Frances Hutchinson Comments on the 'Democratic Money and Capital for the Commons' Report

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Frances Hutchinson:

"The 54 page Report (accessed via http://www.bollier.org/blog/democratic-money-and-capital-commons ) provides a timely introduction to strategies capable of transforming neoliberal finance for benefit of the common good. This very timely document depicts the hold of the “dominant systems of finance, banking and money” over the resources of the commoners and the natural world. One cannot but agree with the view that our “money and banking system is now based on rent extraction that uses privatisation, the division of labour, and the enclosure of commons resources to create a surplus” which goes into private pockets. Hence “the only hope for commoners committed to promoting the common good lies in dismantling the existing rentier system and reintegrating the realms of nature and social value into a reconceptualized whole in which capital serves the collective aims of society”. This involves “using finance to enable people to engage in commoning … [which] ... requires a wholly different set of institutions, legal regimes and social practices for managing (and mutualizing) money, credit and risk.” A very demanding schedule, and one based on the necessity to generate “immense popular pressure” for political change.

The Report makes reference to Iceland, where informed political opinion gave rise to dramatic change in finance and banking, change which followed study of popular movements of the past. I draw attention to two further examples of the awakening of the popular will in defence of the commons. The first is highlighted by Bill Krehm (COMER) writing on the theme of The Political Economy of Social Credit and Guild Socialism on http://www.gaianeconomics.org/social_credit.htm.

Krehm goes to the heart of the matter. The Douglas-Orage/William Morris socialists observe that “production does not create money:

“Douglas-Orage review the nature of money from the ground up with a thoroughness that has few if any equals. “Douglas stressed that production does not create money. It is possible to imagine a producer in a system of single-stage production [i.e., without the purchase of intermediate goods and hence not incurring costs that have need of money]. Having access to land (which has not been bought) and a discarded spade, and having saved seed potato and horse manure (discarded A), it is possible for a producer to plant, tend and harvest a potato crop at no financial cost. The crop can be put in a discarded sack and sold to a neighbour for £5. Has the producer created £5? Or any money at all? That is the sort of maddeningly basic question Douglas was given to asking.

“Nevertheless, at the point of exchange no value is created. However sophisticated the system, production of all commodities follows the same pattern as the potato example. All production requires inputs from the natural world which the economy cannot create. All production requires human inputs. First, an inherited body of knowledge, as in the ability to save seed, cope with pests and drought and so on. Second, a ‘producer’ who may be employed or self-employed, but who comes to the task physically developed from infancy to maturity and still requires social care. Neither form of ‘human input’ is produced through exchange on the market. Wealth creation can take place outside the exchange economy.”


Hence it follows that the case is made for:

“the concept of a social dividend representing the contribution of society over generations in creating the institutions, the inventions, the scientific and technical discoveries that made the productive potential of our world possible. It would include, too, the unrewarded labour of slaves, the contribution of martyrs and prophets that made possible the social and legal framework for modern society and its productivity. That could be allotted to all citizens and it would fill the gap and free society from servitude to financial capital. Instead of patenting scientific discoveries, even genes, for speculative investors to collect a rent on them, the social dividend would contribute to gear down the drive to maximization of the financial sector. It would encourage alternative life styles that would cultivate other goals than the consumption of highly promoted items of little or negative usefulness.”

Krehm brings the role of the commoner or informed citizen into focus by linking the 'social dividend', aka a basic or citizen's income with the potential to encourage alternative life styles that would cultivate other goals than the consumption of highly promoted items of little or negative usefulness,”

A less well-known (on a world scale) popular initiative of the late 20th century is the publication in Denmark of Revolt from the Centre (1978) by three Danes of national repute, a physicist, a philosopher and an engineer. They critiqued mainstream political thought and introduced new thinking on ecological balance, with decentralization of government via small scale production, good work and profit sharing. In the process of writing this remarkably coherent and readable document they came up with the idea of a 'citizen's wage'.


Under the heading “Overall Picture of the Humane, Ecologically Sustainable Society” they predicted:

“People living some way into the 21st century have evolved a number of different family patterns and different forms of production. Individuals have extensive personal freedom to organize their own lives, provided that the basic rules of society are observed. Practical means of safeguarding this personal freedom include the payment of a citizen's wage to every member of the population. The citizen's wage covers basic living costs, so that no one is compelled to take paid work. Anyone wanting a higher material standard of living is ensured the right to a certain amount of paid work.” (Emphasis added)


A revolutionary thought. According to Niels Meyer, sole surviving author of this very accessible prediction of politics, economics and culture in the 21st century, the notion of a 'citizen's wage' was dreamed up out of the blue. If the Deep Dive initiative is to generate popular pressure for monetary reform it will need to be combined with a political philosophy of work and citizenship capable of bringing an end to waged/salaried slavery in all its forms. The obstacles to monetary reform are political, not financial.

The call for a rethink of the whole notion of economic-growth-as-we-know-it comes today is emerging in the form of works like Simon Reid-Henry's The Political Origins of Inequality: Why a More Equal World is Better for Us All (2016). The time has come to reject both cornucopian capitalism and cornucopian socialism. Revolt from the politically aware centre is long overdue."