Friday, June 26, 2009

To Have and To Hold Until Life Insurance Do Us Part

I was delighted to learn from today’s Wall Street Journal that next Tuesday, at AIG’s annual meeting, the U.S. taxpayers will be represented as they are now the largest shareholders. As a taxpayer, I surveyed my mail and found that apparently my proxy statement must have been lost by the U.S. Postal Service so I’m writing to ask the rest of you to “Vote No” to the board and its plans. Here’s why.

In what is clearly a Ponzi scheme by any definition, the Fed is about to receive, unless interrupted by shareholders “bonds valued at up to $8.5 billion backed by life-insurance policies, which could cut the Fed debt,” according to the WSJ and corporate statements. The Fed, for all of our benefit is NOT an organization which benefits the U.S. taxpayer and placing life insurance annuities into the Fed’s hands is an extremely bad idea. The Federal Reserve does not have any business benefitting from life insurance annuities and income ahead of the taxpayers. And, equally challenging, those beneficiaries who have policies which now are being leveraged to manage AIG’s balance sheet, my not be excited to know that the liquidity that is called upon at death is now leveraged by an insolvent financial institution which hasn’t been able to manage hundreds of billions of dollars that have been minted by the Treasury. Using funds from one investor to pay off another is the core of Ponzi scams and this one is epic in proportion. Come to think of it, if the three government trustees representing our interests want to have qualified expertise to execute their current plans, we should see about getting Bernie Madoff on the board candidate list and select R. Allen Sanford as an alternate.

It would be a great idea to have all AIG life insurance policy holders and beneficiaries, to look carefully at their contracts to see if they actually authorized the assignment of their funds for use in this fashion. Wouldn’t it be fun if the fine print – that nemesis of transparency – actually rendered AIG and U.S. government actions impossible or illegal? Wouldn’t it be fun if someone actually woke up and realized that the taxpayer’s interests are not only being overlooked but, more tragically, the fiduciary trust of life-insurance is now being gambled in a government sanctioned Ponzi scheme?

Like I said, I didn’t get my proxy statement. Maybe it was the failure of the postal system. Maybe it was because AIG doesn’t have me on their favorite shareholder list. During my frequent visits to 70 Pine St. in the financial district in Manhattan, I did not always leave having made the best impression when suggesting that accountability and collateral integrity had value. Regardless, I trust that the rest of you show up for the meeting and vote “no”.

After the vote, I hope that one person has the courage to stand up and ask for genuine accountability. In the $173 billion of “aid” (isn’t it nice to know that we’ve no longer even come to refer to this as “bailout” or “debt” but now refer to this in the same way we’d refer to providing AIDS or malaria treatments to our neighbors around the world?) we must have crossed some threshold where we as taxpayers and policy holders are entitled to have genuine accounting for this mess. Obama’s promise of transparency in government can no longer be squashed under the pejorative assumption that it’s too difficult to understand. Tell the truth. As I’ve written before, the pension exposure here is already toxic. Turning the contractual obligations on life insurance benefits over to the Fed is adding insult to injury.

In his up-coming book, The Twelve: 12.21.12 Time Is Running Out, William Gladstone concludes :

“Truth, integrity, and love are what will always matter most in life. The shift that is coming will highlight these simple values, which have been known throughout the ages. As a species and planet, we are facing huge challenges, but the first steps are to wake up to who you really are and wake up as many others as you can.”

Don’t hit the snooze button and go back to sleep. Wake up. Let your friends and colleagues know that the paradigms of contract, public accountability, vows, and trusts all need to be invited into the agora and need to be reclaimed so that commitments made for life are honored.

I will be off-line for the coming week as our family – Colleen, Kate, and Zach and I – partner with 25 others in Reynosa Mexico where we’ll be building houses with our dear friends who work to provide shelter for the displaced homeless in this land of NAFTA’s nightmare. I am deeply grateful to many of you who have contributed to allow us to take the largest group we’ve ever led. The houses and roofs that we build will have your spirit in every sweat soaked line of mortar. While we sweat under the sweltering sun, I trust that you will celebrate a new form of Independence on July 4th. Rather than toasting an event of tax revolt and violence – I trust that you will find ways to share in celebrations of independence from the consensus and tyranny of greed and fear and do so with dependent and interdependent communities wherever you find yourself.


