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Realising The Credit Commons

Currently the vast majority of complementary currencies are local initiatives. I'm talking about real initiatives with daily trades rather than mere ideas, models, exaggerations non-starters, and dead systems. That means mostly about a few thousand business barter exchanges, LETS and Timebanks, and some others which don't fit those categories.

For reasons which nobody seems to know, local systems rarely grow larger than about 150 (The Dunbar number?) and that means, as economic islands in a global economy, they are not very useful and seem condemned to remain marginal; many people join these systems but unable to find trading partners, they never form the habit of using them. So how do communities solve the the problem of exchanges too small to be useful? They could have membership drives to make the marketplace, bigger, or they could encourage members to put better offers and wants in the marketplace. But there is another way which needs to be tried - to join the systems together, making one big marketplace.

This globalising approach has met with some resistance within the movement. Many of these communities are reluctant to connect, fearing that connecting up will compromise the 'local' flavour of the initiative, or even that a larger system would replicate the problems of the current global system. In my opinion these arguments are mistaken or even disingenuous and that a better understanding of money and money systems shows that the real problems come from hoarding money as if it were a valuable commodity and cornering the market. I am working already on making the B2B barter systems, LETS and timebanks interoperable and I'm calling it the Credit Commons, a name coined by credit clearing expert Thomas Greco.

Of course I'm not the first to work on this. Some software packages already allow trading between communities using that software, such as Community Exchange Systems, Cyclos Communities Edition, and most Business Barter software. The ZART clearing system works between different software instances because all transactions are entered manually. Bridging many different software packages is an order of magnitude more work. Firstly new protocols must be designed and published, then each of the software packages must be adapted to support the new protocols. So far this project has been too large for any one movement to take on and there is no central point of agreement that means an offered solution would be used. Even after all that the problem of sharing offers and wants and contact details between systems requires another protocol and perhaps another initiative.

The good news is that all of this is covered in a new proposal to a European Commission funding stream called CAPS (Collective Awareness Platforms for Sustainability).

This project has 6 major partners (the organisations who receive money directly from the EU) A university to design the protocol and upgrade the major software packages. A university for for governance methodology, a university for gender considerations, Global Ecovillage Network for managing relationships, Timebanks UK and FINC, a large time bank in Rome. In addition to those there are ten other partners, including several grass roots movements representing over one thousand local community exchange groups.

More precisely, the proposal is to:

  1. Design a new protocol, one for credit clearing between exchanges
  2. Create a library of functions for a distributed accounting system, probably Ripple to be accessed as a mutual credit accounting web service
  3. Design another web service for communities to post and search offers and wants.
  4. Implement the two protocols in the six most popular software packages.
  5. Work with the grass roots movements to test the software
  6. Design and initiate a governance process around managing The Credit Commons
  7. Publish the protocols for anyone to implement.

The CAPS budget is over subscribed about ten times, so we shouldn't hold our breath. But even in writing this proposal, we have come a long way in developing these ideas and building relationships. The idea is strong and clear enough that other sources of funding could be pursued. We haven't even talked about the commercial benefits to the business barter industry of such a protocol, or what it might be worth to them. That's why, Allmenda and I are already working on a new proposal, just to implement steps 1 & 2, above.

I think this project is about more than just a technical implementation and more than just connecting up some community organisations for more effective sharing. I think the Credit Commons shows us a glimpse of a whole other kind of economy, both global and local, with local governance and decentralised credit issuance, diverse monetary policies all combining to make a resilient monetary ecosystem from systems which mostly already exist. I am inviting every economist I know to give it due consideration!

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