Reclaiming The Economic Surplus By Liberating The Economic Commons

Ethical Markets - RReforming Global Finance, Advisors' Forum

An Email Discussion Through September 7, 2015

Active Participants: Raymond Aitken, Michel Bauwens, Ellen Brown, Pat Conaty, Adrian Costain, Thomas Greco, Hazel Henderson, Chris Quigley, Matthew Slater, Shann Turnbull

This email trail is followed by over 30 experts in: Finance, Sustainability, Alternative Economics, Governance, Community Development, Emerging Markets

Please note that the emails are minimally edited.

 

On 27 August 2015 at 07:53, Raymond Aitken wrote:

Dear All,

Reclaiming the economic surplus by liberating the Economic Commons

I have managed to read through all of the tread of discussions so far. Indeed it is an immense “food for thought and reflection”, which deserves more than just this response. My impression is that we need to more clearly define the commons from an economic perspective, so that as Pat advocates, we can: “integrate all the pieces of the jigsaw”. This means not only recovering money as part of the economic commons, but also our innate human creative faculties (human capital), and the natural and cultural resources (including land and real estate), as well as the financial instruments (financial capital), which define and allocate our usage rights over the natural and cultural commons.

Essentially, these four factors of production that comprise the economic commons have been erroneously commodified, so that they are bought and sold within the economy, and rented out at compound interest. Only the added value that we create through the fourfold economic commons should be exchanged within the economy. Privatisation (enclosure) of the economic commons, and their subsequent commodification, is what permits a small group of non-productive apex rentiers to extract the economic surplus, thereby impoverishing human society and degrading our ecological support systems. The existence and parasitical relationship of the unreal economy vis-a-via the real economy, attests to this root problem.

I believe we are on a journey of “reclaiming the economic surplus by liberating the Economic Commons”.

Being on the same page

However, as Ellen put it, our first challenge is: “getting us all on the same page”, or as Pat said “singing from the same hymn sheet”.

Context, root problem, common strategy and a diversity of tactical options

Too often we identify a promising solution at the tactical level, and then forget to check its coherence relative to macro level opportunities and threats. We therefore need to ensure that we sufficiently understand the wider context, so that we can identify the root problem, and not just palliate its secondary effects. Once we are reasonably clear about this, we can formulate a common strategic aim. Then, at the tactical level, we can envisage a complementary range of solution-options that can be implemented according to the developmental and bio-cultural conditions of the given territorial polity that we might be acting in.

Let’s not underestimate the resourcefulness of our chrematistic adversaries

It is good and necessary to feel optimistic, like when Mary says “that the tide is turning”, but we should also be careful not to underestimate the challenge that we face.

I would rather say that we have “a window of opportunity”, but we must not underestimate the resourcefulness of our chrematistic adversaries. The context and root problem is that, for at least four centuries, the Trojan horse of central banking has successfully maintained its parasitic grip on the nation’s Treasury, in order to extract the economic surplus of each nation, which arises from the division-specialisation of labour, and the ensuing development of social organisation and technological leverage. Rentier-debt banking evolved from and incorporated previous methods for extracting the economic surplus, such as landed feudalism and piracy/banditry (primitive accumulation as Marx called it).

Despite the perspicacious expectations of many great thinkers, including Marx and Polanyi, the pirates of rentier finance have proved themselves to have a formidable adaptivity to every crisis that arises from the fundamental contradiction of their project, (relative to authentic human nature -vis-a-vis their idol of homoeconomicus-, and to our human imperative towards stewardship of the natural and cultural commons for future generations).

Thinking like a “bankster”

It might be advantageous to sound the mindset of our adversaries, and imagine their possible scenarios. We can assume that since a long time, they have understood the fallacy of infinite economic growth on a finite planet. They are intelligent enough to foresee the time when there will be no more possibility of “financial returns”, on the exponentially inflationary monetised debt they peddle, once it exceeds the ecological limits of the planet. The propaganda-dogma of rentier capitalism was for anaesthetising our intellectual defenses, not theirs. Their focus must be clear: to maintain their illegitimate privilege of extracting the economic surplus, within the imperative for a steady-state economy.

What they need to do is transition the debt, which is at the foundation of their false global monetary system, from “growth-debt” to “steady-state debt”. Perhaps that is why they are floating memes about “full reserve banking” through their agencies like the IMF.

Instead of maintaining financial returns from debt-bondage, they must use the present terminal phase of the growth-debt system, as an opportunity to establish a system to extort the economic surplus from a steady-state economy, based on the full reserves of steady-state debt, and enforced through a technocratically managed feudalism.

Seizing the window of opportunity, as the rentier lobster sheds its exoskeleton for a new one

The way the so called economic crisis has been triggered and managed basically amounts to a massive transfer of wealth and claims on the natural and cultural commons, from the people to the apex rentier class. The final chapter may well be a globalised bail-in, triggered by the inevitable implosion of the quadrillion dollar derivative debt bubble.
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However, a growing proportion of the population is growing immune to the increasing dosages of economic and geopolitical “shock therapy”. Even some of those who are employed in the military and police are questioning where their loyalties lie: with the People, or as enforcers of the mercenary State; which has long been usurped by rentier finance. Like the lobster that outgrows its old exoskeleton, the system of rentier debt is vulnerable between its transitions. This represents a window of opportunity that we must exploit with daring competence in a timely way.

Crossing of the State Rubicon

We have to be as audacious and as radical as our worthy adversaries. The re-evolution required to reset the monetary system back onto a democratically sustainable basis, implies a simultaneous re-evolution in our concept of the State, especially regarding the provision of public services, and how to finance them. We have to compare the strengths and weaknesses of more than just the two usual options for monetary system provision: i.e. either the private banking system or the State.

In our SWOT analysis of options, we should include a third way, that of a Civil Society provision, through a tri-articulated circuit of decentralised NGO financial institutions, working on a basis of interdependent subsidiarity on an international scale. In short, a new international monetary system, by and for the People, without discrimination regarding socio-economic circumstance, nationhood, faith or gender, and which systematically distributes the economic surplus in ways that are appropriate to the healthy function of both the productive merchant economy, and of the regenerative non-merchant economy (of public services and infrastructures).

The risk of unquestioned dependency on the State is attested by the numerous mentions in the email thread, relating to the usurpation of State sponsored or controlled banking as a public service, as well as the on-going treason of TPP, TTIP and TiSA negotiations, whereby State representatives are surreptitiously abrogating the democratic, economic, cultural and other human rights of their citizens, so that the resources and economies of their nations can be appropriated and asset stripped by transnational corporations.

In his book “Our enemy the State”, published in 1935, Albert Jay Nock asserts that the main factor influencing monetary history is what has been called “the iron law of fundamental economics that man tends always to satisfy his needs and desires with the least possible exertion”. This is both source of all human progress, as well as the temptation for some men to usurp the State in order to capture and accumulate the economic surplus produced by others. Relative to the present constitution of the State, and its mutually corruptive relationship with rentier finance, can we really count on the implementation and sustainability of State mechanisms for redistribution of the economic surplus, including “taxing the bads” of “usurious rent seekers”, in the form of taxation of the “inflation of land values”?

Reclaiming the economic surplus by liberating the Economic Commons

In spite of its fundamental social and ecological contradictions, rentier capitalism “functions organically”  (as Michel wrote in STIR magazine), because of capitalism’s cunning resourcefulness in externalising the risks and consequential costs onto society and the environment, whilst privatizing the Economic Commons, and thereby economic surplus produced by others, to itself.

Economy originates in the division of labour, whereby specialised production is leveraged through social organisation and technological development, to produce an “economic surplus”, which can be reinvested to create a self-sustaining process of human development, which we recognise as “civilisation”.

Specialisation of work means that everyone produces not for themselves, but for the others. This implies that the unadulterated economy is inherently interdependent and solidaire, as everyone has to exchange the added value they produce, for that which they need from the others. Our self-interest is totally aligned with supporting the economic production and exchange activities of everyone else.

We can only produce “added value”, because our production always depends on the pre-existence of natural resources, which are transformed by the application of our inherent (pre-existing) human creative faculties. The Gift Economy of the commons always precedes and encompasses the reciprocal exchange economy. Therefore we can only claim property rights on the added value part of our production. Regarding the pre-conditional factors of production that we ourselves did not create, we can only be allocated use rights over them.