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Friday, June 12, 2009

A Flock of Black Swans Just Landed

Well friends, we have been discussing the next phase of the economic collapse for some time and I just wanted to point out that a flock of Black Swans just landed (thank you Nassim for the metaphor). In a rather inconspicuous gesture, this morning saw the announcement by The Hartford (the 200-year legacy life and property insurer) that they are taking $3.4 billion in TARP funds and selling up to $750 million of common stock. What makes this significant is what their liquidity challenges represent.

For sometime, I’ve been advising that the reason why Washington is scrambling to put bandages on the hemorrhaging patients in the economy is because there is a greater (and known to at least some of them) specter looming in the darkness. The unholy cover-up seeks to mask the fact that the much touted illiquidity of entitlements (in the form of Social Security and health care obligations) are real but the greater exposure is the significant lack of capital to meet contracted payment obligations in the private sector. Life insurers, annuity managers, pension managers, and others – all who were all too happy to scoop fat fees off of managing investments – are not only undercapitalized to meet obligations but, more unfortunately, the safety net in the PBGC is also illiquid. I seem to be alone in pointing out that the AIG bailout had nothing to do with the importance of insurance (look at the fact that AIG doesn’t want to pay for the US Airways Hudson River miracle) but it served as a money-laundering facility to push funds to banks and other financial institutions with whom AIG had counter-party credit risks. However, the laundry exercise was a smokescreen for a greater risk that The Hartford and Allianz balance sheet uncovers – namely that the pension guaranties, together with life insurance obligations – two stalwarts of American retirement comfort – are in massive trouble and that shoe is falling now.

In case you’re not convinced, ask yourself why unions wound up with so much of the automotive bankruptcies. It’s not to confuse the line between management and labor (thus causing Keynes to do back-flips in his grave) but rather it is to shield the public from seeing the degree to which pensions have been short-changed and mismanaged.

“The Armageddon-risk is off the table,” according to Hartford’s Chairman and Chief Executive Ramani Ayer in his June 12, 2009 interview on CNBC. That’s good because it never was on the table. As I discuss in my radio interview which will be broadcast Monday, June 15 on VoiceAmerica, we’ve got some serious reckoning coming and a tiny piece of tribulation and judgment may be served in the main dining room. No dark horsemen – just a few black swans!

For more encouraging reading, check out the two previous posts from the Chicago Globalization for the Common Good Conference.


Wednesday, June 10, 2009

The Chicago Declaration: An Interfaith Perspective on Globalization for the Common Good

The Eighth Annual International Conference

“Globalization: The Challenge to America”
Chicago 2009 - Loyola University

Prepared in a collaboration of James Quilligan, David Martin, Steve Szeghi, Kamran Mofid, Jim Kenney, Students of the Global College, and other attendees

We honor the spirit of the native peoples, the Pottawattamie, who dwelled here long ago on wetlands that stretched between a generative river and a great lake, calling it Chikagu, or ‘Land of the Wild Onion’. We come together in the city of Chicago, an economic and cultural crossroads, which has been a center of US and international affairs from its inception in 1833. Our conference, meeting in the Land of Abraham Lincoln, has been inspired by the vision of a new President from Chicago, Barack Obama, and the real hope for a new alignment of the common good of the United States with that of the world.

Since our last gathering in 2008, the world has changed significantly. We have entered into the most serious economic crisis since the Great Depression. Poverty, social inequality and violations of human rights have widened sharply. Under present national policies, as economic malaise, unemployment and debt continue to mount, the real cost of ‘correcting’ the market will continue to be borne by the world’s poor and the environment. Clearly, climate change is far more serious than we had believed only a year ago; and some researchers now say that without a comprehensive intervention to reverse the trendlines pointing toward species extinction, we cannot even assume that there will be future generations upon the Earth. As all of these social, economic and ecological crises heighten, international political tensions also grow more serious. Consumptive individualism and neo-liberalism are in crisis. Globalization is no longer merely the challenge of our growing interdependence, it is also a challenge of transforming human experience and values in a time of crisis. We have no choice but to face these new clouds on the horizon and to embrace real change.

