Zero Interest: Looking up for inspiration

Reader Caution: I know very little about the economy, money or banking. Please don’t be offended.

What would you place at the centre of a new economy?

In a couple of other posts, I’ve outlined thoughts and ideas on how a new economy could come into being and how it might think and act.

There are a couple of thoughts I’ll add here.

1. The first concerns how the sun supports the earths ecosystems.

2. The second concerns how to understand the interaction, role and placement of the new and old economy and the working of the sun is a way of visualising this.

The sun as ecosystemic support

The bees pollinate the plants and make honey. The plants have their time in the sun and return to the soil. The soil is part of the respiration system. It all goes round and round and on and on.

What we see is a system of life, development and exchange.

The sun uniquely does not participate in this exchange.

It is set at a distance and it does one thing only. It gives of itself. It is this which enables everything else in nature to take place.

I feel that this is an important principle to remember.

One way of thinking of a possible new economy is not simply a rehash of the old economy but as something that thinks, acts and behaves differently.

Not reformed or reproduced but rethought and transfigured.

Thinking of a new economy as an ‘interconnected ecosystem’ and bringing what we already know about natural ecosystems to this framing could offer some new benefits and insights.

  • It requires a fundamentally different mental model for understanding the world (economy/society)
  • It promotes people and planet and demotes money and industry
  • It helps us to focus on social and environmental concerns
  • It forces us to see externalities

When we look at the social economy (I’m using this part interchangeably) and how it is developing today, we see that many elements of the old economy are already in place.

The language of finance, investments and returns of business thinking and efficiency.

You know the kind of thing.

Charity and philanthropy, what could be considered part of a previous social economy. For most of their existence didn’t operate with this logic and understanding.

This money and business stuff has crept in over time.

I mean I do get it. I understand the many reasons and justifications. I understand the results.

But it’s not all about money. Surely not everything has to think and behave like a business. Must everything be efficient and optimised and systematised?

It doesn’t have to be like that.

What we see is a dominate trend driven by an all-encompassing market and finance system which we have all found ourselves existing within and so we act accordingly.

But is that really the only way that we can respond?

There are some interesting and forward-thinking foundations who have recognised the need to step up to the challenge of system, climate and social change in new ways.

I mean there’s not much point having money, an endowment or even a job if the planet is dead and so are you.

Some have taken the strategic (or sensible) decision to Spend Down.

Giving it all away isn’t a bad thing if it’s allowing something very different to develop.

I see here a connection with the sun.

It gives of itself and the ecosystem which it supports lives and evolves.

A Distinct Lack of Interest

If you’re a customer it looks pretty much the same. You get a house and pay the bank monthly.

The difference is that they do not make money from usury.

To achieve this, they operate with a different logic.

So when you go to an Islamic Bank for a mortgage they don’t say it’s x amount and we charge you x % of interest over the 20 years (the charging of interest is against Islamic Law).

Instead, they take the price of the property. Work out the cost of the services which they offer you over that period and add on the yield that the money could earn if it was invested somewhere. Then divide that total into your monthly payments.

Can you see the shift in logic?

Earning money from usury being a bad thing in pretty much everyone’s good books.

I’m sure I’m offering a poor explanation here so I would advise that you do your own research.

Let’s look at another example.

A Healthy Interest

Their form of banking is far more personal and relational. They have an active interest in the long-term success of your business and the local economy.

This patience, closeness, highly developed knowledge and expertise all adds up to a form of public interest (which depending on the type of bank will also be a legal obligation).

It isn’t free of course and is built into the costs of running the bank.

With this banking system both parties can enter into a mutually beneficial relationship whereby they contribute to each other’s success.

It’s not all about the money is the thing.

To give like the Sun

Instead of thinking in banking and finance terms maybe you could switch and reframe it as ecosystemic ‘development and capacity’.

You work out what the organisations, or place, or local economy needs or is looking to do at any point in time and then figure out the ‘entire package’ that can enable that to happen in the most developmentally beneficial way.

By ‘entire package’ I mean you look at the local ecosystem and what it can offer from within itself (a team from several organisations, specific roles and skillsets, mentors and coaches, workforce retraining, staff development etc) and what needs to be brought in from outside or sensibly developed as a local capacity.

You operate as a network and you act as an ecosystem.

If your purpose is to build and develop a new economy before it’s too late and not to reproduce our current systems then ‘giving it all away’ is actually a pretty good strategy.

I mean to really get that potential out to where it’s needed. Get it to the grassroots, deep into the soil and out to the supportive ecosystem. Help it to get established, grow and thrive.

Just get it out there like the suns warmth and energy.

It’s not like the money vanishes into nothingness.

It all gets converted into social and environmental value that you can then demonstrate on your books and in society. It becomes forms of capacity, potential, resilience and strength.

Barclays and Lloyds it isn’t.

But maybe we need something different at the heart of the new economy.

Something a million miles away from where we’re at.

That exists only to give and expects nothing in return.

Visualising the Arrangement

This is an entirely separate idea to those above, but it is using the sun to help visualise something.

Here the sun gives us a way to conceptualise the arrangement, separation and different roles the old/new economies can play.

This can help in understanding where our ‘social needs’ (the things we must do and fundamentally do have a need for) exist and where our ‘perceived needs’ (the things the market tells consumers they need but could probably get by without).

You see they don’t in truth share the same centre. It’s just that we have a single all-encompassing system dominating everything so there is only one centre available to us.

This inability to separate is a problem.

Our ‘perceived needs’ are not central no matter what anyone tells you. They are periphery and exist at a distance. Do the needs exist? Of course. Is there interaction between the economies? Sure thing. It’s a spectrum of need.

But you can begin to see a logic for some separation, balance and strategy.

Founder of Socially Enterprising / Commoner / Mostly Unemployed.