Creditism

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Creditism: an economic evolution

Summary & Organization

Summary

There are two foundational changes necessary to ensure life and liberty for every person on a Common Planet:

Reclaiming all commons for democratic management in an environment of open and radical transparency and

A monetary transition from circulatory debt-money to flow credit currency like Creditism, whereby individuals are valued inalienably in their existence first, and not based on their ability to capture or exchange all of the world’s capital.

The Commons - Distributed Capital

All resources and property, including finished goods, are considered part of the Commons. The Commons have caretakers but not owners. They will be managed democratically through various local, regional, and global governance councils using metrics like Doughnut economics to maintain sustainability. This can be done using the shared Ledger of Life and open GIS platform. Everything is accounted for and can be made available in the open market. This way, we no longer have to fight over the ‘value’ of our common resources.

Flow Currency - Distributed Credit

Creditism promotes a shift from the circulatory debt-money to a flow currency system. In the proposed flow currency, Credit is continuously created and flows to all individuals, being deleted upon use in exchange for common goods or services. This system removes the control and limitations imposed by debt-money, ensures that everyone has access to currency, and eliminates the necessity of anyone needing someone else's currency. Credit can’t be lost, stolen, or used to control or coerce others. It is simply used to acquire unowned goods from the open market or owned goods between private ledgers.

HOUSING

The plan calls to fundamentally restructure the housing market by shifting from housing as an investment to housing as a utility for caretakers. Upon transitioning to a Common Planet, existing homeowners become private caretakers of their primary residence, with any existing debt (mortgages, insurance, taxes) deleted. The net equity they held in the property would be converted into additional "Personal Credit" (PC), the currency used within a Common Planet system.

Individuals with vacation homes or rental properties could choose to retain them or cash out and relinquish their title in exchange for PC that reflects the property's net equity. **All properties owned by corporate entities, such as banks or investment funds, would become part of the Housing Registry, managed under local, direct democracy. **

Instead of renting, individuals receive a "Housing Level" (HL) that determines the quality of home they can select from a pool of available properties. This HL would be a numerical rating (1-10 similar to iMdb) based on past lived experiences, with higher numbers granting access to higher-quality housing.

We envision a dynamic housing market where individuals can improve their HL through various means. They could directly purchase an HL increase using their PC, with the cost potentially scaling with the level of increase and factoring in supply and demand. Alternatively, individuals could use their PC to renovate and upgrade their current house, which would simultaneously increase both their HL and the house's rating. Conversely, neglecting the upkeep of a house, leading to a decline in its rating, would negatively impact the individual's HL.

This system aims to foster a caretaker approach to housing, emphasizing use-value rather than investment and profit. It ensures everyone has access to housing while discouraging property hoarding. The allocation of housing units for private residences, short-term needs, or vacation purposes would be decided by local communities. This approach, coupled with the use of open GIS and other real-time data, aims to create a transparent and efficient system for managing housing and vacation resources.

Creditism: A Summary of Key Concepts and Values

Creditism is an alternative economic system intended to replace the current debt-based system, called "Game A". It is a game where power concentrates in the hands of banks and corporations at the expense of individuals and communities.

Instead of debt-based money, Creditism proposes a "Flow currency" system using a unit called Credit, intended to address what it sees as the inherent flaws in traditional capitalist systems. Credit is designed to directly reflect and reward real value creation by individuals within a community, rather than prioritizing profit generation through the exchange of goods and services.

Core Values:

Sovereignty: At the heart of Creditism lies a strong emphasis on individual sovereignty. This means empowering individuals to have control over their own lives and participate in the economic and social systems in a meaningful way without coercion. This is achieved with free-flowing Credit.

Cooperation: Creditism promotes a dynamic cooperative and competitive approach to economic activity, arguing that coordinated competition toward just social demands produces a win-win-win result.

Sustainability: Sustainable use of resources for the benefit of both current and future generations should be the foundation of anything calling itself economics. Anything else is death.

Transparency and Fairness: Creditism aims for transparent and fair resource allocation, ensuring that everyone has equitable access to essential goods and services.

