The Next System Platform

The following essay was submitted to the Next System Essay competition http://thenextsystem.org/essayprize/ as a way to formulate some of the various New System ideas into a single place, and will now be used as a starting point to invite collaboration into designing platform(s) to provide this type of functionality.  As a fundamental concept of this system is the empowerment of people, this essay is meant as more of a starting point for co-design, than an explicit, top-down system design.  If you would like to be part of this project, please get in touch to get involved with the conversation.

Introduction

The systems which control society are either broken, or they are designed to destroy the planet and the health and well-being of it’s inhabitants to satisfy the desires of a small minority.

Whilst a detailed analysis of the current situation would require would involve the entire fields of political, social and economic theory, suffice to say that it is the author’s belief that the financial system lies at the root of the vast majority of issues, being designed to allow wealth to be created by a select few at interest and gradually traded for every resource on the planet.  Such a system can only lead to wars fought over resources, laws written by corporations putting profit before all else, and rising levels of inequality.

This essay outlines elements of a new system which would rectify many of the issues our society faces

Goals

Maximise quality of life for all people sustainably.  In practical terms, maximizing quality of life for people within the system without damaging the environment or exploiting others outside of the system.

Describe systems which support the inherent values of maximizing quality of life through the public goods of Healthcare, Education, and Environmental, Social and Economic Sustainability.

Also the transition to the new system should be managed to minimize the disruption to existing industries, especially those who do not violate the values inherent in the new system.

Elements

Right at the foundation of our current system lies an interest-bearing currency issued by for-profit companies, forcing the entire economy to borrow money at interest in order to trade.  This means the economy must grow and people must consume more (an impossibility on a finite planet).  It also means that any effort to feed, clothe, or house the poor will be forced to occur at the fringes of society, dependent on charity or people’s free time and resources that are not fully exploited yet, until such time as the underlying currency system is fixed.  Although fixing the currency system is the most important element, it is not the first step in the process, as developing productive relationships and networks to foster collaborative ways of working together will need to happen first in most instances.

Base Currency

New, non-interest bearing ‘Base’ currency incorporating 1% monthly demurrage to encourage circulation.

  • Basic income tied to the size of the local economy (50% of average expenditure within the local economy – this is important especially during the transition period where few products may be available for purchase in the new currency – ideally, this will gradually even out across communities globally). In new areas, the basic income for the first people within the system will be $100 + $5 per person in the area for a period of 6 months, at which time the income reverts to the 50% of average monthly expenditure as above.  This provides some liquidity while new regions establish themselves.  To prevent massive bouts of inflation or deflation, the month-month change in basic income is limited to (5,000-Current Basic Income)/100
  • 1% Monthly Demurrage – currency destroyed – acting as a spending incentive (proven successful in cases like “The miracle of Worgl”
  • 2% Monthly tax levied on the balance of all accounts. When signing up to the currency, people sign up to a geography – taxes accrue to a council for their geography.  Each geography has a website where members of the community can select projects/portfolios where their money should be spent (eg: “Parks & Recreation” or “Fix potholes on Johnson St”) – 50% of their taxes accrue in accounts earmarked for this work, and an equal sum is set aside in a general account of the council.  The council chooses well-funded projects and contracts members of the community to carry them out (only members of the community use this currency) – the general fund can be used to supplement the costs of the project, and overfunded projects contribute any surplus to the general fund on completion.

Educash

Every citizen is given a $500,000 educash allocation, which can only be used to fund education, which is capped at $20 per contact hour.  Although educational institutions need to be registered, the market is free to control the content and delivery of education.  Educational institutions are able to convert Educash received into the Base currency, reflecting in policy the implicit belief that Education is a public good and that the economy grows by $20 every time one of the members of it’s community is trained/educated for an hour.

  • Base currency may still be required to purchase school books/computers/uniforms
  • The $5 can be used to supplement wages for intern/apprenticeship roles, where interns/apprentices pay $5 Educash per hour worked to supplement their own pay by $5 per hour, reducing the cost to their employer. These are limited to the period of one year, after which time, the employer will need to pay the extra $5 to continue employing the staff member.
  • Educational institutions are allowed to charge a combination of Educash and base currency for their services – the $5 per hour limit is there to prevent inflation of Educash, but with a lot of educational services charging the base of $5 per hour, competition will need to focus on quality of education.