Many of the world’s problems originated in US policies and yet the potential for solving them is also uniquely vested in the United States. The US must play a significant role in the determination of the new world that is emerging through this present crisis. In helping shape institutions that will take us beyond market economies committed to uncontrolled growth, the US must also join with other states in charting the pathways toward social justice and the realization of human rights. Policy must now embrace all of the participants in globalization, not only in Washington DC and the world’s capitals, but in global civil society, business, education, the media and among all other members of the global community. This entails a transition from a global social philosophy of individual rights and entitlements, excessive economic growth and ecological despoliation to one of increasing inclusiveness and responsibility. Our challenge is great. In a time of continuing crisis and polarizing viewpoints, can the United States and the world agree on a new ethical approach to the global economy?

The participants of the 8th annual conference of Globalization for the Common Good have explored many of the structures needed to move us toward the global good. As conference delegates, we affirm our inalienable rights, not only as local and national citizens, but as members of the human race and citizens of the planet. We are heirs to the whole evolution of consciousness and culture, which means that we human beings have to see ourselves as part of the Earth community and recognize that all of life is bound together. We realize that, as members of the household of humanity, we must provide security, sanctuary and constructive engagement for all of our human family.

Sustained by the bounty of all, called by the Sacred, and animated into action by the Spirit of Peace, Justice, and Reverence for All Life, we pledge to hold ourselves responsible and accountable for many commitments. We affirm the vital importance of

- non-violence, dialogue and charity in personal, ethnic and national relations,
and deplore the increasing violence in our world, acutely aware that, with the
proliferation of weapons of mass destruction, there is an increasing possibility of
‘humanicide’ which would take genocide to an even higher magnitude of horror

- the full participation of women in the work of remaking our world, recognizing the rich
complexity of the feminine dimension of the human and the creative compassion, insight
and vision that women offer

- the physical and cultural survival of indigenous peoples through new expressions of sovereignty and self-determination

- the world’s wisdom traditions, which offer living examples of the fruits of contemplation and reflection for contemporary society

- the values that all religions share, arising from their different histories, and the need for particular religions to look beyond the confines of their own dogmas and practices and recognize our common humanity in responding to the cries of those who suffer and in aiding community life through the task of rebuilding and reconciliation

- the rapidly developing global interreligious movement, which offers a radical challenge to sectarian intolerance and violence in the name of religion

- the commons, which has much to teach us about the self-governance and allocation of our shared resources – natural, social, cultural, and intellectual – as an alternative that transcends the interests of the private sector and the State sector in preserving the values of our inherited gifts for future generations

- biodiversity and interspecies ethics, and the need to recognize and legitimate the essential rights of all of Earth’s life forms

- intergenerational engagement of our elders with our visionary youth, who must no longer be ignored in the creation of new economic, technological and spiritual perspectives that lead toward action for the common good within society and in their own lives

- elementary schools, high schools and universities in developing ‘whole person - whole planet’ education – including the teaching of conflict resolution, a spiritual and ethical approach to mind, body and spirit, health, a curriculum on world religions, and the integration of ethics and economics – as a means of inspiring global citizenship

- a new global architecture for a virtuous economy, ensuring a financial system that is more responsive and fair, a trade system that is socially and ecologically just and sustainable, and a monetary system which provides equitable purchasing power for everyone

- businesses in encouraging competitive markets and economic growth, but also in embracing their intrinsic moral responsibility to democratize labor, democratic capital and preserve the natural commons of the planet for future generations

- independent media in informing, educating and representing cultures, nations
and religions in a balanced, technical and socially responsible manner

- the internet and new communications technology – an emergent social and cultural commons – which should remain open to all users for the purpose of networking, distributing and sharing relevant information

Today, we face a daunting transition as our de-centered, post-modern world gives way to an uncertain world of global governance. It is true that people will only accept change when they face necessity – and that we only face necessity when a crisis has come upon us. Such a moment is upon us now. We must engage these global challenges as opportunities for lasting transformational change. The problems of globalization need to be brought down to human scale. This can only be done by adopting global policies commensurate with the local values of people across the planet through the bottom-up process of grassroots globalization – the infusion of our local values into global decision-making.

