Democratic Money and Capital for the Commons: Reflections from the Deep Dive

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The following reflections were shared by Robin Murray following the Commons Strategies Group Deep Dive on Democratic Money and Capital for the Commons.


1. Money and the market. There was a central tension in our discussions between money and markets as acids to be resisted, or as tools for conviviality. Can money and markets ever be neutral, whatever their form, or do they carry within them the germ of capital and social atomisation? Adam Smith embraced money and markets as means to closer and more lateral social relations, that carves out an autonomous space for civil society/economy from the domination of post feudal absolutism and the landlord class. The alternative money and trading systems have something of this character – a kind of free zone, both freedom from (the capitalist version) and freedom to (make a new economy).

2. On the other hand, money and markets are both experienced as alienators – as when paid for social care replaces that of the household or of the state. This last is where the ambiguity is felt most keenly. The disability movement has campaigned and won the right for those receiving public services to get the finance not the service, so that they can use those funds to purchase the services they need. So called ‘personal budgets’ have now spread through the social services in the UK, and led to the formation of co-operatives of users who pool their budgets.

3. What these experiences have brought to the fore is that alternatives to the market, have their own ambiguities, such as patriarchy or bureaucratic statism. The Deep Dive discussions were sensitive to all these issues –there was agreement that both money and markets had to be seen in terms of the social relations in which they were embedded and which they re-enforced. There was also a sense that a new economy involved democratising each of these economic spheres – whether the market, the household, the state or the civil commons. Money in whatever form should be thought about in this context.

4. Distinct questions. The case of personal budgets highlights another point about the context for our discussion of money. The discussion addressed a number of distinct questions, of which the issue of the state/service interface as with personal budgets is one. Others include:

  • How commoners could get access to mainstream investment finance (including finance to cover the living costs of commoners working on new projects)
  • How to manage the interface between the commons and markets and its mediation by mainstream currencies this could in principle include co-operatives using conventional money for their internal relations such as dividend payments)
  • What kind of money, if any, would perform the functions traditionally played by money, for an autonomous commons economy that is insulated from the mainstream economy/monetary system.
  • How could existing money and financial institutions be reformed to tame finance in the social interest

5. The functions of money. There are five functions of money identified in conventional theory: medium of exchange, means of payment, measure of value, store of value and – for Marx – money as capital. In the Deep Dive, much of the discussion considered money in terms of the first two of the above, a medium of exchange and a means of payment. Many of Pat Conaty’s historical examples had this character. The Owenite monies, Worgl and the Gesellian initiatives of the inter-war period, today’s alternative currencies - from LETS to the Chiemgauer.

6. I understood Mary Mellor’s argument in these terms also, namely that just as banks create credit as future means of payment to enable the next round of circulation, so states could do so without causing inflation. If in the old equation MV=PT, then an increase in transactions (T) requires either an increase in M (the quantity of money) or of V, its velocity. A state increase in M could oil the wheels of the next round of (expanded) production without increasing the price level (P), just as much as the private creation of M would. Gesell’s idea of demeurrage and his stamp scrip, focussed on speeding up velocity (V) (in Irving Fisher’s version by creating a self liquidating M) rather than expanding M. All of them are about ensuring that money is a servant not a master.

7. What then of money as (i) a unit of account, (ii) a store of value and (iii) capital. As a unit of account, we enter the sphere of money as quantification of value, linking the invariate system of numbers to the fuzzy real economy of value. Money is a symbol that since the end of the gold standard has broken free from value. The key question is who has the political and economic power to have their symbol accepted as a medium of exchange/payment etc. What is required for an alternative/ commons currency to be accepted from this perspective, so that among other things it can serve as a store of value?

8. For Marx, this analytical and historical progression from money as a means of payment to capital is crucial in his analysis. The moment money takes an independent form, and can stand back from circulation, it can then be aggregated as capital to re-enter circulation fired by the drive for its own self expansion. One of the questions for alternative monies is whether they have an inherent tendency to be accumulated in this way, or can somehow be curbed by restrictions on interest as in the Middle Ages.

9. A number of the alternatives we discussed at the Deep Dive sought to break the link between money as a medium of circulation and credit, and money as an autonomous force of self expansion.