Implementation:

Creditism proposes a multi-pronged approach to implementing its vision, which includes:

Jubilee: A one-time event where all existing debts are forgiven, signifying a clean break from the debt-based system.

Universal Basic Income (UBI): Every individual receives a regular, unconditional payment of Credit to cover their basic needs, ensuring a minimum standard of living for all.

Proof of Value (POV): Individuals earn additional Credit by engaging in activities deemed valuable by the community, shifting the focus from profit to purposeful contribution.

Community Credit: Each community (local, regional, and global) receives a pool of Credit that is democratically allocated to fund public projects and essential services.

Creditism - A Review of Proposed Economic Evolution

Introduction:

Common Planet presents a scathing critique of modern capitalism while proposing a radical alternative based on commons resource management, direct democracy, and a novel credit-based currency system.

1. Critique of Capitalism:

We condemn modern capitalism for its focus on debt, private property, and profit-driven growth which is inherently unsustainable and terminal.

The Illusion of Money: Money is not a tangible asset but a social construct based on debt and manipulated by a powerful few. Echoing John Adams' observation that "All the perplexities, confusions, and distresses in America arise...from downright ignorance of the nature of coin, credit, and circulation."

Banks as Creators of Debt: Banks, contrary to popular belief, do not lend deposited money. Instead, they create new money by extending credit, thereby generating debt that constitutes a system based in renting out productive materials and infrastructure (capital), and our means of exchange (currency).

Exploitation of the Commons: The current economic paradigm, Game A, hinges on the privatization and exploitation of capital (Earth’s common resources) for private profit, leading to social and environmental degradation. The story of the infamous “Tragedy of the (Unmanaged) Commons”.

2. The Promise of Creditism:

In contrast to the perceived failures of capitalism, Creditism is a more equitable and sustainable system based on the following principles:

Resource Management: Creditism proposes a system where common resources are collectively managed for the benefit of all, drawing parallels to the concept of a "commons" where resources are shared and stewarded responsibly.

Direct Democracy: Decision-making power, under a Creditist system, would be decentralized and democratized, allowing individuals and communities to directly influence how resources are allocated and managed.

Flow Currency - Credit: Creditism envisions a novel credit-based currency system where "Credit flows to all and does not circulate as Property." This system aims to eliminate debt, promote individual sovereignty, and incentivize contributions to the common good.

3. Mechanics of Creditism:

The sources outline several key features of how Creditism might function in practice:

Personal Credit (PC): Each individual would have a digital PC account, initially funded based on age, with additional credit earned through a "Proof of Participation (POP)" system rewarding contributions like learning, working, or community engagement.

Community Credit (CC): Communities would also have CC accounts, funded proportionally to their population, enabling them to manage resources, invest in projects, and support local enterprises.

Housing Allocation: A unique aspect of Creditism is a proposed system for housing allocation based on individual "Housing Levels" determined by factors like age, previous housing experiences, and contributions to the community.

4. Achieving Transition:

Recognizing the difficulty of transitioning to such a radically different system, Bajrami identifies strategies for disrupting the existing financial order:

Debt Jubilee: Inspired by the biblical concept, a debt jubilee would involve the cancellation of all debts, essentially resetting the financial system and eliminating the burden of debt-based currency.

Positive Feedback Loops: Another strategy involves leveraging the power of positive feedback loops to build momentum for change. For example, as the idea of a jubilee gains traction, it could lead to rising interest rates, further incentivizing support for debt cancellation.

5. Challenges and Considerations:

While presenting a utopian vision, the practicality and feasibility of Creditism remain open questions. Key challenges include:

Implementation: Translating the theoretical framework into a functional system with global adoption presents a significant challenge.

Human Nature: Creditism eliminates concentrated power so any evils of individual or human nature are thus neutered and manageable.

Complexity: Managing resources, allocating credit, and ensuring fairness in a decentralized, global system will require robust and transparent governance mechanisms.

Conclusion:

Creditism offers a thought-provoking and radical critique of the current economic paradigm, proposing an alternative that prioritises sustainability, equity, and individual empowerment. While facing significant challenges in terms of implementation and feasibility, the ideas presented by Bajrami spark important conversations about the future of economics and the potential for creating a more just and sustainable world.

