Occupy London, Economics Working Group v7, 18 Jan 2013 Work in Progress

ROADMAP TO RECOVERY (&/or REVOLUTION /SYSTEMIC CHANGE)

This is a draft document combining ideas from many sources. (See end.) It often includes more than one solution to a particular problem without yet choosing or necessarily combining them. Caveats against some potential components are raised in the text. The gist of each idea is given without the fine detail.
A/ CAUSES of the ONGOING CRISIS 1
B/ BANKS & CORPORATIONS 4
Flaws 4
Principles towards a solution 4
Network Banking – Deposits 4
Profit in Network Banking 4
Risk reduction in Network banking (repetition here – join or cut?) 5
Competition in Network Banking 5
Network Banking and Customers 5
Investment Banking in Network Banking 5
Role of Small Business Finance 5
Ease of Change 6
Alternative payments system ?? (put at end?) 6
Stock Markets (Simplify or delete this section? Wishful thinking. NO) 7
Liability of bankers 7
Possible Changes in regulation 8
C/ ALTERNATIVES TO AUSTERITY 13
D/ TAX & WEALTH REDISTRIBUTION 13
E/ DEBT 15
F/ HOUSING 16
G/ SAVE DEMOCRACY 16
State planning versus Market-system - 17
Remuneration 18
H/ LEGAL & INTERNATIONAL 19
I/ GREEN & SUSTAINABLE ALTERNATIVES 20
J/ CONCLUSIONS 21

Occupy has been accused of having no idea what to do. Below are many ideas to form part of the package of solutions to end the economic crisis and create a better society.

A/ CAUSES of the ONGOING CRISIS

1) For four decades the share of wealth and income has become increasingly skewed to the upper extreme. ‘..There has been class warfare waged and my class has won. It’s been a rout.’ – said Warren Buffet. This has created a crisis in demand at first steadily, then catastrophically. However rich you are there is a limit to what you can consume. The rest of your money, broadly, goes into paper assets which are intended to command rents, interest and profits – (collectively inducing debt) from the rest of the population. Too much paper wealth, however cleverly packaged, chases limited real assets and the paper bubbles swell and burst. This is preceded by demands that those who have accepted the liabilities (a parcel passing chain which the owners seek ultimately to nail on the tax-paying majority) deliver the golden eggs.
2) However, efficient parasitism needs moderation. Suck too much blood and the organism can give less – and is more likely to riot or demand taxation for welfare benefits rather than for your interest payments.
3) When wealth clogs up at the top of society and is not re-circulated to the mass, letting them command real goods and services, even the rich can only get richer by progressively expropriating one another (and us), creating an increasingly remote and diminishing financial elite – in a modern regression towards feudalism.?
4) So the only ultimate solution for the western economic crisis is a real re-redistribution of wealth and income back to the majority. There are many means to do this, radical and reformist, swift or slow but it starts with a grasp of how this congestion of increasingly fragile wealth has been engineered.

5) ‘Who overcomes by force hath overcome but half his foe.’ (The Devil, in Milton’s ‘Paradise Lost’) As the behaviour of parasitic wasps, which lay their eggs in the brains of caterpillars, shows it takes less energy to control minds than to use force on bodies, although the ichneumon wasp does both. The grand rationale for the expropriation of the majority has become known as ‘the neo-liberal consensus.’ ‘.. a sort of fifty year-long giant intellectual mistake.’ (Lord Turner, Chair of FSA, Prospect 14/12/11)

6) ‘The great global neo-liberalisation that began over 30 years ago was a response to the systemic compulsion to expand profit-making opportunities for investors and thereby enhance their share of total economic value added (the profits share) by greatly increasing the proportion of debt in the system. This phenomenon was closely related to the need to find new investment outlets for recycled corporate profits (surplus value in Marx-speak) which were no longer needed to finance growth of productive capacity, in increasingly saturated consumer markets – a trend which, according to the traditional logic of the business cycle, would have led to a major downturn or slump like the 1930s.’ HS

7) Neo-liberalism is spelled out at various (contradictory) levels of sophistication. The phrase broadly bundles up a set of rationalisations saying that leaving bankers and finance operators pretty much to do whatever they want will turn out to be in the best interests of almost everyone – ‘the greatest good of the greatest number’. The ‘free’ unregulated market is lauded and the essential alternative presented is a centralised soviet-style state that plans and controls all economic activity. Allegedly Adam Smith’s ‘hidden hand’ in his ‘Wealth of Nations’ ensures that the individual mass pursuit of selfishness turns out best for us all.

8) ‘Of course, Adam Smith was no utopian. He was keenly aware of the limitations of the “invisible hand” – and therefore understood that effective institutional infrastructure is required to ensure the operation of a free and fair market. Unfettered markets tended towards monopoly, he wrote, and so proportionate government action is needed to create a clear and stable framework that enables free competition to take place. Getting that balance
right remains as important in the age of the software giants as it was in the age of the cotton kings.’ (George Osborne MP 2006 Introduction to Arrow Books ‘Wealth of Nations’)
(Re-emphasise that the “free market” is an illusion.)
This ‘roadmap’ offers our Chancellor of the Exchequer some helpful advice as to the effective institutional infrastructure to make a non-soviet version of the economy work.
(irony not obvious?)

9) Unfortunately all of the mainstream media are compromised in their motivation to deliver an objective message because they are all involved in the use of under-regulated tax havens which let them keep an undue proportion of profit. Even the BBC encourages its programme makers and top presenters to become spuriously labelled ‘self-employed’ and therefore open to offshore (and some on-shore) tax avoidance/evasion schemes which are to the detriment of the majority. And a small inequitable surplus over your neighbours can build up exponentially.

10) ‘The combination of compound interest on debt, and private property in land, has for thousands of years concentrated wealth in the hands of the few to the exclusion of the many. ‘ CC DG – Although it can be moderated by effective progressive taxation. Ultimately if compound interest rates are greater than the real growth of the economy then without restrictions more and more wealth will accumulate in fewer and fewer hands. SK+

11) ‘Financial deregulation has facilitated the creation of almost limitless credit. With this credit boom have come irresponsible and often fraudulent patterns of lending, creating inflated bubbles in assets such as property, and powering environmentally unsustainable consumption. When the banks suddenly fully understood the scale of debts on the balance sheets of other banks, they stopped lending to each other.’ NEF
12) (We had arrived at) ‘a monetary system based upon the creation of credit by credit institutions aka banks that has virtually no basis on the productive economy, and secondly, a system of absolute property rights – in particular the form of financial capital consisting of shares in a Joint Stock Limited Liability Corporation.’ CC
13) ‘Rather than restructuring along much more equitable and accountable lines – the ruling élite was able to get away with using the resources of the state to underwrite / bail out the system (as) in the so-called Secondary Banking crisis of 1974.’ HS
14) ‘The role of the state as “lender of last resort” – defined by Bagehot in the context of the essentially non-competitive Victorian banking model – was used as justification to underwrite reckless speculative bets in the lasting shameful legacy of (mainstream interpretations of [DD]) Keynesian economics and undermines any claim that the status quo corresponds to a ‘free market’ system.’ HS

15) Neo Classical economics is used to justify the taxation of earned income – Labour, rather than the unearned income arising out of economic rents derived purely from the unearned privilege of private property in Commons such as Land, Energy, Knowledge. CC HG
16) However ultra-high salaries, allegedly earned, represent another form of expropriation by top management of resources which they have got control of, rather than the shareholders or employees.

