A short introduction to the eponymous phenomenon of the Fractal Economy Cooperative
What we strive for in the fractal economy is neither Capitalism nor Communism. The essence of Capitalism can be summed up as the private ownership of the three factors of production (Land, Labour and Capital; or, in common parlance: land, corporations, and banks). Communism can be summed up as the communal management of production, distribution and consumption. The fractal economy is a 'third way' which combines common ownership of the three factors of production and the private management ('free market') of production, distribution and consumption.
Supra-national organisations of an economic nature such as the World Trade Organisation and the International Monetary Fund dictate terms to national governments, and thereby control the global economy without effective participation from global citizens or civil society. Each of these organisations relate to one of the three factors of production (e.g. the WTO with Labour). The Fractal Economy Cooperative is designed to enable global citizenry to build a healthy and viable alternative from the ground up.
We cannot properly resolve the iniquity of private banks practicing credit creation merely by forcing them to loan only the money that has been deposited with them. If that was the case, the economy would stagnate immensely. Credit creation is an absolute necessity for a modern economy - it just has to be taken out of private hands.
Banks create new money every time they make a loan. Up to 97% of our money supply is created by private banks by the act of issuing loans. This act of credit creation is as much a right of the commons as is the right to print notes and coins.
Banking regulations are framed by the Bank for International Settlements and rubber-stamped by national governments. The BIS is in turn controlled by private banking interests. Part of the capitalist/BIS banking regulations require that loans have to be 'secured' by the lender and/or borrower (i.e. collateral provided.) The Fractal Economy Cooperative does not try to amass a huge amount of capital ('money in the bank' or money in the form of asset ownership); it gives the bulk of its revenue away to empower the members and the community that supports it. Since the Cooperative may not have a lot of capital in its initial phase as a bank, and since it has a policy of no collateral required on loans; how does the Cooperative (commons) bank secure its loans in accordance with BIS/capitalist regulations?
We argue elsewhere that the economy would be much more productive, fair and sustainable if these assets were not privately owned. This article argues that such a situation - the private ownership of these assets - would not even arise if we had a proper grasp of what money and banking is; and if we created the appropriate banking system to match.
The FEC, as a fractal, does not give incorporated entities the right to vote - just as no nation-state does.
It may appear that the transaction tax is a clever artifice to raise communal funds at the grassroots level. In fact, the argument is put forward that it should be the the national tax, replacing our company tax, personal income tax, and GST/VAT. This article puts forward seven key reasons why.