Thoughts for the Independent Money Alliance

Given my enthusiasm for the launch of the IMA, I regret not being able to conference with you in Glasgow. Its a field I've dedicated my life to for almost a decade. I started a nonprofit, Community Forge in 2009, in partnership with the Local Exchange Trading System (LETS) in Geneva, to build and host web sites for LETS. Back then I didn't know any theory, but exchanging without money felt to me like kindling a revolution! Soon we were hosting sites for a cluster of SEL in Belgium and now for over 300 active groups, all for free.

I've seen the aging LETS membership advance by another decade and continue to struggle both developing and using relentless waves of new technologies; I have stood by as numerous competitors told me it can't be done for free, then wasted millions on community software that no-one wanted. I chose a different path. Quite literally, visiting community economy projects in over 10 countries, often for months at a time, to offer training, advice and free open source software. On the side I taught myself some community economics and published some findings from my grassroots research with the UN and elsewhere.

So with that introduction I would like to share my truth with you.

What we are doing has no economic impact. I hope that doesn't come across as rude, but there is a planetary emergency going on.

Our shared conviction that monetary mismanagement is at the root of humanity's problems by no means implies that small money systems are an effective lever for change. We all enjoy imagining a new economy based on a new money, but in my opinion we are failing to learn (and to document) from perhaps three decades of experiments. Projects fail for many different reasons - poor governance, lack of resources, lack of participation, technical weight etc. but I think they all fail to thrive for the same reason, which is that our scattered efforts are much less useful than the global institutions they seek to displace. Local currencies are less useful because the global marketplace where most people buy most stuff is best served by globalised money; the few local marketplaces that could use local currencies are smaller, messier, and seem expensive by comparison.

So I would like to make a few brief points, and then a suggestion.

  1. If our goal is to keep money in a local circuit, then there are more tried and tested ways to support local businesses, and build healthy supply chains than issuing local pounds.
  2. If changing money is our goal, then selling fully backed vouchers for local shops does not seem to offer a different, let alone "independent" money system. Instead we could build upon which helps develop voucher schemes backed by the shops inventories, rather than Sterling.
  3. Aside from numerous other benefits to working at scale, economic circuits are easier to create within larger marketplaces.
  4. I believe a community that makes a commitment to buy from each other in solidarity is the reality for which a complementary currency is just a symbol language. There is limited benefit in constructing symbol systems without a base in reality.
  5. Repeatedly we see that a handful of activists in each town are unable to create those kinds of local economic circuits from which pounds can then be expelled. That is because those circuits are more likely to include a wide variety of goods and services, not just high street vendors.

So my main question for delegates at IMA and any other events in the complementary currency field is this: what is stopping us from working on one project, providing a truly independent form of money, possibly with a single brand and a national scope? Could we, for instance, see a progressive competitor to Bartercard, linking transition towns, coops, community supported agriculture, nonprofits etc? Could Bristol Prospects evolve to become such an initiative? It doesn't have to be business barter. I'm impressed by Hullcoin's work, bringing institutions on board, leveraging the blockchain discourse, and focusing relentlessly on enabling the poor. I'm impressed by a project called FairCoop and their working together to make a freely tradeable cryptocurrency (Faircoin) into a community good.

I'd be the first to acknowledge that working together is a challenge. But we have little hope of building a better society or a better money to organise that society until we can organise ourselves to become more than the sum of our parts.

This hope for combining efforts is why the three largest software platforms for complementary currencies, serving over 300 active local currencies in more than 15 countries, have federated into the Credit Commons Collective. Our network is almost entirely outside the UK, and so we look forward to exploring opportunities with the IMA, and wish it every success in invigorating the complementary currency movement in Britain.


I was pleased to come across this post (and the recent one on basic income). I’ve spent many years trying to envisage how a mature society should govern itself and getting the monetary system right is obviously a crucial aspect of that. However, I’ve never looked very closely at existing complementary currencies for much the same reasons you highlight: without a network of strong real-world relationships to bind people together, I couldn’t see how they could ever do more than mitigate some of the ill-effects of the existing system – but most of us are so entangled in the current system that getting those relationships established is a huge task.

I was also heartened to read what you and Tim Jenkin said in your Credit Commons white paper about governance being crucial (having come to it with a good deal of scepticism, after reading Dave Darby’s somewhat starry-eyed blog posts about it on his LowImpact site). I’d be interested to know what goverance model you have in mind for that but I couldn’t see any way of posting questions or comments on that site, so I’m posting here instead.