These factors of production represent the Economic Commons, because everyone depends on them to produce the added value on which we all live. So any allocation of usage rights, by the community, should be conditional to the benefit of the whole community, and conditional to the stewardship of these economic commons for the benefit of future generations.

The Economic Commons comprise four interrelated factors of production:

  • (1) human capital (labour) which is applied to the next factor of production (resources), to produce “human added value”;
  • (2) the natural and cultural commons – i.e. the resources provided directly (natural) or indirectly (through innate human creativity and the endowment of human knowledge) for the benefit of all;
  • land and real estate are rightly part of the natural commons
  • (3) money as a means of accounting for the future creation, current distribution, and consumption of human added value
  • money is a liquid (unconditionally transferable), legal-fiction claim (right of consumption), on human added value, which provides the economic liquidity necessary for economic production and exchange; and
  • (4) financial instruments as a means for registering the allocation of use rights on the natural and cultural commons
  • financial instruments are illiquid (conditionally transferable) legal-fiction claims/rights of use, also known as (financial) capital

In a healthy (unadulterated) economy, the monetary system functions to activate, direct and coordinate human work, and to distribute the economic surplus:

  • (1) to the merchant economy of surplus production, according to the merit of effort and skill of its actors, and
  • (2) to the non-merchant economy for the regeneration of the economic commons, and solidarity to help reintegrate those living in economic precarity

Enclosure and commodification of the four-fold Economic Commons

As I said at the beginning of this reflection, rentier capitalism is based on the privatisation (enclosure) and subsequent commodification of the above described four factors of production that comprise the Economic Commons; so that they can be bought and sold, or rented out at compound interest.

The “labour market”, “money market” and “financial market”, as well as the associated asset inflations-strippings that are standard practice in the land/real estate sector, is evidence of the main forms of rentierism (ribah/usury). The result is that the human being is treated as a material commodity, to be bought and sold into slavery through the bond markets, by which Central bank base money (which becomes commercial bank reserves) is created.

In order to transition to an unadulterated healthy economy, we need to renew our paradigm regarding the nature and purpose of capital and money, and its relationship to human capital (as work/labour) and the commons of natural and cultural resources. This will not be easy, as the false understandings we have inherited or been educated in, do not willingly relinquish their emotional hold on our way of thinking.

The nature of money

Money is a social relationship based on the monetisation of mutual credit rights and obligations. Monetised credit is an emergent property that arises in the context of a community of producer-consumers (prosumers). In other words, money is a common good rooted in the Economic Commons. As such, it is a universal cultural phenomenon. Monetary instruments, such as currency, cheques and bills of exchange represent social technologies devised to facilitate the proof of, transfer and discharge of monetised credit rights and obligations (money).

Like all technologies, monetary instruments can be turned to serve nefarious purposes, like transforming the social relationship of monetised credit into a revenue generating asset, by ransoming its economic liquidity to extort interest, so that the commons of monetised credit becomes privatised as rentier-debt, which then extracts the economic surplus into private hands.

As legal fiction devices that are rooted in the collective mind, both monetary and financial instruments are particularly vulnerable to the mirage of intellectual fallacy and deceit. It is perhaps no surprise that Chinese economists, who have no emotional attachment to the dogmatic propaganda of rentier capitalism, have created the Fictitious Economy Research Lab, in order to objectively understand and thereby harness the power of capitalism towards the ends of the Communist State

I have in mind to visually map out the monetary-financial system, so that we can place the various initiatives and financial institutions that have been mentioned in our discussions, in an integrative systemic context. But firstly to conclude this reflection, here is a first visualisation of the Economic Commons that we need to reclaim.

On 27 Aug 2015, at 09:55, Adrian Costain wrote:

Raymond / Shann

I saw your comments this morning.  I guess the advantage of having Corbyn lead the opposition in the UK, is that it will provide an opportunity to test and develop the new banking/currency system/land ownership thinking, through debate.

From a practicable perspective (says an ex shipbuilder); it is important to trial a few early prototype variations which incorporate the key design themes/variations.  The one which sails the best (and deliveries the desired cargo most consistently) is likely to be the design which the public ultimately back.

Bw
Adrian

On Thu, Aug 27, 2015 at 2:20 AM, Pat Conaty wrote:

Good morning Adrian, Shann, Raymond and Mike

This is precisely how I see it Adrian. Thank you so much!

Richard Murphy, Ann Pettifor and Corbyn are getting monetary reform into the public’s view, on the radio and the into the media debate and if Corbyn becomes Labour leader in mid-September he can continue to do so in Parliament and on national TV every darn week.

Also as Mike Lewis argued earlier on this list or on the other Sustainable Money Working Group list a month or so back, the Bank of Canada radical policies as a public bank between 1938 and 1974 operated very similarly to the People’s QE proposal and did indeed provide interest-free money or at least capital at the level of inflation and meant that Canada had almost no national debt by 1974 when pressure from the Bank for International Settlements forced them to quit this outstanding practice of Keynesian cheap money as it was embarrassing to the Fed and the Bank of England. Hence the importance of the ongoing Comer court case in the Federal courts in Ottawa to revive the public banking mission of the Bank of Canada.

As you say Adrian, People’s QE is a starter for 10 and if reference is made to the Bank of Canada precedent, we can advance this way more credibly to address pressing needs for real economy goods and services and to provide alternatives to austerity. I agree and very good and essential Shann to add in the importance of land reform and community land trusts and co-operative land banks as a sine qua non to halt land speculation by taking land out of the market. This would improve People’s QE. Here again the emphasis that Raymond puts on banking as commons in his intervention is key. I have not had chance to read your full analysis Raymond but I will.

My plea is for us to see more clearly as a group of reformers how particular money and banking reforms each of us on this list has as their own favourite whether People’s QE, 100% money, positive money, mutual credit, public banking, community development and co-operative finance, open credit unions, stamp scrip that is tagged electronically, social credit/basic income, democratic land reform, etc are all pieces of the missing democratic money and banking architecture that is needed to create resilience and requisite variety for money as a commons to secure democratic commonwealth.

All the best

Pat

On 28 Aug 2015 3:52 pm, Ellen Brown wrote:

I’ve been traveling and haven’t had a chance to participate in these threads, but I’ve read the materials and I like how you all think! The challenge is going to be getting from here to there, but there are signs everywhere of imminent collapse or at least of another 2008, and people may then be ready for a “global reset.” The international banking set has one in mind, but we can be ready with some sustainable alternatives.

Ellen

On 28 Aug 2015, at 16:47, Adrian Costain wrote:

Ellen

One of the places we should visit along the road, is how to reverse the r > g perpetual (or Kondratiev) imbalance.

My take, is that the majority of bad credit formation these days is to support the bad r  grail.

If we had a fairer (more transparent and better distributed banking system) we would have more robust regional economies and diverse markets.

Say we had a couple of regional Reserve Bank organisations in the UK – new institutions in Scotland and Manchester to start (1 per 20 million / regional power house) – we might have a better structured ‘institutonal’ debate and fidelity to the real economies needs.

We might reasonably see to create ‘shadow institutions’ of this nature as a reasonable short to medium term UK  goal?

Bw
Adrian

On Fri, Aug 28, 2015 at 9:17 AM, Pat Conaty wrote:

Hi Ellen and Adrian

Thanks for these comments from each of you. You are so right Ellen!

As ex-Goldman Sachs managing director and whistleblower Nomi Prins argues, central bankers have no contingency tools in their box and QE as we know it is running out of road.

I know Adrian you have seen this report from earlier this year and led by Tony Greenham at New Economics Foundation on this list. He is now at the RSA in London. He and NEF offer a credible plan for restructuring the largely nationalised Royal Bank of Scotland and converting it into a distributed set of local banks under mutual ownership.

People’s banking, People’s QE, all very positive, practical and should be popular if the machine politics strangle hold and dead thinking could be breached with such new economics.

http://www.neweconomics.org/publications/entry/reforming-rbs

Pat

Ellen Brown wrote:

Thanks, hadn’t seen that. Will check it out! Adrian, not sure what you mean about the Kondratriev problem, but agreed that the central banks are barking up the wrong tree. Loved Mary’s explanation — they’re still pursuing the handbag model, as if there’s only so much money out there and the only way to get it is to borrow it from someone who already has it. In fact it’s being created and destroyed all the time. The issue is who gets to do the creating, how it gets into the economy, and who gets to keep the rent (interest) and for what purpose.