17) Technical mismanagement of the almost inevitable swings of an economic system has made the bad worse.
‘All participants, including regulators and even economists, act and think pro-cyclically.
Central banks responded too aggressively to incipient recessions in previous decades and governments were too willing to encourage excessive leverage (debt [DD]) in the household sector.’ MW

18) So people’s spending shrinks; less is created to pass profits to the elite and they blindly seek to maintain the value of their paper, deeds and electronic placeholders by demanding more payment on them from everyone else – leading to a downward spiral.

18) The insuperable problem – which may shortly be recognised as the next wave of defaults commences – is that there are no longer enough credit-worthy projects and individuals to whom to lend. CC
—
19) “The key is to map out the ways in which the new society can begin to grow within and alongside the institutions it may gradually marginalize and replace” Spirit Level p236

B/ BANKS & CORPORATIONS

1) Flaws
1) The state has poor control over the payment mechanisms on which our fundamental economic order depends.
2) The government has almost no control over the money supply in the UK. About 3% of the cash (money invented through QE not included) in the UK economy is actually issued by the Bank of England. Electronic money is created by the commercial banks. They maximise their profit by the creation of enormous quantities of new money through offering debt.
3) As the banks have fallen over it has become very clear that we might end up with very few banks and a wholly uncompetitive market for their services.
4) The banks have been unable to regulate themselves, for capital adequacy ratios, appropriate incentives, the appraisal of lending or money laundering RM

2) Principles towards a solution
1.The basic payment system should be under the control of the state. (Clearer detail in RM TRUK 20 Oct 08) The state must be able to control basic payment systems so as not to be hostage to the banks.?

2. The state must have more control of the creation of money and should profit from the creation of that money. (meaning of ‘control’ – regulation and/or operation? What balance?)

3. There must be sufficient banks in the market to both offer choice to consumers and to prevent any one bank becoming so large that its failure could represent a fundamental threat to the economy as a whole. (reconcile wi point about more competition ≠ > stability)
4. The banking system must be better regulated and monitored in the future to prevent a recurrence of the problems that have created the current crisis. RM -(offered as a basis for discussion 20 Oct’08)
(n.b. The Occupy London EWG policy initiative in regenerating the Post Office Bank overlaps some of these issues & solutions)
3) Network Banking (sections 3-11) – Deposits
(The use of the word ‘network’ draws an analogy with the role of Network Rail.)
The basic infrastructure of banking should /could? be entirely? owned by the state. The banks themselves should be franchised operations, offering different levels of services and rates to attract deposits, which at the end of each day they place on secure reserve with the Bank of England. Based upon the volume of deposits they attract when compared to their proven risk profile they will be allowed to make loans using funds that they themselves borrow from the Bank of England. RM
So they pay their deposits to the Bank of England which doles it back? Won’t almost the same money creation spiral operate as the borrowers or those who sell to them deposit this money back in the banks creating new? Is not the fractional reserve now therefore created by the B of E? Is this a problem?

4) Profit in Network Banking

They would make their income from the difference between the loan income they can generate and payment that they make to the Bank of England for the funds that they borrow. They would make their income from depositors by charging for some services (although basic banking would be provided free, as of right {How funded? Out of other profits?}), from the difference between the amount they earn by placing sums on deposit with the Bank of England and the amount they pay to depositors, and from the sale of a limited and regulated range of additional services such as credit cards (so the government indirectly promotes credit card debt?), life assurance, pensions and low-risk investments.

5) Risk reduction in Network banking

As, in effect, franchise operations the banks would raise capital to cover the risk inherent in their own (not from the Bank of England? – so depositors &/or other lenders?) lending decisions and these would relate to the margin that they could lose in making loans. So this is a kind of personal insurance/downside stache? This loss would, however, be much less than the total loan, which would still be owed to the Bank of England at the end of the day, giving them an incentive to intervene long before a crisis situation arose, largely because the majority of any bank’s capital would be supplied by the Bank of England, because the funds that they would lend would come from that source. Surely the same incentive for banks to underestimate the downside risk & underprovide to cover it remains? Especially as they only take a fraction of the loss?

6) Competition in Network Banking

Each franchise operation would add particular skill in certain areas. Some might become specialist business lenders. Others will be mortgage type operations. The interest rates that they offer might reflect the risk profile that they in turn assume regard to their lending. Won’t most go for mortgage and other domestic (credit card) debt? Established business lending could make a profit but most start-ups fail.)

7) Network Banking and Customers

The result will be that in reality banks are unlikely to compete very much on interest rates but they will be competing quite heavily on the quality of service supplied – the development of niche markets for banks that will have a special understanding of customer need as a result. (Are domestic/mortgage customers that ‘niche’? Several examples would help.) This is a genuine market activity for bankers – RM banks as service to, not determinants of, the economy TIM F

Each network bank will have the basic IT trading platform for the bank. / The rule book by which they will operate. / A regulated structure within which it will know it can work. /An oversight regime. Each bank will have to submit returns regularly of their ratios of deposits to loans, with profiles of each to ensure that they are working within agreed capital adequacy ratios RM

8) Investment Banking in Network Banking

Companies that want to trade in derivatives, financial products of other forms, and foreign currency for speculative purposes, and so on will be allowed to do so. But they will be entirely separately regulated, will have to use their own capital for this activity, but will not be banks, and I suggest it should not be possible for a bank to own them. The stock market should supply their capital (What about high net worth individuals? Hedge funds? ‘Shadow banks”?), not depositors who do not know the risk that they face by doing so. RM (plus work within Baker Bill – personal liability regime, see elsewhere)

9) Role of Small Business Finance

Business finance for small and medium-size entities. Banks have been very poor at doing this anyway. Much has been provided by way of leasing, specific asset finance such as factoring, and very little indeed has been genuine capital to fund enterprise. In effect the Bank of England will have to allow specialist banks to operate as venture capitalists to small enterprises and that might require us to take a stake in those companies as is common in the German model banking. It is a radical reform that may not be part of the current UK banking system at all. Also see Peer to Peer lending (e.g. Funding Circle) and Chris Cook etc

10) Ease of Change

When banks are already under state control they have effectively lost their equity base and so a change to a franchise arrangement will be easy to do. The banks are already not lending to each other, but are instead placing their funds on deposit with the Bank of England each night. They are, therefore, already halfway to this structure.

Criticisms (nb need stronger statement on banks’ lack of probity somewhere)
1 You cannot possibly expect people to share an IT platform and still differentiate themselves effectively. (? Elaborate – implausible?) ((RM reply)You make a minor IT issue (where, as I note above I have, I admit used the issue as a metaphor for the licensing of a common trading platform – which is a real issue) an objection to progress RM)

2 The whole breakdown is due to the fact that nobody knows (knew) where the bad debt is (was). The crunch is not down to bad decision-making; it’s down to bad information, (hm, interesting distinction – but yes, highlights the need for a (multi/inter-?) national Debt Dudit Commission) & identify such functions within current European bodies)
((RM reply)..And of course bad debt can be assessed – people did not want to do it. RM)
3) How on earth can the UK do this alone? What about SWIFT? What about VISA or Mastercard?
(Negotiable surely? – but certainly need for more (appropriate) international agreement generally.)

Nb. Incorporate additional elements of BD2 (consensus at GA 1st 11 points 10 Aug ’08)
11?) Alternative payments system ?? (put at end?)