The challenge to the United States, and to the world, is to adopt these new global standards and ensure that they become global norms. We believe that the interests of the US and the world are congruent. We ask: is the United States prepared to assist the shift of the destructive global political-economic-environmental order from one of unbridled growth to one that embraces material wealth creation yet also preserves social and ecological well-being, increases human happiness and enhances community life and meaning? We call upon the United States to embrace this new identity and legitimacy in a time fraught with global uncertainty but also rich with opportunity for the global common good.

Globalization for the Common Good, at Loyola University, Chicago
June 4, 2009


Wednesday, June 3, 2009

De-nominating the Common Wealth: An Exploration into the Currency of the Commons

Plenary speech at the 2009 Globalization for the Common Good Conference, Loyola University, Chicago.

Dr. David E. Martin
Executive Chairman, M•CAM
Batten Fellow, Darden Graduate School of Business Administration, University of Virginia

Examination of the artifacts of value exchange involves a journey inextricably linked to social, religious, and cultural myth. Imagination or invocation of alternative futures invites us to consider the archetypes built upon projections of our communal myth and hold the same in agnostic, polychromatic light. Our ability to manifest new utilitarian metaphors for recognition of value exchange will be log proportional to our willingness to reconsider the dogma woven into our discourse. In this exploration, I stand on the shoulders of Gregory Bateson’s invitation to see linguistic expression not as noumenon or phenomenon but rather as a metaphoric approximation of essence in which the impulse to denominate is subordinated to a receptivity to illuminate. The Common Wealth will manifest as much at a dinner with friends and strangers as in a ledger of accounts. Inseparable from the Currency of the Commons will be an unfettered visibility into all implicit costs and consensus benefits.

It is ideas, not vested interests, which are dangerous for good or evil
- John Maynard Keynes, 1936

We begin our exploration of the Currency of the Commons in one of the most generous examples I’ve experienced. Ironically, in the same land which has been ravaged by the unchecked greed of gold prospectors who consider the blood offerings of the oppressed inconsequential to satiate our lust for gold, one can sit around the elders’ fires and learn how Commons Currency has worked for millennia. I summarized my first experience with this knowledge in an essay excerpted below.

Hermetic Volcano: Ancient Futures of Wealth : A Consideration for the Future of Humanity

En route from and to Port Moresby to and from Rabaul, Papua New Guinea; July 27 and 31, 2008

Dualism, polarity, conservation of finitude, and metric-centricity have been the cognitive companion of Western and Mediterranean philosophers, scientists, and cognoscenti for over two millennia. Fueled by traditions and inspirations from Hermes Trismegistus in Egypt, to Pythagoras, to Aristotle, to St. Bonaventure, to Descartes, to Galileo, to Kepler, to Newton, to Kant, the liturgy of human reasoning has found itself in a constant struggle surrounding the Principles of Correspondence, Polarity, Causality, and Gender . In our present Newtonian framed obsession with objectivity (marketed under the laudatory and self-congratulatory term “science”), our minds have become enslaved to the notion that reality is a blend of the noumenon and phenomenon in an omnipresent, harmonic. Spurred on by the Adamic imperative to “name” or “denominate” – more contemporarily rationalized by Kant’s epistemology and Bateson’s Ecology of the Mind – and Descartes’ reductionistic rationalism, even our lucent minds fall prey to the temptation of believing that, to achieve transformative cognitive evolution for the transformation of human essence, our understanding of ancient wisdom requires a Hermetic dualism. Modern purveyors of quasi-Eastern metascience and metaphysics attempt to rationalize the yin and yang principles and the I-Ching into linguistic metaphors that rob them of their inherent beauty and complexity.