Cheers, Ellen

On 29 Aug 2015, at 3:43 am, Adrian Costain wrote:

Ellen

Some argue that we are in the down phase of  a Kondratiev long cycle of 50 to 70 years.    It is potentially plausible to argue that we will not emerge from the down cycle until we reform banking to facilitate general growth (g) as opposed to corporate growth (r) –  at least this is how I interpret Piketty.

Bw
Adrian

On 29 Aug 2015, at 00:23, Shann Turnbull wrote:

Dear all

The “people’s quantitative easing” proposed by Corbyn’s is a linguistic fraud.
It is not for voters but a national investment bank as reported in The Economist this week – pasted in below.
My two presentation in Greece nominated voters and SME’s but using self-liquidating self-financing digital Gesellian money to create more economic activity with less money.

If the plan to boost investment through reform of the tax system is half-baked, another of Mr Corbyn’s ideas is dangerous. He promises “people’s quantitative easing”, a radical twist on a policy that the Bank of England has pursued since 2009. Instead of using newly created money to buy government bonds, as happens under ordinary QE, Mr Corbyn seems to want the Bank of England to use that cash for more productive purposes, by buying bonds from the national investment bank.

Cheers

Shann

On Sat, Aug 29, 2015 at 12:26 AM, Pat Conaty wrote:

Good morning Adrian and Shann

This is a good question Adrian.

Robin Murray on this list teaches a course on business cycle long waves and Kondratiev theory with Carlota Perez at the LSE. Robin has been on holiday but he may be able to comment when he returns from his break in early September.

Shann, the UK desperately needs a viable set of pathways beyond austerity. Your Gesellian money argument is powerfully attractive. But there are different ways forward. They need not be antithetical.

Richard Murphy’s arguments for People’s QE is directing QE at real needs, for housing, infrastructure, tackling climate change, etc. The arguments previously in 2012 by central bank professor Richard Werner (who in fact coined the term QE when working in Japan in the 1990s) on this list and the Green Deal Group, with some links to NEF,  for Green QE are also related. He may wish to comment. Here is another piece by Richard Murphy on his argument.

http://www.taxresearch.org.uk/Blog/2015/04/30/green-qe-a-response-to-frances-coppola/

Pat

 

From: Ellen Brown; Sent: Saturday, August 29, 2015 5:34 AM

Shann, you write “It could be difficult or even impossible, for politicians to create inflation through issuing negative interest rate self-liquidating money.” That’s true, but inflation is not a problem today. There is too little money competing for goods and services now. Products are sitting on the shelves and workers are idle. I just don’t think you’re going to get people to agree to a decaying self-liquidating money system. They’re paranoid enough about trying to hang onto what they’ve got without their money vanishing before their eyes. But maybe I misunderstand what you are advocating.

Cheers, Ellen

 

On Sat, Aug 29, 2015 at 6:25 PM, Shann Turnbull wrote:

Ellen

You have raised an important point on the propensity of people to use negative interest rate ( “speed”)  money.

However, the evidence of history is inconsistent with your concern that people would not use depreciating speed money.

It was called speed money because according to Professor Fisher (1933: 14) it circulated four times faster than US dollars in normal times and twelve times faster during the Great Depression

The efficiency of money is measured by the speed of its circulation.

The acceptance of speed money in competition with the monopoly fiat legal tender funny money adopted by governments very much depends on such factors as the economic conditions and the nature and architecture of speed money.  Gesell suggested a stamp (negative interest) of 0.1% per week or 5.2% p.a. Keynes (1936: Chapter 23 part V1) thought this was a bit high. However, initial issues of speed money in Germany in the 1920’s was at the rate of 1% per month or 12% p.a. Later rates of 2% a week or 104% p.a.were used in the US and adopted by the Bankhead-Pettengill Bill of 1933. The US money would become self-liquidating in a year creating a 4% profit for the issuer. 5% negative interest rate would take 20 years to be self-liquidating.

It was because Gesell (1919: Chapter 11) shared your concern of “Products are sitting on the shelves and workers are idle” that he was motivated to create money that did not compete with products that sit on shelves though its ability to earn interest. Depreciating money made people more interested in investing in real things (like products on shelves) that employed people to make them than investing in fiat funny money not definable by any one or more real things.

Notwithstanding your concern about folk being “paranoid” about using speed money it began re-circulating during the last decade in Germany – not in a condition of a depression or hyperinflation – but when Germany has been the strongest economy in the Euro Zone. The adoption of the Chiemgauer Regiomoney (Gelleri 200) with a negative rate of 2 % a quarter or 8% p.a. has been impressive. It is tethered and convertible to the Euro. It illustrates speed money by circulating 2.5 times faster than Euros that may earn interest.

The propensity for speed money to compete and replace official fiat funny money could be improved by the way it is created, controlled and/or designed to be better fit for purpose. There are many design options for Terminating, Tagged and/or Tethered (3T) money. We have accounting standards but no standard unit of value that can be defined in terms of anything real!

Money that provided a creditable stable sustainable measure of value would seem to possess compelling prospects for becoming highly competitive and adopted – especially by the paranoid.  Central banks have proved to be impotent in controlling the value of their own fiat money, FX or its cost fixed by LIBOR! The meet my paranoia about governance the unit of value would need to be sustainable service of nature like renewable energy produced and/or consumed by millions of stakeholders controlling a democratically governed cooperative. Money creation could then become determined from the bottom up on a democratic open basis by individual producers, traders, investors and consumers.

Cheers

Shann

 

From: Ellen Brown; Sent: Saturday, August 29, 2015 9:49 PM

Good history, thanks.

From: Pat Conaty Sent: Sunday, August 30, 2015 8:16 AM

Hi Raymond

This is a superb analysis below of how to view money as a commons. You expand well the argument made by Michel Bauwens in his recent article that you cite in Stir Magazine. The Bauwens case is ‘capital for commons’. Thanks so much and for developing the Polanyian aspect of commons and co-operative commonwealth ideas viz nature, culture and the means of production and I would add reproduction (which we are all threatened with at present viz. planetary destruction). Also your case for steady state economics is key.

Your argument on the role of the state is a bit one sided or at least incomplete I would say.. Clearly state capture has always been an issue but during the depths of the Great Depression, central banks were first set up as publicly owned in New Zealand, Canada and elsewhere while before the private central bank model was the norm in the Bank of England mode. As others have commented, the Bank of Canada took this new mission seriously, studied Lincoln and the greenback movement over three decades in the late nineteenth century and between 1938 and 1974 showed how direct investment into the economy could be done by a new democratic and publicly owned central bank via an affiliate public investment bank that was set up in the early 1940s. Here it seems to me the People’s QE case of Murphy and Pettifor and Corbyn is seeking to follow suit by reclaiming seignorage (money creation) by the people through the state and for securing a democratic monetary commons as you highlight is a sine qua non.

There is too often in my view a wrong polarisation between say mutual credit and demurrage solutions and on the other hand the public banking arguments of Ellen Brown and others. Gesell aligned his thinking as Hugh Godshalk on this list has pointed out to me in 1919 when he was briefly the finance minister for the new republic of the state of Bavaria. He saw demurrage as being applied as liquidity to rebuild Germany post war as Shann has argued is the case with demurrage but for a whole state, not just a city.

Also Gesell in his analysis if you read his Natural Economic Order built upon and updated Proudhon’s argument for a People’s Bank. Proudhon proposed mutual credit but he also argued that the Bank of France, a private central bank should be converted into a democratic People’s bank through the use of mutual credit, which was fee based money as he proposed it in 1848.

