It is all too clear that our economy is precarious, economically, socially and ecologically. Steady State Manchester promotes the Viable Economy1, which means greater resilience, localisation, and balance as economic activity is treated not an end in itself, but rather as a means to deliver a sufficiently prosperous future without continual “growth”. The Viable Economy aims to bring the economic system under the control of society, building a culture that favours equality, solidarity and cooperation. Finally, a viable economy recognises the finite nature of ecological resources and embraces an ethic of stewardship by minimising imbalances to the planetary systems – including the climate, biodiversity, and nitrogen and phosphorous cycles – upon which human life depends.2
Any economy requires a sound financial system to facilitate its necessary transactions. Here we take a look at some current and recent financial innovations, asking whether they might help us move in the Viable direction.
Types of financial innovation
We will organise what follows in terms of the following categories, even though they do overlap somewhat.
Financial institutions that serve the interests of the community.
Non-monetary community exchange schemes and credit.
We will not be discussing monetary reform, popular among some parts of the alternative economics and degrowth movements: we have critically discussed one set of proposals in this area previously.
Financial institutions: Community banking
A movement is now gathering pace to fill a gap in the UK’s banking system, that of mutual or co-operative, regionally-based banks, orientated to the local economy, and specialising in offering financial services to smaller enterprises, as well as local citizens. As Greenham and Prieg (2015) noted,
The UK lacks … a local stakeholder banking sector, particularly in certain key markets. We use the term ‘stakeholder banks’ to include any ownership or governance structure that has a broader remit than simply to maximise returns to shareholders.
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