In the Common Good Economy, decisions will be made independently in each Common Good Community, about how to accomplish their mission (make the community sustainable, get everyone’s basic needs met, and help people elsewhere). And they will be empowered — with money — to act on those decisions.

We want the organizational structure of Common Good Finance to reflect those same principles. This means that decision-making and authority must be spread out through the organization, rather than residing solely in a few individuals in a hierarchy like this:

Our Senior Policy Analyst John G. Root, Jr. has proposed a solution. He suggests a system of Organizing Circles, based on sociocracy.

Origins

The idea is very simple and very similar to the committee/subcommittee structure typical of many small nonprofits and the workgroup  structure of many corporations (see diagram). Each committee and subcommittee is a team, charged with a specific mission. Representatives from related teams meet to coordinate their efforts in service to the larger mission of the “parent” committee.Team members may be volunteers, paid staff, consultants, or a mix, depending on the organization. Typically, committees and subcommittees are convened by someone in the parent committee, to take on a specific aspect of the parent’s overall mission.

Differences

That’s the conventional committee/subcommittee model. So how are Organizing Circles different? Two ways:

1. In the Organizing Circle model, each “child” team has not one but two people who participate on the parent committee:

• an elected representative of the child committee represents that team’s interests in the parent committee
• the convener represents the parent’s interests in the child committee

2. Subcommittees are created by invitation rather than by appointment. The invitation to participate on a subcommittee goes out to all members of the organization and details the skills, responsibilities, and commitment required.

Significance

At first glance these differences sound trivial and inefficient. But they have three enormously important results:

• Leadership. Leadership arises from both directions. People who are identified by their peers as potential leaders get elected to a position of broader authority (serving on the parent committee). And a person in a position of authority (serving on a parent committee) can take on leadership by convening a subcommittee. This system allows proven, trusted leaders to “bubble up” from the trenches.
• Accountability. Leaders are accountable not just to a single boss, but also to two entire committees — not just to their own leader, but to their peers and followers as well.
• Discipline. Mission and expectations throughout the organization are clear (in writing!) right from the beginning.

That’s it. That is the essence of Organizing Circles.

Board

One final piece: Where does the board of directors fit in? and the Executive Director?

We are proposing that the system be used throughout our organization, so that the board is the top-level parent committee and its subcommittees elect representatives to join the board. The board will elect an Executive Director. Leaders of committees will be accountable to their committee members and to the board as a whole as well as to the Executive Director. The Executive Director will represent the organization to the public. The IRS and other governmental agencies will represent the public to the board in the usual ways.

Discuss this article on the forum

by Janet Henderson

The “Coming Together for a Common Good Economy” Founding Members’ Retreat was held Friday evening, January 28 through Sunday lunch, January 30 at the historic Inn at Shaker Mill Farm in Canaan, NY. A special thanks for the wonderful rate and comfortable accommodations to our welcoming host, Ingram Paperny. Paul Deslauriers and Christopher Schaefer were amazing facilitators and Becky Meier expertly handled most of the nitty gritty details, with lots of help from many others (especially with meal prep and clean-up and with the Saturday night talent show). Thanks to all of you!

The retreat included brainstorming together, breaking into small groups to work on various issues, and inspirational talks, both planned and adhoc. We discovered that we have fabulously insightful, articulate, and passionate people in our Founding Members group! Discovering shared core values was an especially inspiring activity. The top values we discovered were: love, transparency, harmony with nature, integrity, sovereignty, empowerment, and community. A recurring theme was the need for diversity, particularly racial and ethnic diversity, gender diversity (we need more women), LGBT diversity, and age diversity.

There was an evening of entertainment provided by many of the forty talented attendees, including singing, accordion playing, a psychic trick, skits, poetry reading, humor, and more. Fidel Moreno and Susan Jameson’s Native American drumming and chanting was a wonderful gift to all of us! One of the highlights of the evening was watching William Spademan and Christopher Schaefer dancing together.

A vote was held to elect members of a Nominating Committee to assist the current Board in finding additional Board members. Becky Meier, Chris Schaefer, and Laura Geilen were elected to the committee. The first meeting will be held this week. And members of an action group were determined so that we can begin to sort out the work in front of us. Their first meeting was Sunday, February 6.

It is exciting that we have come far enough in the progress toward establishing local Common Good Economies that we have held our first retreat and are following up on the ideas we generated! It is a milestone and feels very significant. First, we had to attract sufficient persons to become Founding Members (serious supporters and future depositors, regardless of amount of money donated, or size of pledges for future loans and investments in the bank); then we had to generate a level of excitement, engagement, and interest to attract sufficient of those Founding Members to attend an entire weekend retreat; and then we had to sustain that level of commitment in order to set follow-up activities and persons who volunteered time to get them done.

