To escape our extractive economic system, we must change our money


In his excellent article “Money is the oxygen on which the fire of global warming burns,” Bill McKibben, founder of, explains how the world’s leading financial institutions and insurance companies are still funding fossil fuels – by far lower carbon solutions on a larger scale.

Bill suggests that moving our money to ethical suppliers could “become one of the last great campaigns of the climate movement.” Let’s hope so. But on its own, moving our money will not be enough, as he ignores what Buckminster Fuller taught us: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model. obsolete.”

Bill’s article also ignores another basic truth – that our economy is built on the mistaken premise that we can continually extract value and pollute our living environment without any ramifications.

This model, the “extractive economy,” created the climate emergency – and we won’t be able to fix the climate until we change our economic model.

If we are to stop the climate crisis and solve the other problems caused by the economy, we have to change the way money is created.

Banks have had a monopoly on credit creation for too long. Instead of relying on the banks to create toxic debt-based money for us, we can create credit ourselves – and avoid paying interest, too.

By embracing our power to create credit, we can bypass the extractive economy and pave the way for other changes, such as how we account for carbon emissions. Because in a new collaborative economy owned and governed by its members, we the people collectively decide how things work.

Money does not have to be created as interest-bearing debt by banks. There is no law preventing us from allocating credit between ourselves and our companies, and from trading outside the extractive economy.

Money is just a deal – so if we want new money we just have to make new deals.

This is the theory recognized by EC Riegel. Riegel’s ideas of the 1930s suggest that a simple and reliable medium of exchange would do more to improve the dignity and well-being of the common man than any political reform:

“When man has mastered money, he will have mastered not only his economic problem of prosperity, but also his political problem, because he will see that money has no place in the functions of the state, and , the monetary power being entirely in his hands, he easily mastered the state and clearly defined his services.

“So, money should be seen as the way to get over all economic and political problems. Until we get the money under control, we won’t get over any of our problems.”

This theory is now being put into practice by The Open Credit Network (OCN), which, as part of the alpha launch of its new mutual credit network, is offering the first 350 companies a free lifetime membership.

The Open Credit Network is a new type of trust-based trading network. Members can trade with each other without the need for conventional currency using mutual credit. Mutual credit is a proven method of trading that provides interest-free credit, avoids bank charges, provides greater liquidity, avoids discounts, and saves money for essential purchases. You can find more information on the benefits of mutual credit here.

As soon as a business adds their offers and wishes to the directory, OCN software automatically suggests new suppliers and customers for that business, helping them grow while providing them with interest-free credit. The OCN membership agreement is an example of a new agreement that offers an alternative to conventional money.

OCN has ambitious plans. For starters, the credits members exchange are equivalent to £ 1, making it easy for members to price their goods and services. But in the future, OCN will seek to move away from the pound sterling as a measure of value, possibly using a basket of indicators instead, to avoid the negative effects of any inflation or deflation on the pound.

OCN is a unique mutual credit system that has been designed using free or open source software and cooperative governance, giving members full control over network evolution, fees, pricing and all other aspects of governance. These key decisions mean that the network will evolve for the benefit of its members, providing a truly alternative means of commerce with fundamentally different goals from the current extractive economy.

Mutual credit on its own will not be enough to stem the rapacious growth of capitalism or change the entire economic model, but it provides a unique and essential starting point for a truly alternative and democratic economy that puts people and the planet first. profit.

As membership increases and commerce expands, OCN aims to help establish other networks in other communities and countries, using the same free or open source software and agreements from compatible cooperative membership, paving the way for a fully federated global common credit.

With enough members on board, it would then become possible to leverage these communities to launch other economic products – for example, a cooperative link to act as a store of value and provide the much needed capital to launch other democratically governed platform. .

As with all system-level interventions, The Open Credit Network appears to be a very ambitious plan, with no guarantee of success. But given the multitude of system-level problems currently plaguing the planet and the complete lack of successful system-level interventions, such ambition seems essential.

While some of the world’s largest companies expect climate change to cost them $ 1 trillion in five years, now seems a great time to explore alternatives – especially those that provide a real mechanism to change the situation. fundamental nature of our savings rather than offering casts’.

Building Riegel’s vision using free and open source software and cooperative governance has never been attempted before. If companies that recognize change is essential are truly ready to create that change, they should sign up and start accepting mutual credit as the first step towards a radically different regenerative economy.