Thanks to Ross Mayfield for this model that looks like the work also of Valdis Krebs.

In this post I am going to do my best to show you what the observed reality of this “Credit” system is, make the case that social software will be a wonderful tool that will enable us to use this natural system and finally to make the point that we may have no choice but to try this because, the other source of “Credit” will not the available.

In my first post on Credit - I made the point that “Credit” is an ancient process where resources are leveraged not by a direct exchange of money (I lend directly to you and you owe me directly) but by a social process whereby my contribution to the community (which becomes my reputation and my character) allows me access to the wider resources of the group.

In the ancient system, the exchange is indirect. I contribute to an individual and this gives me an option of being helped by the larger group. If another doesn’t not know me well, my close friends stand surety for me. Leverage in this system is the “Six degrees of Separation”.

This system was the basis of all credit systems until quite recently. Even banking itself relied more on the lender’s knowledge of the borrower. 40 years ago, your banker lived in your community. He (was always a man then) knew you and of you not by a credit rating agency but by his own use of the social model shown above. Your banker’s work was to put himself at the centre of this social system. This was true even in the heady realms of Government Finance. The Fugger Bank had lifetime reps at the courts of all the rulers.

But post WWII, this idea of banking being based on relationships died away. It died because, we got to busy to have relationships. Many don’t even manage to have them with their partners or worse their kids!

Something “Inhuman” happened. We replaced community and relationships which is our real wealth with money and things that are only symbols. The more we strove for money and things, the more we lost our connections and hence access to real wealth and real resources. We substituted transactions for relationships. Maybe later I will explore why this happened but not today.

The crisis of our time is going to take us back. There will be little transactional credit available. So if you need resources, you are going to have to put yourself back into the traditional resource model. You are going to have to find a community and you are going to have to do the work to establish yourself as a worthy person or group in that community.

The good news is that those of us that have been immigrants in the live web have paved the way.

This ancient system is being re-created in the Blogosphere and the Twittersphere. So here we see the old system at work. Need technical help as I did the other day when my Typepad site died - ask from my Twitter friends - within minutes I was connected to Mena Trott, the founder of Twitter. Need places to stay and guides for a trip, Jon asked his community in Europe and Ton his community in Canada.

Here is a simpler way of seeing this Resource Map. It is really a solar system or a galaxy. The natural system of organizing power. Hurricanes have the same structure.

This is how I see the elements.

I think at the centre in the human system is an idea and or a great binding inviting mission. Some thing that calls to the hearts on humans. In St Louis where we are working at KETC on the Mortgage Crisis it is the idea that if the city gets together we can help each other get through this. On PEI, it will be how we can help each other get through our energy crisis. Embedded into this Mission or Call, is a very small group who host. In Wikipedia it is 7 people. The research is telling us that tiny resources, the 1% Rule, are all that is required to initiate such a system.

Along the circular boundaries of the system, each mediated to enable the six degrees of separation and each having its own fractal system (for as in the universe itself - each one of us is at the centre of our own universe) energy flows aback and forth via the connectors.

Here is how Col David Kilcullen sees terror groups.

The work we all have to do now is to chart this out for ourselves. Each of us has such a world. Each organization has such a world. By charting it out, we will start to see what we have to do and who we have to know to bring back the power of this system to help us.

More later