So we feel like we are really on our way now! On our way to figuring out how we want to interact with each other…on the areas of special focus that we need to work within to get this undertaking accomplished…and all of the associated tasks for each of those areas of special focus. And, now, we are having people take ownership of various areas in order to begin the first tasks of educating ourselves about the work in front of us and how to do it and understanding subsequent steps.

We are still fledglings in this enterprise and have huge amounts of work in front of us, but our direction is set and our commitment is strong. Bringing local Common Good Economies into reality in our physical world, communities where there is a level playing field, where no one is left out, where everyone’s input and actions are welcomed and appreciated, where everyone’s needs are taken into account, where integrity and love are our watchwords–who could fail to be inspired?

Common Good Economy Retreat

January 28-30, 2011

The Inn at the Shaker Mill Farm

Canaan, NY

Notes compiled by Becky Meier

Attendees: Alan Becker, Anaelisa Vanegas, Andrew Baker, Anna Busser Erik, Becky Meier, Ben Schawinsky, Chris Schaefer, Chris Rawlings, Daniel Kinsey, Dave Pearson, David Edwards, Donal Butterfield, Elfie Six, Emily Peyton, Fidel Moreno, Fred Meier, Gonzalo Burmudez, James Cumming, Janet Henderson, John Root, Jr., John Root, Sr, Kathy Cardella, Laura Geilen, Mario Geilen, Mark Miller, Mark Roberts, Nancy Root, Nigel Hinds, Owen deRis, Paul Deslauriers, Richard Kerver, Rick  DeVoe, Robert Connors, Rose Stanley, Susan Jameson, Todd Chinook, Tom Harter, Tom Finnell, Wes Orlowski, and William Spademan

Retreat Activity Planners and Facilitators: Chris Schaefer, Paul Deslauriers
Retreat Coordinator: Becky Meier

1/28/11

Dinner
Welcome
Native American Blessing by Fidel Moreno
Small Groups of 3: Why are you here? What do you hope for?

Why are we here?

to converse with like minds
to be part of something meaningful
to help
to create abundance
to organize ourselves
to work together
to find our fire
to find meaningful ways to plug into common good economy
due to income disparity
to assure survival
for congenial and intelligent company
to help concept to work
to get organized
to make progress
in order to get the show on the road
to simplify the message
to watch the Big Bird land
to get to 1.5 million
to get new DNA
to pull in the same direction
to get ideas for sustainable economics

Hope for /Outcomes
sustainable system of checks and balances that can stand competition from other banks
emergence of new paradigm of ethics and integrity
transformation of community
clarification of the message and banking
learn from the wise ones
anchor of certainty
news releaser to get attention
ability to receive gifts
knowing how to explain to others
banking system based on love and generosity
committee tasks
a sense of trust
empowering community
defuse fear of money

Emily Peyton introduced John Root, Jr.

Philosophy of Common Good Bank, by John Root, Jr.

Love is the only reality; everything else is illusion. Everything in economy is an exchange. Our egotism is justified when we decide if an exchange will make us better off and since both parties to the exchange make this judgment (that they will be better off as a result of the exchange), in the aggregate we should all be increasingly better off. Human nature is the source of our abundance and we are all inspired to serve our community and most happy when we can do that and be recognized. CGE can create the ability to follow your inspiration- material and spiritual, measurable and immeasurable value, products and services, educated child, inspired performance. As soon as you are empowered to act on the basis of your capacity to love, we can fund our inspirations and build a common good economy.

Chris Rawlings (Board member) introduced William Spademan

William Spademan spoke about history and structure

Structure must follow spirit.
This weekend is aimed at having structure catch up with our intentions.
2002 Created ideal society and how to get there for future’s invention.
Started messy; it will tune itself up.
Governance is the key.
Has to be bottom up.
Money/economics gives power.
William sent out proposals and others critiqued them.
Re-creating ourselves.
2003-4 Created Local currency through Society to Benefit Everyone (S2BE), perceived as flaky, cumbersome; then, thought of Credit Union, Mutual Bank, conversion from Credit Union to Stock Bank.
Finally arrived at decision that starting with a Stock Bank from the beginning and matching it with a mutual credit association made the best sense. Solved some regulatory problems by marrying bank model with a mutual credit system model.
Create one infrastructure that could be replicated.
July 2006 incorporated.
March 2007 William had a head injury and much was put on hold.
2008- Developed partner organizations, no money.
2009- 30 failed grant applications. Advertised job of organizers as independent contractors, receiving a percentage of what they raised. Got about 2 dozen organizers as independent contractors. Organizers not raising enough to continue.
2010- Hired consultants. Advice: Simplify message; get a stronger more active board. Explosion of active participation in Eastern NY and Western MA
Formal Board not that active. We want a more active board.
Have recreated ourselves a number of times.