Fiat money must be rejected. (Strongly disagree & conflicts rather wi govt. control of money creation/credit Dave) It is based on Sir John Davies’ Case of Mixed Money 1603; this is bad law and all efforts must be made to remove it from the common law canon. (Not true imo Dave)
Secondly, the banks should be disintermediated. This would lead to a network solution of money transfers using something called Ricardo Contracts or similar. The banks are totally and utterly unnecessary in a non-fiat based payment system. See the Hawala system for an excellent example. (Yeah Hawala is great for tax evasion & terrorism. Dave) The banks are a key part of the state’s means of controlling its prey, viz. the citizens. In order to disintermediate the banks the money laundering regulations would need to be repealed (What! Dave); further, the very idea of money laundering couldn’t exist within the envisioned system. Anon one on RM site

12) End ’wisdom of markets’ light touch deregulation ideology NI (implied in re regulation, coming?)
(cf. Turner A/ 5) above)

13) People need protection from the predatory practices seen so egregiously in US subprime lending. End of Caveat Emptor MW

14) A three-day bank holiday. (It would only take 3 days? Won’t the new FCA & PRA do this anyway? DD) The Fed, the FSA and the Bank of England check the books of banks for well-hidden ‘toxic waste’ – undeclared liabilities. Only when regulators have a proper sense of the scale of the mess, can they take decisive and appropriate action. NEF [Delete this para? DD NO]
15) The Bank of England should regain control over interest rates – all rates. The interbank lending rate (LIBOR) should be set by a committee accountable to society (Need say who more clearly ?), and, when setting rates, must consider the interests of society and the economy as a whole. NEF
16) Exclude from UK markets companies that deal with tax havens. DD et.al. Tax should be deducted from all payments to a tax haven where no information is provided in response to a request made by another state. RM (Still allows dodgy behaviour once the money arrives there, but a useful start. DD)
17) End Tax Havens (delete / join with Tax Haven section ahead) Impose economic sanctions (some jurisdictions we can just tell ‘em) on tax havens that do not require the disclosure of the beneficial ownership, accounts and direction of all organisations registered in their domain RM (And we need international agreement on tax harmonisation & disclosure DD Tout court – this section should make clear we end the lot. NO DD)

18) Formulary Apportionment The formula places an equal weight on: group sales, payroll, and property within each jurisdiction. Companies etc. should (instead of the current system) be taxed upon the proportion of their worldwide profit which it is reasonable to assume arises in that country based upon the ratio of their third-party sales, number of employees and fixed assets located in that place. This will mean that tax is paid where the economic substance of an activity occurs. DD RP NEF RM

19) Stock Markets (Simplify or delete this section? Wishful thinking. NO)
20) Rewrite the listing and disclosure rules on the world’s stock and credit markets to ensure that the oxygen of capital is withdrawn from socially or environmentally damaging assets. NEF (Does this imply ‘Triple Bottom Line Accounting’ ? DD)
21) Refocus the incentives for investment analysts and fund managers away from ephemeral gains in short-term trading towards steady and reliable returns over the long-term. NEF (Need egs. or obvious?)
22)Fundamental reform of banking rules to remove perverse incentives. (Masses could be said cf. EWG banking docs. Give other eg.s than below?)

23) Bankers’ bonuses linked to objective criteria. (c.f. Haldane’s suggestions
http://www.wincott.co.uk/Andy_Haldane_2011.pdf ) No bonuses on basis of false accounting or Ponzi situation. GK
End bonus culture DD pay packages are transparent and any incentives for destructive forms of remuneration are removed. MW

24) Incentives allegedly provided to align the interests of top employees with those of shareholders, such as share options, create incentives to manipulate corporate earnings, at the expense of the long-term health of the company MW

25) Regulators / Auditors to be independent of the industries / operations they regulate. Investigation into Credit Regulation Agencies. Make the IASB (International Accounting Standards Board) independent. So members with blocking votes who can never (re)enter the private financial sector – ex-poachers, academics, manufacturing sector people, politicians? Give ‘em (returnable) knighthoods or whatever instead of mega money?

26) End false accounting by banks. Reform of IFRS. (What about GAAP – the US equivalent? – harmonise both?) End incentives to defraud bank depositors, taxpayers bailout funds GK
– parallel accounts of IASB with accounts according to Companies act
– only accounts drawn up under companies act should be relevant for distribution
– right to return to accounting under Companies Act

27) Liquidation of insolvent banks based on a ‘true and fair ’ accounting should be encouraged. To be undertaken by UK government but put under independent control. GK

28) Liability of bankers
29) Board members of financial institutions would to be subject to unlimited personal liability for any such losses. (The value of the bonds posted for each person concerned should be the higher of £2m adjusted for future RPI or 50% of the person’s net wealth and bonds would remain posted for a period of 2 years following their resignation.) (Making it too hard for newcomers. Credit unions. Fresh competition. Mutuals, Co-ops etc. caveat/exceptions? DD) A financial institution would be any company regulated under the Financial Services and Markets Act 2000. (Isn’t this superceded with the coming abolition of the FSA? – but probably the new legislation will do the same job.))
The payments of any bonuses that are awarded in any given year would be deferred for a period of 5 years. (What is it now? Close surely? DD) The bonus pool would provide an additional form of core capital that would be used to make good any reported losses.
The core capital of the bank would be the sum of the shareholder equity capital, the current value of the bonus pool and the current value of the personal bonds of the board members.
A bank with a core capital/assets ratio below 3% is essentially a zombie, i.e., not a going concern, and as such should not be allowed to continue in operation. GK

30) Senior executives of banks and board members of such companies should purchase and own at least 1% of the equity. (Realistic? For HSBC this would require over a £billion.) Bonuses should only be paid as dividends on these ordinary shares. Tom F

31) Possible Changes in regulation
Pass a Bill outlining a programme (including a timetable) leading to the end of all state support for financial institutions. (Officially that’s what they’re aiming for apart from deposit guarantees surely? – unless you include recent SME etc. loan ‘incentives. It’s easily said but governments tend to relent in emergencies DD)

[Note: This would lead to the liquidation or reorganization of any banks currently on state support and the return of any reorganized banks to normal activity.]

Future state or central bank support for financial institutions would be prohibited. (Surely some kind of support is the aim, in part, of a Central Bank – or else domino collapse? NO DD) nb. link with 1st sentence of ‘Liability’ section)

Any banks that operate in the UK would be required to obtain UK authorisation.

32) Create new Financial Crimes Investigation Unit to investigate financial crimes, and whose focus would be crimes committed by senior bankers and financiers. GK KD SB (nb. currently Golden’s Hague arbitration body has potential. DD)

33) Revised Basle Agreement. Basle 2 taxes banks by imposing higher capital charges on loans to unrated small or medium sized enterprises (SMEs). GK KD DD (& Basel 3 raises issues/ unsatisfactory DD They’re always potentially revising – greater need for openness & clarity & wider representation on Governing Body. Get simplicity through less protection?)

34) Central Banks. Clearer identification & harmonization of their role & scope. (How independent of governments and banks etc? Democratic input mechanisms? – some need to collaborate internationally against large corporates & capital holders to avoid ‘regulatory arbitrage’ –i.e. race to the bottom (e.g. issues of taxation, capital movement to tax havens, accountancy criteria).

