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The Tap Runs Faster: When Prudence Loses Control

“Money speaks sense in a language all nations understand” – Aphra Behn (1770-1827)

Expert or not, the topic of money – systems, banking and finance – has moved out of the lecture theatre and into our daily lives. Whether as an undergraduate grappling with the labour theory of value, or ranting at yet another claim that we could divert EU funds into the NHS, I wager that today you have unwittingly exchanged views on a subject related to money.

In his seminal book, Postcapitalism: A Guide to Our Future, Paul Mason takes us on a serious romp through the history of money. His treatise on ‘fiat’ money – money from nowhere, not underpinned by a physical good – is an eye-opening fear fest. The fragile basis of the economic and financial sectors is chilling. Take a look at the economic section of any book store and the demand for ‘more of the same’ seems insatiable. When things go too macro, it’s time for the micro.

The premise of this article was based in error, a reminder that research is essential in all spheres. At the outset, it was intended to be a light examination of the history of small-scale saving, specifically exemplified in and around the Midlands. However, some myth-busting seems necessary.

The traditional image of ‘collective’ savings via friendly societies (FSs) lends itself easily to a sentimentalised view of collegiate comradeship. Mutual savings, the forerunners of FSs, started and gained rapid growth primarily in the medieval City of London, the mercantilist era predating industrialisation by at least two centuries. The Co-operative Bank headquarters in Balloon Street, Manchester, seemingly the flagship symbol of membership asset-holding, is not and was never a true member organisation, as with FSs or the John Lewis Partnership.

The rosy-cheeked image of ‘in it together’ at the pit head also needs a re-think. In his 1961 tiny tome, The Friendly Societies in England, historian PHJH Gosden provides a darker perspective to this hand-holding, ‘rainy day’ image. Social pressure on the poor, emerging working-class household to contribute to the local scheme was one such common feature. In close-knit communities, where mutual dependency in treacherous and dangerous working environments was the norm, you would not want to be the only worker in the pit not contributing to the overall kitty. In the maritime sector, men were pressurised into savings schemes as their itinerant lives commonly meant that they could not support their families directly.

Death provides the global link between ancient, classical cultures and the industrialised areas of England. The first identifiable collective ‘benefit’ associations can be traced back to Greece, where evidence points to both the pragmatic and cultural need to despatch the dead as the main driver for the collective underwriting of community funds. This far predates the function to provide monetary support in times of sickness and unemployment. In the era of English poor law, those who administered and encouraged the growth of FSs and similar schemes often had a more budgetary-driven agenda than that of individual care – not draining the local coffers, for example. Any of this sound familiar?

Credit unions, local exchange and trading schemes (LETS) and Christmas clubs illustrate the traditional and modern practice of community saving. Does the existences of these, and alternatives currencies like the Totnes and Brixton Pounds, send a signal surrounding those who feel excluded by the overwhelming economic ‘system’? Why, in the 21st Century, do we engage in smaller, locally-based units of saving?

One of the many premises of capitalism is to perpetuate the desire to consume. Currently, there exists record levels of low investment and high savings across Europe, the ‘twin peaks’ of depression. These savings mainly relate to the institutional financial sector and are unevenly spread across and within countries. In the Gosden book mentioned above, the favouring of small-scale schemes, it is suggested, addressed the constant suspicion of large institutions and the instinct to keep money local. Post 2008, this view has a somewhat different spin, but at a recent conference, Michael Heseltine continued to bang the drum for keeping wealth and income close to its source.

Current personal debt levels are equally chilling. UK individual debt, including mortgages, currently stands at over £1.5 trillion, and 16 million adults in the UK say that they have no buffer against sudden unemployment.

No saving scheme is risk-free, and remember that it was the Khmer Rouge which attempted to eliminate money as part of its power play – not an example to follow. So, caveat emptor, and remember: your faith in community asset holding can go up, as well as down. Always read the terms and conditions.

Background art: Chris Cyprus

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