Love is the first principle- taking care of everyone. Freedom is second principle- model must honor our individual initiatives, model must gather people, work with humans at our existing levels, resist corruption, and be transparent. Align personal profit to community profit.

Creativity Serves Order- Native American saying

Andrew Baker (Board member) read letters from two other Board members: Carol Lewis and Karen Robero

Janet Henderson introduced Rick DeVoe

Rick spoke about political aspects and organizational structure.
We WILL do this.
Social Activist and Organizer. Usually it’s been People against the Money. Strange to shift gears.
Soldiers perform sacrifice. Why not activists?
We need to find the front line- our soldiers.
We’re out of practice being true citizens. Re-Creation of the common space.
Stories of activism in 1970s
We are on the front line of social change with this model.
Need to do it right. Model will require true citizenship.
Will need to survive the counter attack, defend what we are about to build.
Need to be authentic.
People doubt the current institutions but don’t know who and what to believe in.
This resonates with people. That’s how I know we’re going to succeed.
We are picking up the mantle of populist movement- joining economic and political rights.
We’re going to take the high road to the high ground and hold it.
We need to define ourselves; don’t let adversaries define us.
Economic and political rights are inseparable.

MLK: Nothing is more powerful than the unarmed truth.
We need to learn to believe in ourselves. The vast majority of us are of good character and good conscience. We need to overcome cynicism.
Martin Buber: The truth is God’s alone- It is humanity’s duty to pursue it.

Paul Deslauriers: What are our Common Values?

Values should:
be powerful motivators of personal action
align and harmonize
energize and Inspire
values in action can replace rules
serve as foundation for strategies, policies and compensation.

Divided into small groups to brainstorm values.
Reported back from values groups and put values on flip charts.

Becky taught Russian Peace Song, If the People Lived their Lives as if it were a Song.

Leaders from small groups created list synthesized from all groups.

Saturday, January 29, 2011

Each participant received three stars to attach next to the core values they felt most connected to, resulting in the following:

Core Values

Love 20
Transparency 17
Harmony with Nature 17
Integrity 15
Sovereignty 14
Empowerment 11
Community 11

Justice 9
Respect 7
Authenticity 7
Best Practices 7
Courage 7
Vigilance 6
Democracy 6
Compassionate Communication 5
Commitment 4
Humility 4
Humane 3

Note: A video of the values activity we participated in is available on YouTube at http://www.youtube.com/watch?v=XhUHSAP8tl8

Presentation on existing organizational structure.

Structure of current organization:
William Spademan: Designer and Executive Director
William, Rick and John serving as Executive Committee
We are a 501(c) (3), incorporated as the Society for the Benefit of Everyone.
We have a Board of Directors of nine people and a Board of Advisors.
We get legal advice from Ropes and Gray and three other legal firms.
We have an active IT team that meets weekly (electronically).
We have a Board of Directors for the Bank, once it’s chartered.
In 2005 Mike Novel was appointed CGE Bank CEO and Leonette Coleman, Chief Lending Officer.

The Executive Committee has phone contact daily and in person meetings every 1 1/2 weeks; decisions are made by consensus.
The Board meets monthly. It’s mostly been following consultant advice and assessing Board commitment. It has been reconstituted in the last six months. The members have been appointed by William. Eventually, they should be elected by the membership. They function as an advisory board.

There are currently eight regional Organizers (Sarah Noyes, CA, Todd Chinnock, CA, Anna Busser Erik, NY, Amiya Chaudoir and Randy Jones, OR, Eric Krawczyk, CO, Chris Meyer and Wendell Wiebe-Powell, Michianna, Tom Finnell, VT, and Emily Peyton, VT.)

We need to continue to develop leaders.

The Campaign will begin in the spring. We will need outreach, media, social networking, Powerpoint.

We need Education/Orientation/Workshops on Mutual Credit, how money is created, alternative currency, and different structures of democracy.

We need Founding Members meetings to practice the democracy we are preaching. Focus on the Berkshires and Pioneer Valley. Use college students to spread the word.

Broke into small groups to brainstorm areas that needed strengthening.

Reported back to plenum.

Synthesized groups’ brainstorming lists into categories. Put questions pertaining to each category on separate flip charts. In groups, came up with recommendations. Below are the questions and recommendations made by the groups, although they probably need to be updated by members in each group.

