The finance heretic: how a more co-operative finance system can be created

Brett Scott is an activist and author whose work challenges financial norms. What does he think is wrong with the financial sector, and how can a more co-operative...

Brett Scott is an activist and author whose work challenges financial norms. What does he think is wrong with the financial sector, and how can a more co-operative and democratic financial system be created?

Originally from South Africa and currently based in London, Brett Scott has just returned from a trip around Europe, visiting Greece to support new co-operatives, Berlin to help a radical arts group mapping money in the oil industry and Dublin to work with a new alternative investment fund.

Before embarking on his work supporting an alternative economy, Mr Scott was at the heart of London’s financial centre. “I worked in the financial sector for two years as a broker in derivative markets … in a start-up company during the financial crisis. A lot of old brokers and traders were trying to start something new. Mid 2010, with the crash, that all fell apart, and I got out of the sector.”

Brett Scott: A range of alternatives could create more democratic financial system
Brett Scott: A range of alternatives could create more democratic financial system

It is his mix of financial know-how and activist engagement that led Brett to write The Heretic’s Guide to Global Finance and become a campaigner for democracy in the financial system.

“The mainstream financial sector is at the heart of a global system of inequality. It’s predicated on ecological destruction … On top of that you have the complexity of the financial system and a lack of transparency.

“All of this creates a deeply alienating experience. Even if they don’t feel they are disconnected from the financial sector, people feel powerless in the face of it.”

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He also worries about the gradual expansion of the financial system, which is “turning things that used to be commons into tradable assets, from pollution rights to land. One of the new frontiers of financialisation is data.”

Mr Scott supports and campaigns for a range of alternatives that can help create more democratic financial system, over which people have some control, from co-operatives and mutuals to other, new ways of organising.

In Greece, Mr Scott had first-hand experience of a number of mutual credit systems that have been established following the instability of the euro.

“There are some interesting models of how to use alternative currencies to create co-op systems in Greece,” he says, giving the example of Tem, a group which has created a mutual credit system. With over 800 members in the city of Volos, the system enables people to trade their time with one another based on a credit note rather than money.

And others are emerging too, he says, mentioning Sardex in Sardinia, “a credit system where businesses commit to giving each other credit after all the banks pulled out. It’s a solidarity network.”

“I’m always an advocate of currency experimentation,” he adds, “both as a way to empower people and as a way to learn about the mainstream financial sector.”

While in Dublin, he met with Robin Hood Minor Asset Management, a new Finnish-based co-op that will be “taking returns out of the financial sector and directing them to artists and under-employed people. They have already raised around €600,000 (£472,000).”

Mr Scott also highlights how peer-to-peer lending (where individuals and businesses lend to one another without financial intermediaries such as banks) and crowdfunding (where individuals donate or invest in businesses directly) are becoming mainstream. A recent report from innovation charity Nesta estimates that alternative finance of this kind has grown by 161% over the last three years.

“I don’t necessarily see direct lending to people as the future of the finance,”, he says, “but it makes you more connected to how your money is being used.”

The mainstream financial sector has “appropriated” shareholder ownership, he adds, “with their massive IPOs and armies of shareholders. But when you bring business ownership back to the small scale you get the sense of knowing the business you invest in.”

The alternatives he cites are largely small-scale, forming a tiny part of the global financial system that he is struggling against. “The scale is very small,” he says, “but you are working against the grain. I don’t get that despondent.”

In this shift to more democratic involvement in business and finance, Mr Scott has a number of suggestions for how co-ops can be part of the change, with the proviso that the co-operative movement needs to open up to new language and alliances as part of this.

“There’s an opportunity to get people excited about collaboration,” he says, with younger people particularly likely to see the co-op model as an attractive option.

“It might be a question of updating language, though,” he adds, citing Altgen – which helps young people and students struggling to find jobs start worker co-operatives – as an example of a co-operative that is getting the message right.

“I teach sometimes at Camberwell School of Art, and there’s a lot of excitement. If it can be pitched correctly, [co-operation] can be an appealing vision for some people.”

He adds that “there’s a lot of cross-over between the technology community and co-ops, especially in the open-source area and, to some extent, start-up culture.

 “There are a number of themes circling around each other – co-ops, the commons, elements of the open source community, the peer-to-peer movement … and I think that’s the way to attract younger people.”

• The public is becoming increasingly concerned over the issues surrounding the money they spend and invest. Over the next 12 months, Co-operative News will be looking at ethical finance, with support from Ecology Building Society. Read more: www.thenews.coop/ethicalfinance

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