35) Restraint of speculative capital/money flows between nations DD Re-regulating the international finance sector is an urgent priority, as is reducing its size in relation to the real economy. Countries with capital controls used to be/ could be both insulated from the crisis and could retain policy autonomy to pursue their national economic priorities. End idea that countries should simply abandon all interference with international financial markets. NEF

All recipient countries need the flexibility to impose capital controls by instrument or maturity as appropriate to their needs and policy priorities. The emphasis should be on mobilising and using domestic resources, with international flows used to supplement these only where there is a real need. NEF

36) End of predatory exchange rate control (building up massive surpluses indebting others) cf. China, more innocently/ignorantly perhaps Germany? – implies international agreement(s)

37) A new ‘Bretton Woods’ to fix exchange rates NEF (Dubious NO DD – tensions – +&- of Bretton Woods?)

38) Higher fractional reserve ratios with banks ‘too big to fail’ DD (Prob drawing line – 10,30,100%? DD)
The most important is far more capital. The core financial institutions should not in the long run have leverage of more than 10 to one MW (So 10% generally for now? DD) – R Murphy’s Network Banking would make this less relevant? –Though arguably fractional reserve function/decisions being passed to the state.)

39) Reduce size of banks so an individual failure is not a catastrophe. (Wishful thinking? NO)
DD / NI
Demerge banks that are ‘too big to fail’ – to reduce the risks of systemic failure NEF

40) Reduce size (mix of absolute & proportional thro’ alternative growth? DD) of financial sector + shift to sustainable activities NI set up independent commission into the contribution of the City RP

41) Separate retail from investment’ banking DD /NI (nb sort of in Vickers) (nb links with GA passed policy)
Retail banking should be split from both corporate finance (merchant banking) and from securities dealing. NEF

42) Managing the payments system and providing credit to households and small and medium-sized businesses should be separated from investment banking, to strip away implicit subsidies. MW (cf RM’s solution)

43) (Re)introduce market segmentation. The removal of barriers between different types of financial institutions has seen the financial ‘herd’ grow ever larger, as very different financial entities increasingly behave in the same way and vast financial conglomerates emerge. We need to put in place clear regulatory boundaries so that institutions are restricted to their core tasks, returned to the appropriate scale and regulated accordingly. (cf. The Glass-Steagal Act in the USA to prevent financial institutions exploiting their market position and power and profiting from conflicts of interest) NEF (Simply separate Retail & Investment,? + Commodities, Derivatives? – or breakdown further?)

44) Now is the time to strengthen the Post Office as a trusted national institution which can offer an established and viable home for savings, a local banking system that can provide untainted and impartial information and advice, and an environmentally sound network of community centres which can be strengthened and made ready for the future. Also to provide back-up infrastructure to massively expand our small network of credit unions and community banks; by launching a Post Office Bank like the ones in Italy and New Zealand; by investing in a new mutual lending infrastructure; and by backing experiments with local currencies like the ones Roosevelt shut down 75 years ago. NEF

45) Law to let the authorities act promptly once institutions are on the brink of losing funding. MW
(Wishful thinking NO. Does this mean power of take-over DD?)

46) To protect finance from the economy and the economy from finance. This requires bigger shock absorbers. (e.g.? Capital flow controls? DD) If that change is made, the normal disciplines of the market can operate, as they should: no more “too big and connected to fail”. MW

47) Banks to be under democratic control – fully accountable public institutions providing service not profit based NI (How? NO) (n.b. Haldane’s proposals on collective stakeholder management are suggestive)
Bring the Bank of England under democratic control. (Semi repetition – join? & still ambiguous)

48) Democratic employee ownership of economic institutions (some? All? %? Other stakeholders? DD) (end of acting in interests of outside investors) Not simply employee share ownership and profit share, – has to be combined with active participatory management methods. Greater workplace democracy W&P

(Pension fund beneficiaries & work place ownership here? From below – or link)

49) Move our accounts unless there is a reduction in bonuses culture. (n.b. for ‘Move your Money’ to be more effective we need to prioritize targets and collectively threaten to move unless action, rather than just shifting and losing influence. DD)
Move money to mutuals. co-ops & Peer to Peer– as far as possible – issues with mortgages & costs

50) Faster account transfer schemes (c.f. 7 days Vickers ‘from 2013’)

51) Stricter control on commodity trading, stopping/penalising market manipulation DD (more CC) We need a strict limit on leverage ratios (Stay vague or offer number? DD), as well as to outlaw speculative practices such as short-selling.

52) Derivative instruments should require regulatory approval to be used, and be brought on balance sheet and subjected to regulatory capital requirements.

53) CDS (Credit Default Swaps) & CDOs (Collateralised Debt Obligations) not enforceable at law unless licensed (for public good) Bring onto the balance sheet, rigorously check and officially license all ‘exotic’ financial instruments DD / NI / NEF including Repo s which allows for sale of prime assets while buying a repurchase option so the asset remains on the books (as ’failed sales’) GK

54) Complementary currencies have a successful track record of providing local means of exchange, when money is running short in the local economy. Government providing an explicit legal power to local authorities to set up currencies systems – regulated by a new e-money regulator – and to accept them for local taxes and fines. NEF (OK but LAs don’t need explicit power now surely?) ? how integrate with R Murphy’s Network Banking?

55) Local Authority green bonds, green gilts and green family savings bonds, and publicly approved enterprises designed to deliver the mass transition to renewables could be among a range of options designed to leverage funds needed to deal with the effects of climate change and smooth the transition to a low-carbon economy. NEF

56) Create new public money, free of interest, where necessary to cope with unprecedented financial emergencies, and as the basis for loans to rebuild the infrastructure of productive local economies The Bank of England should, for example, exercise its power to create money to provide the loan finance for the new local lending infrastructure. This should then be repaid, free of interest, when the task is complete, and then withdrawn from circulation. NEF (needs to go back with similar stuff on govt money creation/control Link with investment banking NO DD & next para. Also Put in need for National Development Bank needed – like Brazil etc. nb once Labour Party policy) – should link easily with RM’s Network Banking?

57) Quantitative Easing (when appropriate) applied from the bottom (low earners, not merchant banks) Housing/? & Green? provision

58) Force banks to lend to small/medium businesses NI (The government has tried incentives nb. most start-ups go bust.)

59) Affordable finance can be made available in a targeted way to kick-start pump prime new, low carbon, energy, transport, food and housing sectors. One useful precedent is the example of South Korea. Over years it channelled lines of low-cost credit to key parts of its economy. NEF

60) Encourage co-ops, mutuals, profit sharing though investment & legal protection DD RP NI + Green Ethical Banks NI

61) Economies should be rebalanced over the next 10 years, so that the mutual sector is at least as large as a percentage of GDP as it was in 1980. Tom F (nb. Currently c.4% GDP in UK. $1tn for top 300 co-ops world wide)

62) Tax breaks and official support for credit union deposits and community banks RP

63) Peer-to-Peer connections of the Internet are now enabling the veto of the Institutions to be by-passed. CC e.g Zopa, Funding Circle, Rate Setter, Kiva, Buzzbank – need more
Legislation for more ‘Peer to Peer’ asset creation, without large capital ‘guarantors’ creaming it. See Chris Cook’s Nordic Enterprise Trust

64) Non-elite based systems of capital accumulation for technological development (link CC P2P)

65) Mutualise RBS – before tackling the rest of the sector

66) A People’s Pension would be backed by People’s Pension Funds. These entirely new funds would be created to provide a way in which pension contributions could be invested in the building of new public infrastructure projects, such as schools and universities, hospitals and other health facilities, transport systems (including railways, trams and bus networks), social housing and sustainable energy systems. (Sounds like PPI. DD NO) – A far more secure and socially and environmentally beneficial haven for pension funds and local authority investments – local authority bonds. These could include local authority green bonds, green gilts and green family savings bonds and publicly approved enterprises, all of which could help deliver the mass transition to a cleaner more environmentally sustainable Britain NEG. (Surely straight National Insurance & taxation is simpler & cheaper? DD NO) – nb. Danish private pensions 2/3 cost of UK ones for same return – other issues. DD

67) Re-regulate financial markets NI (Allegedly happening, fair enough but vague DD NO)
Regulators need to watch the build-up of leverage. They also need to ensure adequate levels of loss-absorbing capital in financial institutions and among the ultimate borrowers. MW (repetition, join )

68) End corporate personhood for banks. (& arguably other corporates) End limited liability DD (To simplistic & radical? – except for accountancy partnerships) Make corporations (more fully, presumably? DD) accountable to society for actions that do harm NEF – bit vague, the law’s meant to do that, poorly enforced

69) Tax banks more.