Ownership in a Creditist Society

Creditism redefines the concept of "ownership," particularly regarding resources and property, by transitioning from a system of private or state ownership to a system of collective stewardship of commonly held resources. This shift is based on the understanding that all property is essentially a common heritage, derived from the Earth and the collective efforts of humanity.

In a Creditist society, the traditional notion that someone must hold exclusive ownership of resources is challenged. Instead of private individuals or the State holding titles and controlling access, resources are managed democratically by the community through transparent, decentralized systems. This ensures that resources are allocated fairly and sustainably, prioritizing the well-being of all members and the planet.

Property Ownership:

Private Property: While the concept of private ownership is redefined in Creditism, personal belongings like homes, cars, and personal possessions would largely remain as private property. Individuals would gain "Title" to housing, granting them the right to reside in a house free from debt, rent, insurance, and taxes for as long as they choose. They would have the ability to relocate to similar quality housing anywhere in the world, fostering individual mobility and freedom. However, ownership would be subject to certain limitations, such as restrictions on the number of properties one can hold, to prevent hoarding and ensure equitable access for all.

Common Property: Resources like land, buildings, equipment, and corporations would become part of the "Commons," managed by the community through democratic processes and transparent accounting systems. Current "owners" would have the option to "cash out" their equity for Credit or transition into the role of "caretakers," responsible for managing these resources for the benefit of the community. This ensures that the control and benefits of essential resources are distributed more equitably, preventing the accumulation of power and wealth in the hands of a few.

Management of Essential Resources in Creditism

Creditism seeks to create a three-layered economy that goes beyond the traditional models of resource allocation, including mutual coordination, ethical market mechanisms, and planning.

Mutual Coordination: This involves using shared logistics and accounting systems. While acknowledging that capitalist firms engage in planning, the text argues that this planning is extractive and not balanced with the needs of humanity and nature.

Ethical Market Mechanisms: Creditism envisions a system where resources are exchanged fairly. The text criticizes the existing market's allocation of resources without considering its impact.

Planning: Creditism recognizes the importance of a planning framework to ensure the sustainable use of planetary resources. This framework considers the needs of both current and future generations.

It's important to note that the source emphasizes the limitations of current resource allocation methods. It argues that both capitalist and socialist approaches have failed to decouple the value of people from the price of things, leading to an unfair distribution of value.

Creditism proposes that all common property, including essential resources, should become the common heritage of all humans, owned by no one and everyone. This means that no single entity, whether private or governmental, would have sole ownership or control over resources like oil, timber, or minerals. Instead, these resources would be managed democratically through local, regional, and global decision-making processes.

Transparency and Data Collection

A crucial aspect of this management involves meticulous accounting of all resources, with information on their extraction, production, and consumption made available in open and transparent databases. This data transparency ensures informed decision-making by the community regarding resource allocation and sustainable extraction practices.

Shift From Profit to Purpose

The system aims to transition from a profit-driven model of resource management to one focused on meeting the needs of the community and ensuring sustainability. This shift is facilitated by a move away from traditional corporations towards worker-run cooperatives that prioritize social and environmental well-being over profit maximization.

Fair Access and Distribution

In the proposed system, individuals would use a 'Credit' currency, earned through their contributions to society, to acquire goods and services produced from these commonly held resources. The Credit system aims to ensure fair access to essential goods and services, potentially even making some, like energy, water, and internet access, mostly free.

Sustainable Development as a Priority

Creditism emphasizes the importance of sustainable development, recognizing the need to manage resources in a way that benefits both current and future generations. By incorporating data on resource availability and consumption patterns, communities can make informed decisions to prevent overexploitation and environmental degradation. The system aims to incentivize production practices that minimize environmental impact and prioritize long-term sustainability over short-term profits.

Justification for Private Ownership in Capitalism

The provided text "Creditism: an economic evolution (1).pdf" states that Capitalism operates on the premise that shared resources are unowned and free for the taking. The text criticizes this premise, arguing that it is essentially "banditry that has resulted in an unfair pre-distribution of capital".

