2012/03/26 EWG Minutes
2012/03/26 EWG Minutes
EWG Meeting minutes 26th March 2012
1. 23th March meeting minutes – approved
2. Chris Cook – Background: fraud investigation; AFBD; compliance at IPE; law and
accountancy; OTC holidngs/OilClear. Concentrating on legal and financial structures.
Napster was a disruptive technology in music business. Came across a shipping brokerage
using internet for trading (chat rooms) – multiple simultaneous conversations. Started
looking at banks and economics – foundational myths. Thinking about money from first
principles. In the context of history (read David Graeber “5000 years of debt”) trade has
always been based on credit. Tally sticks – accounting system. Half the “stock” issued as an
IOU for future payment of taxes to the King. £17m tally sticks in circulation in 17th century.
Effectively a tax credit. Rate of return derived from the rate at which stock is to be returned
to the King/Exchequer. Origins of gilt edged stock – credit. Modern Monetary Theory not
quite the answer. Base credit on productive assets eg. Land. People based credit or asset
based credit? Looking to simplify the arrangements for people to interact creatively using
unconventional legalised forms/entities. Bring all stakeholders into a (credit) agreement for
reality based projects. Governments merely provide quality control. Agree to build projects
without middleman (ie. banks). Involved in action based research. Institute for Security and
Resilience Studies. Near seizure of money transmission services in 2008 – few hours from
cash machines running out. Networked financial system are more resiliant. Spread the risk.
Looking at both global markets and community projects. Link together micro to get to the
macro. Seven years working on housing project in East End. Falkirk project abandoned –
“don’t work on elephants work on fruit flies.” The Art of Flirting LLP (film project); actors
became members (shares in the partnership); capital partners invested cash for 20% share –
although the project failed, investors claimed a tax loss. It’s all about participation as coowners.
Property projects: Edinburgh waterfront land (Granton waterfront) needs more
investment but is a partnership involving the local council , architects and others in LLP
structure. Enabling participation to share risk and reward but not paying money for the use
of money (current banking model). Housing co-op owned by Tower Hamlets. Conventional
means of development have been exhausted. Banking system is never going to come back.
UCL presentation: the debt will never be repaid eg. jubilee debt debt forgiveness (each new
Pharaoh forgave debts owed to the previous ruler). Two issues to be solved. 1. resolution of
existing unsustainable debt 2. need for transitional transformation. Consensual solutions by
forming partnerships. Viral spread of community projects. eg. Energy projects. New tools
for investment in land. Future electicity production of wind turbine funds the investment to
create it. Quantitative Easing – dollars flooded onto market which drove up prices of assets:
equities, gold, commodities etc. to hedge against inflation. All markets became correlated by
excess liquidity. Banks were running the casino (trading ahead) – moved from middle men
to service providers. Investments banks are bringing investors and investments together.
Proprietary trading is greatly reduced. Creating financial assets – CDOs and CDSs. Credit
ratings agencies played their part. When banks stopped lending to each other the only source
of credit were the central banks. QE stops deflation. Patient (economy) is a zombie requiring
repetitive blood transfusions(cash injections). New tools are required – return to modern
versions of extremely old tools. We’ve forgotten what stock is. eg. raise finance by issuing
stock selling forward rent at a discount; selling forward energy. Sell off some of the
production/not the asset. Community partnership model? How to deal with redistribution?
Talking to the top 20 housing associations about refinancing their debt from pension funds.
Wiping out the compund interest, ie. not paying interest for the use of money. Another
example: Albion trust – school converted into affordable offices for charities and social
enterprises. No vacancies in 15 years – waiting listfor tenants gives certainty of return.
Develop a market based system? How to stop the market abuse? – transparency. Land based
value currency. Paid in rental units. Limited Company structure is toxic. We need cooperatives
of co-operatives and remove “money for nothing rent seekers” from the equation.
Need safeguards against corruption – transparency. Eg. Norwegian tax returns posted on the
web. Under co-operative based finance it is in your interest to be transparent. How to
commons the land? Look up “Nondominion” (derivation of condominium). Self-regulation
is preferable to government regulation
3. Housing – EWG agreed to support Chris F-D’s social housing proposal for approval by GA
and promotion to government and press.
4. Finsbury Square – incidents of violence and not adhering to occupy principles. A statement
produced to disassiociate OccupyLondon from FS. Food money reduced which precipitated
violent reaction from more vulnerable occupiers. Objection to the online process which
produced the statement – outside Occupy process. Clearly there is a serious problem at FS
which may be exacerbated/fomented by external forces looking to discredit/disrupt occupy.
Although some of the EWG felt strongly that the statement should go forward, others
expressed grave reservations preferring more dialogue with wider occupy at a GA (involving
those at FS) before resorting to such draconian action. Acute recognition of the problem but
objection to the manner in which it is being addressed. Vote for supporting the statement =
1, Against the statement = 3, abstentions = 4.