Move your funds to a co-op for a better system

Capitalism, or any free market system, is always defined by it’s participants.  Goods and services in demand will be provided to the extent possible.  We all make economic decisions on a daily basis, and by doing so, are creating the system.  For example, if everyone decided not to buy watches, at some point, they would cease to be manufactured.  The same can be said for any product or service.  Financial services are no different.  While Main Street complains about the evils of Wall Street, many still keep their funds with Wall Street institutions.  In the case of banking, commercial retail banks hold the majority of customer deposits.  But alternatives exist such as credit unions, which are member owned.  By choosing to keep our funds with Wall Street, we are providing our seal of approval, and basically financing, their activities, good or bad.  

From Julian Baginni:

The most significant card I received over the holiday period was one I had to sign myself: a Visa debit for my new current account. It marked the end of a 13-year relationship with my old bank, four years shorter than British customers typically stick it out, but still two longer than the average marriage.

My grounds for financial divorce echo those of many a romantic separation: my old bank is no longer the one I joined. It was called smile, launched as Britain’s first full internet bank in 1999, but more importantly for me, a part of the Co-operative Group, owned by its members for their benefit, not that of shareholders. Last year, however, the bank virtually collapsed, and was bailed out by bondholders led by hedge funds, and is now a private company. So I’ve moved my account to a building society that is still a mutual.

You might dismiss this kind of ethical consumerism as mere gesture. Waving my right-on debit card as a badge of honour as I pack my Fairtrade chocolate into a canvas tote bag can look like a poor surrogate for revolution. This is part of a knowingly superior narrative of impotence that tells us our day-to-day choices can’t lead to meaningful political change. “The system” is inherently corrupt and to believe we can affect it by our choices is to buy into the very myth of consumer power that late capitalism promotes in its own interest. It is to believe that virtue can be bought, when the vice of the system is precisely that it puts a price on everything, including a clear conscience.

But this narrative is wrong. It portrays capitalism as though it were a kind of entity with a will of its own, whose only desire is to maximise profit. In fact capitalism is amoral, not immoral. It doesn’t care for right or wrong, only for what people demand. If we demand goods and services at the lowest price, capitalism will provide them, and damn the social and environmental consequences. If, however, we demand Fairtrade bananas or recycled toilet paper, capitalism will provide them too, as it demonstrably has done.

When it comes to financial services, there is nothing in the banking system that requires three quarters of us to put our money in the big four high street banks rather than a mutual. Ending the dominance of profit-making financial institutions does not require any change to the system or even of government. It simply requires people who moan about it to move their money instead.

To believe this is not to fall for the myth that our own personal choices “make a difference”. Frankly, you’d need an electron microscope to see the impact of my defection to smile’s bottom line. The only way to bring about meaningful change is for individuals to do their bit, knowing that it will all be for nought unless lots of others do the same. In that sense, recognition of the uselessness of individual action is the very reason for making our modest contribution to the collective effort.

The implosion of the Co-operative Bank might make some think twice before seeking a mutual home for their mortgage. Its failure certainly shows that for-profit banks have no monopoly on bad practice. But that should simply provide a healthy dose of realism for the pro-mutual case. It would be naive to believe that all co-ops are well run. Of course they are not and some will fail.

The preference for mutuals should not be based on the guarantee of a better deal but a more fundamental desire for profit to be distributed among those who help generate it. A country in which more organisations are run for the benefit of their members and customers rather than shareholders would be a very real place where success is more equitable, not a utopia where failure is impossible.

That’s why it is not good enough that the newly private Co-op is committed to maintaining its tough ethical policy. All other things being equal, it is of course good that a private business vows to follow high moral standards. But such optional bolt-ons, however laudable, are no substitute for the ethic of fairness at the heart of mutuals.

Mutuals offer a realistic vision of a better society that we can create without a revolution, without even an alternative model to the market economy. Capitalism is not the problem, it’s the actors in the capitalist system. Of course embracing mutuals is not the whole solution, but they offer much of what we wish for from a post-capitalist world.

I’m often surprised to see a friend who is impeccably left or liberal offer a bank card from one of the big banks. But then I look at some of my other financial arrangements like my measly stakeholder pension, and see that I am just as complacent about that.

More of us could and should change where we keep our money. At a time of year when resolutions are made that are aimed more at self-improvement than social benefit, vowing to move our money is a more realistic and worthwhile commitment. Long after fitness regimes have faltered and unwanted gifts have gone to Oxfam, that new debit card will still be doing its good work.

Julian Baggini is founding editor of The Philosophers’ Magazine

List of credit unions in USA

More about Cooperative Banking 

Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world.

Cooperative banking, as discussed here, includes retail banking carried out by credit unions,mutual savings banksbuilding societies and cooperatives, as well as commercial banking services provided by mutual organizations (such as cooperative federations) to cooperative businesses.

About the author


We've been closely watching the Crypto Currency Market if you can call it that, with all the fake data, fraud, and related problems.  One thing stands out - it's not so different than FX, commodities, futures, or stocks.  Market dyn...

