---------- Forwarded message ---------- From: Great Transition Network <gtnetw...@greattransition.org> Date: Mon, Jul 24, 2017 at 6:11 AM Subject: Money for the People (GTN Discussion) To: michelsub2...@gmail.com
>From Mary Sue Schmaltz <mary...@igc.org> ------------------------------------------------------- [Moderator’s Note: As you may have noticed, the GTI site was down for a few days. Thankfully, we’re back up and running. Note that the discussion ends on MONDAY, JULY 31st (one week from tomorrow), although we may extend it due to the glitch. – JC] Mary Mellor's exploration of the nature of money and its role in the diminishment of socially and environmentally relevant values is well taken. Active participation from local, regional and national governments will be imperative to any endeavor to transform monetary structures. However, it need not be expressly a centralized governmental function. Currency expert Bernard Lietaer has long argued that we could re-design our system of money in a manner that would be more socially beneficial if we were to shift the money "target" away from the competitive model towards more socially viable aims. Ultimately, Lietaer believes the answer lies in designing complementary forms of local currencies to work in tandem with our conventional currency systems. Lietaer also introduced the idea of a global currency called the Terra, which would be comprised of a combination of various commodities and international services. Creating a standardized basket of the prominent commodities and services, he believes, would incentivize long term thinking and would better stabilize the global business cycle as it would be more inflation-proof. In line with Mellor's idea of public money is the idea of utility banking. Banking expert Martin Mayer notes the significance of banks no longer acting as social institutions rooted in their communities with direct relationships to their depositors and borrowers. Now banks are businesses who sell off their loans severing the relationship between borrower and lender while shifting risks onto the public. Suzanne McGee in her book Chasing Goldman Sachs likened the money grid to an electrical grid. Just as we have electric and water utilities, McGee proposes that we need a banking utility. When liquidity dries up, it can be just as devastating as a water or electrical shortage. Playing off the proposed public option for health care, Ellen Brown in her book Web of Debt suggests that we consider a public option in banking. Instead of taking profits out of the community system, the public banking system would be better positioned to reinvest in the community. An example of such a successful regional bank already exists – the Bank of North Dakota, which is owned by the state. It is vital that we directly address not just the creation and control of the currency itself, but the whole system of money and finance - including accounting rules, taxation, regulations and other metrics which incentivize or discourage certain types of activities. Rana Foroohar in her book Makers and Takers: The rise of Finance and the Fall of American Business, does a great job of examining how the incremental rise of hyper- financialization and commodification have diverted resources away from activities that promote overall well-being. Former British banking regulator and chairman of the Institute of New Economic Thinking, Adair Turner, in his book Between Debt and the Devil, notes that a mere 15% of the global financial flows are applied to the real productive economy. The rest relates to fabricated values derived from financial engineering and manipulations, divorced from the real productive economy of products and services. These values are truly representative of the "something from nothing" to which Mellor refers. It's not just that financial values are widely disconnected from human and ecological values. These values are not even in line with sound economic values. When companies such as Apple borrow funds to buy back shares in order to artificially prop up its share price rather than innovate, the distortion becomes obvious. Exacerbating the distancing of economic values from life-affirming values is the fact that finance today is driven by complex algorithms. Quantitative expert Paul Wilmott has been sounding the alarm loudly about the role of complex algorithms in financial risk and value distortion. Per Wilmott: "If you used the wrong model to design airplanes, you'd kill passengers and end up in prison. But do the people using financial risk models care what happens? Of course they don't." Value at Risk, the dominant risk measurement used by the financial industry certainly proved fatal to global financial health leading up to the financial crisis of 2008. Skewed financial modeling is still the driving force of economic values. (Paul Wilmott just co-authored a new book with Paul Orrell which was just released entitled The Money Formula: Dodgy Finance, Pseudo Science, and How Mathematicians Took Over the Markets , which I'm sure will add new insights to this debate.) We also need to be careful not to simply monetize certain altruistic or caring activities. Technology exists today for exchange systems which make it possible to maintain the integrity of such activities. For example, BiologicTx, has developed a kidney transplant chain, whereby the system identifies willing donors to compatible matches without financial gain. Say a person needs a kidney transplant and a loved one would readily offer one of their kidneys, but they are found to be biologically incompatible. The altruistic intent remains intact to mutual benefit as the willing donor is still giving a kidney to get a kidney for their intended recipient. As we struggle with financing the needs of our aging populations, we might consider a Japanese approach known as the fureai kippu, which roughly translates into “caring relationship voucher.” People volunteer as caregivers to the elderly and receive credits. All in all, I very much appreciated Mary Mellor's paper which offers a great starting point for delving deeper into discussions about the monetary system. How do we connect people to services and products? How do we preserve the quality and create universal access to life-giving resources? What will be the new nature of livelihoods and market participation in this era of automation and worker obsolescence? We can begin by linking financial values to real life on the ground. Local circles of economic activity should be nested within the global system, but not smashed down by the top-heavy nature of our dominant money systems. Mary Sue Schmaltz mary...