Philosophy & Design - Spectrum of Economic Systems

Vision | Mission | Design Principles | Key Features | Influences | Technical Details | Strategy

Common Good Bank communities are inspired by the full range of economic systems, incorporating the best of each system.

			SYSTEM		EXAMPLE
	C		mainstream banking		Bank of America
	G		LETSystems / barter clubs		Victoria LETS / WIR Bank
	B		ethical / green banking		New Resource Bank
	E		Islamic banking		Dubai Islamic Bank / JAK
	C		CDFIs		Shore Bank
	O		microcredit		Grameen Bank
	N		local currency		Ithaca Hours
	O		parecon / econdem		Mondragon
	M		reciprocity / informal barter		Iroquois trade
			gift economy		Cook Islands / families / philanthropy

Mainstream Banking. Common Good Bank communities will offer typical mainstream community savings bank services (checking accounts, home mortgages, ATM cards, etc.). Unlike mainstream banks, Common Good Bank communities will enable a high level of democratic financial cooperation among participants and will empower those most in need.

LETSystems / Barter Clubs. Common Good Bank alternative currency is a formalized reciprocal credit system, like LETS and barter clubs. Unlike other systems, the Common Good Bank system is fully integrated with the mainstream economy. Participants use ordinary checks and Common Good currency is traded for dollars securely and automatically, as needed.

Ethical / Green Banking. Common Good Bank communities will lend exclusively to socially and environmentally responsible borrowers for socially productive purposes. Unlike other ethical / green banks, Common Good Bank communities are designed not only to do good within the current system, but to create a more just and sustainable economic system.

Islamic Banking. Common Good Bank communities uphold the Islamic prohibition against usury and immoral investments. Depositors and investors are limited to a maximum rate of return equal to the true inflation rate of the dollar (that is, a zero percent return in real terms). Unlike Islamic banks, Common Good Bank communities are not tied the unjust, unsustainable mainstream economic system.

CDFIs (Community Development Financial Institutions). Common Good Bank communities will support community economic development, especially where it is most needed. Unlike many CDFIs, Common Good Bank has not a triple or double bottom line, but a single one: the common good. Unlike most CDFIs, Common Good Bank will empower communities immediately to invest in themselves, set their own investment priorities and decide how to use the profit from those investments to advance the common good.

Microcredit. Common Good Bank communities will make small, unsecured loans to local businesses and entrepreneurs.

Local Currency. Common Good Bank communities will manage a local currency system. Unlike any other local currency system, the planned Common Good Bank currency system is fully automated and seemlessly integrated with the dollar, so that it requires no ongoing maintenance and no extra effort by participants.

Parecon (Participatory Economics) / Econdem (Economic Democracy). Common Good Bank communities will establish some central planning at a community level, as in participatory economics. Common Good Bank communities will support the whole range of owner-operated businesses, as in economic democracy. The Common Good Bank democratic system supports both models. Unlike either proposed system, the Common Good Bank model can begin at the grassroots, allowing strategic details to evolve rather than requiring society to change all at once.

Reciprocity / Informal Barter. Common Good Bank democratic process and support for local busineses will foster the strong community spirit that is characteristic of reciprocity economics. (See also "LETSystem / Barter Clubs" above.)

Gift Economy. Common Good Bank communities will create a culture of philanthropy by giving communities responsibility for empowering those most in need, near and far. At the same time, by operating as a state chartered community savings bank within the existing mainstream economy, Common Good Bank communities are an ideal transitional system to a more benevolent economy.