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Common Good Banks, democratic economics for a sustainable world

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Common Good Banks (CGBs) can put people to work, to make a better world for everyone. Consider this Parable of the Desert Isle: One day the Skipper and his little buddy take a boatload of tourists on a three-hour tour. A terrible storm comes up and they get marooned on a deserted tropical island, totally cut off from civilization. There is lots of work to be done: They need to build shelters for themselves, gather food, and figure out how to get off the island. Everyone is eager to get to work, but they all just sit around because there is no money to pay anyone. 100% unemployment. Does this seem foolish here? Yes. But this is exactly what we are doing right now in every community in the country. Plenty of people desperate for work, plenty of work that needs doing, but no money to pay them. This is just as foolish, but harder for us to see. For seven years, hundreds of people around the world have worked together to design a new sustainable, democratic, community-based economic system -- a system that will support and empower ordinary people everywhere to put an end to war, poverty, hunger, unemployment and even global warming. CGBs will let us build the kind of communities and the kind of world we all dream of. And what are those dreams? What we want for our communities and for the world comes back to what we want for ourselves. There are a few basic things that we ALL want out of life: good food, good health, a pleasant home, a friendly commmunity, satisfying work, time to play, and a sense of security. Of course you want all that for people you care about too -- and for the people they care about. This is also at the core of what we want for our communities and for the world -- we want a life like that for everyone. So, what's the problem? Why isn't the world like that? The answer is: MONEY. Our global economic system has a very basic flaw that leads to for-profit corporations controlling most of the world's wealth and making decisions about that money -- deciding what to invest in, what to fund, and they even create our money and decide what is to be done with it. Which means that for-profit corporations are pretty much deciding what gets done in the world. Of course this is not democratic. But even worse, for-profit corporations have a legal responsibility to their investors: They are required to make as much profit as possible, no matter how bad that might be for the world and its people. Putting profit above all else results in decisions that often have terrible consequences. We can fix that basic problem by giving each community its own CGB, so that communities can create and control money, deciding for themselves by direct democracy: what to fund and what to invest in. Nothing in the CGB plan is actually new. Every piece of the plan is already widely used. Just never in this combination. How can this new combination be so powerful? The answer again is MONEY. Money is powerful and much easier to create than most of us realize. We tend to think of money as something physical, even though we know it's just representing value. But these days most money isn't even paper, it's just entries in a database. Either way, whether it's cash or a database entry, money is just an accounting system, keeping track of who is entitled to how much goods and services. Since most money is just database entries, a bank is essentially just a computer. All that brick and mortar is just a building. CGBs will have one computer system for typical bank services and one for community cooperation. The Parable continues. The island folk get tired and hungry sitting around, so they elect the Skipper mayor and ask him to find money to pay people. Not knowing what else to do, the Skipper writes a note to Bank of America asking to borrow a million dollars, puts the note in a bottle and throws it into the sea. He goes to bed worried that the bank won't get the note and has a vivid dream about the island's zero balance. In his dream, the bank grants the loan request and it does this, which is what banks actually do when they make a loan... It changes the amount in the database to a higher number. The money doesn't come from somewhere else. The bank just changes the database entry. Banks are allowed to lend out 10 times as much as they originally take in as deposits, so 90% of our money is created in this way. It's just a dream, so the bottle that washes up on the beach the next morning is empty, but it gives the Skipper an idea. He makes checkbooks for everyone out of palm bark and at the top of the island checkbook he writes $1,000,000, just like the bank would have told him to do if they had granted the loan. The islanders decide together who's going to do what and everyone gets paid with a check. They also pay each other to do this and that and the money circulates in the community. The island prospers. Until one day, about a year later, another bottle washes up on the beach with a note from the bank. It says "Got your note. Your loan request is granted at 6% interest. You now owe $1,060,000. Sign here." Should they sign the loan agreement? No! They don't need it. They already have a million dollars that they created. We can create money freely within any group. Whether it's the whole Earth or the United States or an isolated island community or a CGB community division, we can create money freely as long as the money is just circulating within our group. The challenge comes, for example, when you're in the USA group and you want to do business with a mom and pop store in Brazil. They don't take dollars! How can you pay? Back on the island, the Skipper burns the loan contract and the community continues to prosper. Then one day a waterproof laptop computer, with satellite internet, washes up on the beach. The island is reconnected with civilization! One of the islanders, Mary Ann, does some consulting by email and her client asks where to send the check. Everything Mary Ann needs is on the island, so the check will do her no good. So the Skipper gets a bank on the mainland to accept the check for the island. Then he writes Mary Ann a palm bark check for that same amount. The next day another islander, a professor, needs $20 to download some software. He can't pay with a palm bark check, so the Skipper, again, on behalf of