The text "common-planet-book-remzi-bajrami-feb-2022.pdf" does not provide a justification for private ownership of commons resources in Capitalism, but echoes the view that Capitalism is based on the idea of private enclosure. It argues that this is based on a "primitive notion of ownership" where "in the game of life today, it is only through trade that value can be realized". This concept of ownership is described as a "childish premise of ‘finders keepers, losers weepers’" which evolved into the "'divine right of Kings'", and is now the "divine right of capital", where "money is our master".

Is Private Ownership of Commons Resources Theft?

The text "Creditism: an economic evolution (1).pdf" argues that "shared capital, the 'Commons', is a birthright of all living beings" and that "We are the rightful owners". It views "all private claims on our global Commons" as "clearly illegitimate". The text goes further to state that nations are guilty of "claiming ownership over all common capital" and listing it on "their private balance sheets". It argues this is equivalent to stealing resources and then charging rent for this theft, stating that "nations rent and trade that stolen capital daily, collecting money for the theft".

The text "common-planet-book-remzi-bajrami-feb-2022.pdf" does not explicitly state that the private ownership of commons resources is theft, but refers to the views of Thomas Paine, who in 1796 wrote that the earth "in its natural uncultivated state, was, and ever would have continued to be, the COMMON PROPERTY OF THE HUMAN RACE". According to Paine, "Man did not make the earth, and, though he had a natural right to occupy it, he had no right to locate as his property".

Credit and Value Creation:

Creditism introduces a "Flow currency" system where Credit is directly created and allocated to individuals as a recognition of their contributions to society, rather than being controlled and issued as debt by banks. Individuals would earn Credit through various forms of value creation, such as learning, playing, working, and engaging in activities that benefit the community. This shifts the focus from profit-driven labour to a system where individuals are directly rewarded for their contributions, fostering intrinsic motivation and a sense of purpose.

By decoupling currency from the concept of ownership, Creditism aims to create a more equitable and just society where access to resources and opportunities are no longer determined by pre-existing wealth or social status. It promotes a system where individuals are valued for their contributions and have agency in shaping their lives and communities, fostering a sense of shared responsibility and collective well-being.

Determining Value: Capitalism vs. Creditism

Capitalism determines value based on the profit motive, achieved through trading property in a market system. This system, referred to as Game A, views Property as the primary source of value, with individuals, corporations, and nations competing to own as much as possible. Individuals, in this system, are only valued for their labour power, which they sell to property owners in exchange for money. The price of goods and services, determined by supply and demand, dictates the allocation of resources and profits. This focus on profit often leads to the exploitation of both people and natural resources, as the pursuit of profit outweighs concerns for social good or environmental sustainability.

Creditism, in contrast, defines value as originating from contributions made by individuals and communities. This system, referred to as Game B, utilizes a "flow currency" called Credit, which is distributed directly to individuals as a recognition of their inherent value. Credit is not based on debt and is designed to incentivize positive contributions to society, such as learning, working, and participating in community activities. Property, while still important, is primarily viewed as a commons, with resources managed democratically for the benefit of all. Prices, in this system, are used as information to guide resource allocation, rather than as the primary determinant of value. This system prioritises fairness, sustainability, and individual well-being over profit maximization.

Game A's circulatory currency, which refers to the traditional system where money is treated as a commodity that circulates through trade, suffers from a fundamental flaw: it primarily serves to amplify existing power imbalances rather than reflecting true value creation. Instead of prioritizing the equitable distribution of resources and opportunities, this system incentivizes the accumulation of capital by a select few, leading to several negative consequences:

Concentrated Wealth and Power: The current system allows those with access to credit, primarily banks, to wield disproportionate control over the flow of money. This power enables them to direct resources towards profit-maximizing ventures, often at the expense of social good and environmental sustainability. The result is a system where the wealthy become increasingly influential in shaping regulations to further their own interests, creating a self-reinforcing cycle of inequality.