  • JAK bank did this by not charging interest.
  • The terminating building societies by making sure everyone got the money for a house eventually.
  • Michel Bauwens’ example of the Amish and we could have added the Menonite Credit Unions (low saving and borrowing rates).
  • Ellen Brown’s State Bank and Mary’s State money creation both provided capital without interest (Mary) or at trivial rates (Ellen).

These ran alongside the proposals to rein back the private banks’ capacity to create money and to put a cap on interest rates.

10. The above puts the focus on interest. We should note that throughout our discussion there was a thread which suggested that it was the availability of money as short term credit or longer term capital rather than the level of interest that was the issue – whether for public spending, for commoners or for marginalised communities. Christoff Guene made the point in relation to his credit union, and I took Cliff Rosenthal’s experience to suggest something similar.

11. These are the five different yet interconnected functions which have a different place and connection to the real economy in the various theoretical traditions. But modern money suggest we consider five further functions:

i) money as ideology. Marx’s version of money as ideology was in terms of commodity fetishism, and the way that value produced by labour could only be seen in terms of commodities of which money was the most abstract form. It was less a labour theory of value but a value theory of labour, i.e. labour expressed itself in terms of monetary exchange value

How does it stand up today? Marshal McLuhan suggested that money was a medium. Like all media – print, film, television, radio – its content commonly took the form of a previous medium, in this case money as hard currency, either as coin or metal backed tokens. Contemporary digital, post gold standard money could be seen as a new medium.

There is a theme developed in an interesting Mcluhan lecture (given in Berlin this year) by the Canadian David Orrell, titled ‘Money is the Message’. He makes the point that today the connection between money and the source of value in the real economy has become increasingly weak. Money remains a medium of exchange, but it has become an ever more powerful symbolic medium. Its form (as abstract digits) affects the way we think about the economy and social relations. And because it has become so generalised globally it is now fetishised as a universal message.

When so much value now resides in knowledge, how far can a value theory of labour help analytically? If the connection between labour and exchange value has become so much weaker than in the days of artisan capitalism, then the battle for surplus value (that could be put as a struggle between rentiers) is loosened from its labour moorings.

For the Deep Dive, the question is how money as an abstract digital book entry works ideologically both as a medium and a message. Can we draw any conclusions – whether from Marx or McLuhan -for the design and processes of an alternative commoner money ? Can we (should we) take on the digital form, but use it as if it were a tool for different purposes. Are these different purposes part of a different message?

ii) money as information. Currencies in the form of coin or notes are anonymous. They exist tangibly and hide the stories of their circulation. This is no longer the case. There are increasing numbers of financial media/intermediaries who have details of every transaction – of the buyers, the sellers and what has been exchanged. What we know from credit card companies, and from store cards, is that they use this information to target the parties to the transaction. There have been increasing numbers of quasi monies, from air miles, to nectar cards and now Amazon money. What Google has done for so much of our information has been happening increasingly in the world of quasi monies. The interesting question to explore is whether alternative monies can turn the tables and track the sellers and the intermediaries on behalf of the buyers.

iii) money and power. If the acceptance of a currency as symbol depends on various forms of power, then the development of multi polar power in the state and the corporate worlds, would lead us to expect the coming period to be one of multiple currencies. We are entering the world of post modern money. How can we (should we) establish a counter power, and counter currency in this fragmenting financial world?

iv) money as a medium of socialisation. Adam Smith’s point re-appears as money defining an open system. Using it means we are entering a particular information system. This is not just economic socialisation. It can go beyond that. In a co-operative network a co-operative currency would become like a membership card, a mark of identity. Such a network would have negotiated that all parties to that currency will accept the currency as a medium of circulation, and have privileged (enclosed?) access to the information arising from the use of the currency. As such it would give the co-operative economy a certain protection. Instead of tariff protection based on nation states, we have currency protection based on currency as a medium of information and identity.

v) money as memory. One aspect of the social relations of money is its connection to social time. The Brazilian Paul Singer suggested at the Solikon conference that money could be seen as the bridge between the present and the future. It can also be seen as a bridge to the past.. The anthropologist Keith Hart saw money as memory, a way of transferring to the symbolic realm the balance sheet of social relations that we keep in our heads. What is striking now is that the memory of transactions can be stored to an extent far beyond the capacity of the human memory (for example in the block chain technology). The early co-op movement put great emphasis on the transactions between equals and their history as part of their social bond (they were against debt as introducing unequal relations within the co-op for similar reasons)

12. Moving beyond money. One stream of ideas prompted by the discussion was whether a commons economy could move beyond a world of exchange values to one based solely on use values. This was not necessarily a movement to a barter economy (which incidentally is implicit in so much classical and neo-classical economics that sees money as a veil), but rather a distributive one that might or might not be based on equivalence. To each according to their ability, from each according to their need.

