Mutual credit


Imagine a local community with hundreds of local people, all offering products and services, but not for money. Everyone has an account – if they provide something for someone else, they go into credit, and if someone provides something for them, they go into debit.

That’s the basic idea – it’s a way to trade / exchange products and services with each other, without official currency. It’s an old idea that, in the age of the internet, could scale up to strengthen local communities and eventually challenge the banking system. It’s mutual because it’s something we do together – you can’t give credit to yourself; and what’s credit if it’s not mutual? It’s a lending institution trying to make money out of you. But collaboratively, it’s just about exchange.

See here and here for more of an introduction to mutual credit.

What to do

Join a scheme

There are existing LETS (local exchange trading systems), timebanks or even commercial barter groups that you can join as an individual or business, but if the idea of a global credit commons inspires you, this is problematic, as there are few LETS groups and no timebanks with the software that can connect to a global network (Reading and Bracknell LETS are exceptions), and there are few businesses involved – transactions tend to be of the babysitting, gardening and loft clearance ‘favours’ type (that probably wouldn’t have been money transactions anyway, and often don’t get registered on the system). Nothing wrong with that of course – but it makes it difficult to attract a younger crowd or to build the base of a new economy.

Start a scheme

Get a group together who’d like to trade with each other in your community and who are interested in helping bring about wider change. Make sure that some members are businesses – especially those that provide essential products and services. Examples could be community-supported agriculture, veg boxes, farmers’ markets, housing and worker co-ops, local shops, restaurants or market stalls, independent cinemas, nurseries, garden centres, plumbers, builders, electricians or car mechanics. You don’t need permissions, start-up capital, grant money or expert advice. Just get a group of people together and you can start a mutual credit group.

Then set up a trading website – one that will allow your group, once established, to plug into a global network. You can use Hamlets software, available from Community Forge (with step-by-step guide, test site and support contact details). There’s help available, and it’s free. Because the Hamlets software is open source, anyone can run it on their own web server; but Community Forge will host it for you.

Credit commons

Go global! When your local group is working well, using software that can connect with a global network, you can connect your group to that network to intertrade and help build a global, collaborative exchange system. More here