Medicash

All citizens receive a monthly stipend of $500 for healthcare expenses, which can only be used to pay medical expenses.  As hospitals and medical institutions receive Medicash, it is automatically converted into Base currency, for wages and other expenses.  This reflects the inherent value that a healthy population makes for a productive population.  It is better for the economy that all it’s members are healthy.

  • Revenue-neutral health-feebates: Different products like cigarettes and alcohol would incur a Medicash tax, which would automatically accrue to a central fund (rather than an account with the vendor), and that fund would be paid out with purchases of goods deemed healthy (memberships to gyms, sports clubs, yoga studios, dietary supplements, fresh fruit/veg) – the fee and rebate %s would be calculated to average out to $0 net across a region* – This could also encompass a carbon feebate, rewarding purchases of public transport or electric vehicles with taxes from combustion vehicles or petrol purchases.
  • Is it envisaged that the predictability of the $500 stipend will lead many medical institutions to offer payment plans for more expensive medical procedures.
  • As and when necessary, a board of health will be set up to allow applications for disability or chronic/terminal illness cases, with the power to provide individuals with a higher monthly stipend to cover ongoing medical expenses for degenerative conditions or permanent disabilities. Since these would be made in Medicash, they should have little or no inflationary impact to the base currency.

EcoCash

The platform provided to local communities for implementing these alternative currencies should include the facility to support EcoCash – a currency created and designed to support local environmental initiatives such as payouts for recycling and surcharges on products with non-biodegradable packaging or high embodied energy.  The exact structure of these initiatives should be free for the local council to establish, as different localities will have different priorities, as a logical extension of differences in local geography and demographics.

Enterprise Currencies

Another niche currency for which the platform should cater is Enterprise Currencies – allowing business to issue their own currencies (much like gift cards), and spend them directly into circulation.  These currencies would not be subject to demurrage, and the quantity allowed in circulation at any one time should not exceed half the annual sales volume for the business.  Since the primary currency is subject to demurrage, and is hence expected to be the preferred currency to spend, these currencies are expected to be used to invest in the future growth of the business beyond the current cash reserves.  Since these currencies must eventually return to the business to be consumed, any investment of them will encourage future business.  Another possible use for these currencies is as contribution to large capital works projects (as a way for local regional companies to invest in, say, a Gigafactory being built in the area that will then support the local regional economy).

 

Direct Democracy –

The vast majority of government functions should be decided at the local council level, allowing the local council to set policy priorities and initiate a transparent online discussion of possible policies to address key priority metrics (eg number of homeless/unemployed people within the region).  Members of the community can suggest policies and their expected impacts and timelines, and these are open for debate and refinement until the community is ready to vote for a policy to trial.  Once voted in, the policy is implemented in the region for the trial period.

At the end of the trial period, the impact of the policy on the community is assessed and published, both to the local constituency, and to a global repository accessible by other localities who may seek to address similar challenges in future.  At this point, a further discussion is held and citizens vote as to whether to continue or cancel the policy.  This way all the policies in effect within the region address their stated objectives.  Also, since members of the community can vote on different policies to address the same issue, the current practice of adding clauses into unrelated legislation in order to promote unpopular agendas would have to deal with the increased transparency and lack of ‘all or nothing’ limitation to voting.  In addition, the localization of legislation means people will be empowered to make the decisions which impact them directly, and will gain the political awareness of likely policy implications on their local environment over time.

  • A caution around the implementation of any direct democracy initiative is to be aware of the intentional limiting of individual agency, consistent misinformation and undermining of true democracy in the current system. Each of these factors, as well as an education system designed to produce factory workers trained to follow instructions without asking questions, has created a very infantilized citizenry, who expect to be told what to do, and expect the government to take a parental role, fixing the problems in their lives, the economy, and the environment for them.  This means that any direct democracy initiative needs to be implemented incrementally, allowing people to acclimate to an environment where their votes have an impact on their lives, and allowing the time for people to be educated in the fields of economics, sociology, national and international politics and the areas of policy relevant to them.  Furthermore, democracy is not a perfect system, as it is susceptible to the vagaries of groupthink and propaganda manipulation.  Fortunately, the decentralized nature of locating the policy decisions at the local (shire) council level, makes it more difficult for private companies to change federal legislation to further their own interests.