Exploitation of Labour and Resources: Treating labour as an expense rather than a source of value lies at the heart of this system's exploitative nature. Workers are compelled to participate in a system where their compensation is often disconnected from their actual contributions, while those who control capital reap the majority of the rewards. Similarly, the relentless pursuit of profit encourages the unsustainable extraction of common resources, driven by the flawed logic that prioritizes short-term gains over long-term consequences.

Perpetuation of Unfair Competition: Since access to capital is unequally distributed, Game A's economic system inherently favours those who have already accumulated wealth. The existing system incentivizes the hoarding of resources and the pursuit of profit above all else, creating a competitive landscape where individuals and entities are pitted against each other in a zero-sum game. This approach undermines cooperation and stifles innovation, as those with fewer resources struggle to compete on an uneven playing field.

In essence, Game A's circulatory currency system is inherently flawed because it prioritizes the accumulation and circulation of money itself over the well-being of people and the planet. Treating money as a commodity creates a system where its pursuit becomes the primary motivator, distorting our perception of value and hindering our ability to create a more equitable and sustainable society.

Distribution of Credit vs. Distribution of Money

Creditism proposes a "flow currency" where Credit is continuously created and distributed directly to individuals, primarily through:

Universal Basic Income (UBI): Every individual receives an equal monthly amount.

Proof of Value (POV): Individuals earn Credit by engaging in activities deemed valuable by the community, such as learning, working, or community participation.

Bonus Credit: Awarded for exceptional achievements or contributions to society.

This Credit is deleted once spent in the market, preventing accumulation and concentration of wealth.

Capitalism, on the other hand, relies on a "circulatory currency" of debt money.

Money is primarily created when private banks extend credit (loans).

This money is then distributed through loans, investments, and wages, with interest charged on loans, leading to debt.

Individuals and corporations compete to accumulate this money, often leading to concentrated wealth and inequality.

In essence, Creditism aims to distribute value directly to individuals based on their contributions to society, while Capitalism distributes value based on ownership of capital and participation in a market driven by profit.

Credit as Flow Currency vs. Traditional Circulatory Debt Money

Creditism proposes a fundamental shift from the traditional circulatory debt money system to a flow currency system based on "Credit." This difference is central to understanding Creditism's potential impact on individual agency.

Money is a circulatory currency issued as debt that limits and controls individuals, while Credit is a flow currency that is earned and deleted upon use to facilitate exchange. In a capitalist system, credit is issued as debt money, making it an instrument of power that controls resource allocation and people for profit maximization.

Money is tied to the idea that value is objective and depends on the cost of labour and resources. It is a fixed and objective measure that can be exchanged for goods and services in the market. As more money is accumulated, the more units of value one has. These units can then be used to command, exploit, and profit from labour and resources. This system concentrates wealth, capital, and power, creating a power pyramid.

Instead of being a fixed measure, Credit flows to every individual automatically, empowering them with purchasing power. Individuals accumulate more units of purchase value as they receive more Credit. However, unlike money, these units cannot be used to command or exploit the labour and resources of others. This mechanic intentionally flows and spreads wealth, capital, and power automatically, meritocratically, and democratically, removing the power pyramid.

Traditional Monetary Systems (Circulatory Debt Money):

Money is created as debt by private banks when they issue loans. This money is then circulated through the economy, with individuals and entities competing for a limited pool of funds.

This system often results in a concentration of wealth and power within the financial industry as banks profit from interest and control the flow of money. Individuals become dependent on employers for wages, which are subject to the demands of a profit-driven market.

Creditism's Credit (Flow Currency):

Credit is not created as debt but flows directly to individuals as a recognition of their inherent value and their contributions to society. It operates on a principle of abundance rather than scarcity, as there is no theoretical limit to how much Credit can be generated.

This system aims to decouple work from the constraint of generating profit for employers, allowing individuals to choose work based on their passions and receive Credit directly for their contributions, whether through a universal basic income (UBI), proof of value (POV) for work, or bonuses for exceptional achievements.

Implications for Individual Agency

By transforming the nature of currency and its relationship to work, Creditism aims to significantly enhance individual agency.

Autonomy and Choice: Individuals are empowered to choose work that aligns with their interests and skills, rather than being compelled by the need to secure a wage. This allows individuals to pursue personal and societal goals based on their values.