70) Charge banks more for government’s deposit guarantee. (currently at £85K per account)

71) Tobin tax: Finance has become the end in itself, with short-term, high frequency trading strategies turning over trillions of dollars every day in global markets. We need to discourage the short-term, speculative moving of paper assets but to encourage long-term, sustainable investment. A small tax on international currency transactions would discourage short-term, high frequency trading (you pay the tax every time you trade) but leave longer-term, real investment unaffected. It is estimated that, globally, a tax of just 0.005 per cent would raise tens of billions of dollars annually.
To avoid ‘regulatory arbitrage’ (doing the deal in cheaper places where possible) it needs international agreement ideally. Issue of who gets the taxes – OK for national governments but issues if some to an international authority (EU, worldwide?)

72) Securitize government debt by wealth a) tax b) bond c) some form of land tax or bond 4/ company cash reserves useable as ‘safe deposits’ (Banking GA idea 20Jan 12) (presumably if QE starts loosing credibility DD)

73) Truly independent regulation / no re-entry / stakeholder blocking vote at level of individual banks, nationally & internationally (Banking GA idea 20Jan 12)

74) Hold accountancy firms accountable – new measures to counter cronyism, re-regulate, improve auditor self-governance, and more broadly redefine the legal reporting duties of the finance sector. (+ Restore partnership full liability.) The market domination of the Big Four could be broken up. Give real ownership of such a vital public interest function back to its diverse stakeholders, for example by taking on a new, not-for-profit form. With fewer distractions, perhaps then the accountants will be able to concentrate more on counting what matters, such as systemic risks posed to the economic architecture and productive economy. NEF

75) End off balance sheet operations (e.g. ‘Special Purpose Vehicles’)

76) Regulations should be created for Ratings Agencies that penalise them for mistakes and reward them for getting opinions right. Tom F (Is this reasonable? We don’t hang fortune tellers. Other measures? DD NO)

77) End/ restrict loans to financial companies / ‘entities’ (which is where most British debt lies – 6 times national income) DD (Need say how? DD)

78) Pension fund ‘beneficiaries’ i.e. real end users elected to board level & remuneration committees

79) Create National Bank of Construction for more industrial & service enterprise development (See bank notes above – link)

80) Constrain ‘Shadow Banks’ e.g. Hedge Funds, Private Investment funds, e.g. Blackstone

81) Allow defaults & bankruptcy (of banks & equivalents). (reasonably often)

82) End Fiduciary Rule (max profits regardless) DD/ NI Breaking with shareholder value. RP

83) Shareholder control is too often an illusion. MW
Companies are not effectively owned. That makes them vulnerable to looting. MW

84) Firewalls, reserve requirements, equity cushions – like trying to put banks in sort of padded cells, without actually making them less mad. RP (OK, therefore?)

85) Each workplace is owned in equal part by all citizens so that ownership conveys no special rights or income advantages. PPS (Link Democratic Employee ownership – middle of P?9?)

86) Profits on public sector and charity contracts should be capped at 200% of the relevant industry average. Tom F

87) Investment Reforms
88) Ban on short selling of financial instruments –
89) Ban on purchase of bonds & shares using leverage (so no borrowing at all here?!)
90) -A ban on spread betting.
91) A minimum holding period for bonds and shares of one year. (FTT better? DD) Tom F
92) The right to purchase futures contracts to be licensed and restricted to organisations that can show a need to take delivery of the product or service on the expiration of the contract. i.e. naked futures only Tom F
93) Investor rights. Individuals purchasing shares through tracker funds, unit trusts and pension funds (see ) to have the right to vote in the AGMs and EGMs of the businesses their money is invested in.
Banks should not speculate with the funds of retail customers. (Repetition)

C/ ALTERNATIVES TO AUSTERITY

1/One-off wealth tax & / or (D9/ says permanent wealth tax)

2/ FFT via a National (Poverty Alleviation) Fund TF (Currently repeated in D4)

3/ Pay for energy transition and fuel poverty: a windfall tax on the unearned profits of the fossil fuel companies to provide a safety net for those in fuel poverty, and to help finance the UK’s transition to clean energy. UK could follow Norway’s lead and set up an Oil Legacy Fund, paid for primarily by a windfall tax on oil and gas company profits.

4/ Contest that the crisis is caused by over-spending instead caused by reckless risk-taking by financial sector. NI (in the urge to expropriate the 99% DD)

5/ Explicit fiscal redistribution from the winners to the losers and particularly to the children of the losers; subsidisation or direct provision of jobs; big efforts to improve the quality of education and childcare for all, including public financing of access to higher education; and a determination to sustain demand more effectively in severe downturns. MW

6/ Government support to cover the administration of community exchange schemes such as timebanking. We should consider funding innovative ventures such as Carebanks which would combine a reciprocal system of care between older and younger people with state resources /using ‘green’ volunteers to decarbonise our housing stock, to helping people afford homes through a combination of providing some of the labour needed to build them, and shared rental or equity schemes. Time banking allows more human assets, including those of people who are under, or unemployed, to be usefully engaged in the local economy. Should be recognised and embedded into public services to increase individual and community resilience and reduce demand on hard-pressed resources. NEF

7/ The core economy – the productive activity that takes place outside the market – at least at 40 per cent of GDP, some much larger still. To give just one example, in the UK, carers and parents alone provide over £87 billion of unpaid work each year. In 1998, the total household work done in the USA was valued at $1.9 trillion, whilst in 2002, the informal care that keeps the elderly out of homes was given a replacement price of $253 billion. Timebanking is a tried and tested way of growing the ‘core economy’ – the abundant wealth of human assets that are largely neglected by the machinery of state and eroded by the market-system. These assets are embedded in the everyday lives of every individual (time, wisdom, experience, energy, knowledge, skills) and in the relationships between them (love, empathy, watchfulness, care, reciprocity, teaching and learning). Another way of doing this is to ensure that the public services that depend on the financial resources drawn from taxation and professional expertise work in equal partnership with the people they are supposed to serve. NEF

D/ TAX & WEALTH REDISTRIBUTION

1/ The Systemic Fiscal Reform I (what? Check site) is neither a revolutionary appropriation by the State nor a redistribution of income. Instead a transition from the taxation of earned income (since there is no longer enough earned income left to tax) to the taxation of the privilege of exclusive use of Factors of Production. (a) Location – a Land Value Tax, levied on the use value of location (b) Energy – Taxation of the use of the Resource Commons, particularly a Carbon Tax; and(c) Knowledge – a Limited Liability Tax levied on the gross revenues of the Corporation used to “enclose” Knowledge, through employment contracts and Intellectual Property. CC ( (re?)- join with D6?)
2/ (Tax Haven stuff) At present a host of loopholes protect them, including the ability to turn income into capital gains. Some of this demands global co-operation, which is horribly difficult to obtain. MW

‘Corporate tax is largely a voluntary gesture by the well-run multinational’ (FT).