Worker-Owned Enterprises

Capitalism is renowned for privatizing profits and socializing losses, from mining disasters resulting in government expenditure to address local environmental and health emergencies, to ‘off-shore’ tax-havens, to the 2008 Bank bonanza where people driven to bankruptcy by the banking industry were given the privilege of bailing them out.  The Next System needs to encourage cooperative business models, legally empowered to pursue criteria other than shareholder profits.  Structures like the B-Corp and Co-operative ownership models need to be catered for at the platform and legal framework level, to the same extent that for-profit and publicly-listed corporations are built into our current legal and banking frameworks.  Blockchain technology allows for protocols to govern peer-to-peer corporations, disintermediating management structures and centralized infrastructure.  In a similar vein, legislation needs to allow for new ventures to crowd-fund their startup capital and offer members of the public and their future staff and customers a share of the company.  Where this is not possible due to local legislation, the Next System platform will need to provide the functionality to implement simply.  This, together with embedded Enterprise Currency functionality should allow cooperative enterprises to establish themselves anywhere, independently of the local legislature and banking policies, so long as the local marketplace has a need for the product or service provided.

Ongoing, Iterative design and development

As one of the core aims of this Next System is to empower citizens, they need to be involved in the design and creation of the System infrastructure itself.  This means that although some central themes can be outlined at this early stage in the project, the Next System will, in effect, have to design itself on an ongoing basis.  To outline the exact laws and rules the world will live by in order to be free and just

toolkit than set legislation.  Although the world has accepted the current framework of Banks, Governments, Laws, Law Enforcement, Utilities and standing armies, the realities of how these are implemented on the ground in different countries vary greatly, depending on the geographic, economic and political landscapes of each country and wider region.

Social Provisions

Although Educash and Medicash implicitly fund education and healthcare as social provisions within the marketplace, there are other aspects of a functioning modern society that should be provided by government (traditionally those things that are unaffordable on an individual level).  In the last few decades, many of the social provisions previous generations have been able to take for granted have been eroded due to the high cost of money in this society (as the money infrastructure is designed as a tool to extract value from the productive economy and shift it to static assets through interest).  These can either be funded by Federal Government, or, when Federal Government fails to do so, these areas may need to be taken over by the local councils, and funded through crowdfunding from their local citizenry (offering people the opportunity to pre-pay their local taxes or issue of Enterprise Currencies).

These social services include, but are not limited to: Public Transport (now Private in many countries), Fire Service, Disability Care, Police, Road Safety/Infrastructure, Utilities (also usually a public cost sold to privatize revenues), Defence.

At the local level, these would be given priorities commensurate with their impact on the local region due to the funding model.  In areas where the Federal Government have proven unable to provide sufficient services, but local councils cannot effectively implement in isolation (building telecommunications infrastructure, changing road code legislation, or funding defence, for instance). Local councils will need to coordinate responses and funding together.  These are areas where the decentralized model of control and direct democracy imperatives discussed here are likely to take more time than current top-down models.

Commons Management Infrastructure

Some of the most important elements to our collective well-being are our shared commons.  Although many spaces have been privatized for the extraction of profit, what commons remain need to have clear rules established around management, access and usage.  The original English Commons thrived under the purview of the Catholic Church who opened them up for public access.  This is a tradition worth reviving in different ways by different communities, who need to decide together how to manage local water, green space, fish stocks, air quality, knowledge, and other shared common resources, how to determine the appropriate access to these resources, and how to deal with transgressions.