So People’s QE and democratic demurrage can be aligned. But the Bank of Canada did not utilise demurrage and still achieved a fabulous outcome as this article by Murray Dobbin shows. So it is not either or but both and. But how we get started and get to first base is key and here the growing support for Corbyn is noteworthy and especially the support by young people loaded down with student debt, unable to avoid overcrowded housing and struggling to find any jobs.

http://thetyee.ca/Opinion/2015/04/17/Liberate-Bank-of-Canada/

Pat

 

On 30 Aug 2015, at 14:24, Hazel Henderson wrote:

Hi Pat, Raymond, Ellen, Shann, Michel, James, Ann and All;

Karl Polanyi’s The Great Transformation was a foundational text for me and I footnoted him in all my writings, visited his widow, Ilona in Toronto and am happy to see his daughter’s extension of his work.

Re. the financial system as a part of the commons , see  the “Transforming Finance Declaration”, signed here at Ethical Markets Library  in 2010  by a group of market players (www.transformingfinance.net  and  published in CADMUS, Oct 2010   www.cadmusjournal.org the journal of the World Academy of Art and science www.worldacademy.org, also  atwww.ethicalmarkets.com ). Our Declaration states that “finance is a part of the global commons”  and that today’s global casino rests on electronic platforms, the internet, satellites  and communications largely financed by taxpayers, and therefore is  a key part of public infrastructure .

In the report of the Global Commission to Fund the UN, THE UN: POLICY AND FINANCING ALTERNATIVES, Eds. Harlan Cleveland, Hazel Henderson, Inge Kaul, FUTURES, Elsevier Science, London (1995, 1996) we called for a financial transaction tax and that all commercial uses of the global commons should be based on fees and mis-uses (currency speculation, arms sales, etc.) fined, with funds going to various charitable agencies, e.g. UNICEF (available on Amazon).

It’s wonderful to see all this reintegration of knowledge and practice and we will be posting this amazing thread on www.ethicalmarkets.com since many agreed and we have heard no dissent.

With deep appreciation for all your contributions,

Hazel

 

From: Pat Conaty Sent: Monday, August 31, 2015 5:15 AM

Hi Hazel

Thanks so much for hosting this thread on Ethical Markets and for sending us the Transforming Finance Declaration.

This Smoke and Mirrors interview this week with Michael Hudson referencing his new book is insightful of how QE funding as we know it is being used by US internet corporates like Amazon, Google and Apple to pump up their own stock prices. He highlights the total farce of so called independent central banking policy that is tragic beyond belief when basic needs like affordable housing cannot get a look in and land speculation via QE is become increasingly rapacious. As Michael concludes in the title of his new book, public policy is killing the host and is taking us on a collective suicide course driven by global debt bondage.

http://michael-hudson.com/2015/08/smoke-and-mirrors/

Pat


From:
Ladislau Dowbor; Sent: Monday, August 31, 2015 3:49 PM

Dear all, I am sending you a 2 page note on the Brazilian financial drain, we are in a very critical moment but unfortunately the way it works here is very instructive. The whole effort to reduce inequality in the last decade is being jeopardized. The interest rates are staggering. Abraços, Ladislau

How the financial system drains the Brazilian economy: overview
Ladislau Dowbor
31 August 2015

The numbers are quite clear. In Brazil, credit represents about 60% of GDP. Therefore, it is important to understand the origin and destination of this mass of resources. The different parts of the system are well known, what we have done here is to put them together so as to show how the gears work together and the paralyzing impact on the Brazilian economy. We will look at credit in commercial chains, credit cards, banks (both for personal and legal persons), the public debt, taxes and financial outflows. Much research is still to be done with this outlook, but the orders of magnitude of how the real economy is being drained by financial intermediaries becomes quite clear. Consider this as the Brazilian dimension of the global financial mess. Pikettyzinho, so to speak.

Consider the installment plans in commercial chains such as Casas Bahia. When you buy household ware on credit you will be paying a little over 100% interest. Since so many, particularly the poor recently incorporated into the economy, have to buy on credit, you will be cutting their final purchasing capacity by half. Add to this the fact that intermediaries charge an average 238% on credit card revolving credit and the more than 160% on overdraft, and we see that well over half the purchasing power of consumers is drained here to financial intermediaries, thereby sterilizing much of the economy’s stimulation on the side of demand.

The result is that the population becomes heavily indebted while purchasing very little. The installment plan presented to the consumer “fits in the pocket” according to the TV commercials, but it overloads that pocket for a long time. Thus the demand impact is jammed. Similar results are found on the investment side of the process, because if in the reproductive cycle most of the profit goes to financial intermediaries, the producer’s capacity to expand production is thwarted, with the double restriction of reduced demand and restricted self-financing: they get paid very little for their product, when facing the huge commercial chains which have become basically financial intermediaries more than providers of commercial services.

In banks, personal credit average interest rate is 103% according to ANEFAC (Associação Nacional de Executivos de Finanças, Administração e Contábeis), which is staggering. Interest for legal entities is prohibitive, in the order of 40 to 50%, and to start a business under these conditions is not feasible. There are official credit lines in public banks which operate with more reasonable interest rates, but they only partially compensate for the appropriation of results by the private financial intermediaries.

The third item in the gear is the “Selic” rate, the official central bank interest rate paid to owners of the public debt. With a GDP of 5,5 trillion reais, one percent of GDP is 55 billion. If the debt service is set at 4% of the GDP, for example, this means over 200 billion reais of our taxes transferred essentially to financial groups, each year. Thus, a very significant part of the government’s capacity to finance more infrastructure and social policies is sterilized.

Furthermore, the high “Selic” discourages productive investment in companies as it is easier – zero risk, total liquidity – to profit from public debt securities, 14,25% for an inflation of 8% in July 2015. And for banks and other intermediaries, it is easier to profit from public debt than to promote the economy by funding productive initiatives, where you have to identify opportunities and make your project analysis homework. The large profits in financial intermediation end up by contaminating a whole set of economic agents, all sold in the name of protecting the population from the inflation monster.

It is thus understandable that we have this strange situation of a financial profit growth of the giant Itaú Bank over 22% while GDP growth remains stalled at around 1%. The economy is being drained by installment plans, credit card costs, bank interest rates for personal credit, by the interest rates for legal persons and by the high “Selic” rate. This is the Brazilian dimension of the global financialization. In the global financial speculation system, someone has to bring real value in, and this is how it works in Brazil. And through the Santander, City and other international banks heavily involved in Brazil, the country joins the world casino.

To close the circle, we have tax evasion. With the global crisis we have little more than some hand-slapping as regards the financial regulation system, but at least we have more information: money in tax havens is in the range of 20 trillion dollars, according to the Economist, for a world GDP of 70 trillion. Brazil participates with an estimated amount of some 520 billion dollars, about 28% of Brazilian GDP, according to the Tax Justice Network research. Which means that resources which should be reinvested in the development of the economy are not only diverted to financial games internally, but they do not even pay the required taxes. For example, we now have some data on Itaú and Bradesco in Luxembourg, while the Global Financial Integrity studies show some 100 billion reais (roughly 40 billion dollars) illegally drained from Brazil every year through misinvoicing and mispricing. ICIJ has identified around 8600 Brazilian fortunes in the Geneva HSBC asset management unit.

Legal or illegal transfers to tax havens represent only the external part of the drain, since the Brazilian tax system is heavily skewed, with the poor paying 32% of their income in taxes, while the rich pay an average 20%. Thus the regressive Brazilian tax system (there are no taxes on fortune and inheritance taxes are ridiculous) represents a formally legalized internal tax avoidance system, while the tax havens solution managed by the banks themselves represents the external mechanism. Join these various pieces together, and the dimension of the systemic deformation becomes quite obvious.

Brazil has made a huge effort to include the poorest one third of the population into the economy. The financial intermediaries managed to paralyze the economy and to thwart the growth impact that this enormous effort had generated. The financial intermediaries adapted quickly to siphon away the new economic capacity at the bottom of the social pyramid.

The numbers match. The data are known, all we have done is to put together different lines of research that usually do not communicate with help coming from the Sindicato dos Bancários and other institutions.

Please have a careful look at these ten pages, it is not an “paper ” of opinion, but indeed a report on how the gears work together, and an example of how the financial system manages to push a great country down the drain. Consider this paper as a working tool. Most people comfortably sleep with the idea that financial mechanisms are beyond comprehension.