My attitude, for both governance and monetary system, is that we need to envisage models that could be arrived at either through reform of the established system or through getting some kind of parallel society going which might eventually take over the existing one from within.

A well-designed currency will have to be a core feature of a parallel society, but the fact that taxes have to be paid in the established currency is a powerful disincentive for people to switch to trading with a different exchange system. The only way I can see of overcoming that disincentive is for the new system to have control of some ‘disruptor’ technology that people want but can only buy as members of the new system. (I’ve an idea for something that would qualify but so far I haven’t been able to make it – whether that’s because it’s not in fact doable, or because I’m unconsciously blocking myself from breaking through with it until an embryo new system is in place, I don’t know).

As well as having something to draw people in, I’d say a new society will also need some means of binding those who join – in a way that doesn’t compromise their economic freedom but prevents them from transferring the benefits back into the established system. The most promising idea I’ve come up with is to require new members to enter a covenant that would bring any real-estate wealth they own into the alternative system; not constraining their own use of it but preventing it ever being passed on to anyone who owned more than their fair share. That, of course, requires coherent rules governing inheritance and resource allocation, rules that neither allow cross-generation accumulation of wealth nor inhibit worthwhile economic activity – which comes back to the broader question of governance.

My feeling is that the importance of governance increases with scale, and it’s not something that can be easily changed once a system is fully operational. So if you’re trying to get a global exchange system going by linking up local systems, I’d say you need to focus on governance right from the start. If you’re looking for collaborators on that, I might be able to make a worthwhile contribution.

Hi Malcolm I'm not an expert on governance, but the point about the credit commons is that governance of local groups is decentralised to those local groups. The protocol only requires that the outcome to certain decisions be known.

The other question is how to govern the Credit Commons protocol itself, but we are very far from that being a problem. Until now Tim Jenkin has been unchallenged and largely unassisted in benevolent dictator within CES so governance has never arisen as problem!

The Credit Commons Collective hasn't yet found the kind of money it needs to hire software developers build even a modest open community infrastructure. I've contacted several community software organisations, but seen little interest in working on shared protocols to support decentralised scaling. And without the means to coordinate thus, there's no point rushing ahead on governance questions. Don't for get that each of the hundreds of groups we support is already governing itself and looking to us only for software.

I'm not aware of any project that 'binds' people into the system, but in my latest Faircoin article I point out that capital gains made by Faircoin's appreciation should rightfully be spent and not liquidated.

Thanks for the reply, Matthew.

It’s the question of how to govern the Credit Commons itself that I was wondering about. I can imagine that it has never been a problem so far, but that’s a large part of the reason societies around the world got into the mess they’re in now: benevolent dictators establish procedures that work well as long as they themselves are at the helm – but then they pass on and the reins are taken over by others with a less developed sense of what’s right.

A core principle of my own philosophy is that power should be exercised as locally as possible, that we should delegate to higher levels only as much power as it is absolutely necessary for them to have, and only for as long as it is necessary for them to have it (that principle is reflected in the name of my website, Local Sovereignty, which is a draft manifesto for a proposed UK reform party). However, there are undoubtedly many decisions that do need to be taken centrally and, long term, the individuals who take those decisions need to be democratically accountable. That poses a host of problems but, fortunately, we are able to draw on what’s been learnt in the past and we can recognise certain principles that a system of governance needs to embody. It’s very much easier to build those principles into a new system from the start than it would be to integrate them into a fully functioning system which finds itself, some years down the line, threatened by a crisis of democratic legitimacy.

You think it’s not worth rushing ahead on governance questions until you’ve got more people onboard but I suspect there’s a circularity there. I’d have thought that getting people together to sail off into the unknown is bound to be harder than getting support to head towards a well-defined destination. Unless you can present people with a clear vision of where the project is heading, it’s not surprising that they’re reluctant to commit to it; most people considering a venture will be unconsciously aware of all kinds of problems that it might throw up and knowing that there are satisfactory plans for dealing with those problems can make them much readier to join in.

For me, your point that capital gains made by Faircoin's appreciation should rightfully be spent and not liquidated illustrates one of the reasons why so many well-intentioned projects fail. As you know, it’s one thing to knock together a bit of software that performs a particular function, it’s another thing entirely to make it robust enough to cope with every error and exception that it might possibly encounter. I would say that any exchange system, or indeed any socio-economic system, that relies on people behaving unselfishly is doomed to either failure or, at best, a tiny niche.