Bitcoin and other cryptocurrencies flash-crashed Saturday night, one day after the US Commodity Future Trading Commission (CFTC) sent subpoenas four cryptocurrency exchanges in an ongoing probe into bitcoin manipulation that began in late July - following the launch of bitcoin futures on the CME, according to the Wall Street Journal
CME’s bitcoin futures derive their final value from prices at four bitcoin exchangesBitstamp, Coinbase, itBit and KrakenManipulative trading in those markets could skew the price of bitcoin futures that the government directly regulates.
In delay reaction, Bitcoin fell as much as $433 or 5.6% in Saturday night trading, with some noting that the flash crash happened shortly after a 90th ranked crypto exchange, Coinrail, had suffered a "cyber intrusion", and was likely the more relevant catalyst for the crypto price drop.
While major Cryptocurrencies were down from 4.5 - 5.5%, Bitcoin Cash dropped over 8.4%. 
The CTFC subpoenas were issued after several of the exchanges refused to voluntarily share trading data with the CME after being asked last December. Of note, the CFTC regulates the CTC. 
According to the WSJ, the CME, which launched bitcoin futures in December, asked the four exchanges to share reams of trading data after its first contract settled in January, people familiar with the matter said. But several of the exchanges declined to comply, arguing the request was intrusive. The exchanges ultimately provided some data, but only after CME limited its request to a few hours of activity, instead of a full day, and restricted to a few market participants, the people added.
What is curious, is that if there was indeed manipulation since the launch of bitcoin futures, it was to the downside, as the price of cryptos peaked around the time the crypto futures were launched, and are down well over 50% in the 6 months since.
Coinbase in particular has been under the watch government regulators. On February 23, Coinbase sent an official notice to around 13,000 customers to notify them they were legally required to turn over their information to the IRS
The IRS had initially asked Coinbase in July 2017 to hand over even more detailed information on every one of its then over 500,000 users in an attempt catch those cheating on their taxes. However, another court order in Nov. 2017 reduced this number to around 14,000 “high-transacting” users, which the platform now reports as 13,000, in what Coinbase calls a “partial, but still significant, victory for Coinbase and its customers.”
Coinbase told the around 13,000 affected customers that the company would be providing their taxpayer ID, name, birth date, address, and historical transaction records from 2013-2015 to the IRS within 21 days. Coinbase’s letter to these customers encourages them “to seek legal advice from an attorney promptly” if they have any questions. Their website also states that concerns may also be addressed on Coinbase’s Taxes FAQ. The ongoing legal battle between Coinbase and the US government dates back to November, 2016, when the IRS filed a “John Doe summons” in the United States District Court for the Northern District of California.
On Feb. 13, personal finance service Credit Karma released data showing that only 0.04 percent of their customers had reported cryptocurrencies on their federal tax returns. 
And in April, former New York Attorney General, Eric "we could rarely have sex without him beating me" Schneiderman, launched a probe of 13 major cryptocurrency exchanges according to the Wall Street Journal - claiming that investors dealing in the fast-growing markets often don’t have the basic facts needed to protect themselves.
Former AG Schneiderman’s office said the program, called Virtual Markets Integrity Initiative,  is part of its responsibility to protect consumers and ensure the integrity of financial markets, and its goal is to ensure that investors can have a better understanding of the risks and protections afforded them on these sites.
CFTC Commissioner: Crypto is a "modern miracle"
While the CFTC, IRS and New York Attorney General's office are all cracking down on cryptocurrency exchanges, it seems to all be part of the government's embrace of virtual currencies.  Last week CFTC Commissioner Rostin Benham called cryptocurrencies a "modern miracleat the Blockchain For Impact Summit held at the UN in New York last week. 
But virtual currencies may – will – become part of the economic practices of any country, anywhere.  Let me repeat that:  these currencies are not going away and they will proliferate to every economy and every part of the planet.  Some places, small economies, may become dependent on virtual assets for survival.  And, these currencies will be outside traditional monetary intermediaries, like government, banks, investors, ministries, or international organizations.
We are witnessing a technological revolution.  Perhaps we are witnessing a modern miracle. -Rostin Benham
Rostin hinted at the upcoming legal action against the exchanges during his speech:
Under the CEA and Commission regulations and related guidance, exchanges have the responsibility to ensure that their Bitcoin futures products and their cash-settlement process are not readily susceptible to manipulation and the entity has sufficient capital to protect itself.  The CFTC has the authority to ensure compliance. In addition, the CFTC has legal authority over virtual currency derivatives in support of anti-fraud and manipulation including enforcement authority in the underlying markets.

Meanwhile, the official Bitcoin website removed references to Coinbase, and Bitpay, according to Crypto News - only one of which, Coinbase, was subpoenaed.  just removed/censored the 2 largest US Bitcoin companies (@BitPay Payment processing and @coinbase Bitcoin Exchange). It’s a good move: Bitcoin Core is obviously no longer Bitcoin, and should ideally be removed from both @BitPay and @coinbase too.

The CFTC officially recognized bitcoin as a commodity in September of 2015 when it went after Coinflip for operating a platform for trading bitcoin options without the proper authorization. Since the agency effectively asserted its dominance over the bitcoin market with that decision, this is the first time it has given its blessing to an bitcoin options trading platform. Expect a burst of institutional trading activity to follow - especially since they approved institutional options trading in July
This post sponsored by Total Cryptos @  


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