3/ Broad international progressive tax harmonization. DD (Impossible NO)

4/ A nationally raised and distributed FTT tax with international agreements where possible DD
FTT on International financial transactions NI (C2 repetition)

5/ Land value tax / covenants RS RP TF (D1/a) or very similar)

6/ Commons
A new set of Factors of Production.
Location – Three-dimensional spatial location.
Energy – in the form of electricity, the energy value of fuels, and from other sources.
Knowledge – the accumulated knowledge, experience and talent
Each of these Factors (with the exception of an individual’s lifetime knowledge) is in fact a Commons. Those who have exclusive rights of use of a Commons should compensate those they exclude. (Link back, adjacent to D1 – or unify?)
7/ Ownership would have no bearing on the distribution of income, wealth, or power. PPS (Articulate – otherwise pie in the sky.)
8/ Equal Pay
More than 100 years ago, business guru JP Morgan said no company should have a differential between highest paid and lowest paid greater than 10. Propose a maximum wage. It matters both because the economic case for high executive pay in terms of company performance doesn’t hold up, and because highly unequal societies fall apart. (nb need to anticipate creation of dubious/ illegitimate profit-share – note Harvard operates generally on a pay ratio of ‘only’ 1 to 20)

9/ Permanent Wealth / Asset tax TF (C1 says one off wealth tax)
Shift the tax burden from incomes on to consumption and wealth MW

10/ Progressive tax regimes NI

11/ Taxing the richest rather than borrowing from them DD (points D9 & 10/ with rhetoric)
Tax to pre-1980’s levels NI

12/ Nations guaranteeing to all citizens the livelihood to maximize their own development, physically, educationally, socially. (Basic Income?) (nb. an estimated general income tax rate of 60% to fund it is a hard sell. Introduce progressively)

13/ Limited pay ratio between top & bottom paid employees DD Maximum pay ceiling. Ban bonuses NI (virtual repetition of D2 except for last sentence)

14/ Reduce Inequality MW (er yes. This is what all of this is about)

15/ Remove the incentives for leverage embedded in personal and corporate taxation. MW

E/ DEBT

1/ a) Permanently ending the subsidised, speculative investment game that has brought us to collective ruin under mountains of unpayable debt, and b) writing off / down the value of the vast bulk of financial assets held by or in the name of hundreds of millions of people round the world (i.e. more than just the 1 per cent). Such destruction of capital would be without precedent in the history of capitalism and will continue to be resisted by the ruling global élite (criminal syndicate). HS

Unreconstructed Keynesians persist in the view that is possible to solve the problem by stimulating a revival of growth – through even greater public deficits and indebtedness – combined with the inflation they perhaps secretly hope will result from QE and thereby help to devalue the debts HS
(plausible comment reaffirming E1/)

This seems most likely to occur by means of debt default / repudiation, probably starting with Greece – but not ending there. Private sector banks around Europe, particularly the UK, hold much of this public debt. Hence the contagion likely to spark further losses at the likes of Barclays and HSBC. (plausibly links with M King’s warnings speech 23 10 12)

2/ No further public bailouts of any institution (they should be allowed to go bust with only retail deposits to be guaranteed by the state); (repetition – join up)
3/An end to QE (money printing) in any form. (Wasn’t it better than nothing? Government should retain the right to create money rather than the banks)
4/ Taxation of the wealthy including some form of land tax (D5/ consolidate?) in place of assaults on the welfare state (cuts to be reversed).

Governments allowed debt to become an informal substitute for wages. (comment not solution)
5/ Longer term debt reduction strategies RP (need elaborate)

Debt burden is creeping upward – at a faster rate than GDP growth. RP (comment not solution)

Cancel all odious debt. NI (fuzzy – see next)

6/ Create UK & European (& beyond) Debt Audit Commissions as advocated by the Jubilee Debt Campaign to identify what and how debt can be denied/ forgiven / restructured / written down /written off.

7/ Stabilise debt by cutting it by equivalent to just over a year’s GDP down to 180% of GDP. RP (Which debt? National debt is well below that now. Is this household debt or within finance sector debt? Fast debt reduction creates crises of demand)

8/ Banks and insurance companies recapitalised via a one off wealth tax on financial assets (comment not solution)over £100,000 to the requisite level of 27%. Why should we recapitalise them? Earlier we were saying let them go bust. Also D9/ Wealth tax is implicitly annual, though C1/ says ‘one off’)

9/ Make credit rating agencies independent. (Close those on pay of banks and corporations) NI (link previous credit rating comment)

10/ Instead of bailing out banks exposed to sovereign debt make available equivalent money as grants to indebted nation’s citizens to stimulate economic recovery. NI

11/ End of predatory exchange rate control (building up massive surpluses indebting others). (repetition)

12/ Leaving aside the question of whether growth is still feasible or desirable in the long term (highly doubtful, but definitional issues), it is pure escapism to suggest it could or should happen in the short term when all economic actors are paralysed by debt. HS (comment not solution surely?)

13/ Establish debt workout mechanism independent of creditors. NI Challenge power of creditors to determine policy NI (cf E6/ repetition – join)
14/ Government gives money to populace to reduce debt. If not in debt then to stimulate demand (to come from ?) Steve Keen
15/ Consumer loans cut by a fixed percentage. RP (what %? Incentive for mad borrowing if flagged up. Unjust?)

16/ National Debt figures are wrong as they do not take into account QE which effectively reduces government debt account to 45% of GDP. R Murphy (Tax Research UK) (true – implies national debt is less of an issue (at least in UK) than other forms. Action implication – relax slightly?)

F/ HOUSING

1/ Reduce the outstanding mortgage balance. RP (What ? Meaning How?)

2/ Constraining mortgage finance (Yes, but need mitigate short term lower access effect or just wait for prices to fall?)
3/ Building more homes (Absolutely; which finance & land release schemes? e.g. ‘low level’ QE? Planning allowed to release agricultural land with Local Authority taking profit? Just LVT? See F7/ below)

4/ Sharing out existing houses more fairly, sophisticated rent control schemes RP (e.g.?)

5/ Ambitious programme of investment in increased affordable housing / Speculation in house-price appreciation must be discouraged. / cutting the link between home ownership and wealth acquisition. (links with f3/)

6/ Moratorium on credit-crisis-related home repossessions. NEF
Houses facing repossession could be taken into the stock of public housing in the event of homeowners defaulting to one of the newly nationalised banks and mortgage providers. NEF

7/ New forms of ‘mutual’ home ownership – separating the cost of the land from the purchase price of the housing on it. Taking the land out of the marketplace through a Community Land Trust. At the same time, the land can be held in trust for the benefit of future generations and the community as a whole. Successful examples already exist but there is now a role of more ambitious Community Land Banks, which would create scope to find a match with new municipal bonds or other forms of targeted, low-interest capital. NEF

G/ SAVE DEMOCRACY

1/ Protecting democratic politics from plutocracy MW of FT (So reducing wealth differentials & more transparent lobbying systems?)

2/ No monopolistic control of essential services except through democratic processes.

