Restructuring Financial Systems - An Introduction of the Concept of Equity Union(s) By Mike Morin
With respect to the "nature of wealth", I think that the "quality of life" paradigm in lieu of the "standard of living" paradigm needs to be stressed. "Quality of life" includes personal happiness for self, family, friends, neighbors, and all others. It includes ownership opportunities for all and everybuddy having the things they need, including health, healthy and loving relations with family, friends, neighbors, and all the people of the world. It includes peace on earth, and it includes a future for all the children of the world. "Standard of living" implies maximizing the consumption of things.
The current Capitalist dominated system is dysfunctional both from an equity/fairness and economic and natural resource sustainability perspective. The dominant paradigm in Capitalist financial business operations uses something called the discount rate which assumes that money will be worth less (eventually worthless) in the future, thus creating a necessity to extract profits exceeding a "hurdle" rate leading to unfair and unwise exploitation of workers, borrowers, and natural resources, and to rampant inflation.
The use of credit is not a good business or personal practice. In business, it should be discouraged because creditors have first claims on net revenues and hold liens on real property and capital assets. For "consumers", the use of credit is unwise because the system is set up to extract profits from interest thus assuring that when consumers use credit that they are losing money relative to inflation. Certainly the current foreclosure crisis in the USA is ample evidence of the inflation and the unfairness and unhealthiness of the mortgage lien process. Credit Unions and Mutual Insurance companies are in theory attempts to institute non-profit economic democracies for their respective industries. However, because of the need to compete for customers, both of these relatively progressive financial service organization types are forced to play the same game that is basically destructive to individuals, families, communities, and the natural environment. Ideally, credit should only be used as a last resort, much more preferably not at all. We should replace all aspects of the extant financial system with an Equity Union. In some ways, a mutual insurance company is similar to an equity union. However, because such companies are required to realize profits in order to compete for "policy holders" (really investors), the companies that comprise the portfolios of the mutual insurance firms cannot be not-for-profit, can not be mutual organizations themselves.
In a not-for profit Equity Union financial services system based on principles of mutuality working in concert with ethical, wise, knowledgeable, and intelligent community, inter-community, inter-regional, and worldwide planning there would certainly be an important role for financial service workers.
A major impediment to such an Equity Union would be the competitive advantage of the current financial sector and the fear of the friction of change to those individuals and organizations. Dealing with this sector of "the" economy, it would be more feasible with regards to Capitalist resistance and more humane, to orderly and peacefully transition to an Equity Union, coordinated with ecologically sound economic planning. I am writing and talking about transitioning slowly, methodically, and with the minimum amount of friction and hardship from a dysfunctional financial system, based on self-interest, to one designed to benefit everybuddy. At risk of understatement, it will take a huge amount of work to educate folks to the need and benefits of such change and to communicate the basic Plan. Transition Planning will also be a very difficult process, but I see no alternative to the current, impending and worsening global economic, political, social, and natural environmental collapse.
The Peoples' Equity Union concept is designed to be a grass roots, popular choice "movement". I am organizing with individuals, workers, and shopkeepers in my neighborhood, adjoining neighborhoods, and through the inter-net to whomever I can attract an interest in the concept.
The focus is primarily local, yet global at the same time. It is my dream, not a hope yet, to encourage a critical mass of people to organize locally around a unifying mission, unifying principles, unifying strategies, and unifying tactics in order to minimize the amount of executive administration at the regional and global levels. The theory is that neighborhood locales, the neighborhood community/worker hybrid association will have maximum autonomy and will be guided only, in their inter-community and inter-economic sector relationships by regional Planning Boards and a Global Policy Committee.
We must replace the current equity trading systems, corporate conglomerate corporations, insurance companies, and usurious banking systems of the Capitalist status quo with a worldwide Peoples' Equity Union with branches in every community/neighborhood.
The goal is to be a true economic democracy: of, for, and by the people.
Housing and Property Ownership
Concurrent with financial systems reform, where equity sharing and not-for-profit equity collaboration would replace the current financial paradigm of for-profit equity investing, equity trading, and usurious credit arrangements, we need to evolve to a different system with respect to residential and other real property occupation arrangements.
In lieu of rent or leases, people should be allowed to acquire equity in their abodes and business properties. For example, in the case of an apartment, if one paid $500 per month to a property management firm, let's say $50 per month would go to property maintenance, and another $40 to administration fees, insurance, etc. This would leave the resident with $410 of accumulated equity added to their account each month. If we had a large cooperative housing organization (preferably world-wide, and preferably the only form of property ownership) then when someone had to move or wanted to move, they could take their equity with them to the new property.
With regards to mortgages, they are horribly usurious and should be banned. The scenario related above would also replace the current system of financing "home ownership loans". A huge problem that we are facing now is the terrible inflation in the market values of real property (and capital assets, for that matter). If we pooled our equity, pooled our assets, and collectively wrote off our liabilities, then we could significantly write down the market values of real and capital assets.
More on Equity Union(s)
In a not-for profit Equity Union financial services system based on principles of mutuality working in concert with ethical, wise, knowledgeable, and intelligent community, inter-community, inter-regional, and worldwide planning would serve the needs of the people.
In local and inter-community equity unions, equity sharing would be the modus operandi. People with funds being held in equity unions would have the option of sharing in primarily worker owned community betterment projects based on the principles of quality of life, equity (which means ownership, and also means equality), humanity, and sustainability (which means there will be an economy and natural resources for the youth and the children, and for generations to come).
If the inflation spiral can be removed (and the cost of real and capital assets brought back to earth), then indigent and poor workers could hope to increase their equity holdings and quality of life assets and equity investors could hope to get their money back. Some endeavors, beyond poor workers enrichment, would be not-for-profit. That is, profits made beyond a pre-determined return to the poor workers, would be re-invested in more such worker/community betterment hybrid businesses (preferably cooperatives).
Equity investments in community businesses could not be sold to others, but could be bought back at par value (the price of the share of the stock when it was invested). Such would be discouraged, and disallowed if it was a qualified low-income/low wealth equity investor, who may, or may not if they were allowed to collect (limited) personal dividends.
Equity Union branches in low income/low wealth neighborhoods would be allowed to set up a (501)(c)(3) to receive donations to an equity fund for their neighborhoods, to be kept in a local Equity Union and the funds allocated (equity grants) by a Board committed to community betterment and the likely success of the endeavor(s).
Equity Union – An Example Getting Started (needs links or text)