I hope it will be useful as a guideline, since we need many more people to understand where the economy is being deformed. No GDP can progress with so many resources drained away from the productive cycle, out of the real economy. The new Dilma government is experimenting with a “fiscal adjustment” centered on the reduction of public expenditure, which bankers love, but a broader fiscal and financial adjustment is unavoidable if we want to put our economy on its feet. The consumers, the real economy entrepreneurs, and the public administration in its capacity as provider of infrastructure and social policies, could be winners in the straightening up of a deeply skewed system.

The paper and sources of information can be downloaded at http://dowbor.org in English and Portuguese.

Text in English (13 p.) – http://dowbor.org/2015/02/ladislau-dowbor-the-current-financial-system-jams-the-countrys-economic-development-fev-2015-12p.html/

Full text in Portuguese (36p.) in the present state of research, see http://dowbor.org under Artigos: Resgatando o potencial do sistema financeiro.

Contact: [email protected]

 

On Mon, Aug 31, 2015 at 7:44 PM, Shann Turnbull wrote:

My questions are:

(1) Can the block-chain technology be architechtured into a decentralised operating system and commons block-chain platform, to provide banking as a public service, both at the local and international scale?

(2) Can it be architectured as the framework of a new international monetary system, in accordance with the proposals of the French-Swiss economist, Michel Laloux (whose book I am translating into English), so that

(3) Money needed for regeneration of the economic commons (the 4 factors of production mentioned in my last email), as well as for solidarity (welfare) purposes – without dependency on the centralised State?

We need to ensure the one true purpose of the State, which is an institution to guarantee the Social Contract, that the rights and duties of all citizens will be protected and upheld, irrespective of their social rank, creed, race, gender, or any other discrimination.

In a search for a suitable block-chain platform on which to register and account for both the economic commons, as well as property rights relating to the “added value” component of production, I have come across an emerging propriety project called DeOS, which could give us some ideas. Perhaps this could inspire an open-source commons based block-chain platform and operating system?

 

On 31/08/15 13:44, Shann Turnbull wrote:

Dear All

Today I had a “Aha Aha” moment that I would like to test on this list.

I was reviewing the power points of Mathew Slater on the history of money as a student undertaking lesson two of the MOOC on Money and Society presented with Jem Bendell at Cumbria University.

The assignment set out below was responsible for formulating the idea that the need for money could be eliminated without the need to going to back to barter:????

However, it would require every community on the planet to establish its own creditable sustainable unit of value to provide a reference unit of account for any individual within or outside the community to enter into contracts for the exchange of goods, services and/or making investments.

I had in mind every community on the planet establishing a democratically governed producer/consumer cooperative to supply and/or /consume Kwhrs produced from local benign renewable energy sources to create a unit of value that reflected the ability of the community to exist on a perpetual basis.
Electrical energy is produceable anywhere (by one means of another) and useable useable everywhere (for widely different purposes) in every productive environment, of course.

The Sustainable Energy Dollar (SEDs=$Z) so established would provide a reference unit of account so only book entries would be required – not a medium of exchange to undertake trade or investments.
Yes, I would hope so.

The assignment for “Money and Society” MOOC students of lesson 2 follows:

  • Can you detect any recurring themes in monetary history? 
  • Develop your own theory on the main factor influencing monetary history, and turn this into a “law” enabling you to make predictions relevant to our current situation. 
  • Provide examples from monetary history, using examples from this lesson, other sources if required, and Glyn Davies book: https://archive.org/details/HistoryOfMoney[The index has no reference to Marx, Proudhon or Gessel]
  • When you have formulated your law, and justified it from examples, write it up in no more than 500 words and post it in the forum, then comment on and vote up and down the laws of the other students.

In formulating a “law” for the future of money I noted that:

The process of replacing all notes and coins with digital money in cell phones and other devices is now taking place with leadership being provided by Finland. This means that all future money will be digital. Bitcoins illustrates that digital money is not likely to possess creditable intrinsic value and the ability of any authority to establish monopoly money by fiat no longer exists. So the remaining function of money will be in the form of communicating promises to pay.

My proposed law is:

Money as either a medium of exchange or a store of value will be replaced by creditable communications between different individuals and/or groups when each individual and/or group has a mutually agreed creditable reference unit of value for individuals within and between communities to enter into contracts to exchange goods or services or making an investment of resources to a secure a net benefit.

Community established units of value would then become the commons, not money.
The term “value” is often always troublesome, even when defined in terms of commonly used resources.  The subjective value of any resource (or collection of resources) always varies not only from region to region (depending on the resources readily available locally) but also from community to community within each region (depending on social position/relationships).  A democratically agreed (and continually re-assessed) definition of currencies’ values would greatly (imho).

However, a medium of payment (future claims on reciprocal “value”) are only part of the picture.  Metasystemic channels are underused, often restricted to little more than credit risk ratings and reputational feedback. The richer the collection of information channels informing the democratic assignment of “value”, the greater the opportunities to regulate resource consumption, minimize waste and pollution, allocate fairly and sustainably, and so on.  A credit commons is of limited value without an information commons.

Comments invited

Cheers

Shann

 

From: Raymond Aitken; Sent: Monday, August 31, 2015 5:12 PM

Subject: Contingency rapid-reaction plan and team

Dear Michel and All,

Great! I just looked at the bio of Primavera De Filippi. She certainly has the expertise and commitment we need regarding the establishment of a suitable block-chain platform, on which to register and account for the  fourfold economic commons defined in my email of 27 August, which includes the monetised credit that represents unconditionally transferable (liquid) property rights, relating to the “added value” component of human production.

Perhaps the concept and objectives page of the P2P Value website give us some idea of the kind of blockchain projects that she is working on? I am pleased to see she is also working on an alternative Internet, based on the meshed networking of ICT devices.

Perhaps we need to consider integrating the input of Primervera into an integrated action plan, so that citizens and enterprises (social and commercial) can have a practical “get out of jail” option, in face of the on-going “dislocations” of the political-economy (including bail-in and the interest rate hikes reported by Ladislau), which result from the machinations of apex rentier-extorter’s of the economic surplus.

Some of the elements for action might include:

  • establishment of a multidisciplinary international Faculty of experts, to advise and support on an action-research basis, project implementation teams. Primavera would be one such expert. We need others in monetary system design, law, the commons, peer to peer open-source technology and production, new cooperative organisational models that enable synergy across organisational boundaries, and practical project planning and management etc …
  • mobilisation of Civil Society organisations and movements, including the ones you mentioned (Podemos etc), so that Civil Society becomes a transformational cultural force, capable of ending the mutual corruption between the political and financial domains.
    • including the possibility for citizens to use the aforementioned blockchain technology, to sign a declaration (not a petition), to the effect that they do not consent to the abrogation of their human and economic rights,
    • that as a minimum, in order to reset the State as the protector of the rights and corresponding obligations of citizens, that citizens can declare the assertion of a right of veto and a right of initiative, regarding the enactment of legislation at every level of governance.
    • Civil Society might also establish an institutional mirror to the organisational arrangements and meetings of the apex rentier system. This would be the same original strategy of the World Social Forum, vis-a-vis the World Economic Forum. For example, we need to establish our own answer to the Financial Stability Board (FSB), as well as to organise summit meetings and declarations in parallel with the Group of Twenty (G20). The aim is to de-legitimise the institutional apparatus of rentier finance, with legitimate alternatives that can be announced in parallel.
  • the establishment of legally declared and structured, rentier-free, “experiential economic zones” (eeZones) on opportune territories in different countries, to restart the real economy on a national and international basis, including through the establishment of a new International Monetary System, in the form of a Civil Society public service, based on interest-free credit. A possible first steps would be to re-establish a “Eurozone by the people for the people”?, and to make obsolete the privatised corporate one that operates for the benefit of international peddlers of counterfeit rentier-debt.

My feeling is that we should be careful not to “fiddle whilst Rome burns” with too much academic discussion. Perhaps the elements that I have suggested for a contingency plan need a lot of improvement and adding to, but I suggest that we need to establish a team to work out a rapid-reaction plan, which addresses the likely scenarios of a possible financial system implosion (including bail-in and interest-rate hikes).

