“The ultimate, hidden truth of the world is that it is something that we make, and could just as easily make differently.” – David Graeber
What is a low-impact economy?
It’s an economy that doesn’t destroy nature (by constantly growing) or democracy (by concentrating wealth). The current economy does both of those things.
Capitalism (or whatever you want to call it – ‘the actually-existing economy’) is a money-based system, in which the point is to invest money in the production of goods and services (commodities) to make more money. The new, low-impact economy is a commodity-based system – the point is to produce commodities in return for money (or another exchange medium) that’s used to buy commodities produced by other people. See here and here for more on this important distinction.
We, ‘the people’ have to take economic power before we can have political power. But Marx was wrong about seizing the state. The approach has to be decentralised, not centralised, and certainly not by using force, or we’ll get a repeat of what happened in the 20th century. We just build a new, commons economy that works better for ordinary working-class communities, where most people live.
Low-impact living isn’t enough
The destruction of nature isn’t slowing down. We need to change direction and prepare for what’s coming. Lowimpact provides a bank of information to help people do that. But not enough people will / can do it, and we live in a system that’s hostile to it. We need system change, to a low-impact economy too.
Low-impact living and low-impact economy complement and require each other. We can’t have a low-impact economy if everyone wants to consume as much as possible and compete rather than collaborate; and we can’t live low-impact in a system that concentrates wealth and has to constantly grow.
The state won’t build a low-impact economy for us (27 years of COP meetings culminating in record global carbon emissions confirms this), because capitalism also concentrates wealth, and therefore power, so the holders of this power are able to maintain the status quo. And it can’t come through ‘overthrow’, because the centralised power is too strong. We have to build it ourselves, in communities.
Existing elements of a low-impact economy
- Co-operatives: in every sector, including energy, land, housing and finance.
- Platform co-ops: online marketplaces owned by their members.
- Mutual societies
- Community-based institutions: including sole traders / small businesses, cohousing, community land trusts, community-supported agriculture.
- Community Wealth Building: involving local authorities.
- Commons: resources and infrastrucure held owned in common.
- Digital commons: FOSS (operating system of the new economy); knowledge – e.g. wikis; design – e.g. open hardware (Wikihouse, FarmHack) / open-access academic articles.
- Peer-to-peer production, including Fablabs: venues equipped with tools and machinery (including 3D printers).
- Licensing: Copyleft, Patentleft, Creative Commons, Peer Production and GNU.
- Sociocracy: governance system for the new economy.
- Pattern language: design for the new economy.
There’s a huge ecosystem, which provides resilience against state or corporate attack (no centre / single point of failure). However, co-ops / mutuals aren’t challenging capitalism, and are now being absorbed into it (e.g. the Co-op Bank, Co-op Energy, most building societies). This has a lot to do with the fact that the co-operative world needs to incur debt to obtain infrastructure and resources.
Now, new ideas are emerging that solve that problem.
New commons ideas
Lowimpact.org are working with Mutual Credit Services, the Credit Commons Society, Island Power and Local Loop North West to help build commons institutions without incurring debt. There are four main aspects: for each, here’s a strapline, brief ‘elevator pitch’ and a link to a topic introduction (where you can put questions to specialists).
1. Credit clearing: reducing the need for money and banks.
Elevator pitch: Banks do it, to reduce the need for money for payments. We can do it too. Imagine A owes B £10; B owes C £10; C owes A £10. If everyone has all the information, it can just clear, without needing money. For networks of trading small businesses, this can be done with algorithms, covering larger and larger areas.
2. Mutual credit: means of exchange in the commons economy.
Elevator pitch: Small businesses can trade without needing money or banks. Members get an account, set at zero. When they sell, they get credits, when they buy, they get debits. There are limits to how far they can go into credit or debit. It’s just a way of accounting for who’s done what, so nothing can be extracted from communities and concentrated.
3. Use-credit obligations (UCOs): savings and investment in the commons economy.
Elevator pitch: allows infrastructure to be brought into the commons without incurring debt, by issuing vouchers sold at a discount. Imagine a community energy group wanting to put up a wind turbine. Currently, they’d need a loan or to give away equity. Instead, they issue energy-credit obligations – vouchers denominated in kWh, not £ (which makes them inflation-proof). People buy them because they’re sold at a discount, and they provide a store of value – interest-free security for old age or sickness. UCOs can work in every sector of the economy (starting with housing commons, because everyone needs housing, and the housing market is so broken).
4. Credit Commons: going global.
Elevator pitch: It can all be connected into a global network, but owned and controlled in communities – to form the basis of a new global commons economy. Everything is interoperable – so people can pay their rent, energy bills etc. (and get paid) in mutual credit.
What are the benefits of a low-impact economy?
There are three ways to explain the benefits of a low-impact economy, and especially the new commons ideas.
1. Non-radical: provides affordable housing, energy, broadband and everything else, because it brings infrastructure into the commons without incurring debt; protects jobs and small businesses, because it allows businesses to trade even if they have no money.
2. Semi-radical: strengthens communities by preventing wealth from being extracted from them, because trade doesn’t require money, and assets are held by the community.
3. Radical: builds a viable replacement for the existing economy, which:
- Locates value in profit, wealth accumulation and GDP growth.
- Creates undemocratic, investor-owned, gigantic institutions with centralised governance.
- Sucks money out of communities to pay shareholders.
- Concentrates wealth in very few hands, which corrupts the political with donations, lobbying and jobs for politicians.
