Hacking the economy is easier than it looks.

The first step, of course, is to remember that the economy itself is just a model. It’s a way of understanding the world as a series of transactions made by rational, self-interested beings working to maximize value for themselves. That’s supposedly the given.

Of course, it isn’t even true. We don’t live in an economy. Never did. If we were really all playing some sort of poker game for chips — and making all the right decisions — then our world might behave like an economy. But seeing as how we’re really more concerned with our moment-to-moment experience, getting laid, or finding a private place to poop, the last thing on our minds is retention of value over time.

We do live amongst some really big economic actors though. And the more we mistake the stage on which they act for the world in which we live, the less access we have to script. We end up in the audience, watching the financial spectacle and — worst of all — mistaking it for real life.

The economy we live in is a rigged game, established around the time of the Renaissance in order to promote the welfare of early-chartered corporations and the monarchs who gave them license to monopolize world business. Until that time, there were many kinds of money in use simultaneously. People used centralized currency to conduct long-distance transactions, and local currency to transact on a more day-to-day basis.

Most people, in fact, never used centralized currency at all. They simply brought their season’s harvest to a grain store, then got a receipt for the amount of grain they had deposited. This receipt was currency, redeemable at the grain store for something everyone knew had real value.

like most innovations of the Colonial era, centralized currency is a way to extract value from the periphery and bring it back to the center.

But since a certain amount of grain went bad or was lost to rats, and since the grain store had some expenses, this money lost value over time. Since the money would be worth less the following year than it is worth that day, the bias of the money was towards spending and reinvestment. That’s why medieval towns built cathedrals: as a way of investing in the future with excess money from the present. They were that wealthy. Women were taller in Medieval England — a sign of their good health and diet — than at any time until the last two decades.

Local currencies allowed towns to create value and reinvest it in their own affairs. This was intolerable to an aristocracy already waning in power and influence. So European monarchs began to outlaw local currencies, and force everyone to use “coin of the realm.” These centralized currencies had the opposite bias. They were borrowed into existence by businesses, and then paid back to the central bank, with interest.

Like most innovations of the Colonial era, centralized currency is a way to extract value from the periphery and bring it back to the center. People’s labor no longer contributes to their own wealth, but to the lender’s. Eventually, the lending economy — central banks and banks — becomes bigger than the “real” economy of people doing stuff. Today, in fact, over 95% of currency transactions are made between speculators. Our money is used less for real transactions than betting.

Hacking the EconomyA majority of the money earned under our current currency system is earned by people who don’t actually do anything. As such, all this speculation is a drag on the system. Speculators just bet on various companies’ ability to pay back what they have borrowed.

Thanks to interest, everyone must pay back two or three times what they have borrowed in the first place. The central bank loans money to a big bank at one rate of interest, that big bank lends to a smaller one at a higher rate of interest, and so on until it gets to the actual person or business using the money — who pays the highest rate. As a result, businesses can’t be merely sustainable — they must grow. And a world accepting this economic model as reality must submit to the incorrect assumption that this is just the way things are.

The way out — as I see it — is to begin making our own money again. I’m not talking barter, but local currency. Money is just an agreement. And the more a community trusts one another, the more efficiently the moneys they develop can function. We can create units of currency based on anything; if we don’t have grain, we can earn it into existence instead by babysitting, taking care of the elderly, or teaching in a charter school. Every hour worked is an “hour” of currency credited to your account.

Thanks to the current economic meltdown, a restaurant in my town called Comfort has been unable to secure a loan from the bank to expand. Instead, John the owner has turned to us. We are buying “Comfort Dollars” at a rate of 1 US dollar for every $1.20 worth of restaurant food. So if I invest $1000, I get $1200 to spend at the restaurant. I get a 20% return on my investment, and — since he’s paying in food — he gets money a lot cheaper than he can borrow it through the bank.

Plus, I have a reason to promote his restaurant, invest in my town, and extend the good will. Everybody wins.

Making money is that easy. You don’t get it from a corporation or a bank. You make it yourself, with your friends, as you create value for one another. This is the ultimate hack in a society addicted to the market: pretend it doesn’t even exist, and go about your business.

Douglas Rushkoff is the author, most recently, of Get Back in the Box: How Being Great at What You Do is Great for Business, and the upcoming Life Incorporated: How a Business Plan Took Over the World, and How to Take it Back.