the island, accepts the Professor's $20 palm bark check and asks the mainland bank to pay for the software. This is the same system that lets you make a credit card purchase anywhere in the world. Banks make it work. As the island's banker, the Skipper handles all foreign exchange in cooperation with other banks, so that the island's created money can be spent off-island with no problem. We can do this as a community if we have a community-based bank. Any community that has a CGB can create money. CGBs will have tremendous short-term financial benefits to participating communities: to schools and other nonprofits, to local businesses, to individuals and families, and to our visions for a peaceful, sustainable world. CGB profits go to the community. Banks make big profits. Mutual banks and credit unions mostly have to hold on to their profits. Stock-based banks distribute their profits unequally to people who can afford to invest, making wealth inequality worse and worse. All of a CGB's profits will go to schools and other nonprofit organizations near and far, helping them make life better for everyone. Depositors decide together what the bank should invest in and what to fund with the profits, using a combination of proven democratic systems. Local businesses will benefit from low interest loans for energy-saving improvements. The CGB system keeps customers shopping locally. Businesses can offer a percentage rebate to other CGB members in exchange for low cost guaranteed advertising. Half the rebate goes to the community fund along with the bank's profits. Most credit cards cost businesses 2 or 3%. Accepting the Common Good Card will cost the business nothing. Any business can accept the card, using a cell phone, card swipe or the internet. For individuals and families, CGBs give you a secure, reliable, socially responsible place to keep your money, protected from inflation and other economic disasters. CGBs will plan for sustainability, so that communities can provide what people need for a happy productive life: good food, a good job, and so forth. More money circulating in the community means higher wages and lower prices. Rebates from local businesses will make everything a little cheaper still. Most importantly, CGB depositor groups will take the lead in seeing what new industries are needed and proactively funding them. Creating new jobs, including microloans for starting your own business. CGBs can put everyone to work, by matching up what needs to be done with who's looking for a job. Together CGBs will tackle large scale cooperative projects for stable lower prices on some of our biggest expenses and community control of health care, energy, telecommunications and food processing. Together, CGBs can even buy a controlling interest in corporations, to restructure them one by one, for sustainability and dedication to the common good. CGBs will fund our shared visions for a better world. For every dollar invested in a CGB, we can invest ten dollars back into the community. Once we have one CGB, any community anywhere in the world can have one very easily in just a few days with no need for a bank building. Through greater democracy, cooperation and giving, this will lead to a more peaceful world. Here's how easy it is to start a CGB in your community. Get 50 people to be depositors. Get one nonprofit partner to help people open accounts, 5 businesses to offer rebates and one business to accept the common good card in exchange for cash. Communities can have a bank building if they want one, but you don't need a building to get started. You use a bank building for four main things: to open an account, put money in, take money out, and to apply for a loan. You can do any of these things by mail or through the internet. CGBs will also partner with a local nonprofit to help people open accounts and apply for loans in person. You can use your cell phone or computer to transfer some of your CGB balance to another member in exchange for cash. Or you can get "cash back" from a participating business, with no purchase required. Could something go wrong? Yes. But corruption at the community level is easier on people and the planet, than corruption in a corporation the size of a country. Also, unlike corporations and government, CGB books will be open to public view. Everyone will be watching. Likewise, if a community makes bad decisions, then they will get bad results, but not as bad as profit-driven corporations and corporation-driven countries laying waste to the planet. To make CGBs work, you will have to let go of two things: - Attachment to your current bank and the idea that all that brick and mortar gives you some kind of security - AND the view we all grew up with, that money is something special that has to come from somewhere else. The Island Parable has one final chapter. Years go by. The global economy collapses. Desperate for something better, we learn from the islanders how to create sustainable, democratic, community-based economies. We see the tremendous short term financial benefits to schools and other nonprofits, to local businesses, to individuals and families, and especially to our visions for peace and sustainability. We see how quick and easy it will be to start a CGB, once the first ones open. Everyone will want a CGB and they will spread rapidly. Soon our crazy profit-driven system of corporate decisions over what gets done in the world will get squeezed out by local decision-making for the common good, so that all of us can achieve our dreams in community: good food for everyone, universal healthcare, a good home, friendly communities, satisfying work, time to play, true security, a beautiful world. With your help, CGBs can make a better world for everyone. Sign up. Be one of our 4,000 founding depositors. Sign up now with no cost or obligation at

Video Details

Duration: 14 minutes and 32 seconds
Country: United States
Language: English
Producer: Society to Benefit Everyone
Director: William Spademan
Views: 1,920
Posted by: wspademan on Sep 8, 2009

Common good banks will be the cornerposts of a new economic system -- a democratic, community-based system that can support and empower ordinary people everywhere to put an end to war, poverty, hunger, unemployment and global warming, before it is too late. This is not just another bank with a social mission. This is a social mission with a bank!

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