Group Participants:

Community Building: Elfie Six, Tom Finnell, Anna Busser Erik, Nancy Root, Janet Henderson, Tom Harter, John Root, Sr

Marketing: Alan Becker, Mark Miller, Daniel Kinsey

Diversity: James Cumming, Wes Orlowski, Mark Roberts, Anaelisa Vanegas

Spirituality: Kathy Cardella, Ben Schawinsky, Owen deRis, Susan Jameson (Elfie Six)

Peace Force: Donal Butterfield, Emily Peyton, Mario Geilen, Robert Connors

Leadership Training: Becky Meier, Fidel Moreno, Gonzalo Burmudez, Laura Geilen, Rick DeVoe, William Spademan

IT: Richard Kerver, Dave Pearson

Board: Nigel Hinds, Andrew Baker, John Root, Jr, Todd Chinnock

Categories:

Spirituality
Listening to the voice of spirit in our individual and collective lives
Guiding humanity out of its adolescence into its adulthood:
The movement from Homosapien to Homodivinitus
Workshops to embody spirit, love, light and values
Love, Freedom, Beauty, Longevity
Knowing there is enough
Conscious Reality Creation Work
ie: Humble Shadow Work
Ceremonies- interfaith
The Work- Byron Katie
Andrew Harvey
The High Energy Zone, Paul DesLauriers
Ho’oponopono
Encourage a personal practice
Global midwives and midhusbands

Leadership Training
SCORE, SBDC-UMass
Educate young children
Members educate each other out of skills present
Educate self and others on values
Develop a resource data base (time, skills)
An education on the world of finance
Needed: A training program for organizers
Q: How should it be developed? Content? How should it be carried out? Are organizers sufficiently knowledgeable and educated?
Leadership: talent, skills, experience, commitment, vision

Training Needs
We want some kind of completion certificate, using a committee to determine if a person passes or not.
Types of training:
Training Program for Public representatives of the Bank
Public
Media
Organizations
Internet
Training to orient founding members
Leaders support group including mentorship and interns
Training facilitators for the common good communities
Trainer’s training

Leadership
Developing job descriptions and roles
Figure out skills necessary for jobs
Who makes the hiring decision?
Hiring by volunteers or by selection
Training and support

Diversity
Aggressive Outreach to Diverse Communities
Get coalitions of churches involved, as well as LGBT communities
Get youth organizations involved
Have approximate equal gender split on the board

Non-Violent Communication training for Board and Staff

Timetable:
Search Committee, recruiting
Chair and Vice Chair
Board Creation
A few NVC Retreats for Board and senior staff
Board Completion- full 24 people, 6 months
Second NVC retreat

Local Groups/Community Building

Education-local
Create space for divergent standpoints
Community Division Development
Create basis for decision-making following “6 characteristics of energy”
Developing investment priorities/visions
How viable not to have a physical building?
How to harmonize with nature
Relationship of local bank with community- function?
Decisions on interest or not (loans)
Localvore movement- building connections
ATD symposium- doing it
More gatherings- “tendrils” connecting: planting the seed deep
Economical in operation

Developing Local Division
1. Find one organizer for a locality- commitment, groundwork
2. Have a meeting space and time, get list of interested people, develop group of committed persons
3. Series of meetings, explaining bank, create vision, find needs, sign up founding members and “wait and see” members
4.  In 6 months- open local bank branch.

Local Groups- Community Building
1. Access to physical space to meet and internet meeting- don’t necessarily need to own or rent
Need teller access
Teleconferencing would help when face-to-face meetings aren’t possible
2. Economical operation/efficiency
3. Mutual interface between bank and local interest groups
4. Education, reading, meeting, social network, lectures, courses
5. Regular meetings / ongoing
- local executive committee- 3 people to consider people for membership on Board
- general members
6. Make goods and services of members transparent and accessible.
7. Interface between local executive and professional central bank- explanation
8. Critical mass
First one central bank
9. How we work together
- voting procedures (rank vote)
- listening with respect, tolerance and interest in others
- safe space
- mediation if necessary and NVC training
10. Creating vision of need and sustainability (local)
Develop investment priorities (transition towns)
Equalize wage disparity
11. Local decisions on loans, interest, mutual credit

Peace Force
Bank Charter Requirement
Who will lobby MA banking commission on CGB behalf?
How will CGB prepare to Lobby MA Bank Commission?
How will CGB mutual credit association fight “blowback” from entrenched financial interests in USA?
Will CGB have a political arm to affect mutual credit association and charters?
Will CGB mandate nonviolent purpose (of loans, grants, etc.)? also ethically environmentally responsible
B Corporation
Triple bottom  line

