Say, I am selling great pizzas, you are selling good shoes. We would gladly exchange the goods (with or without much mediation of money). But we are both in deep mortgage debt, and we cannot afford to buy each other's goods. Not only we can't buy or do much, we can't service a large portion of people just like us as well. Only those with good equity balance can buy at our shops - we are all doing best to service them. In effect, exclusively them. That's the barrier of money. It's very good to be on the wealthy side. If we would barter our goods, then... dunno... that would probably be very unfair to hard-working financial experts as we would get the same quality goods as only their money could buy. Escaping their network of rent and interest payment would be revolutionary indeed; wouldn't they have an excuse for forceful reaction?
It would be interesting if more LETS began appearing throughout the world as a result of this crisis. Truth unfolds in time through a communal process.
LETS involve monetising credit (which is what Banks do as well), and rely upon trust. That's fine among communities where trust is normal, but once the "commercial" world is involved, trust goes out of the window.
As Comrade Stalin said:
"Trust: but Validate". "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
B2B Barter systems like the WIR in Switzerland and proprietary systems such as Bartercard and BX all have credit built in, and where you have a barter system with in-built credit, then the result is a monetary system.
The reason for the pervasive (multi billion Swiss Franc) success of the WIR in Switzerland is that all members have to give a charge on their property to secure against defaults (ie non payment of debit balances).
ie the WIR is property-backed.
No one has yet managed to extend these B2B systems to customers as well (B2C).
But this will happen, and when a simple piece of software (a "transaction engine") does appear (there are several candidates) all that will be necessary for a complete credit solution is a mutual guarantee backed by provisions made into a mutually owned default fund.
At that point we will have created a "Clearing Union" (as advocated by Keynes) and banks as credit intermediaries will have become obsolete.
Of course, they could still have a role as service providers managing the process of credit creation; setting guarantee limits; managing defaults and so on...all without putting their capital at risk by creating credit based upon it... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