If we know we know (gnosis) than we can control, and with that control, we tell ourselves, comes power over – power over others, power over our destiny, power over that which must be changed to conform to our illumined projection of “should”. That which we don’t yet understand will be forced into an experimental model which we will design in our ignorance to measure that which we don’t yet know to confirm or contradict a hypothesis framed from reducing our capacity accept that which is unknown. Following our Adamic psychosis to name, without regard to what the aardvark really wanted to be called, we are deluded to believe that linguistic encoding is a moral imperative rather than seeing it as the means by which we restrict ourselves to communicating with a finite tribe in compressed dimensional code. Our lucency, in autoerotic ecstasy, celebrates past Renaissance and calls out for new Renaissance all the while denying the ever present completeness of Cognogentive Fusion through which all that exists is both knowable and known.

I sat around an ever-expanding circular breakfast table in Port Moresby this morning looking out over the wind swept heliorefractive Coral Sea with the most engaging set of companions. There were friends and colleagues sitting over coffee, eggs, and toast speaking about the epistemology of value. In our conversation, we were exploring the latent sequelae of ethnographers who, in the first half of the twentieth century, etched an image of Papua New Guinea and its people in the minds of the north and west. My inquiry was focused on elucidating the notion of “value” in the collective social framework prior to the projections of money, currency and development which followed in the wake of Western intervention. Specifically, I was interested in learning more about “shell money” and “bride price” – two ethnographically contrived terms that, I will propose, most egregiously damaged both the local self perception in context to outside influences as well as corrupted the appreciation of a complex social structure from which we could learn considerable improvements to our current mercenary imperatives.

Before outside influences infected the islands, “shell money” was called “taboo”. Depending on the location of the community, the type of shell selected to represent taboo was based on a complex understanding of the life that the shell represented. Among the Baining and the Komgi in what is now East New Britain, the shell chosen to be strung along rattan fibers was a small white shell about the size of a human tooth. This shell represented the perpetually effusive fertility of the sea – a symbol of the feminine mystery of the giving of life. With the top spiral of the shell removed, these small shells were strung onto fibers which typically measured the length of the stringer’s fully outstretched arm from finger tip to sternum. Ironically, and supporting the notion that taboo was not viewed as an absolute currency, the taboo was not adjusted against a “normative” arm length. If you had a shorter arm, the taboo had equal value despite the obviousness that there were fewer shells.

The taboo represented several important social constructs. First, it represented effort and industry – explicitly the sweat of the brow. When one had achieved great productivity of effort, the honor of taboo served as a physical memorial. Second, it represented honor. At Custom, visitors to the community would offer pieces of taboo, breaking off section by section and bestowing it on hosts based on the honor status of a person in the community. Both the generosity of the giver (as evidenced by the quantity of taboo offered) and the recognized honor of the recipient (evidenced by the quantity of the gift) were explicit symbols reinforcing the social value of leadership, wisdom, and rank. On finer examination, a profound subtly emerges. One’s taboo offering was not necessarily empirically assessed on quantity. Rather, the proportionality of the division of gifts provided recognition of the social values, not the absolute magnitude of shells. Third, taboo served as a means of sealing agreements between families and communities. Here, we can explore the second construct of the mistakenly identified “bride price”.

When a baby boy and baby girl were born, it was not uncommon for parents to begin the process of arranging, should the children reach adulthood, the ultimate marriage of the two. As the years through puberty passed, the families and even the broader community would begin assessing the consequence of such a consummated union. Given that land and its use was passed through matrilineal processes, the productivity of the land that would be entrusted to the girl would be considered as a component of the feminine homage that would be recognized at the marriage. Ultimately, the families would agree on the taboo – the forward option representation of future industry and productivity – associated with the granting of access to fertile ground and this would establish the feminine homage taboo. At the marriage, the families would give and receive lavish gifts of food – taro, pigs, coconuts, fish, bananas (and obviously more than a few betlenuts) – and the entire extended family of the man’s family would contribute taboo to offer as the gift to the bride. The bride’s family gift of food and provisions would, in some respect, evidence the bounty of the land that would now be serving the next generation as the bride’s familial land would, in all likelihood, be the future home of her children or their cousins while she would live with her husband. Rather than a dowry, the mutual exchange was reinforcing the sacredness of fertility and an escrow, of sorts, on future productivity of both family and land. Unfortunately, entranced by the artifact of shells on rattan (called “shell money”), this intimate communal confirmation of common values of fruitfulness was viewed by outsiders as a commodity transaction.

