Many of us understand that big banks are at the heart of the U.K.'s failing economic model and have an unhealthy influence over our political system. But still too few of us understand how the way that banks create our money is undermining the diversity and resilience of our high streets and local communities.

The story of the creeping takeover of our high streets by chain stores starts with understanding how money is created. Almost all money in circulation in the U.K., some 97%, is created by private commercial banks when they make loans. Sir Mervyn King, former Governor of the Bank of England, put it like this: “When banks extend loans to their customers, they create money by crediting their customers' accounts.”

Importantly, this money creation process is contributing to the demise of our small independent high street shops and giving rise to the monopolization of almost every area of our lives.

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The Golden Goose

To understand how this is happening, put yourself in the shoes of a banker who has the power to create new money out of nothing and loan it to whoever he or she likes. The only thing you have to worry about is that the people and companies you make the loans to keep up with their interest payments – because if a significant number of people stop paying the interest payments, your bank eventually goes bust. You've killed your goose that lays golden eggs – your bank.

So who are you going to lend to? Not risky innovative businesses or small and medium-sized businesses which face heavy competition. No, the sensible and rational choice is to lend to big businesses to help them expand and monopolize local, regional and national markets. Because big businesses that have a monopoly position can stifle competition, force prices up, force costs down and by doing so guarantee increasing profits. They'll make their interest payments: it's a sure bet.

If you back a corporation and provide it with access to an almost unlimited supply of money in the form of loans, in the short to medium term it can do whatever it needs to push competition out and work toward establishing a monopoly position. This is not good for the rest of us because, as any economist worth their salt will tell you, jobs and innovation are created by small and medium-sized businesses that contribute to local economies, whereas corporate monopolies drain wealth out of our communities and corrupt our political system due to their outsized influence.

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Distribution Not Growth

A further unhealthy consequence of banks creating money as debt with interest is that it creates a Catch-22 for our economy. Each year, we as a society have to take on more debt to pay previous years' debts and interest. Under the current monetary system, economic growth must be sustained at all costs to keep interest payments flowing into our banking system, to stop our banking institutions from collapsing.

As Marvin King has said, "Of all the many ways of organizing banking, the worst is the one we have today." The fact that supporting small and medium-sized businesses would be better for our economy is of no consequence to the big banks.

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Support Your Local Community This Christmas

Here are three concrete steps we can take this Christmas to start to change things – gifts that we can give to our community to help make our money work for us instead of against us. We can:

1. Shop locally. Research shows that money spent in local independent businesses is more likely to stay in the community, helping to create jobs and keep our towns and cities vibrant. Money spent in our local independent shops this Christmas is more likely to help maintain and create local employment.

2. Support a complimentary currencies. A complimentary currency is locally issued money that cannot be sucked out of the local economy for shareholder profits or financial speculation. Complimentary currencies are nothing new. In fact, the New Economics Foundation reports that “The Swiss WIR complementary currency has an annual turnover of [over £700 million], serving 62,000 SMEs [small and medium-sized businesses] and has been in existence since 1934.” Importantly, establishing complimentary currencies strengthens our economy and reduces the fear of switching away from the pound in the future.

3. Get informed and put pressure on the U.K. Parliament to change the way our money is created. The Positive Moneycampaign was set up a few years ago to do exactly this and has been amazingly successful. PM was partly responsible for securing a parliamentary debate about Money Creation and Society, held several weeks ago in Westminster. This was the first debate of its kind since 1844.

Without changing how our money is created by the banks, making positive changes to many other areas of our lives – economic, political, social and environmental – is, as we have seen, fighting an incoming tide. Let's get our money working for us and support our local communities this holiday season.

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