Tasks vs opposition
Seek bank examiners, bank commissioners to lobby governor re commission
Other bankers
Create documentary film on CGE- 5 year process- seek and support
Establish courses in CGB for MBA programs, with college professors
Start college student outreach
Hold student retreat here and offer certificate with college credit

Marketing, Promotion, Art
What is our sizzler? packaging
How do we manage our image?
How to create promo materials?
How best to do solid press releases?
Simplify our message
Talking points
Short videos on website and U-tube
Money as love b=versus profit
Artistic license granted- involve artists
An internet radio program
Creative endeavor: What sill society look like after CGB goes viral?
Howard Zinn film “Let People Speak”
Potlatch, occasion, passion
A banner we can use at public events
Branding, logos, design work-up
We need to share a clear understanding of the strategy for community to the public about the bank and the mutual credit system.

Define CGB Products/Services and Needs in marketplace (feasibility studies)
1) Education
2) Framing Talking Points
3) Pro bono ad agency
4) Draft Sample News Releases (and critique)
5) Create a game board or computer
6) Use the internet

Define and differentiate CGB from competition
1) Create a strong local economy through mutual credit
2) Create sovereignty through depositor’s association vote process
3) Create monetary expansion in local economy
4) What does 10% local economy look like? 20%? 40%?

Model and Systems
Improving the model
Using B-corporation certification
Best practices of Ethical Banking
Incarnation of
Look at different cultural model of leadership and bring in
Cybernetics
Talk to B-Corp banks like Grameen and Green, etc. Pick their brains ask for assistance
Economic 101: how real banks work in the real economy
Guest Speaker: Ellen Brown
Writers- develop our own text book
Use of mutual credit system as stepping stone, prior to opening CGB
Develop self checks
Leader-free structures and enforcing sovereignty

Compensation/Income Benefits (not discussed)
Q: How many average sized residential mortgage loans does it take to pay a loan officer, and by extension to cover the bank’s overhead?
Members can decide on compensation (influence)
Staff development as key benefit

Miscellaneous (not discussed)
Reinvesting in infrastructure: manufacturing and local agriculture
For a mutual credit system to work, it has to be small and face to face.
Does a working bank need to be larger than that?
All ideas are ideas not laws
An education program that involves reading groups and resource materials
Support health/balance
Equalize wage disparities
Don’t reinvent the wheel- look at existing models,
“The Secret”

Another sheet, Untitled
Required Reading
Workshops w/ Mike R.
Core education/envisioning group (every 2 weeks)
Generate projects and recruit
When this group exists and properly trained. Create mutual credit systems in local economy as an educational and marketing tool to create financial power for CGB
Internal marketing (for CGB creators)
External marketing (for general public)

Sunday, January 30, 2011

Groups met and were asked to choose one person to present the suggestions for each committee to the plenary session and also to choose one person to head a Coordinating Committee coming out of the retreat.

Met back in the main room for the presentations of their recommendations for others.

Coordinating Committee members:
Nigel Hines, Board
Elfie Six, Community
Mark Miller and Alan Becker, Marketing
Bob Connors, Peace Force
Becky Meier, Leadership
James Cumming and Anaelisa Vanegas, Diversity
Susan Jameson, Spirituality
Dave Pearson, IT

Coordinating Group set meeting for Sunday, February 6th, 10-1.

After a break, John, William, and Rick spoke briefly. John said he is incredibly grateful for the Founding Members. We get to re-think…do those concrete things that re-create the world… William said he feels immensely blessed. He went over the various committees’ recommendations. Rick said that we have the idea whose time has come. There is tension between established structure and individual sovereignty. Integrate this weekend’s work with 1) Campaign, including facilitation, 2) Orientation and training, 3) Creating Common Good Communities in the present. We now have a low-income option: a donation of any amount and no requirement for any pledges; you agree to recruit two other Founding Members.

Chris Schaefer led an activity: Each person: Pick a postcard that speaks to you about your connection to money. Share with group your emotional connection to money and how your postcard relates.

In groups of 2-3, discuss whether retreat met your expectations.

Back in large group, go around and each person say a sentence or two about their experiences.

Lots of thanking of individuals for their contributions to Common Good and to the retreat.