- Allows corporations to avoid taxes, so the rest of us have to pay more.
- Uses our taxes to bail out banks and corporations when they fail.
- Damages nature with huge supply chains and by having to constantly grow.
- Harms people via zero hours contracts and sweatshop labour.
- Squeezes small farmers and closes small businesses.
- Promotes war by selling weapons to both sides in global conflicts.
- Spreads biased and superficial news via its media.
- Steals our data for targeted advertising.
- Promotes unhealthy food.
- Promotes materialism.
- De-personalises life, preventing human contact.
- Makes all towns look the same.
In the low-impact economy, on the other hand:
- Value lies in meeting individual and community needs, not perpetual growth.
- Institutions are worker and user-owned, or multi-stakeholder (but not investor owned), small-scale and decentralised.
- Money stays in communities, making them more resilient and protecting them against wider economic crashes.
- Wealth is spread more widely, which prevents corruption of politics.
- No businesses are ‘too big to fail’ and won’t require taxpayers’ money to bail them out.
- Supply chains are short and sweatshop-free.
- We employ ourselves, either individually or co-operatively.
- No-one gets rewarded for someone else’s work.
- Work is more meaningful and interesting.
- You can talk with real people and get personal attention.
- Communities are strengthened and become safer, friendlier and more fun.
- Homes exist to house people, not as investments, and are owned by the people who live in them, individually or in common.
- Towns retain character and uniqueness.
- There’s no divisive left vs right – communities take control, not corporations or the state.
What can I do?
Read; watch our interviews with people building the new economy;
Beware things that pretend to be non-extractive and democratic. First, ‘corporate social responsibility’ (CSR – now covered by ‘environment, social and governance (ESG) policies: corporations employ armies of graduates to devise ways to give a small percentage of their profit to charities, or install renewables on their HQ, whilst trying to disguise the fact that corporations are centralised, undemocratic entities that suck money out of communities. The real aim of CSR is to maintain market share. Second, the ‘sharing economy’ – a misnomer that includes Über, Airbnb and other companies that not only suck wealth out of communities, but don’t even provide or maintain infrastructure.
Consume from the low-impact economy
The new economy won’t grow if we don’t use it. For each of the topics in our Economy section, there’s information on how you can be involved / become a customer. It’s often just about favouring small, local shops and businesses over giant corporations.
Produce for the low-impact economy
Browse our topics and learn how to do something that appeals. Provide things for yourself, family and friends.
If you enjoy / are good at it, offer your products / services to your community via the mutual credit club (see below). It could be the start of a new career, or a boost to an existing one, while playing a part in the new economy.
Mutual credit clubs will have jobs boards for things required locally that aren’t currently provided by members; local businesses or individuals can be invited into the club to provide them.
Be a commoner
Blueprints and top-down plans won’t work. The emerging commons will arrange and organise themselves via patterns to build a new economy. These ideas are spreading around the world already, and ‘commoners clubs’ of local activists can speed up the process. We’ll be blogging about progress, and helping set up clubs. Prices will be lower than capitalist alternatives, so the mainstream will become commoners too – making the movement unstoppable.
Contact us if you’re interested in becoming involved with any of the ideas outlined above; or if you’d like to volunteer, work or collaborate with us, provide funding or help in any other way. If you have any thoughts or comments, we’d love to hear from you.
The specialist(s) below will respond to queries on this topic. Please comment in the box at the bottom of the page.
Dave Darby is the founder of Lowimpact.org. ‘Specialist’ is definitely the wrong word, as this is a huge topic, with many component parts. If you post queries on specific topics in the ‘economy’ section, we’ll try to get specialists to answer them for you. This page is for general comments and queries, and discussing how we collaborate and network to build the new economy.
The views expressed here are those of the author and not necessarily lowimpact.org's
1foster goodwill January 7th, 2019
Glad to come across your site. will pass it on to my local Bioneers study group.
2foster goodwill January 7th, 2019
Forgot to mention I am in Boulder, Co. USA
3Dave Darby January 7th, 2019
foster goodwill – thanks; (we’re hoping to launch in the States at some point).
4homeminderuk January 4th, 2021
Forgive my ignorance – or perhaps naiviety – but does the lowimpact/mutual credit philosophy resonate with the ‘austrian school of economics’?
Insomuch as the latter advocates a natural economic cycle of production and consumption driven purely by the producer and consumer, leaving whatever governmental interference as an ‘interested observer’ only. The illustration used was as a football game, with the 2 sides on a level playing field and the refereee interfering as little as possible. Both can be irreparably damaged by top heavy, short-sighted, over-bearing involvement.
5Dave Darby January 11th, 2021
The Austrian school favours individualism, whereas the mutual credit idea is more of a mutualist approach – like the Austrians, nothing to do with the state (I’m not in favour of a planned economy any more than they are), but more concerned with building trust in communities – irrelevant to the Austrians, I think. Battles between the Austrians and mutualists regarding labour theory of value too. The Austrians / marginalists tried everything to distract people from the fact that, apart from in very few situations, if something of value is produced, then someone did some work to produce it. Sure, value is subjective, but I prefer to look at it from the other side of the coin – i.e. whatever is paid for something, I’d prefer it if only those who did useful work to produce it were rewarded. So reward people who do work, rather than people with money, who do nothing useful except own stuff.
This is just me though – generally, no-one working in mutual credit is really thinking about this. It’s more about building a non-ideological tool to help communities and small businesses to thrive in a time when there’s very little money.