@igc.org ----- Original Message ----- > Transition Network >Sent: Jul 19, 2017 4:25 PM > > for the People (GTN Discussion) > > >From Peter Barnes > > ----- >I love Mary Mellor’s path-breaking thinking and writing on money. And I completely agree with her main point: that we, the people, ought to reclaim sovereignty over our currency and issue new money directly to ourselves as part of a basic income, rather than let banks create it by making loans. > >But her proposal, as well as others that are necessary for a Great Transition, leave me wondering about how we craft a viable political strategy. Speaking as an American, I wonder how many of my fellow-countrymen have any inkling about how banks have privatized the social construct we call money. Very few, I’d venture to say. So it is hard to imagine a popular movement arising for monetary reform along Mellor’s line. The same is true for other proposals discussed on this site: they are necessary for our planet and society, but way too complex for the average distracted citizen to comprehend. > >That’s half of our political challenge. The other half is that all of our proposals face intense political opposition from powerful legacy industries, whether these be fossil fuel companies, health insurers or banks. These companies have immense power to confuse the public, buy politicians, and block progressive legislation. So how do we create a framework that is simple and persuasive enough to inspire a popular movement, and sturdy enough to do so over the decades it will take to effect a Great Transition? > >The best historical model we have, it seems to me, is social insurance. Leaving aside its older European roots, this model took root in America with the Social Security Act of 1935 — propelled by such grassroots movements as the Townsend Clubs — and has expanded steadily ever since, resisting all efforts from powerful industries to decimate or privatize it, including the latest onslaught against the Affordable Care Act. What has made social insurance so impregnable are its universality (the middle class is solidly behind it) and the fact that it addresses the near-universal fear of economic insecurity — a fear that, despite our seeming prosperity, is only intensifying. > >That said, the present financial base of social insurance — payroll contributions by workers and employers — has essentially maxed out. Nor is it possible to supplement existing labor income by taxing it. So a 21st century system of economic security will have to be built on a new financing model, which I have proposed to be income from common wealth, in the manner of Thomas Paine and the Alaska Permanent Fund (see With Liberty and Dividends For All). > >Picture, then, a giant “common pot” into which flows money from multiple forms of common wealth and out of which flow monthly dividends to every American with a Social Security account. Such a pot could begin, as Social Security did, with a relatively small inflow and outflow, and grow over time as Americans become comfortable with it. Its funding sources could include fees on pollution of shared ecosystems and use of socially constructed financial infrastructure, as well as new money created in the manner Mellor proposes. > >This system, anchored by the common pot, would serve three functions simultaneously. First, it would address the pressing need for lifetime economic security, a need that will only increase as automation and artificial intelligence replace more jobs. Second, it would create demand for more revenue sources which, if properly designed, would advance one of the key goals of the Great Transformation: internalizing the costs of destabilizing nature. Third and perhaps most importantly, it would supply the political juice for the first two functions. To paraphrase Mary Poppins, rising dividends from the common pot would become the sugar that helps the less palatable transformational pills go down. > >In short, three cheers for Mellor’s monetary proposal. And let’s make good use of it by embedding it in a larger strategy that makes a greater transformation politically possible. > >-Peter > >Peter Barnes >Author, With Liberty and Dividends For All > >********************************************* > >************** > >On Sat, Jul 1, 2017 at 9:31 AM, Great Transition Network wrote: >From Paul Raskin >________________________________________ >Dear GTN, > >The old proverb—money is the root of all evil—may overstate the case, but money is, indeed, implicated in the iniquitous debt/growth spiral now degrading Earthland. > >Mary Mellor explains in her new GTI essay, “Money for the People,” that it needn’t be so. The modern money system is a social construct that evolved to spur capital accumulation, but lingers on in an era needing, instead, to throttle consumerism, debt, and the economic growth machine. Rather than creating money privately through bank lending, as the current system does, an alternative approach—public money—can undergird an economy oriented toward people and use value, not profit and exchange value. > >I think you’ll find Mary’s vision of a critical institutional pillar of a Great Transition economy illuminating, intriguing, and inspiring. Please read it at www.greattransition.org/publication/money-for-the-people, and let the comments and questions begin! How would public money work in practice? How would it interface with the market? How might its pursuit contribute to strategies for system change? > >Comments are welcome through JULY 31. > >Looking forward, >Paul Raskin >GTI Director > >HOW WE WORK >Odd-numbered months are for internal GT Network discussions; even-numbered months are for public dissemination. You will receive all comments via email, and can review the entire thread online at www.greattransition.org/forum/gti-forum. The essay will be published alongside a “Roundtable,” comprised of selected comments from the GTN discussion and a response from the author. > ------------------------------------------------------- Hit reply to post a message Or see thread and reply online at http://greattransition.org/forum/gti-discussions/191- money-for-the-people/2377 Need help? Email jc...@tellus.org -- P2P Foundation: http://p2pfoundation.net - http://blog.p2pfoundation.net Connect: http://p2pfoundation.ning.com; Discuss: http://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-foundation Updates: http://del.icio.us/mbauwens; http://friendfeed.com/mbauwens; http://twitter.com/mbauwens; http://www.facebook.com/mbauwens
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