Adventures in mutual credit

This post is a response to a number of high level discussions about using a single Drupal instance to serve many communities, each using their own currency. Running many Drupal instances can be done with reasonable efficiency, though they take time to set up, and there is a trade off between their independence and the amount of time and expertise taken to train, administer and maintain them. CES is already running in one instance of custom built software and its success is testimony that few of these kinds of communities value independence over convenience.

There are two approaches to the problem of allowing exchange between mutual credit circles.

(This builds on my previous post, Choosing CC software 2009)

Today I released version 2.0 of my mutual credit module for Drupal. In the mania of recent weeks it has become clear to me that national currency backed currencies and mutual credit each imply different values, accounting standards, security, and features, and require different kinds of software to do it. My offering is clearly intended to meet the needs of the latter.

Last month's meeting at Tiocan, near Geneva was pivotal for Community Forge, as it was the first time we had really engaged with a broad spectrum of users, potential users, and other actors in the movement. We made tangible progress on many fronts, but the headline issue, how we should coalesce into a Community of Practice wasn't properly addressed. Nor was it addressed at all in Lyon.

A new web site Our Goods, a barter network for the creative community "is a recipient of The Field's Economic Revitalization for Performing Artists (ERPA) Phase 3 Implementation award. The Field's ERPA program receives funding from The Rockefeller Foundation's Cultural Innovation Fund."

$20,000!

It hasn't even got an accounting system!

Why is there money for artists but not for engineers???

Mutual Credit systems require that half of their users be indebted, or in 'commitment' to the other half, yet the law does not recognise these debts unless they are measured in national currency. The money is only as good as the willingness / ability of the indebted users to repay. That makes it rather difficult to bootstrap such projects and to assure users that their credit will be redeemed. So when a mutual credit grows beyond the point where all the members trust each other, we should have some way to guarantee that the credit is good.

In this final apology (in the classical sense) for complementary currencies, I will briefly survey the plethora of other currency experiments, and consider their success.

Mutual credit systems have one, serious limitation - the credibility of the 'money' is the average of the credibility of its users and there is no way to enforce the debts which the system requires. If I borrow from a bank and fail to repay, with interest, I am accountable in law for that debt. if the debt is measured in some other unit, such as hours, it has no weight in law. In mutual credit systems, half of all the users should be in debt to the other half, and they rely absolutely on the confidence between the users.

Will Ruddick (Eco Pesa) reached the last round of telephone interviews for a TED fellowship only to be confronted by an Important Person who flatly stated that CCs had been tried but failed. In this series of three I opine that CCs have hardly seriously been tried, and that many of the failures should be put down to the specific design or implementation of the projects.

Initially, Tim and I decided that we wouldn't go to Lyon, as it was purely academic, and as practitioners, we neither had time to write an academic-style paper, or listen to theories that had no bearing on our work. However as time went on, and the practitioners day was announced, and we later timed our 2011 Community Forge General Assembly to follow it directly, more and more of our colleagues appeared to be coming, so in the end Community Forge showed up in force.