What it boils down to is: what are your intentions for the system you’re building? Are you just aiming to fill in the gaps in the existing capitalist money system or are you hoping to build something that might displace it? This sentence – "But we have little hope of building a better society or a better money to organise that society until we can organise ourselves to become more than the sum of our parts. " – suggests the latter and that’s what drew me to engage here.

A key argument in your blog post, and the earlier one on basic income, is that ‘currencies are tools that have utility only in the context of an existing marketplace’. You recognise that scale is a significant factor, that ‘economic circuits are easier to create within larger marketplaces’, but I wonder if you’re overlooking a qualitative barrier, which can’t be transcended through exchange system innovation. What I mean there is that, if there are certain categories of essential resources that don’t get traded within a particular marketplace, then no amount of technical improvements to that marketplace will make it an adequate challenger to a broader system.

I’m conscious here that our world-views might be fundamentally at odds. In his ‘What comes after Capitalism’ paper, Tim Jenkin suggests that ownership of the means of production is derived from the capitalist's control over the means of exchange, with the implication that it is subordinate to it. Even if that is historically valid (which I have doubts about), I think they have to be treated as two independent features of capitalism, which need to be addressed separately. Fundamentally, the people who control the means of production can choose to use whatever system of exchange they like, but the people who control the means of exchange don't have any de facto power to force people to use it.

I quite understand if you want to focus just on currency issues, and I’ll leave you in peace if that’s the case. What I’m suggesting, though, is that we will only be able to build a new society if, alongside a healthy exchange system, we also work out what rules it will need governing the ownership and inheritance of essential resources, and the exercise of power generally.

Once we’ve worked those rules out, we’ll obviously still have the little problem of wresting control away from the existing system but … well, one step at a time. We certainly won’t be able to displace the current system if we don’t have a coherent vision of what could replace it.

Forgive me only addressing your main point....

I acknowledge that if the Credit Commons is to be a thing then its governance is important. But the reason that I'm hesitant to put more energy into it, is that the groups that the credit commons is intended to empower and scale are mostly uninterested, uncomprehanding, or have other priorities. So while many individuals have shown appreciation for the idea, every business barter network I've talked to has rejected it for different reasons, time banks don't care about equality of exchange because they are about volunteering at the end of the day, LETS think its nice to have but regard themselves much more as isolated local groups than a global network of producers. Cooperative movements seem not to understand money. Ecovillages don't want such formal systems for informal exchange. I don't know where to turn next.

My energies are going towards a general upgrade of software for LETS and then more teaching because that seems to be what's most needed!

If you want to write a credit commons governance proposal I'll be happy to post it alongside the original white paper!

"I don't know where to turn next."

I know the feeling!

I go on the principle that, even if it looks highly unlikely that everything necessary will come together, I still have to do what I personally am able to do. While a constitution for a healthy society is a very long way from being sufficient to bring it into being, it is still a necessary part, and it’s something that, in principle, an individual can work out regardless of whether everything else is in place. If nothing comes of it, so be it, but there’s no great harm in doing it and, who knows, perhaps the gods are waiting for that before they open the other doors. By contrast, I suspect that, if I had managed the technological breakthrough I mentioned, without first preparing a healthy societal framework to slot it into, it would almost certainly have ended up strengthening the existing system rather than undermining it.

Anyway, I won’t rush with it but I will probably take you up on that offer and write a credit commons governance proposal.

I love this article I can't wait to truly have a sit down with you. I think we have the perfect mesh! Please take a look at what I am working on here: and this is a United Nations Sustainable Development Goal registered as SDG Action Number 27655 - Standard Benchmark Agreement to end world poverty using the CES. I am advocating on behalf of the World Citizens for World Government. As a registered World Ambassador at The World Government has been around since the 50's and was established by Gary Davis famous actor a veteran. Now with us issuing World Currency through the CES and the Bitcoin blockchain for the World Government as the official World Treasury and specifically the Global Mint branch for all supranational governments with UN IGO Consultative Status to bring together two more governments to issue there global treasury funds in the form of CES Mutual Credit and Bitcoin / Bitcoin Credits (XCP Tokens / Instruments). You and I have both accomplished a lot and the more and more study your work I think its time we come together to get even more done.

Best regards,
World Chaplain
H.I.M Dr. Lawiy Z Shamuel

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