Lunch

Dispersal

Recommended Resources
Google “The Secret of Oz”, describes banking-money systems
Esther and Jerry Hicks, “The Vortex” Book
The Money Masters Documentary
Web of Debt, Ellen Brown
Handbook for a New Paradigm
Money as Debt, movie, Google
Yahoo! “The Crash Course” by Chris Martenson
Lost Science of Money, Stephen Zarlenga
For-Giving- Book by Robin Wright

Common Good Economy Retreat

January 28-30, 2011

Focus Group Recommendations

Common Good Peace Force
(how to preempt effective opposition)

• Recruit the opposition
• Recruit bank expertise
• Get young people involved
• Educational programs for youngsters
• Maybe make a documentary film
• Political outreach

Marketing

• Internal / external
• Get supporters up to speed
• Seek pro bono advertising
• Clarify how CGB is different
• Write press releases
• Use the internet, especially social networking
• Create a board game
• Create a mutual credit system now
• Use common good democracy now
• Research and illustrate what a community looks like with various percentages of local buying

Leadership Training

• Certification process
• Training for leaders in several roles:
• Public presentations (several types/levels)
• Orientations for Founding Members
• Common Good Community facilitators
• Training Trainers
• Ongoing mutual/mentoring support
• Committee to develop job specifics

Diversity

• We need it (for diverse viewpoints, etc.)
• Board diversity (matching US percents)
• Outreach to low-income/minority communities
• Translations
• Simple, inclusive language
• Nonviolent communication training for newcomers
• Diversity training for everyone
• More diverse executive committee

Board

• Nominating committee to revise and add to board
• Distinguish between CGF / CGB boards
• Active coordinating committee
• Charge the committee with what it should do and by when
• Get the house in order, then focus on the nuts & bolts of starting a bank

Common Good Communities

• Need a meeting space
• Need a way to explain it easily and sign people up
• Open a branch within 6 months
• Use internet and teleconferencing
• Have a teller
• Regular meetings
• Create a save psychic space that embodies our underlying values

IT

• Is more advanced than other areas, but behind schedule
• No rocket science, but no mistakes!
• Mostly standard bank stuff but some different
• Open source when possible, plus built or bought. Thanks partly to encryption technology, open source is often more secure than proprietary software.
• Extend web resources to include video, audio, etc.
• Use social media / youtube

Spirituality

• Listen to spirit to guide us
• Be ready for our “stuff” to come up
• Leaders should have a daily spiritual practice
• Specific workshops
• Society is moving from adolescence to adulthood
• Homo sapiens is becoming homo divinitus
• There is enough (in the world)
• This group will continue to meet and be active

Money Creation

We need to create money from time to time because things change and there is always a “right” amount of money for the current situation. Clearly a society could have too little money (for example none at all). We don’t want that. Likewise, society could have too much money. If the amount of money in society doubles overnight (or half the goods and services vanish), then the value of each unit of currency falls by half. Today’s dollar would be worth 50 of yesterday’s cents. That’s inflation. We don’t want that either.

Let’s say that at some point we have a society which has just the right amount of money. When, then, should additional money be created? The answer is obvious: it should be created when it is needed. And how much should be created? Naturally, as much as is needed.

So when is money needed? Well, of course, it is needed when someone needs it. We should create money when someone needs it.

And when might someone need money? Ah! Here we are at the crux of the question.

CASE 1: You don’t need more money. Suppose you have plenty of money saved up from your labors. Plenty to carry you through the coming year. You have a steady job that brings in money fast enough to cover your ongoing costs and whatever special costs you expect this year. You don’t need any more money! So no money should be created.

CASE 2: You DO need more money. Suppose now that you don’t have much saved up and

• You need a new car to get to work.
• Or you want to start a new business and don’t have enough saved up to buy the equipment and rent a building.
• Or you want to go to school for a new profession and don’t have enough saved to pay for tuition.
• Or you need a house (or an operation) so you can survive to be a contributing member of society.
• Or you were just born and need a few years to get on your feet.

You need more money! As stated above, money should be created when someone needs it. You need it, so it’s time to create some!

Okay, sure, you need more money, but why should society (your friends and neighbors, collectively) give it to you, if you haven’t earned it and saved the credit? Either

1. they take pity on you because you are unable to carry your weight — that is, you must consume more than you produce (which is a special case that I will not cover here) OR
2. you will be earning that money sometime in the future.

So society creates a certain amount of money (however much you need) and fronts it to you in advance of expected future productivity. That’s a loan. That’s debt. That’s how money should be created! So the Common Good Bank system will create money as debt.

Money Destruction

The flip side of the question is: How should money be destroyed? That is, when and how should the amount of money in circulation be decreased?

Similarly to the creation question, the answer here is: Money should be destroyed when it is no longer needed. That is to say, when a person who once needed it needs it no longer. That is, (a) when a loan is repaid or (b) when a person has more money than they need. The (a) case is exactly how money destruction works in our current system. So we’re all set in the (a) case.

Too Much Money

The (b) case is more difficult. We will need to establish a formula for deciding how much is “more than enough”. For example, anyone who has a net worth more than 100 times the median probably has more than enough. However we do not want to simply confiscate that money, in order to destroy it. That would remove any financial incentive for future productivity.