More profound still, is the recognition that taboo was not a redeemable, horded currency. To the contrary, while one received it at certain festivals, Custom, weddings, and funerals, one was also obliged to give in proportion to what one possessed. In short, to him who had been given much, much was obliged. In fact, taboo, rather than being a measure of horded wealth, was in fact a measure of honor and generosity. In small fragments, strands of taboo could be used to buy a chicken or a pig in commerce, however, the complete taboo serves as a deeper symbol of mutually held beliefs of honor, dignity, feminine fertility, and life. Taboo was and is not a currency contract in a dualistic representation of a monetary exchange. Rather it is an infinitely dimensional reminder of the fruitfulness that comes in holistic communal values.

What would happen if we invited ourselves back to a place where the past, present and future could walk on water, call sharks to play, carry the breath of ancestors in woven blankets, and walk with the forest spirits on burning logs? What would happen if we understood that the veins of rich minerals which link the energy of the sea to the mysterious productive land on the top of the mountain actually were there to sustain life, not minerals to extract, melt, hammer, and gild our pagan consumption? What if we were known, not for what we give in the name of Aid, but by our ability to insure that for everything we give, we humbly receive, with honor and dignity, an equal portion back?

I believe that we need to re-discover and be taught taboo all over again. Ironically, even that word has been corrupted by our neo-pagan christian dualism of good and evil. Taboo is the explicit, often unspoken, understanding of that which is pure, that which edifies, that which destroys, that which celebrates, and that which denigrates. It is the recognition that physical manifestations of wealth are only known in their exchange – not in their hording. It is the recognition that the creative fertility of the feminine, with all of its complexity and elegance, is what holds highest honor because, volcano, plant, or womb, the breath of life is the sacred stewardship which is that to which and from which all other things flow.

Our epistemology of economy finds its roots in ignominious inhumanities. Our modern notions of currency, market exchange, and central banking are indistinguishable to the Judeo-Christian story of Joseph in the land of Egypt when, during a great famine, Joseph and Pharaoh created the first documented commodity exchange in which currency, commodities, property rights, and futures markets were created . While frequently overlooked, this financial innovation derived from desperation and famine serve as the archetypal inspiration for even the most sophisticated market transactions today. Managed scarcity – the basis for historical and modern economic models and practice – saw humans and land as commodities for exploitation by the few for the benefit of the few. While Niall Ferguson celebrates modern financial innovation alleging it to be a crowning achievement of the modern establishment, a careful review of the Egyptian famine account contains every element of the risk-hedged arbitrage market behavior that was both celebrated and vilified in 1929 and 2007 (Aetna in the turn of the 20th century, AIG in the turn of the 21st century and J.P. Morgan, Chase, Citibank, Bank of New York, etc. and their predecessors in both).

The very word economy (derived from the Greek term describing the management of a household and first used in its current expression in France during the 15th and 16th century) emerges during a period of revolt against papal and sovereign taxation excesses in which the “house” doing the managing was the Church and the Crown. In the records of an Estates General gathering in 1484 in France, it was stated that, “Money is in the body politic what blood is in the human body: it is then necessary to examine what bleedings and purgings France has undergone.” Hale and Mallett summarize that, “the two major bleedings were papal taxation and the purchase of luxury goods from abroad. The effects of the first could be countered by political action, the second by ‘drawing gold and silver into the country.’”

