Pat Conaty on Distributed Money Creation Without Central Banks
Pat Conaty (referring to Mary Mellor's proposals):
"Thus on behalf of the People, a state could create money via distributed and dispersed money authorities that for subsidiarity reasons can and should be based locally. US Federal reserve set up regionally distributed entities but as the system is debt based, it’s scope for stewarding local US economies has been defective from birth a century ago.
Think alternative of this distributed system of the future as renewable energy and well insulated and resilient district heating system to provide everyone an equitable degree of basic income and warmth for well being purposes. If they want more income, this is also possible via the non-public economy circuits.
For reasons of full transparency and publicly accountable economic planning, this system would be set up as a system of democratic social, ecological and economic provisioning. This is Mary’s argument move from a for profit to a for provisioning system moving towards a steady state beyond growth. Thus there would be no role for any central bank in the process but distributed public banks could play a useful and functional role. Democratic money could be injected into the system each year as a pre-distributed system of basic income and for the renewal of infrastructure and for carbon reduction measures of all sorts. The Great Transition and Green New Deal arguments could be resourced this way.
Money would be created as Mary argues by participative budgeting with civil society organisations, small businesses, commoners, etc and thereby endorsed locally and democratically by fiat. It could and should have time limits and, say, a one year life. Supplies of money could be adjusted thereby annually to avoid inflation and also by taxing it back to lower the volumes. So like a central heating system, the controls could be adjusted to secure ambient temperatures for health and well being.
Banks would have a complementary role in investing co-operatively for their democratic members People’s savings and they could advocate and help democratically plan for the volume levels of new money locally and regionally. Their expertise would be important in the annual planning and budgeting. Here in this system savings would become known as co-operative equity so similarities to JAK banks but adapted without debt as Oscar indicated the need for in Berlin. Thus Mary’s system could be aligned very well indeed with Oscar’s argument for the fundamental need to get off the Economy Must Grow thesis by moving in an evolutionary way say over five years from the perverse debt systems that we know to be toxic to 21st century social and ecological equity investment systems. Public banks could play a role as Ellen advocates.
All the above elements are core and part and parcel of the missing democratic money and co-operative capital architecture needed for the Great Transition to secure co-operative commonwealth for commoners." (email, April 2016)