Likewise, suppose someone has more than enough because they are dead. We cannot simply confiscate their money, because that would encourage a wide variety of socially unproductive schemes to hide the money as death approaches.

How to Fund Nonprofits

At the same time, we have an unrelated problem. How should nonprofit organizations get funded? They typically depend on gifts. We want these funding decisions to be mostly made collectively at the community level, rather than disproportionately by wealthy individuals. Maybe a community could spend money into existence, as a grant to a nonprofit?

Well no. Permanent money creation (spending it into existence) is a gift from society as a WHOLE. Why would we want to do that? It would only make sense if we expect the nonprofit to produce enough value to justify the creation of that money.  Otherwise the ratio of money to products would rise, making each dollar worth a little less (inflation).

In order to avoid inflation, if we spend the money into existence, the nonprofit has to produce a corresponding volume of goods and services regularly and often enough so that the money does not have time to circulate (and be used more than once). That means it has to produce that much DAILY or thereabouts.  In exchange for a $1,000 grant, the nonprofit would have to produce $1,000 worth of new goods and services every day until the end of time. Clearly that is unworkable, so spending money into existence is out of the question.

On the other hand, we do not want to LEND money to the nonprofit unless, like a for-profit business, it plans to increase its business income by expanding production of goods or services. That is not the usual case for nonprofits.

This leaves no choice but to give the nonprofit money that already exists. In the Common Good Bank system, that means giving the nonprofits the bank’s profits (plus whatever else goes into the Community Fund). So we will do that. The nonprofits could certainly use more, but it’s a start.

Two Problems Become One Solution

Getting back to the problem of what to do with people’s excess money, the problem of how to fund nonprofits adequately is a magical match. We can ask the person with excess money to give it to nonprofit organizations — wherever the person thinks it is most needed. This maintains some motivation for gainful productivity without condoning private fortunes. That solves both problems!

Similarly we can allow some amount to be passed on as inheritance and ask that the rest be distributed to nonprofits for the common good, as directed by the deceased or by the heirs.

The same proposed solution applies to businesses that accumulate more money than they need. After covering the business’s costs including reasonable compensation to its workers, all net profits should go to the common good as directed by the workers — OR to the Common Good Bank Community Fund for distribution by the community as a whole.

Redirecting excess money to nonprofits (directly or through the Community Fund) does not destroy money. Rather it eliminates the situation where someone has more money than they need (the (b) case, described above).

The Down Side

Creating, destroying, and redirecting money as described above appears to satisfy all of society’s funding needs. But is there any down side? Is there any reason NOT to create money as debt?

Since money is just accounting, we need only consider the possibility of damage to the accounting system itself. Specifically, does creating (and destroying) money as debt affect the value of the monetary units? That is, does it result in inflation or deflation? Or will the amount of money in circulation tend to increase and decrease as it ought to, in proportion to the goods and services being consumed? Will there be enough money so that people and businesses can buy what they need, without there being too much extra money?

If money is created as needed and destroyed or redirected whenever there is too much, then the answer to this last question is self-evident. Yes.

There is no down side. Hurray! Let’s create money as debt! The Common Good Bank system will lend money into existence whenever and wherever it is needed.

Is There Another Way?

We CAN create money as debt, but MUST we? Can we also create money some other way? Yes and No. We can lend, spend, reward, or gift money into existence but the creation is always accompanied by a debt.

Money represents the right to goods and services. Those goods and services have to come from somewhere — that is, someone has to provide them. Therefore money also represents an obligation to deliver goods and services. Who is obligated to deliver those goods and services varies.

If I as an individual issue money, who will deliver the value that it represents? I must not obligate someone else to deliver that value — that would be a kind of theft or fraud. Likewise, I must not obligate myself beyond my ability to deliver. That too would be irresponsible. If I issue money, then I must acknowledge (implicitly or explicitly) that *I* am obligated to deliver that much value to society. It is a debt.

Likewise, a community or nation cannot obligate the rest of society to deliver goods and services. A community or nation can create money responsibly only by obligating ITSELF to create the value that the money represents. Even if we as a society create money, for example, as a reward to an individual for work they have already done or as a grant to a nonprofit, the money is a promise that the rest of society will provide that much value (goods and services) to the individual or organization, on demand. It is a debt.

Money is a promise of goods and services. Money is always debt, by its very nature. We MUST create money as debt — and only as our own debt to society. Anything else is irresponsible.

