SMCS No Longer Operating

Snohomish Mutual Credit System (SMCS) was a not-for-profit member-owned cooperative, a local alternative currency system, based in Snohomish, Washington. It was open for operation for almost three years, from 11/18/2011 to 10/20/2014. (However there was never a sufficient volume of transactions to require IRS reporting, so no IRS reports were ever made.)

Mutual credit systems are advocated by grass-roots alternative economists as a way to reduce dependence on fiat currency and the Federal Reserve, and instead to become more materially dependent on one another as neighbors. They are about restoring community interdependence and financial freedom. Such a project seemed wise considering the growing instability of global fiat currencies, especially the US dollar.

In our case, the system was founded by a web engineer who lead with infrastructure (his forté) and later sought help to develop a network of members (not his forté). The infrastructure was envisioned as a gift to the community. The founder never made a dime, and instead spent a great deal of his own time and money in this volunteer community service project for the benefit of the community in which he and his family lived.

The Little Red Hen

...But the Pig said, “Not I,” and the Cat said, “Not I,” and the Rat said, “Not I.” “Well, then,” said the Little Red Hen, “I will.” And she did....

However, developing the network of members proved more daunting than building the infrastructure. Supporters—for the most part—did not really know how to offer support.

Even though the founder had put almost three years' of full-time work into research, development, construction, administration, outreach, and education, and a working infrastructure was ready to use, unreasonable demanding members repeatedly and consistently seemed to feel it was their proper place to demand new infrastructure and procedures without educating themselves or volunteering any time or resources whatsoever to bring their vision to life.

Like the Little Red Hen of fable, they took for granted the founder's labor, and wanted only benefit without participation or investment, apparently not realizing that this was a not-for-profit community service, and thus there was no paid agent to carry out their wishes. This amounts to opportunism, laziness, and magical thinking.

It seems these members were wanna-be creators, without first spending the time and effort that it takes to create. They wanted to be decision-makers without first educating themselves. Even after the founder responded to substantial consensus changes to the project—with zero pay—these unreasonable demanding members repeatedly and viciously attacked him for not volunteering infinitely more time and money to satisfy their endless stream of frivolous demands, each in a different arbitrary direction. This is called “looking a gift horse in the mouth” and focusing on “the greener grass always on the other side of the fence”.

What other unexamined shadow behaviors came into play? How often are good projects derailed by people who mean well but don't have sufficient self-awareness to contribute constructively to community projects?

There were also moderate and reasonable members, but they generally remained less vocal and involved; which left the unreasonable demanding ones to dominate and erode what the founder had built.

Liberals Determined to Exclude Conservatives

The main “grievance” behind the vicious personal attacks was that the founder insisted the project had to be inclusive, welcoming to people of all backgrounds, liberal and conservative alike. The founder, as a political moderate, was in a unique position to stand Swiss-like for inclusivity.

However, the vocal liberals seemed to feel entitled to claim this project (as they do with regard to most public projects) as their exclusive domain; and kept trying to redefine the project to align with only liberal sensibilities, excluding conservative ones, justified by their Mithraic mythology that one is “good” and the other “evil”.

If the founder had given in to this mindset of exclusivity, the already-underrepresented conservative half of our community of place would have been made completely unwelcome. So he kept trying to hold the door open to complete inclusivity, incurring tremendous liberal wrath, for—contrary to their marketing image—the inclusivity of the liberal faction extends only to persons who agree with them.

Critics Pretending to be Supporters

Thus, those who had stepped up to be primary supporters were not supporters at all, but rather the bitterest of critics. (They were also dishonest. Two of the primary “supporters” had falsified their profile information, after making personal affirmations that the info they provided was true.)

“False friends are worse than open enemies.”
When the founder verbally defended himself from the ongoing groundless attacks, they considered this a social faux pas, and judged him for it, and subsequently turned their efforts to marginalizing the founder within the community and undermining his efforts to build the member network.

Why is it that attacks are OK but defense is not? Is it because of selective focus? Though the founder somewhat naively tried rational arguments, no one was interested in the facts. Prejudice and sentiment came to dominate over evidence and rationality. Thus the founder's years of selfless volunteer service was repaid with being made a pariah. Apparently, “no good deed goes unpunished”.

In futility, the founder relinquished all control, leaving the member/owners to do whatever they chose with the project. Naturally, they did nothing. A non-profit organization stepped up, agreeing to handle administration and outreach, but did absolutely none of the agreed-upon work, and did not even notify the members that it had abandoned the agreement.

Not that it really mattered. By that time, the critics had won anyway. Growth in the member network had been reversed and trading had ceased. Congratulations, our community now has fewer economic alternatives, and is therefore more vulnerable to the shenanigans of the corporatocracy.

Time to Cut Losses

Finally, several members with negative balances in their account asked to have their account closed but refused to take responsibility for their negative balances (after explicitly having agreed otherwise), so members with positive balances were left “holding the bag”. This does not happen in successful community currency projects; but ongoing groundless criticism and a lack of self-awareness made ours the toxic exception.

With another significant payment due at, but no revenue stream to cover it...with two potential viruses threatening our SSL security, but no revenue stream to cover updates to the web seemed on 10/20/2014 that it was no longer justifiable to keep the system operating. After already closing the accounts of several shirkers, the final balance of the remaining open accounts was:

accounts balance range
2 members substantial positive balances
2 members moderate positive balances
6 members trivial positive balances
14 members trivial negative balances
15 members moderate negative balances
the “bank” a very substantial negative

Are There Lessons to be Learned?

It apparently takes much more than an infrastructure and education opportunity for a community to learn mutual interdependence, and cooperate in matters of mutual self-interest. It takes more than good intentions and hard work to overcome generations of mental conditioning about the nature of money and community.

We have a lot of growing up to do as a species before it will really become possible for us to begin to think as communities and take back our communities and collective financial future from the exploitation of the corporatocracy.

It has more to do with each community member working hard on themselves to overcome mental conditioning, think originally, own themselves, face facts, and use facts to inform their decisions (rather than letting prejudice and irrational sentiment drive them); and less to do with whether the perfect opportunity and the truth of the situation are made available.

Apparently, the available opportunities and having access to the truth of our situation do not really matter until we awaken enough to choose them. Let's celebrate those communities who are awake enough. Snohomish is sadly not yet among them.