Given the range of local cultures and commons out there, the exact framework is likely to need to go through several iterations before being able to cope with the management of even the majority of common resources.  From a platform perspective, the first steps will need to include a platform for documentation on a community’s shared commons and agreements around them, to educate members of the community around these.  Other, specific commons may be managed with a more specific toolset (eg: online booking systems, carbon credits, etc).  Having these built into the local community infrastructure will increase awareness of the concept of a commons (the platform itself being a shared commons), and encourage the development and open sharing of tools for managing additional resources for the public good.  The Next System platform will include an extensible Commons Management Framework, where communities can add processes and tools for managing different shared resources (from land to toner cartridges to marine wildlife).

In an ideal world, all land would be managed as Commons, for the benefit of the whole community, where individuals can have equal access to land, but improvements like properties can be bought and sold much as they are now.  Unfortunately, since the banking industry is built in large part on mortgages on (primarily) land and buildings, there is no politically feasible transition to a system without the asset class – it would drain billions right off the bottom line, and potentially make entire business models like those of real-estate, banking, or McDonalds obsolete.  In the absence of treating all land as commons, steps can still be taken to remove or reduce the speculative and rent-seeking value extraction from land.  This is a vital step in addressing the wealth inequality around the world.  Economists have long observed that increases in productivity through technology or competition accrue first and foremost to the holders of land (and other capital assets), with wages trailing far behind rents in their appreciation.  To address this, as much land as possible should be treated as Commons, accessible by all, and any land taken out of general use (whether for a residential home, a mine, or otherwise) should be rented/leased from the community, through a tax accruing to the local council for the benefit of all local residents.  Different regions may address issues of environmental compliance or potential carbon taxes for land use differently, but the platform will need to cater for some form of carbon tax on land usage.  This, much like the flat tax on all account balances, shifts taxes from income to assets, allowing for society to have overall greater productivity than today’s systems which are designed to concentrate wealth into ever greater pools of static, non-productive, interest-bearing assets and isolate more and more productive assets away from the people who need them in an effort to drive up profit margins.

In the words of Henry George: “The great cause of inequality in the distribution of wealth is inequality in the ownership of land. The ownership of land is the great fundamental fact which ultimately determines the social, the political, and consequently the intellectual and moral condition of a people.”
― Henry George – Progress and Poverty

Implementation

It is the belief of the author that governments and banks have proven throughout their history that they will not willingly surrender their power and control, or support any policies which decentralize wealth and power.  Therefore, changes, such as those described above will mostly need to be implemented from the bottom up, in an organized but decentralized fashion, with the help or buy-in from local government where possible, but independently where that is more expedient.

The plan, therefore, is to create the tools to implement the policies within this project, test and fine-tune them in a few local communities, then offer them up open-source to Intentional Communities, Transition Towns, and movements like Occupy globally, for further collaborative, incremental improvement.  The idea is that a single town with it’s own complementary currency does not upset any of societies’ dominant institutions.  Once distributed to around a thousand towns across 4 or 5 continents with the same or similar, interoperable currency systems trading between each other, the global nature of the movement will make it difficult for money interests or national governments to disrupt effectively.  At this scale, these communities will have replaced most of their requirements for legal tender and can supply themselves with all the goods and services they need “off-grid”, including increasingly providing education and health-care, two fields with significant money interests influencing legislation.

There are already a lot of local initiatives around the world looking to address social issues and provide food, shelter, or clothing to the majority of people who are being exploited by the current system of capital and the first objective is to connect, support, and strengthen these initiatives.  Spreading the platform into the failing European economies (such as Greece and Italy) can help provide early adopters.  Promotion to communities in highly educated socialist countries like Finland, Sweden, or Australia can help provide ideological alignment and spur further development of the underlying technology.  Most importantly for the greater wellbeing is for the platform to be taken up in various Third World countries currently being exploited for their natural resources like Indonesia, South America, India or China (etc.).  Although the situation on the ground in each of these countries is quite different, anti-capitalist sentiment in South America and India might be able to be leveraged to shift more production towards supplying local needs and growing local economies while encouraging uptake by major producers like China in an effort to improve worker’s agency and quality of life (in parallel with a reduction in product imports by the rest of the world).

