[Current capital flows are used to perpetually multiply themselves while escalating demands on the commons, even as it becomes unprofitable, brittle and toxic. To restore the natural generative and replenishing functions of finance and the economy and better match resources with needs, we must find ways to use finance and finance instruments to revalue future value and to grow the commons, in particular to use derivative as a measure of growth of the commons, and to revalue future value.
The transition to a circular economy for the investment and financial commons must start at natural limits to profitable growth for the sake of growing and for vitality and growth of the commons, sustaining investment profitability and guiding investors to higher purposes for their profits than putting money into the productive economy to take growing amounts out of it.
Trends & Existing initiatives:
- The Giving Pledge is a move in this direction, that needs to be adequately channelled...
- Financial & investor markets and searching for sustainable returns
- Endowment funds for community, commons and sustainable innovation.
- Business communities searching for sustainable investments and products
- Risk Management, (re)insurance companies looking to reduce their risk
- Crowdfunding alternatives]
References:
- Bernard Lietaer <<Find the relevant reference>>
Dynamics at work:
- Future value approach. Use of negative interest rates to promote long term investment in productive activities (see Bernard Lietaer) as against the compound growth driver which is compound interest that systemically reduces future value to negligeable.
- More trivially, shifts from taxing income to taxing depletion of commons such as non renewable resources and waste will reinforce this, as will real world commodities and energy price rises. The removal of perverse subsidies which promote extraction over regeneration or stock over flow would add impetus.
- The practical transition is for investors of all kinds to find higher purposes for their profits, such as healing both their world and environment, avoiding direct liability for growing hidden impacts, and in the spirit of the commons and well-being. Developing some responsiveness to the emerging and unexpected needs of their environment, and ready to explore errors and omissions in their own teachings and past conclusions, that living in a changing world may make important. See articles A biomimicry for self-regulating commons and Self Organization as niche making.
Who?: Local and regional communities and stakeholders -the people, business community, Insurance sector, Finance sector, Investors, regulators, consultants, economists
- Detailed Action Items: [Expand more?]
- Research the natural functions of the economy
- Research and develop new financial and monetary systems
- Find ways to indicate the profitability to the whole of different kinds of investment, creating a new kind of financial commons guided by transparent policies for whole system profitability (see Assessment, reporting & monitoring section).
- Develop endowment funds and safeguards for commons based investments (against volatility and cooption -misdirection of funds)
- Look at how Social Impact Bonds can be used to grow the commons.
- Work with insurance companies to embed the value of the commons in risk approaches
- Research ways to evaluate and revalue future value of the commons. In particular find alternative incentives to compound interest as growth driver that systemically reduces future value of an investment to negligeable (see Bernard Lietear - negative interest rates).
- Look into shifts from taxing income to taxing depletion of commons such as non renewable resources and waste. The removal of perverse subsidies which promote extraction over regeneration or stock over flow would add impetus.