The Finance Industry developed from feudal economics as a way for the privileged in Society to extend and a pass on their privilege through institutionalised rent-seeking.
An emergent property of the financial system since the invention of fractional reserve banking was the systematic reinforcement of rent-seeking behaviour by all in society. Groups who start with the best intentions of sharing the commons succumb to the siren song of rent seekers as some members of a group break to become part of the privileged few. It is hard to resist because the financial system disguises rent-seeking as a public good.
Assume there is a community within any society that pools its resources for the common good. A typical example is a Cooperative Home Ownership Community. Within a Cooperative some members deposit their savings, and other members borrow the savings and with the money purchase or build a home. All goes well while the value stays within the group. At some point, one or more members, or the community as a whole, decides they no longer want to participate. They wish to take their homes or savings out of the group. The person who replaces them does not agree to put savings into the community for the use of other members, and so the community rents money from others outside the community for the purchase of a home. For the community, this is lost money and has gone to the rent seekers. Inevitably the community homes become part of the national home market.
This scenario plays out time after time with many community projects. One form is the privatisation of community assets. Luckily communities can reverse the trend by replacing third-party loans with community loans. Third-party loans are always more expensive than community loans because value generated from the use of the assets goes out of the community. With community loans, all the value stays within the community, and the community decides how to use the value for the benefit of the community.
Using this approach the cost of community renewable energy in Australia could drop as outlined in this Rooftop Renewable Energy Co-operatives (RECS) article.