3/ Guaranteed membership of democratic unions for all workers. DD

4/ Loosen anti-union laws – with democratisation of the big unions as a quid pro quo – and let employers and workers slug it out, Sectoral wage agreements RP

5/ Intro:
State planning versus Market-system? –

Even without capital ownership, (conventional?) markets favour private over public benefits and channel personalities in anti-social directions that diminish and even destroy solidarity. They reward output and power, not effort and sacrifice. They produce a disempowered class saddled with rote, obedient labour and an empowered class that accrues most income and determines economic outcomes. They force decision-makers to competitively ignore the wider ecological implications of their choices. Central planning, in contrast, denies self-management and produces the same class division and hierarchy as markets but instead built around the distinction between planners and those who implement their plans, extending from that foundation outward to incorporate empowered and disempowered workers more generally

5/ Proposals: Instead: cooperative, informed decision-making via structures that ensure actors a say in decisions in proportion as outcomes affect them and that provide access to accurate valuations as well as appropriate training and confidence to develop and communicate preferences—that is, we opt for allocation that fosters council-centred participatory self-management, remuneration for effort and sacrifice, balanced job complexes, proper valuations of collective and ecological impacts, and classlessness. PPS

6/ Participatory Planning—a system in which worker and consumer councils propose their work activities and consumer preferences in the light of true valuations of the full social benefits and costs of their choices.
7/ The system utilizes cooperative communication of mutually informed preferences via a variety of simple communicative and organizing principles (ref to what and where these are? (nb. Alvin Roth’s alternative allocation ‘market-like’ mechanisms?)) and means including indicative prices, facilitation boards, and rounds of accommodation to new information—all permitting actors to express their desires and to mediate and refine them in light of feedback to arrive at choices consistent with their values. PPS

8/ Workplace democracy/ employee ownership. RP Each workplace is owned in equal part by all citizens so that ownership conveys no special rights or income advantages. PPS

9/ Worker and Consumer Councils (also nested councils [ see G21/ ] (also allow for direct election to higher levels or just filtered through layers?))
Councils would be the vehicle of decision-making power and would exist at many levels, including smaller work groups, teams, and individuals, and broader workplaces and whole industries, as well as individual consumers, neighbourhoods, counties, and larger. Votes could be majority rule, three-quarters, two-thirds, consensus, etc. and would be taken at different levels and with fewer or more participants and voting rules depending on the particular implications of the decisions in question.
(bring up G13/ to here?)

10/ Balanced job complexes (rotation of skills) – (in moderation – Brain Surgery?)
Unlike the current system, we would not have a division between those who overwhelmingly monopolize empowering, fulfilling, and engaging tasks and those who are overwhelmingly saddled with rote, obedient, and dangerous tasks. For reasons of equity and especially to create the conditions of democratic participation and self-management, balanced job complexes would ensure that when we each participate in our workplace and industry decision-making, we have been comparably prepared by our work with confidence, skills, and knowledge to do so. PPS
Balanced job complexes do away with this division. They complete the task of removing class divisions that is begun by eliminating private ownership of capital. They eliminate, that is, not only the role of the capitalist with its disproportionate power and wealth, but also the role of the decision monopolizing producer who is accorded status over and above all others. Balanced job complexes retain needed conceptual and coordinative tasks and expertise, but apportion these to produce true democracy and classlessness. Job complexes to be decided by workers’ councils PPS

10/ Remuneration
We ought to receive for our labours remuneration in tune with how hard we have worked, how long we have worked, and how great a sacrifice we have made in our work. We shouldn’t get more because we use more productive tools, have more skills, or have greater inborn talent, much less should we get more because we have more power or own more property. We should get more only by virtue of how much effort we have expended or how much sacrifice we have endured in our useful work. This is morally appropriate, and it also provides proper incentives by rewarding only what we can affect and not what is beyond our control. PPS

11/ Guaranteed conditions for labour internationally DD e.g. TU membership (partial repetition-put above or International below?)

12/ Self-managed enterprise development model. RP (elaborate?)

13/ Capture of political control by the 99% through involvement of citizens’ assemblies (Join next to G9?)

14/ Lobbying restricted & transparent (e.g. no ex-regulators as lobbyists) DD Close the ’revolving door’ of politicians & top government officials working for corporations. Transparency rule for payments between governments and parties. Ban corporate donations. NI

16/ Greater control on private & corporate funding of political parties. DD Regulating the use of money in elections and by the supply of public resources to those engaged in them. At least partial public financing of parties and elections. MW

17/ Expose lobbying at World Trade Organization skewing trade rules and imbalances. NI

18/ Fair Trade to cover all trade. NI

19/ Bottom up and networked international democratic movements as opposed to neo liberalist globalism. DD
Global solutions need to be democratic. We do need institutions that take a global view, but we also need these to act in the interests of all, not just the most powerful groups. This requires real democratic control and a new approach to political participation. NEF

20/ Norway in the 30’s formed alliances between Unions (including those unable to pay) communes led by workers councils, open Labour Party inc Marxists, rural workers and small landholders, led to massive demonstrations and strikes, protection v eviction of farmers in debt. Large farmers in the Agrarian Party left the Conservative party; coalition with Labour took over in 1935 – public works, full employment, large firms taken into public ownership, progressive taxation, strong regulation of business for public good e.g. Glencore would be banned from their metal exchange. After a neo-liberal bubble ended in disaster seized 3 largest banks, fired top management, left stockholders without a dime, refused to bail out smaller banks. Did not go into crisis in 2008. G Lakey (split & reallocate to different sections?)

21/ Nested Councils: – is an alternative to Central state control (Leninism), representative democracy referendum democracy, autonomous communities (commons). (but also allow for direct election to higher levels or just filtered through layers?)

22/ A third type of direct democracy is to reject both the self-sufficiency and the referendum models and instead have small councils, linked to one another.
First, everyone gets to participate in a council that is small enough for face-to-face decision making and for real deliberation.
Second, many decisions will be made in these councils. That is, there are many decisions that should be made at this lowest level council because the decision affects only or overwhelmingly the members of that council.
Third, because there are many decisions that affect more than the people in a single council, the councils affected will have to coordinate their decision-making. This means that councils will have to send delegates to a higher-level council. (And, if the decision affects more than one of these higher-level councils, they would in turn send delegates to a third-level council. And so on.)
How would these higher-level councils operate? We don’t want to have delegates mandated by their sending councils, for then the higher-level councils will not be deliberative bodies. As noted previously, there would be no point to anyone speaking or trying to persuade others, or passionately explaining one’s special concerns, because all the delegates would have zero leeway — they have to vote the way their sending council told them to. This means that no one from council A gets to hear the perspective of people from council B, and there is no possibility of coming to a better position than either A or B alone proposed. On the other hand, if the delegates are not mandated and just do what they want, then we have the problem of delegates becoming like the unrepresentative representatives that characterize representative democracy.
What makes more sense is to send a delegate who, because she or he has been part of a council and participated in a deliberative process with its members, understands their sentiments and concerns, and is authorized to deliberate on their behalf with other delegates. But what will prevent this unmandated delegate from becoming an unrepresentative representative? First, the connection between delegates and their sending councils is an organic one, not at all like the connection between members of the U.S. Congress and their 600,000-member constituencies. The delegates are part of — and constantly returning to — their sending council. Second, delegates will be rotated; no one will be permitted to serve continuously as a council’s delegate. Third, delegates will subject to immediate recall. If ever a council believes that its delegate no longer adequately reflects its concerns and sentiments (and all higher-level council meetings are videotaped and easily monitored), then it may immediately replace the delegate with someone else. Fourth, the higher-level councils will only vote on matters that are relatively non-controversial. Whenever a vote is close (or when enough lower councils insist), the decision is returned to the lower councils for a decision.
It might be asked, why not send all issues back to the primary-level councils for a vote? But this is where our concern to avoid overdoing participation with excessive time demands comes in. By sending back contentious issues or those so requested by the lower-level councils, we have a check on abuse of power by the delegates to the higher-level councils. But to send everything back would simply be a waste of time. PPS

H/ LEGAL & INTERNATIONAL

1/ How to regulate businesses that operate on a global scale? Particularly difficult in finance. There is a choice: align support in times of trouble with regulation at the national level and so break up the integrated global financial system, or align support with regulation at higher levels and move towards a more integrated European or global politics. (relative weights rather than absolutes?)