China represents somewhat of a ‘worst-case’ scenario, owing to the combination of a highly centralized, authoritarian management structure, a culture which has come to expect little or no agency to act, the Great Firewall of China making it difficult to communicate into the country, and some of the worst labor and environmental laws in the world.  To bring the Next System into China, ambassadors will need to be recruited and trained to organize and set up the infrastructure and organisations within China.

If a significant portion of the Chinese work-force gain access to free complementary currencies with a guaranteed basic income, they will also receive education on how to organize, grow food, protect the environment, and manage commons.  If this happens while the rest of the world reduces their dependency on Chinese imports (by localizing a lot of production), this will lead to a slowdown in Chinese exports and a gradual de-leveraging of the global economy.  This is likely to lead legal and violent reprisals (See Risks), which communities need to prepare to leverage as an opportunity, rather than be blindsided by (at this point, stepping out of the interest-bearing currency system even partially will increase individual resilience against market shocks more than water cannons or spraying glyphosate on community crops).

Risks

Military and Police intervention

From the Dakota Access Pipeline to the Spanish Workers Revolution, to the CIA-sponsored coup in Indonesia, private interests have repeatedly demonstrated a preparedness and capability to bring military force to bear against any perceived threats to their power. Previous attempts of people to retain access to public land, or of workers to control the companies they worked in have frequently resulted in violent, brutal retaliation.  To suggest a complete shift of global economic systems that include removing the capability of today’s incumbent capitalists to destroy the natural environment in pursuit of profit without addressing the contingency of military intervention is shortsighted.  It takes a lot of military force to retain the high levels of inequality evident in today’s world.  To transition to a world where money and power are more evenly distributed, there needs to be a wide-spread demilitarization of police and state.  This can be accomplished in the U.S. by providing better opportunities to the youth in poor areas that are currently at the greatest risk of being recruited with the promise of a free education.  Regions which are currently highly reliant on Defence money will similarly need to have other industries built locally to offer locals other opportunities to contribute.

Ideally, the operations of the military should be kept in check through legal means as well, but the use of military on our planet today is generally in complete disregard to international accords or other legal frameworks.  The ‘War on Terror’ can allow a country like the US to sell weapons into countries to foment rebellions, then bomb said countries without authorization from Congress, making sure to bomb any hospitals which might issue reports on civilian casualties, regardless of what the Geneva convention or the UN might have to say on such matters.  Other military powers around the world are not much better, but are at least kept in check by America’s superior firepower, at least when contemplating doing anything against US interests.  As a general rule, no military should have jurisdiction over their soldiers beyond their national boundaries – this would force a Defence department to actually focus on defence (or on oppressing a domestic population).  A body like the UN should also use non-proliferation agreements as a basis to tax weapons sales to fund efforts at maintaining peace and enforcing international law (such as the Geneva convention).  Unfortunately since the US is unlikely to ever agree willingly to any initiative which decreases it’s ability to profit from or apply military force to further their own interests around the world it appears it will be the task of the Next System to expand to the point where it diminishes the power of capital to deploy military force, as well as democratizing access to commons to such an extent that the use of military force becomes moot.

For instance, keeping much of the Next System infrastructure decentralized allows any person to join in with the Next System, partaking in the marketplace, currencies and free education from anywhere, but makes it much harder to destroy the infrastructure.  The military is simply not (yet) equipped to destroy Bitcoin the way it can destroy a local water or power supply.  Likewise, when companies are truly cooperative and don’t rely on banking infrastructure, it is much more difficult to freeze assets or arrest the CEO.  If people don’t need the oil, and the oil there is is being traded in a dozen currencies other than USD, there would be no need to remove regimes in the Middle East.

Ensuring local food, shelter and clothing production initiatives are empowered by the network of Next System communities everywhere builds resilience into the whole network to provide support when individual communities are targeted by military force.  As demonstrated by the recent Dakota Access Pipeline protests, the use of internet communications and social media are more important than ever for bringing light and support to issues.  The Next System will be highly connected, and will emphasize interpersonal relationships by prioritizing face-to-face communication, where possible.

Although there are other alternatives to avoid having to develop a standing armies to compete with national military forces around the globe, they are beyond the scope of this introductory essay, which aims to outline some of the necessary Next System infrastructure and highlight some potential difficulties around implementation.