 

From: Michel Bauwens;   Sent: Tuesday, September 01, 2015 7:31 AM

Dear Raymond,

I have copied in Stacco Troncoso, who is leading commonstransition.org which is a platform for transition proposals and strategies,

Would be great if you could send him a full summary of your views to date, i.e. your article augmented with your blockchain questions and proposals, for publication, which can then lead to further discussion amongst a broader public,

Michel

 

On Mon, Aug 31, 2015 at 8:10 PM, Ellen Brown wrote:

This blockchain idea is brilliant. My questions would be, if it’s set up outside government or the existing banking system, who would determine who gets loans and on what terms? It’s easy enough to envision an e-bay or paypal style exchange of goods and services outside the conventional system. But businesses run on credit — lots of it, in large amounts. If banking is to be a public service without government or banks, how would they get this credit and where would it come from?

Cheers,

Ellen

 

From: Ellen Brown; Sent: Tuesday, September 01, 2015 1:44 AM
Subject:
Re: Contingency rapid-reaction plan and team

Another question: how to get access to existing bank records to verify the sums of individual depositors? That was the problem Varoufakis faced when he tried to set up an alternative Greek system. He had to hack into the banks’ records, a proposal that got him in trouble.

 

From: Michel Bauwens; Sent: Tuesday, September 01, 2015 7:35 AM
Subject: Re: Contingency rapid-reaction plan and team

by the way Ellen,

if you know French, I strongly recommend checking out the ideas of Bernard Friot, on monetary creation via the funds that already exist in welfare state countries,

Michel

 

From: Pat Conaty; Sent: Tuesday, September 01, 2015 8:20 AM
Hi Richard, Michel, Raymond. Shann, Ellen, Jem and John

Welcome Richard!

Thanks Michel for setting out so well the Commons vision and the money commons platform that needs to be democratised. We do not want Google banking and money.

So glad you can join us Jem and thanks for introducing your MOOC course on money that has been successfully run.

We are back again to the conundrum between the let us do it mutual credit demurrage ideas and also the wider macroeconomy potential to use existing democratic infrastructure like the People’s QE campaign if so-called independent central banks can be democratised. Here the federal court case in Canada is something that should be given wider publicity. Moreover when Richard Murphy is leading on in this blogs and media arguments are ploughing the same field as the Canadian litigation. I think both monetary reform efforts can and must be married together as Michel suggests with the caveats about Greece he points to. Clearly block chain technology enables self-help and mutual aid efforts to prove it, independent of the state.

John great to see your excellent comments on what Raymond and Shann have set out. As like Cliff Rosenthal and Yvon Poirier, you are a practitioner working in the credit union, co-operative finance institutional world. One observation I made a while back that I would like to remention. Tom Greco may know more of the detail. But during the 1930s, EC Riegel a mutual credit pioneer worked closely on a co-operative model and indeed closely alongside James Warbasse the leader of the US co-operative movement between the first and second world wars. They were searching for this same solution we are talking about. This history may be of interest to Cliff Rosenthal and Ed Mayo of Co-operatives UK.

As Ellen points out, in a future scenario as we are discussing where money could become a safe and secure and democratic commons, people will still be looking for those with trusted relationship banking skills like those in the best tradition of the co-operative movement. Also as James Robertson and Mary Mellor show in their books, a partner state will be key for the pre-distribution of value and for ensuring social security and tackling poverty.

But as Gesell showed so clearly, monetary reform and land reform need to go hand in glove as the Apex rentiers are extracting value and securing super profits through rack rents on money and landed property. The land question and the money question must constantly be kept in our reforming sights.

Thus for the greening of cities, a partnership with municipalities for land assembly through their ability to use public land and acquire sites by the powers of eminent domain to move things on will be pretty fundamental. Some have talked about state capture as being an impossible barrier but I beg to differ. In fact there are so many local governments desperate for these ideas as their statutory duty problems for addressing local social welfare continue to soar with austerity deepening. Therefore creative thinking that highlights the evident ability to use the state theory of money in partnership with local governments or small states, like Wales or Catalonia, and combined with mutual credit and demurrage ideas could be a winner politically and secure us many more allies for these wonderful thoughts. Not least among the general public and so many politicians ignorant of what can be done simply because it has been proven in the past and not least on a national scale by the democratic Bank of Canada between 1938 and 1974. This is credibility and we need this in any way we can marshal it.

All the best

Pat

 

From: Shann Turnbull; Sent: Wednesday, September 02, 2015 9:25 AM
Dear All

John Walters identified the biggest problem in economics and in particular modern forms of money when he stated a couple of days ago in response to my Aha Aha moment that:

“The term “value” is often always troublesome”

It seems to be a taboo topic?

Orthodox economists do not consider it a problem as they have blind faith in markets determining value.  But they cannot define monetary value in any one or more specified real goods or services.

So there is no reference value.

Any prices created by markets become self-referential without any definable connection to any real goods or service.

Modern modern is only social construct. Except for notes and coins that only represent around 3% of fiat money, modern legal tender has become as virtual as Bitcoin.

This is why modern fiat funny money or any other virtual currencies cannot be fit for purpose for allocating real resources as it is not connected to any!

An intelligent visitor from another planet would want to know why humans allocate resources by relying on prices created by disconnected units of value?

They would conclude that either money had become a religion, or that humans were mad.

We establish standard units of weights, measures, time, etc, etc but not for value!  This is ridiculous.

I have met with a couple of members of the International Accounting Standards Board and invited them to establish a standard.

They explained it was too difficult!

While there may be no perfect way to define economic value my criteria for establishing the least worst basis would be one that minimised human variables and governance uncertainties.  A basket of commodities introduces too many human and other production and consumption variables as well as governance uncertainties. Might anyone offer a better alternative than Kwhrs generated from benign renewable energy?

Over the 25 year or longer operating life of generators the largest human managed variables are management and maintenance costs.  However, these may represent only around 20% of total lifelong costs with the other 80% being writing off the cost of the investment. With 80% of the cost of Kwhrs fixed for quarter of a century the opportunity for volatility in value over this time is greatly attenuated.

The opportunity for volatility in the management and maintenance costs can be greatly attenuated by being governed by the contested interest of many suppliers and consumers pooling their interests in a democratically controlled cooperative network in each bio-region of the globe. Eacg cooperative would average the cost of many types of renewable generators commissioned at different times to create an average production cost that would also minimise changes in the cost of production or price of consumption. In this way the average cost of the generators and their operating life that would determine the cost of supplying Kwhrs largely independently of the Kwhrs produced or consumed. This would insulate the currency peg from short term flections in supply and demand.

The value of the currency peg so created in each bio region of the globe would vary according to the cost of the investment to generate renewable energy in its region. In this way the unit of value in each bio region could be different according to the ability nature to service humanity with renewable energy in perpetuity. A price mechanism is established to distribute humanity around the planet according to the capacity of nature to economically service society with unlimited energy.

The value of  Sustainable Energy Dollars (SEDs=$Z) defined by the peg would not be redeemable into Kwhrs. In the same way the Swiss WIR is tethered but not convertible into Swiss Francs. When a currency becomes convertible into specified goods and services its value becomes exposed to manipulation thought the supply and/or consumption of the goods and services.

$Z becomes a standard reference unit of value and account but it need not necessarily need to become money for the reasons I set out in my post of August 31 that John Walters posted his comment about “The term “value” is often always troublesome”

Cheers

Shann

I invite members of this list not be like either orthodox or non-sort.

 

On 1 September 2015 at 11:04, Adrian Costain wrote:

Raymond / Richard

Fascinating debate in recent weeks (welcome onboard Richard).    We are concurrently enjoying the Edinburgh Fringe –  yesterday’s Kafkaesque play the ‘Titanic Orchestra’ suggests we are all on board the Titanic steaming full speed toward our fate, and we should perhaps  be careful to ensure as activists we play a more structuring role, than the Titanic’s Orchestra (Richard has certainly been effective in his public advocacy of  potentially significant design improvements with his ‘Peoples QE’).

I am a little concerned that too much emphasis on ‘block chain’ digital banking innovation at this stage risks letting government off the hook – for chronically poor regulation and public policy formation.  Understood these defects exist because the system is currently totally in thrall to rent seeking neo liberal power structures – but not sure this yet justifies a call to ‘abandon ship’ and hit the inadequate lifeboats (none of the financial IT systems I use seem to work properly at present).

I think Ellen’s last comment supports the primary argument for optimal transparency in our relatively conventional ‘to be’ banking systems – whether fractional reserve or may be particularly sovereign banking.