13. Could those involved in open source commoning negotiate a relationship with the co-operative economy.Co-operatives would provide the commoners with basic provisions, and the commoners in turn would provide knowledge and support to the co-operative sector in the joint development and implementation of software design? Or could the elements of what we call capital investment – in terms of equipment, know how, and the provisioning of the designers be supplied as use values without the mediation of money?

Financial intermediaries

14. Intermediaries and platforms. Returning to the issue of the availability of finance draws us back to the nature of the intermediary institutions. There were two currents here. One was the remarkable alternative financial intermediaries that have been created:

  • the network of 1,000 credit unions in the US,
  • the 1,000 Raiffaisen co-operative banks in Germany, as well as those in Austria, Italy, Holland and Quebec.
  • the CDFIs in the US and the UK,
  • the JAK bank in Sweden,
  • the new Banco Etica in Italy and Spain.

It was extraordinary to be in the same room with the architects, animators, experts, and ambassadors of these alternatives to mainstream banking.

15. On the other hand, there was Silke Helfrich’s question of how far the individualism of banking relationships was creating a commons, and how could we think of money as a utility for the development of the commons. What substance can be given to the idea of money itself as a commons? Here we had the new initiatives – Ucoin, time banking, Goteo, en.spiral and crowd funding, each an example of explosive trends.

16. Alanna Kraus’ description of co-budget on Wednesday evening and how it worked in en.spiral has so many implications – the pooling of resources in a loose collective and the detailed transparent tracking of what is contributed and taken out by its members. How would this work on a wider scale? For example in a municipality like Bologna could co-budget and Lumeo be developed together to allow for a greatly expanded form of participatory budgeting? At the wider level still can we envisage the development of an open source platform controlled by its user intermediaries that provides access to many of the 23 basic banking functions – such as the various payment and clearing systems. What many of these new financial platform innovations offer is a transformatory means of financial disintermediation.


17. Two of the issues raised in relation to the many social financial initiatives we discussed were:

i) ways in which the ‘living cells’ could spin off new cells, replicate, inspire, federate and develop into more complex distributed systems

ii) implications of ICT and platforms as providing a material base/interstructure that would take this process of diffusion and interconnection to a new level, and range.

There were similar themes at the Solikon conference as they related to similar initiatives in different sectors (such as organic food growing and distribution, energy co-ops, housing, etc.) and how they could develop closer connection between these different ‘sectoral’ initiatives

18. The multiplication/federating route. The week had a number of wonderful examples of the ‘unfolding’ of distributed generative systems:

  • Cliff’s story of the growth of the 1,000 credit union movement in the USA, further supplemented by other CDFIs. We didn’t have time to go into the details of the architecture that emerged beyond the developed federated structure with overall service support organisations being directly owned/controlled by the constituent credit unions/CDFIs. Pat gave similar examples of the developing CDFIs in the UK.
  • The Raiffheisen co-operative banks in German, Austria, Switzerland, North Italy, with their second and third level structures that Christoff worked with (and with his Berlin credit union).
  • The en-spiral story which is an association of individual software designers and companies, some incubated by enspiral itself, then spun off and expanded All are contained within a single limited liability company and a complex web of democratic processes
  • 19th century UK retail co-ops, many of which served as banks, and now the 300 strong network of recovered local co-operative village shops
  • the 14,000 Italian social co-ops with their own supportive financial institutions
  • the Japanese food co-ops, whose ‘living cells’ are the 6-10 household ‘hans’ that act as the collective ordering/distribution/ oversight level in the 350k strong Seikatsu and Green co-ops.
  • The Mondragon Caja Laboral, which is a service body for the network of workers co-ops, controlled by the co-ops that they serve.
  • Solikon had a session with Claudia Sanchez Bajo and Bruno Roellant. Their book Capital and the Debt Trap, which contains a detailed and fascinating account of the debate about federated structures and the division of powers in the Desjardins network of co-operative banks in Quebec.
  • Another Solikon session was a presentation by Das Mietschanger Syndicat, a network of co-operative housing associations. It has grown from its founding co-op in 1987 to 98 housing associations, ranging from 6-287 households in size and with a total of 2k-3k members as of 2015. The legal form is that the housing is owned by a limited liability company owned by the members but with a stake for the network’s Trust.

