Guarantee Society

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Proposal for partnership based business governance by Chris Cook of Open Capital.


Chris Cook:

"This is a mutual guarantee framework for bilateral "Peer to Peer" trade credit. This credit is interest-free, but not cost free, in that a provision is made to cover system and service provider costs (provided by a service provider formerly known as a Bank), and also an amount is paid into a "Default Fund".

Settlement of trade credit may be made by the trade buyer in either money or also - with the sellers' consent - in "money's worth" ie barter. If the buyer defaults, the default fund pays and collects from the buyer - if possible - in money or money's worth.

The outcome is essentially dis-intermediated and "Not for Loss" banking where the bank no longer puts its capital at risk by creating credit based upon it, but instead acts purely as a service provider. There is also an element of community currency there." (

The backing of a guarantee society is human time and knowledge.

In a default situation the ‘pool’ would settle credit, and the defaulter could ‘pay his debt to society’ at an agreed rate eg by doing community work.

A Guarantee Society provides a framework of trust (typically lacking in a LETS scheme) for the credit which is necessary for the circulation of goods and services and the creation of productive assets.

Not dissimilar to the WIR, but without the central issuer of complementary currency.

Productive assets will then themselves be the basis of credit by what I call ‘unitisation’ ie simply the issue of units redeemable in payment for use value.

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