Insights on Economic Democray and Communal Politics

Aug 10, 2020 by

In recent times, money has become a powerful leverage point even though not just neutral means of exchange (it is private, debt-based, has positive interests and is part of a monoculture, it is an operating system whose functioning parts remain invisible) and controls most of the transactions, key values or unit of measure for the whole system, hidden values (based on artificial scarcity). Most of the money in use is privately owned and based on positive interests. In order to change this narrative, one has to look at how to change the banking system. In this regard, public banks have been shown with numerous examples to be more beneficial to societies. They could be a systematic way to develop communities and localize everything. This could be done by seeing the monetary system as the operating system of the economy, and there should be a creation of public banks and a diversity of currencies, especially a carbon currency. This undoubtedly would be a holistic way to solve the inequality in the current economic system. On the other hand, the private bank is more interested in return on investment for shareholders, maximization of profit, minimization of risk & responsibility, making loans and investments that are repaid and managing liquidity, interest rates and defaults.

Moreover, public banking benefits the community rather than the private sector. Public banks respond more quickly to disasters. Overtime, this bank had been able to lay down some drastic solutions such as community building, paradigm change, development of local circuits, development of an ecosystem of currencies, sustainability, and resilience. To strengthen monetary systems, cryptocurrency, carbon currency, loyalty currencies, and demurrage currencies are interesting current and potential future developments because it would support more effectively integrated economic and human systems.  -Gwendolyn Hallsmith

About Alexandra Strickner’s ideas:

In her lecture, the political economist Alexandra Strickner focused on the need to establish an economic democracy, namely an economy “of, by and for the people”. According to Strickner, the economy should not dominate politics, but is rather a tool in which democracy should be incorporated in. Recalling that our current system is based on strong inequalities, she stressed the necessity to redesign our basic institutions and activities. This should be done according to seven principles: community, inclusion, locality, good work, democratic ownership, sustainability, and ethical finance. To her, economic democracy is our systemic tool to take the power back from the one percent and give it back to the people.

During the live session with Alexandra Strickner and Gwen Hallsmith, many interesting points were brought up by students. Strickner specified that local currencies can be useful, but they are not an end: They should be used as democratizing institutions. She then developed her idea of system change through municipalization of public resources and services (e.g. water). I really liked her examples and her idea that management of public services should be organized by citizens themselves.

It was interesting to see that both lecturers disagreed on the issue of a carbon currency. Hallsmith argued that a carbon currency would be the fastest and easiest way to reduce our carbon emissions while meeting our basic needs. She added that this currency could then be converted into dollars and be exchanged for carbon-based goods, like oil. Conversely, Strickner said she did not like the idea of a carbon currency for several reasons. She explained that it would be a commodity which would only help big companies. Moreover, it would not contribute to deep change in our societies. Instead, she suggested that we need better taxes on energy in general, especially in Europe where we greatly rely on nuclear energy. Energy taxes should be increased steadily and slowly. This was important because we saw earlier that taxations should not be implemented without social justice.

Strickner’s take-away message was that if we want to keep getting the things we need, we have to change the logics of our economy.

Written by: Jade and Henry

Based on the session with Alexandra Strickner and Gwen Hallsmith during the AEMS 2020.