Published on AlterNet, by Thomas Greco, Jr., July 27, 2009.
The dysfunctional nature of the dominant global system of money and banking has for a long time been apparent to anyone who has cared to look at it. Now, in light of the present financial meltdown, it has become painfully obvious to virtually everyone. What most people have failed to recognize is that, regardless of the nominal form of their government, their political power has been neutralized and exhausted by the privatization and misallocation of credit money.
The political money and banking system disempowers communities and enables a small elite to use the present centralized control mechanisms to their own advantage and purpose …
… The Empowering Solution
As in times past, like the populist era of the late nineteenth century, the business people, farmers, and others engaged in productive enterprise are clamoring to gain access to credit — credit which they fail to recognize is already theirs. Under the present arrangements, we give our credit to the banks then beg them to lend some of it back to us — at interest. The real solution lies in creating new structures for allocating credit based on the legitimate needs of businesses, workers, and state and local governments.
Is there any practical possibility of organizing on a sufficiently large scale to achieve this? I maintain that there is; that in fact, it is far more practical, likely, and empowering than any political reform of money and banking currently on offer. America’s greatness has always stemmed from the creativity, industriousness, and goodwill of its people. Ours is a cooperative, compassionate, “can do” society. I believe that we can create exchange alternatives based on voluntary, free-market and community-based initiatives that enable people to transcend the money monopoly and the “war machine.” Socially responsible businesses and social entrepreneurs have a crucial role to play in organizing these parallel systems that can shift enough power to achieve greater measures of independence and self-determination and bring enormous benefits across the board — social, political, economic, environmental, and cultural.
The primary objective of an exchange alternative should be to utilize the credit of local producers to mediate the exchange of goods and services locally. The bottom line is that non-bank exchange system credits and community currencies must be issued in ways that monetize the value inherent in goods and services being exchanged. This means they must be “spent” into circulation, not “sold” into circulation. With regard to the various alternative exchange systems and community currencies that have been tried so far, almost all have been designed to solve secondary problems, or have been lacking in scalability.
Reciprocal exchange and finance are necessary aspects of any developed economy. As I explained above, money today is nothing but credit. It is our common or collective credit that supports any generally used payment medium, including political money. We have allowed the “credit commons” to be privatized … (full long text).