The associations are largely self managed, but they cannot decide to sell or change their Mem and Arts to alter the governance. The Trust itself comprises all the constituent associations. They decide also on the allocation of surplus finance of each association, maintaining low rents, but not lowering them as costs reduce, but rather using the surplus to finance new associations. These decisions also taken in an assembly of all the members. The key point is that this structure provides a shield against external (or internal) predators. The more associations join, the more complex the governance and the greater the difficulty for an external demutualiser to persuade the Trust to sell the properties. Silke says that there is an English translation of a paper on the Trust which it would be useful to circulate because of its relevance to similar generative social financial networks such as:

19. The platform route, with appropriate tools, financial and payment systems.

i) mutualising network infrastructure. Some of the platforms act as ‘network deepeners’ enhancing the collaborative capacity and resources sharing of existing networks. They can serve as supporting infrastructures for the federated organisations, increasing their internal flows of information, sharing knowledge, enabling collective decisions using apps like Loomio.

A platform for local food projects for example might also (a) share some of the collective services and (b) synthesise some of the operational protocols – e.g. data collected that can be used for comparisons and self-reflection. One example is the open energy monitor, which is open hardware that measures flows of renewable energy and strengthens community energy projects by sharing their information. A negative example where synthesis was lacking were the community buying groups that connect to the CSA’s in Italy have 13 different ordering systems.

ii) open source platforms as generators of viral growth. In some cases the results of open source developments radically reduces costs/improves quality of key inputs that prompts the rapid growth of social production and projects. Some examples:

  • openspim microscopes that use open source to drastically reduce the cost of powerful microscopes (down to the nano level) at a fraction of the normal cost. Can be used for example for i) organic food and CSA producers; ii) urban food projects in neighbourhoods, schools, hospitals etc; iii) environmental groups developing open soil mapping as a marker of environmental degradation.
  • ateliers paysanne. The ateliers use open source designs of agricultural machines and films about how to make them, enabling collective local production of these machines (all in the pre 3D printing era). As a result machine costs fell from €15,000 to €1000 opening up improved distributed agricultural production to environmental groups by dramatically improving their costs relative to the mainstream.
  • Buurtzorg. The Dutch social care platform has enabled the formation of autonomous teams of upto 12 carers. The first team was formed in 2007, and since then their number has grown to 750 with 9,000 care workers. The organisation is not a formal commons (it is a not for profit enterprise) but it demonstrates the significance of the generative capacity of such a platform.
  • Piggott windmills. 100s of communities have been building and using these open source designs. (see wind empowerment)

20. Finance. In relation to finance what might be similar examples? One would be the ‘bank in a box’ which is a closed system developed by two former American Express employees in Brighton. It provides back office services and is being used by among others housing co-operatives wanting to start a credit union; and municipalities wishing to set up a local bank. The cost of starting such a local bank has been radically reduced in the UK from £100m (for the Metro Bank started with this box) to £10 million. Ideally the box could be expanded to included some of the services monopolised by the major banks – such as various types of payment systems/debit and credit cards and so on. What is needed for the open development of a platform of this kind – an open box – is a co-operative platform, with ownership and control of the box lodged with the user banks.


21. As systems become more complex a key question is the interfaces and inter-operablity of the constituent parts. There was a long discussion at the Solikon on how to increase convergence between the scattered parts of the social economy. Many of the means discussed involved face to face meetings of a various kinds, but people raised the question of translation – not simply of language, but culture, available time and so on. Looking at the interconnection of the social solidarity economy more broadly and echoing some of the issues raised at the Deep Dive, the discussions threw up a number of generic interfaces:

i) social finance and projects

ii) the social economy and the state iii) the digital commons and the users iv) the social ventures and ICT v) reluctance of individual projects to subsume their autonomy to common information and other back office functions

vi) language and cultural divides

In each case there is a need to discuss experiences, and register the innovations that have been made already to overcome the obstacles.