The story of money as a reductionist expression of denominating value is inextricably a story of taxation – originally required to support religion and war. It may be worth noting that little has changed in at least four millennia of human history as, to this day, our fear of considering alternative, more orthogonal and humane value metrics, may have, at its core, profound angst that to question monetary and economic precepts is to menace a divine right. Five hundred years after Louis XI and Henry VII substituted luxury consumerism and terrestrial conquest for the hegemonic role of the Church’s control of wealth (set in full preeminence by Innocent III in 1199 in his financing encyclical for the Fourth Crusade), to suggest that society can operate without a single, scarce artifact of monetary exchange managed by a sovereign is still heresy. Therefore, as we consider a Commons “Currency”, we are invited to consider not only the laudatory energetics of a more human value exchange but we, at the same time, bear an obligation to consider the transition between the incumbent now and the future to which we strive. This position is seldom taken when we speak in sweeping idealisms however one of the enemies transformation comes in the form of a failure to invite the current actors into the future.

The Commons Currency hinges on a transformation from extractive finitude and scarcity management (thermodynamics) to stewardship plentitude and fruitful engagement (cognogentive fusion). To highlight this shift, it is helpful to consider the ancient future wisdom embedded in our current myths. To that end, I have selected, in one pole, John Maynard Keynes’ The General Theory of Employment, Interest, and Money (1936) which highlights the catechism that has defined and enslaved modern economic thought. Tragically, Keynes himself concludes his posthumously misapplied (though frequently invoked) treatise stating that:
“Our criticism of the accepted classical theory of economics has consisted not so much in finding logical flaws in its analysis as in pointing out that its tacit assumptions are seldom or never satisfied, with the result that it cannot solve the economic problems of the actual world”
And, while I will not reflect on the adequacy of his insights in 1936, I will make a few doctrinal observations from the Scarcity Sect which, like the indicted “classical theory” beg careful scrutiny.

First, Keynes, in his own hand, and in the current U.S. administration’s incompetent application of his tenets, builds his entire thesis on the fact that “consumption – to repeat the obvious – is the sole end and object of all economic activity.” The “propensity to consume” together with the centrality of malleable monetary friction are corollaries to every argument in his model. The natural sequelae of this foundational postulation include:
1. Labour (a euphemism for all those engaged in productive endeavors) are a commodity and are Pavlovian actors who are coerced and manipulated by fickle money-wages and interest ;
2. Natural resources supporting extraction (gold, silver, metals, oil, etc.) are free for the taking, exist for the purpose of consumption alone, and are essentially baseless in value at extraction thereby rendering them “free” for exploitation; and,
3. That entrepreneurial psychology will persist in seeking to maximize monetary profits as sine qua non giving no consideration for value metrics apart from those defined in monetary terms.

Superimpose on an understanding of Keynes’ writing the fact that one of his inspirations was Sir Isaac Newton (as evidenced in his private collection of Newton’s personal papers) and one can easily see how impersonal Euclidean reductionism was a desirable utility to build the General Theory arguments. And without irony, the University of Chicago-inspired condescension of Keynes in favor of Free Market excesses and unbridled hubris, while riding the wave of the bubbles and bursts from the Nixon-era forward to the evidencing of our present unpleasantries in 2007, equally fail both in their critique of, or effort to validate or repudiate, these inhumane assumptions.

Economists from Smith to Keynes to Friedman have been felled by the most improbable, identical stroke – the digital age. While I’m far from nostalgic about the brave new world where we’ll digitally manifest crowd sourced unity for all human needs, I am struck by the subtle coup of the digitally-empowered commons to change all the rules.

Fundamentally, the Currency of the Commons – an infinitely orthogonal value surrogate – changes all the rules. First, value can be entirely uncorrelated from consumption. In point of fact, reward and benefit can be linked to the capacity to produce. Observe in our economic transition, for example, the fact that ad revenue (not the enterprises placing advertisements) forms the basis for the intoxicating equities like Google, Amazon, eBay, and others. In a world where consumption is the raison d’ĂȘtre for all enterprise, we now deify the surrogates of conveyance of things, not the things. Further, by acclaim, virtual communities are now preferred venues for social interaction where electron infinitude replaces the extractive industrial complex reliance on scarcity management. And in a world where Moore’s Law has obsoleted itself, the notion of monetary surrogate depreciation-based metrics of value have become the laughingstock of irrelevance.