I would like to see the evolution of an equitable banking system over the next decade which is fundamentally transparent – facilitating money moving into local and regional markets to create full employment and the kind of trend inflation our children need to make property and life affordable.  The presumption should be that State should be given the opportunity to be the primary facilitator of this basic civil society need – until it is proven beyond doubt that our democratic and judicial systems are no longer capable of acting in the public interest?

It may well be that the like of digital phone wallets transforms the systems architecture of banking in time – and that block chains deliver the best transparency reporting – but I would argue that rational expectations type theory supports the public regulation of all key systems; as SOLAS conventions have evolved to protect life at sea.

If government are supporting an inferior ‘ public interest perspective’ banking system – then we primarily need to facilitate a wider political debate and ultimately full on legal challenge (this is what the people of Greece should be doing – perhaps we should be holding an international banking Fringe event in Athens before too long)?

Bw

Adrian

 

From: Matthew Slater; Sent: Tuesday, September 01, 2015 7:20 AM

I too think discussions about blockchains are probably misguided. What we lack is human organisation more than technical solutions.

I would like to see some consensus emerging within the solidarity economy about specific tools or platforms to which we agree to flock so that we can start to create network effects and pull away from the mainstream.

For example what if RIPESS or some org like that said “From now on, the preferred social network of the Solidarity Economy is Diaspora”. We will attempt to raise money for its development.

Likewise alternatives to Skype, Twitter etc.

More interestingly, what if they recommended everyone opened a Ripple account and trusted 5 others?

Maybe next week you can ask me to explain why I think Ripple is important.

Matthew

 

From: Michel Bauwens; Sent: Tuesday, September 01, 2015 7:36 AM
Subject:
Re: Contingency rapid-reaction plan and team

good point Matthew,

but with all the competing viewpoints out there, RIPESS would need a ‘Open Technology Assessment’ process, to come at reasonable recommendations,

Michel

 

From: Chris Quigley; Sent: Tuesday, September 01, 2015 1:01 PM
Subject:
Re: Contingency rapid-reaction plan and team

I attach a brief document on Credit Exchanges to throw into the discussion.

Thank you all for sharing. Thank you for having the courage to keep up this great work.

Christopher M. Quigley,

Dublin, Ireland.

Discussion Action Plan For:
Peer-To-Peer Independent Regional/National/International Banking Exchange.
“Unencumbered Exchange Is The Basis Of All Freedom”.
(See Essay: E.C. Riegel Below).

  1. Help, Assist, Motivate, Network And Educate Towns, Cities and Regions, On A Case By Case Basis, To Develop Independent Credit Clearing Exchanges, Offering Them “Best Of Breed” Culture, Know-How, Systems, Practices, Experience, Software and Technology. (Community Is The Future: See Prof. Carroll Quigley’s Lecture Below).
  1. Help These Exchanges To Link Together Organically, As The Need Arises. (Based On The Natural Need To Expand Credit And Services; Regionally, Nationally And Internationally).
  1. Offer To Link Local, Regional, National And International Exchanges Through The Provision Of A Peer-To-Peer, State Of The Art, Block Chain, Interest Free, Credit Exchange Currency. This Currency Should Not Be A “Commodity Currency” Like Bit Coin But Rather A “Cultural And Systemic Currency”: A Gift To The World If You Will, To Facilitate Fraud-Proof Interest Free Exchange Capability.

The Increased Credit Made Available By These Exchanges Will Increase Purchasing Power Available To Consumers. As We All Know The Major Problem Caused By Interest Based Monopoly Money Is The Collapse Of Purchasing Power In Society. (See Essay Below “Robots Don’t Buy Cars: Understanding Social Credit”).

  1. As With Bit Coin, The System Must Never Rely on Any Third Party For Its Verification And Control. Rather It Must Be: “Robust In Its Unstructured Simplicity”. (See Bit Coin Essay Below).
  1. A Working Group To Advise And Nurture This International Exchange Network Should Be Set Up, With Annual Conferences Arranged, When Scale Requires It.

For Further Conceptual Reading:

  1. Oscar Iden Lectures
    “The State Of Individuals”
    The Last Public Lecture Given By Prof. Carroll Quigley A Month Before His Death.
    Georgetown University Press
    https://www.scribd.com/doc/228759687/the-Oscar-Iden-Lectures-Lecture-3-The-State-of-Individuals-Prof-Carroll-Quigley
  1. “The Bit Coin Paper”
    The Original Paper Introducing Bit Coin To The World.
    https://www.scribd.com/doc/277410904/Bit-Coin-by-Satoshi-Nakamoto
  1. Essay: “Robots Don’t Buy Cars”
    (Understanding Social Credit)
    Christopher M. Quigley
    https://www.scribd.com/doc/112688693/Henry-Ford-and-Social-Credit
  1. Essay:“A Summary Of The Monetary Theory Of E. C. Riegel”.
    Christopher M. Quigley
    https://www.scribd.com/doc/263358065/The-Monetary-Theory-Of-E-C-Riegel

1st. September 2015 Dublin, Ireland.

 

From: Thomas Greco; Sent: Tuesday, September 01, 2015 1:45 PM
Subject: Re: Contingency rapid-reaction plan and team

Christopher,
I was happy to see you at my Dublin lecture last Friday.

Thanks for offering your Action Plan for discussion, and thanks for citing Riegel and Carroll Quigley. I’m 100% on board with it.

Thomas
Thomas H. Greco, Jr. from Northern Ireland

 

From: Michel Bauwens; Sent: Wednesday, September 02, 2015 11:05 AM

I had the pleasure to read david graeber’s anthropological account of value across the ages, and of course, he concluded that nobody knows what it really is and that it changes all the time ; which is easily verified by putting various economists around a table …

I certainly see it as very useful to peg material expenditures in production, to energy expenditure,

many people around the world are working at various value-redefining practices, which I keep track of at http://p2pfoundation.net/Category:P2P_Accounting,

the two main trends seem to be contributory accounting on the one hand, very important in peer production communities; and multiple value recognition on the other hand,

Michel

 

On Wed, Sep 2, 2015 at 1:57 AM, Raymond Aitken wrote:

Michel, yes, I will send Stacco the summery you requested. I just had a look on the Commons Transition platform via your link, as well as the bio of Stacco. Very impressive.

The first thing I saw on the Commons Transition Platform is the article: A COMMONS TRANSITION PLAN, BY MICHEL BAUWENS.

It seems the P2P network is already in action! I particularly liked your introduction:

“The emancipatory forces of the world urgently need to move away from the simple market/state duopoly and the false binary choices between ‘more market’ or ‘more state’. As an alternative, we propose that we move to a commons-centric society in which a post-capitalist market and state are at the service of the citizens as commoners. While there are already substantial, if not thriving, social movements in favor of the commons, the sharing society and peer-to-peer dynamics, this is the first coherent effort to craft a transition program in which this transformation is described in political and policy terms.”

I look forward to connecting with Stacco, especially since we both live in Spain.

Raymond Aitken

 

From: Michel Bauwens; Sent: Tuesday, September 01, 2015 4:53 PM
Subject:
Re: Contingency rapid-reaction plan and team

It will be really great to add your voice and views there,

the work we did was focused on enabling knowledge commons, and their feeding mechanism, and immaterial and material discussions,

but the material commons are still missing as such,

we would love to find funding for a project that would integrate the full commons approach,

Michel

 

On 6 September 2015 at 09:51, Raymond Aitken wrote:

Hi Ellen,

for the present and in the time available, here is the best answer I can give to your question;

If banking is to be a public service without government or banks, how would they get this credit and where would it come from?“:

In his latest article: “Monetary solutions for a Europe in crisis”, Michel Laloux, a French-Swiss economist well surmerises the untenability of the Syriza government in its negotiations with the IMF-ECB-EU Troika:

“The financial sphere is problematic because we need it. We do not know how to make do without it. If we try to go against it, to take measures which thwart it, it [finance] says, “Okay, go ahead! But capital will flee. You will not get any more capital. And when you will ask for some capital, it will return, but at a higher rate, and with conditions that are more difficult to meet”. This unchanging discourse is always sufficient to rein in any head of government.”.