The disjunction between the level at which politics operates and the levels at which business and the economy function is a concern.

2/ International Court to rule on financial crime beyond the reach of nation states.

3/ ‘Principles Based’ legal framework in UK (as in Nordic countries – not the present system of specific rules which leads to companies etc. looking for loopholes).

4/ End child Labour.

5/ Broad national control of mineral resources (not outsiders or elites).

6/ Arms reduction

7/ International Pollution Control (nb mentioned already – connect)

8/ If we really want a stable international financial system – and if we are remotely serious about global poverty – it is time to democratise the IMF. NEF (i.e. reduce US funding? Link governance below level of national government representatives? NGOs or what?)

9/ At the international level, the global financial system needs to be underpinned by a new global reference currency, along the lines of the bancor proposed by Keynes at the Bretton Woods summit, and backed by a basket of commodities. This will make currencies safer from sudden collapse, and will also provide an added underpinning to economies in developing countries that are wealthier in raw materials. NEF

10/ Reducing inequalities is not going to be easy. It will require the north to reduce its consumption of scarce resources and carbon emissions, which means some reduction of average consumption generally. It will require the global elite, spread across both developed and developing worlds, to curb extravagant lifestyles. It will require wage shares of national income to rise from their current very low proportions, with corresponding declines in the shares of profits and interest. And it will require governments in the powerful developed countries to recognise that they can no longer call the shots in all-important international decisions. NEF

I/ GREEN & SUSTAINABLE ALTERNATIVES

1/ End subsidies for fossil fuel producing industries. NI

2/ Make corporations accountable to society for actions that do harm environmentally and socially.
NI / DD

3/ Green Government bonds NI

4/ Massive investment in renewable energy. Help polluting industries to convert. NI

5/ Green housing and transport projects NI

(Above creates employment)

6/ Bank priority to lend to green projects

7/ Economic & Environmental Sustainability / zero growth NI TJ (v controversial & problematic definitions cf. P81 Tim Jackson stats open to question DD NO)

8/ Tighter control of Hazardous Waste & its Disposal. Pollution control DD

9/ Farming stays heavily dependent on oil to grow and transport what we eat, it will remain so. Yet, if we grow not all, but more food locally and use less oil to do so, we can curb future food bill rises, shift away from large-scale, oil- and gas-guzzling farming, to smaller, lower-input or organic farms. NEF

10/ As an organising principle, we should also move towards taxing more what we want less of, such as pollution and unsustainable consumption of natural resources, and taxing less what we want more of, such as those activities needed for the environmental transformation of the economy. 11/ This transition should be managed not only to just protect the poor, but so that it reduces inequality, just as Roosevelt’s original New Deal did in the 1930s. For example, pensions could be adjusted to enable people to save energy rather than just pay for more fuel. NEF

12/ The Government should be implementing plans for dramatic decarbonisation of the electricity supply, reduced energy use in buildings, increasing renewables on the scale needed, and hugely expanding clean reliable, public transport. GREEN NEW DEAL. / The Green New Deal calls for the re-regulation of finance and taxation, linked to a transformational economic programme to substantially reduce our dependence on fossil fuels. At the same time, it would provide secure investments for pensions and savings, using that capital to kick-start a massive public and private works programme to cut energy use and create countless high-quality, green-collar jobs. NEF

13/ Re-localising the growing of food, (an essential direction, but technically implausible as a complete solution DD) which would not only benefit health, but also strengthen communities that have lost touch with the very stuff of life – the food we need every day. Build a sustainable food system that will leave us all more resilient to future shocks; either to the climate, or to the financial system, that are driving the climate beyond its limits. The proposed creation of new food hubs, coupled with a determined effort to grow vegetables and food in London’s already extensive (and largely unused) green spaces. NEF

14/ The environment is a classic example of a ‘common-pool resource’: no one can be effectively excluded from using, but it is finite and some resources in it are diminishing. Common-pool resources are subject to the ‘free-rider problem’: So tradable permits combined with a cap on emissions, for example, are proposed as a way to guarantee lower overall emissions. Introduce the free-rider problem; and tradable permits are part of the problem rather than part of the solution – they reinforce a mindset that leads to the problem in the first place. The free-rider interests of carbon-traders will always mean that the cap is set too high and the price of carbon too low – which is exactly what happens all the time. To break this deadlock we need a different social logic: ‘I will even if you won’t’. Utterly illogical from the point of view of commerce and contract, it is entirely rational when it comes to building the kind of social movement that will enable us to respond to the challenge of climate change. NEF (Dobson) See Olstrom

J/ CONCLUSIONS

Warning The initialled sources that make up this roadmap have not always been quoted precisely because this would have made the grammatical flow even less smooth. But a sincere effort has been made to maintain the argument. We apologise if we have failed anywhere. Obviously, similar points may have been made by others, sometimes earlier and some attributions may have drifted during the editing process. Members of the Economics Working Group temporarily initialled freely confess to having stolen their points from superior sources which they either no longer recall or who might not wish their association with Occupy to be trumpeted.
BD2 EWG Banking Document 2, CC Chris Cook, DD David Dewhurst, et.al. = and others, GK Gordon Kerr, HG , HS Harry Shutt, Kevin Dowd, MW Martin Wolf, NEF New Economics Foundation, NEG ,NI New Internationalist, NO Nelio de Oliveira, PPS Project for a Participatory Society, RJ Ross Jackson, RM Richard Murphy, RP Richard Paton, SK Steve Keen, TomF Tom Fitch, TimF Tim Flitcroft, TJ Tim Jackson, TL Tom Lines, TRUK Tax Research UK, W&P Richard Wilkinson and Kate Pickett

We realise that this is not a true Roadmap – yet. Consider change of title – unfortunate resonances for some?

GLOSSARY
FCA Financial Conduct Authority– one replacement body of the terminating UK FSA
(Financial Services Authority)
GAAP Generally Accepted Accounting Principles – US originated now fairly international framework of guidelines for accountancy practice.
IASB International Accounting Standards Board – Delaware registered subset of IFRS
IFRS International Financial Reporting Standards – London registered equivalent of GAAP (Arguably they should merge.)

LIBOR London InterBank Offered Rate – (dodgy) system which sets the base rates of interest charged almost world wide for various transactions “The rate at which banks don’t lend to each other.’ ☹ W Buiter & Mervyn King
PRA Prudential Regulatory Authority – another replacement body of the terminating UK
FSA (Financial Services Authority)
SWIFT Society for World-wide Interbank Financial Telecommunication – a bankers’ co-operative > 10K members.
Vicker’s Report – post crash UK report on reforming backing – generally regarded as too weak, except among banking fraternity

(If you’ve got this far (& didn’t just flick to the end) you deserve to know that Dave D is currently (Feb13) collating/ splicing in responses – you can email him directly or post on EWG list) – or more riskily on this website

[btw Janos – can you update the contents links with the current text page numbers? Ta, in anticipation]