The emergence of the great fusion reactor that will energize and animate the next iteration of value exchange and trade will be predicated on the removal of knowledge asymmetries in recognition of the value in transparency and homage to humanity. All economic endeavors since the Fourth Crusade have been inextricably ensnared with cabals of information asymmetry. Those with the gold, make the rules and enforce the same for their hording benefit. This fulcrum control around which financial leverage has been wielded enters into auto-obliteration with the persistence of network information exchange.

The foundation of the Commons Currency renders visible the all-in costs of every trade and trade surrogate. For example, rather than the indulgence-inspired transubstantiation of environmental carnage for carbon trade credits, the Commons informs the counterparty procurer of the environmental, social, cultural, and energy components of every exchanged unit. The blood of the tin miner is seen on the box of the iPod. The cyanide-laced stream graces the cover of the gold-mining company’s annual report in London, New York, and Toronto. Similarly, the pasture, filled with llama on the terraces in the Sacred Valley in Peru, is shown with the women’s cooperative members weaving and dying cloth on the tags of designer dresses. The organic packaging from renewable grasses encases the produce from the Pacific. Transformation comes, not from violent eradication of the sirens of “efficiency” of old but rather from an Orphean sweeter song where the consumer now chooses to “value” values. In our Peace Trade initiatives, we are already seeing local enterprise flourish where this simple information utility is brought to bear.

Artifacts of the Bretton Woods hegemonic past – like the IMF, World Bank, WTO and the like – likewise are invited to transform or extinguish. A Commons Currency does not create wealth inequalities which require the self-congratulatory charity provided out of ill-gotten excess. Rather, it seeks to engage all actors in a participatory forward call option. Each person – not the euphemistic laborer – is educated – not trained – to originate or recycle innovation and industry in situ. Development and wealth redistribution is freed from the monetary resource “feasibility” hurdles and instead, the Gross Innovative Output (or GIO) is both means and metric. GIO can be scaled from the micro to the macro and can engage in Commons means-testing throughout the scale. The Commons does not lend itself to the lottery winning fervor of the past decades where the heroes are made in punctuated equilibrium while the masses are apprehended with the opiate of admiration. Neither wealthy person nor corporation nor country gains its power by manipulating scarcity. Rather, like the Komgi in our opening observation, wealth is seen as those who reduce barriers to GIO manifestation regardless of nominal artifacts.

Finally, Commons Currency is not hijacked as a surrogate for debt and taxation – rather it is a call-option for fruitful productivity. Wage labor – the bane of our employment-consumption addiction – becomes supplanted by “taboo” based on GIO engagement. The option to consume and the option to contribute are seen as equally valued and appropriately transient. The artist who wishes to share her work can be compensated in access and venue every bit as much as our current impulse to place a monetary unit value on the creation. The laborer who wishes to contribute innovation is rewarded by seeing that innovation adopted (with or without financial gain).

When John Maynard Keynes looked into the future, he actually almost saw what I’ve just described. In his conclusion, he writes,
“I see, therefore, the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work. And with the disappearance of its rentier aspect much else in it besides will suffer a sea-change. It will be, moreover, a great advantage of the order of events which I am advocating, that the euthanasia of the rentier, of the functionless investor, will be nothing sudden, merely a gradual but prolonged continuance of what we have seen.”
He goes on to see the day above as the day when the volume of capital increases so as to eliminate scarcity and that the executive skill of the entrepreneur will, “be harnessed to the service of the community on reasonable terms of reward.”

In East New Britain, Papua New Guinea, we are seeing the birth of the first country founded on the embrace of the Currency of the Commons. In this ancient land where humanity has engaged in enterprise for millennia, the ancient future is re-emerging. We can observe, engage, and respectfully learn the lessons from people who have cost the earth so little and rewarded us with so much. For in their lives and wisdom, we will find our Common Wealth.