22. Social finance and projects. Cliff described the work undertaken by the CDFI in helping the social projects shape their proposals. It is the role played by the better development banks – the Caja Laboral between 1956 and 1990 was one of the best. Peru Sasia spoke about how the Banca Etica went further, seeing its lending less as an isolated loan, and more as a means of including the lender in the wider economic circuit of the product or service in which the project was involved.

23. In the break out group about the old and the new, the old were described as focussed on funding social projects and how to prepare/support/and mentor them. Banco Etica widened the scope beyond projects to whole economic circuits. The new was designed around platforms, notably through various forms of crowd funding.

24. Banco Etica could be seen as combining the old, the intermediate and the new. And it was suggested that such a combination would be needed for crowd funding: those projects put on the platform would require the kind of preparation and post funding mentoring and support provided by any strong social development bank. Maria Perulero was not in the group so we didn’t have the chance to discuss how far and in what way Goteo played this role. But it seemed clear that as such sites developed, they would be in the role of curators or editors of the many projects that came forward on their platforms.

25. A parallel issue was raised during the week by a woman from a foundation, who said that foundations like hers had traditionally looked at requests for support project by project. But a group of them had got together to consider how they could work together to relate to the developments taking place in the solidarity economy. In other words she wanted to be better prepared to be an adequate partner with the social solidarity movement which might mean funding things like platforms/meetings/support overheads which could be seen in the context of enabling the development of the particular projects and having closer continuing relations with solidarity projects they were funding

26. The social economy and the state. Public grant or loan programmes face similar issues. In the case of direct state funding too many such programmes are run by those with little experience and understanding of the solidarity economy. It would be valuable to collect experiences of those who have tried to get a better fit in such programmes, for example by the creation of in-out teams comprising both civil servants and those from the social economy working together on projects or groups of related projects.

27. Another public-social interface is the partnership Christian Iaione described in Bologna under the headings: making the city together/living together/growing together. John Restakis, Michel and Pat have written extensively about public-social partnerships and the partner state. What are the secrets for successful collaboration of this kind between two different types of economy?

28. The interface problem can be put more broadly as follows: the state is governed by the rules of what we could call a ‘levy bounty’ economy. The state raises taxes, which are then distributed through a centralised Treasury. This centralisation requires a line of vertical accountability that stretches upto the politicians that have been elected to oversee the tax.

29. The social economy on the other hand is an economy centred round enthusiasms, calling on many kinds of good will, finance, volunteers, and people willing to work for wages that are far from the normal capitalist labour market. It also embraces the principle of the open circulation of ideas.

30. The cultures of the two economies are very different, particularly if the social initiatives remain small and horizontal. In partnerships where relationships are crucial, the turnover of public staff tends to be more rapid than social economy partner staff. Policy switches on the public side may also upend projects that depend on longer time horizons. This is a question that needs further discussion and an exchange of experiences at a future Deep Dive.

31. The digital commons and the users. Open source and all that has developed in the free software movement has been supply side driven. Because the outputs are free to the users less attention has been given to the demand side. How far have the creators engaged in user centred design? Lumeo and Co-budget both seemed to have been developed by those who needed them, the en.spiral collective itself. The creators were the first users. Do we know who are the 100,000 people that have signed up for Lumeo, and which of them then use it? Does it need a level of digital literacy to make use of it? Are the users digital peers?

32. Bridging the open software/co-operative interface. The new co-operative movement – in schools, social care, well-being hubs, renewable energy, food, housing, fair trade peasant producers – tend to give greatest emphasis to qualitative social relationships, and often see the platforms and toolbag of the digital world as a challenge rather than a support to face to face relations. Yet the move to make ‘the small not just beautiful but powerful’ in Pat’s phrase, would be immeasurably strengthened by plugging in to the extraordinary capacities of the digital commoners.

33. Where are the bridges between the two movements? Who could act as translators of the one to the other? Could we imagine a new movement, of peripatetic barefoot software commoners living with co-operative communities and with their projects for a month at a time, acting as their guides to the world of digital possibility, developing bespoke programmes with others in the barefoot movement tailored to the needs of each project?

34. The medieval church was a remarkable distributed institutional creation. The friars (in their early days) freed preaching from the parish and took it to the barrios of the poor. They were fluid, dependent in their poverty on the communities through which they moved. Is this a model for a new wave of digital friars?

Robin Murray January 2015