Fortunately, Michel Laloux also proposes what we can do in face of the extortive mirage of capital flight, in terms of establishing of a self-financing monetary system, based on sovereign subsidiarity without Grexit, which enables international trade, without dependency on bondholders, central bank liquidity, commercial bank reserves or foreign investors. I have attached my translation of Michel Laloux’s article for your information.

The approach of Michel Laloux is to uncover the physiology of the economy in its original healthy state, that is to say, freed of all the mechanism’s of rentier extraction of the economic surplus, and all the palliative measures put in place to provide sufficient systemic viability to keep the host alive for the benefit of the parasite.

In effect, it means to start the design process of the monetary system from “a clean slate” – a very powerful design principle that is being harnessed in a limited way by Fintech. See the video: “Hiroki Takeuchi: why the internet needs a global payments network” – https://www.youtube.com/watch?v=qe5tFl5UE5s

In order to be truly innovative, we have to try to put aside what we already know, which also means to identify and question every assumption that we have about money, finance and banking.

The design thinking process is creative, and here are two more short videos that might help us to free our thinking from the karma of the past, so as to be able to embrace our true human Destiny, as it is and was from the beginning, before we took cooked paths.

How to Build Your Creative Confidence | David Kelley | TED Talks
https://www.youtube.com/watch?v=16p9YRF0l-g

Tina Seelig: The 6 Characteristics of Truly Creative People
https://www.youtube.com/watch?v=CgCdsERkqrc

 

On 6 September 2015 at 11:39, Adrian Costain wrote:

Raymond

Very interesting article.

Am I being naive to ask why it is not potentially possible for the people of Greece to transfer their accounts/business to unleveraged new entrant banks, who focus entirely on ‘consumption money’ type activities and which use a new ring fenced systems architecture – isolated from external political intervention?

Unfortunately, from a consumer point of view in the UK a lot of bank leverage is being used to fund house purchases (and perhaps a vortex of house price inflation).

So, my second inquiry is how do we concurrently resolve the housing problem in the UK?  Someone asked what would be the raison d’etre of the type of working group Pat has proposed. If Corbynd wins the Labour Leadership competition I hope we will see plenty of debate about these issues and I would suggest that those of us who are also members of the Garden City movement, might constructively create an event which considers potential parallel solutions to these looming structural threats to British society.

Bw

Adrian

 

On 09/06/2015 11:50 AM, Raymond Aitken wrote:

Hi Adrian,

By themselves, Banks of Consumption Money are not sufficient. We need the whole (organic) package of 3 monetary institutions, that are independently ring-fenced from each other, yet systemically integrated (like is proposed by Michel Laloux), in order to establish a self-financing monetary system, based on sovereign subsidiarity without Grexit, which enables international trade, without dependency on bondholders, central bank liquidity, commercial bank reserves or foreign investors.

How this could come about in the case of Greece is an open question, and depends on many factors that are outside of our knowledge and influence. However, through the social networking function of the LinkedIn platform, I have established contact with some potentially influential people within the Greek governmental, civil society and academic establishment. And, I am sharing the proposal of Michel Laloux with them. They are better positioned than we to identify and action any opportunities that might exist now or later.

Regarding your second question, this relates to what I have called the fourfold Economic Commons. See the diagram below for a quick summary of my initial exploration of this concept.
?

As has been said by others, the problem of monetary rentierism is tied up with the problem of land and real estate rentierism. And, it goes further than these two components of extorting/extracting the economic surplus (as is summarised in the above diagram). Behind the problem described in Ed Mayo latest blog post “Renewable energy rollback or community energy fightback?” is the enclosure of the economic commons of natural resource (in terms of energy). The usurped State on behalf of the apex rentiers is making sure that individuals and communities cannot “unplug” from the rentier payment meter. As JP Morgan said “Morgan said, “If anyone can draw on the power, where do we put the meter?“. The enclosure of these four economic commons also lead to the problem of democratic governance, or more precisely the lack or distortion of it.

Human beings cannot claim to create economic value on an “Ex nihilo” (out of nothing) basis, even money (which properly named is “monetised mutual credit”). We are obliged to use pre-existing natural and cultural resources, in order to create new “added value”, through the application of our human capital (abilities) and the expenditure of our human energies. All these pre-existing “factors of production” represent the “commons”, since everyone depends on them, and nobody made them (and therefore cannot claim ownership over them), including our innate human creativity, which is the true “capital” that resides within the fabric of our very being (not in a bank). We can only exercise “property rights” over the “added value” portion of our production.

The sovereign nature of the Commons on which everyone depends, means that we, as a community, can only allocate “usage rights”, relative to the production of human added value, to meet the existential and developmental needs of human beings. As I wrote in the email you refer to: “any allocation of usage rights, by the community, should be conditional to the benefit of the whole community, and conditional to the stewardship of these economic commons for the benefit of future generations.”.

This raises the issue of the “governance” of usage rights over the commons, as well as the governance of property rights over the added value we produce (the issue of governance was not integrated in what I wrote before). Perhaps this is not the time nor place to go into detail about the important issue of governance, save to say that since everyone depends on the Economic Commons, whether they are able to be economically productive nor not (e.g. children, elderly, handicapped, etc), then everyone should have an equal say in how the allocation of usage rights to the Economic Commons is governed. Therefore the imperative for democracy is rooted in the governance of the Commons.

The essential role of Government is to uphold human rights, by allowing everyone to exercise, through a process based on true democracy, their corresponding obligations: to themselves, to each other, and to the ecosystem of life on which we all depend. Government needs to be relieved of any extraneous functions that could interfere with, or distort this essential function, especially anything which could tempt or allow the State to be usurped, by clever and powerful elites for the purposes of rent-seeking. Most public services for example, would be better provided through Civil Society social enterprises, acting within the non-merchant part of the economy. The State should only maintain a monopoly public service in domain of internal peace-keeping (police) and external defence (military). But the members of these State public services must owe direct allegiance to the people (i.e. Civil Society).

Since turkeys are not inclined to vote for Christmas, I don’t know if Corbyn or the Labour party would be capable of contemplating the radical transition needed in the domain of governance. The essential issue is not Left vs Right vs Green or whatever, the real issue is a choice between governance based on a distributed decentralisation of power within a framework of interdependent subsidiarity.

Money is a social infrastructure for mobilising and directing human ability through work. Whoever controls the monetary system, controls the direction, nature and purpose of aggregate human activity. At the moment this huge power is centralised in few hands, as a phenomenon extrinsic to the majority of individual human beings.

As we know, “power corrupts and absolute power corrupts absolutely”. So in my view, our purpose is to contribute to the decentralised liberation of this power, so that humanity rediscovers that this money power is intrinsic within each individual as the exercise of their innate creative talent. And as I mentioned above, this automatically means a radical redefinition of governance and the State, based on a social contract that is equitably humane and ecologically sustainable. It means the end of Empire, and all the slavery and destructive vanity that goes with it.

As the monetary theorist,  E. C. Riegel wrote in his book,  Private Enterprise Money, which was published in 1944:

“(…) you have not suspected that the money power resides in you
and because of your failure to exert it
the world is afflicted with miseries.
You have the power; you have the responsibility.
The power and responsibility to banish poverty, unemployment, insecurity, misery and war
rests entirely with you.

(…) You need no laws — there is a law, a natural law that governs your money power. (…)
We need not petition government
and we need not waste time to denounce bankers,
for they can neither help nor hinder our natural right to extend credit to each other,
and this is the perfect basis for a money system.”

Kind regards, Raymond

 

From: Thomas Greco; Sent: Monday, September 07, 2015 7:34 AM
Subject: Re: Contingency rapid-reaction plan and team

Raymond,

Bravo! What an excellent statement.

And thanks for quoting Riegel’s wise and compelling insight, “we need not waste time to denounce bankers, for they can neither help nor hinder our natural right to extend credit to each other, and this is the perfect basis for a money system.”

And this is the way toward our political re-empowerment as well.

Thomas
Thomas H. Greco, Jr.
Beyond Money: http://beyondmoney.net
Archive Website: http://www.Reinventingmoney.com
My fourth and latest book, “The End of Money and the Future of Civilization” can be ordered from Chelsea Green Publishing, Amazon.com, or your local bookshop.