financial system has been designed to create. It thrives on scarcity. On austerity for the majority. On making people feel powerless against a mighty ‘beast’ called finance.

Yet there are alternatives. While constraints are excellent tools for building agility, creativity, lateral thinking, and community, killing a project in its infancy without seeking alternatives is to give up far too soon.

Out of the ashes of austerity in Greece and Spain are arising communities that have designed a new system. People need to eat, get health care, be educated, feel valued members of society. When there is no ‘money’ to pay for these things, the constraint requires adaptability on how to continue to provide these services without any loss to those contributing.

When we make finance a commons, an engagement involving citizens and communities thrives. This is evident in countless communities around the world where complementary currencies are deployed.

A complementary currency requires two elements. An unused asset and an unmet need. Empty seats on a bus or train, and the need to collect and sort garbage. This was the beginning of the revitalisation of the city of Curitiba in Brazil in the late ’70s.

Now we see whole communities around the world take back their power and move from despair to thriving, without waiting for the government, the global economy or the finance system that has failed them so thoroughly…to come to the rescue. The Bristol Pound, Fair Coin. More here.  Crowdfunding.

Our current finance system is irreparably broken. Anyone who thinks we can continue to patch it up, to rearrange it, to move the debt around…is living in a delusional state. The level of debt cannot be serviced. At the least, there needs to be a jubilee. If not this, then the crash of all crashes. The crash we did not have in 2008 because more deck chairs were being arranged.

And make no mistake, there was purposeful intent in alluring citizens into credit card and consumer debt. Very cleverly designed, seductive marketing campaigns. Just as the rich countries lured the smaller, more needy countries into unpayable debt traps, Greece is a larger hologram of you and me.

Yet a crash is not a bad thing. People will lose a lot of stuff. They will lose their sense of security, which was always built on a house of cards.

Out of the fire of imposed austerity is arising real financial innovation, community, genuine productivity, greater connectivity to value. In this, we can celebrate.

Like any endeavour of worth, the price of entry will not be easy.

Photo credit : Brookings Institution via Compfight