Discuss this article on the forum

In the late 1800’s the New York elite discovered the beautiful Berkshires and built “Cottages” – mansions – here and so began the summer migration, when the population doubles.  The Berkshires are now America’s “Premier Cultural Resort” with world class music, theater, dance and art.  There is usually plenty of audience and money for the arts here and one of the highest concentrations of great restaurants per capita in the world.  In 1985 the first Community Supported Agricultural project was started in the orchard on the newly established Community Land Trust property in South Egremont, and I wrote all the literature for the CSA project when we moved down the road to Indian Line Farm.  The CLT also houses the E F Schumacher Society (now the New Economics Institute) and Berkshares, our local currency.  Berkshares are a discount coupon on the dollar, but they do raise the awareness of local since you can only spend them in locally owned establishments.  Unlike the CGB, Berkshares do not increase the money supply, and are cashed back for Federal Reserve Notes as often as not.

We have a number of really first rate publications in the Berkshires, including Berkshire Living and Our Berkshire Green Your Holistic / Green Resource, we have numerous small cultural groups, the Railroad Street Youth Project, a low power FM community owned and all volunteer Radio Station, and I am a frequent guest an various shows and weekly on Truth Search.

More to come.

About a dozen local people have signed up to be future depositors.  Another dozen have indicated interest in the project but have not signed up as yet.

Salem is a fairly conservative, unsophisticated city of ? 120k.  It is the capital or Oregon and site of most gov agnecies including prisons, state hospitals, and so on.  But it has a fine progressive community as well.  I hope to help bring CGF to town as soon as possible.  There is growing interest!

I have been acclimating over the past 18 mos. to central Tennessee while engaged in developing an organization to address the multi-dimensional (social, political, economic and environmental) crisis that we all face. When I came across Common Good Bank about a year ago, I  realized that it has the potential to be a primary means to catalyze change and that it embodied much of what I was endeavoring to actualize independently.

I live with my wife Faye and golden retriever Traveler (he’s upset that he’s not going on the Mass. trip)  in Gainesboro (pop. 1500), which is about 15 minutes from Cookeville (pop 35,000).  The land here is beautiful: full of creeks, rivers, lakes, woods and dotted with small communities. Cookeville  is known as the “Hub of the Upper Cumberland” region and will be central to my organizing, as will Nashville (90 mi) and potentially Knoxville (110 mi).

I look forward to working with you all. Given this extraordinary concept and the demands of the times (an idea whose time has come) our work together promises to be momentous.

Rick DeVoe

My name is Eric Krawczyk and I’m organizing a division of Common Good Finance in the rural mountain community of Gunnison, CO.  Marked as one of the coldest cities in America, Gunnison is completely dependent upon outside supply chains, energy resources and tourists for survival.  We, too, are sensitive to the country’s centralized economies, yet have a resiliently collaborative community supporting the arts, education and nonprofits.  We are slowly awakening to the economic and health benefits of investing in local food, goods and services.  Its only a matter of time before we reach the tipping point of demand for democratic economic involvement bringing in a flood of new memberships for a Common Good Bank division.

I am also a school counselor, licensed professional counselor, sustainable home builder and director of the ministry-Gunnison Creation Care.  I enjoy cultivating the strengths in youth, adults, and all creation for the common good of all.  For the last 2 years, I’ve been unfunded by all banks to complete construction on a creation-caring home for my expecting wife and two huskies.  I believe the Common Good Bank model can empower our community to decide how our money is invested.

Let’s make it happen Gunnison!

My name is Chris Meyer, and I live in Goshen, IN. Along with Wendell Wiebe-Powell, I’m helping to organize a Common Good Bank division here in northern Indiana/southern Michigan.

While there is high unemployment and a very challenging economy in Michiana, there are also many dedicated entrepreneurs,  small business owners, and residents who are working to build a sustainable economic system. For instance, in my home community of Goshen, downtown is full of thriving independent businesses. I believe the Common Good banking model would help enable more sustainable development, and many of the people I’ve already spoken with are enthusiastic about CGB.

As an organizer, I hope to encourage and capture that enthusiasm!

My name is Richard Todd Chinnock  and my roots are planted in Loma Linda, CA.  I am thrilled to be participating with this great group of people to launch the next big step in societal development- Common Good Banking!

Imagine with us a new way of doing business and accounting.  A way in which we ALL have a say in where the money goes and how it gets spent- for the common good of us ALL.  Then go and press that sign-up button to help us make it a reality!  It’s your future, your bank, and your community.

The motto of Loma Linda is, “Serving Man” and I can’t think of a better way for us folks here in L.L. to fulfill that vision than to create a local division of the future in banking- Common Good Banking!

Feel free to contact me at any time for any reason; rtchinnock@commongoodbank.com