Reduced Coercion: With basic needs met through UBI and the ability to earn Credit directly for their contributions, individuals are less subject to economic coercion. This reduces dependency on employers and opens opportunities for pursuing personal passions and goals without being solely driven by financial necessity.

Empowerment and Participation: Creditism seeks to shift power dynamics by giving individuals greater control over their economic lives. By directly rewarding individual contributions, it aims to promote a more egalitarian and participatory society.

Important Note: The provided sources present Creditism as a theoretical framework. It is crucial to acknowledge that the real-world implementation and outcomes of such a system are complex and could differ significantly from theoretical projections. Assessing the feasibility and potential challenges of transitioning to a Creditism-based economy would require analysis beyond the scope of the provided text and likely involve considerations from various fields, including economics, sociology, and political science.

Decentralising Power Through Credit

The proposed system of Creditism aims to redistribute power by decentralising control over capital and credit, shifting it away from banks and traditional financial institutions and redistributing it to individuals and communities.

Here's a breakdown of how Creditism intends to achieve this:

Eliminating Debt-Based Currency: Creditism proposes replacing the current debt-based monetary system, where private banks create most of the currency as debt, with a "Credit" currency. This system seeks to strip away the power banks currently wield by creating money from credit as debt. Credit, in this system, would be an interest-free, tax-free, and inflation-free currency that flows directly to individuals and is deleted upon use in the market. This system aims to create a more stable, efficient, and equitable flow of value.

Community Ownership of Resources: In the proposed system, all common property, including corporations, land, buildings, and equipment, would become part of the "Commons", owned by nobody and everybody. This transition would involve current owners exchanging their equity holdings for Credit, thereby relinquishing their ownership claims. The Commons would be managed democratically at local, regional, and global levels, ensuring that the allocation and use of resources are determined by the people, not by a select few.

Direct Value Recognition for Labour: Creditism posits that value is created through contributions to society. Therefore, individuals would earn Credit directly for learning, playing, working, or engaging in any activity deemed valuable by the community. This system contrasts with the current paradigm where labour is often seen as an expense that businesses seek to minimise for profit maximisation. By issuing credit directly to labourers as payment for their contributions, Creditism aims to empower individuals, giving them greater control over their time and labour, and allowing them to choose where and how they create value.

Bonus Credit for Exceptional Contributions: To encourage innovation and excellence, Creditism would reward exceptional contributions with "Bonus Credit". This recognition would extend beyond financial realms to encompass achievements in education, art, science, and other fields. This merit-based system aims to foster healthy competition that benefits society as a whole.

By implementing these principles, Creditism aims to dismantle existing power structures rooted in the control of capital and credit, replacing them with a system that empowers individuals and communities to participate in economic decision-making and shape a more equitable and sustainable future.

Definitions of Work

Capitalism defines "work" as the trade of labor for money, where individuals sell their labor as a commodity in exchange for wages. This system views individuals as possessing the only valuable property they can trade: their labor power (time, mind, and body). Capitalism inherently requires this exploitation of labor for profit, as businesses seek to maximize profits by paying workers the minimum amount necessary while accumulating capital for themselves. This creates a system of masters and slaves, where workers are treated as commodities rather than valued members of society.

In contrast, Creditism redefines "work" as an opportunity for individuals to create value and receive credit directly for their contributions to society. This system shifts the focus from profit-driven labor to voluntary and purposeful work that benefits both individuals and the community. Creditism recognizes that work encompasses a wide range of activities beyond traditional employment, including learning, playing, creating, and caring for others. Individuals are rewarded with Credit for engaging in activities that benefit society, regardless of their perceived economic value in a traditional market system. This eliminates the inherent coercion and exploitation of labor present in Capitalism, enabling a more equitable and fulfilling relationship with work.

Creditism: FAQs

1. What is Creditism?

Creditism is a proposed economic system that aims to replace the current debt-based, profit-driven model with one based on cooperation, sustainability, and individual well-being. It envisions a world where work is voluntary, resources are shared equitably, and individuals are valued for their contributions to society, not just their economic output.

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