Global Financial Collapse

If there is another collapse like we saw in 2008 before the complementary currencies described above have been widely adopted, serious pressures will be placed on today’s institutions to exacerbate today’s problems.  This would most likely be through further publicly funded bailouts, followed by austerity measures, restructuring society to draw more cash out of the citizenry by reducing benefits, minimum wage, leave entitlements, etc.  Anyone offering a visible alternative to the dominant economic model is likely to be blamed for the issues and targeted through lawsuits, changes in legislation, and media defamation.  The best way to prevent this is for the Next System platform to be built with it’s own media platform built in to it’s DNA.  Apart from publishing the results of policy changes or the establishment of new Next System community activities internally within the Next System, the platform needs to cater for communications to the outside world, both through “Share Now” – style social media integration, as well as more formal templated educational initiatives so local communities can educate themselves as well as the wider community about the benefits of economic democracy in the form of worker-owned cooperatives, direct democracy, and community outreach through local food-hubs.  It is through people’s personal experiences of the Next System that their opinions should be formed, and each experiences represents a new brand of society.

Government Collapse

Economic issues are casting doubt on the capability and/or the legitimacy of various governments around the world (e.g. Turkey, Spain  to take command and drive countries toward a more authoritarian, more extractive solution to the current problems.  The only defense against such a scenario is to prepare to fill the power vacuum before it forms, because once a Stalin, Hitler, Erdogan or even Chavez rise to power, it is almost impossible to stop them.

Lack of Adoption

Almost all government fiat currencies eventually fall to a value of $0, and most community currency initiatives take constant encouragement or die from a lack of use.  What if no-one buys into the Next System and associated currencies?  There are thousands of independent ‘Next System’ initiatives around the world, where people have implemented local currencies (eg. LETS exchanges, Intentional communities, Transition Towns, and many more).  Initiatives are already underway to strengthen the relationships between initiatives and allow these initiatives to benefit from network effects through the Open Source movement both by allowing access to shared software platforms, as well as other technologies, ideas, and resources.

The implementation strategy needs to focus on activating and empowering existing networks, as building trust between a diverse group of producers in a region is far more costly (in terms of time and effort) than creating a medium of exchange for them to trade with.  Working closely with the first communities to adopt a Next System approach to the shifting economic landscape will ensure that the platform is built to meet the needs of local communities, and directly improves the lives of the people who use it.  Members of these early adopters can then act as champions and ‘brand ambassadors’ to local businesses and other, linked communities.        Although this approach means ‘preaching to the converted’, it will be a far more cost-effective way to support those sectors of the community that are disadvantaged by today’s systems, namely the working class, and especially minorities. By leveraging the politically active sub-section of society that has proven to be open to alternative ways of living/organizing resources, these early adopters can be empowered to share the platform with the wider working-class community in their local regions.  Ultimately, buying into the Next System is to be as easy as downloading an app (your new wallet, allowing you to pay for local goods and services from local suppliers, with your guaranteed basic income).  From this first easy step will flow opportunities to engage with your local economy at all levels, from trades to determining what projects your taxes should support, to receiving education/training, and voting on local policy decisions, etc.

Issues

The issues with implementing this Next System are two-fold:

First: The highly organized and established power-structures with a vested interest in maintaining the status quo.  Worldwide, there is less and less land remaining that has not been lost to private ownership and the profit motive.  People all around the world have been so thoroughly disempowered as to no longer expect to be able to influence the decisions which affect their lives, either in the political sphere, nor at their work places.  The risk of military reprisals stems from this issue.  Empowering our shared commons to have legal rights is a lengthy prospect, but absolutely necessary if we are to protect marine wildlife, air quality, or public spaces.

Second: The urgency of the issues facing the world.  The world is changing.  The economy is shifting to new models faster than ever before, regardless on what influence the working and middle classes choose to exert on that process.  Oil supplies are being depleted worldwide, and the genie in the fracking bottle charges a high fee in terms of environmental damage.  Weed species around the world are building resistance to Glyphosate, just as studies are emerging about the impacts to human health and country after country are banning GMO crops and glyphosate.  Governments everywhere are swinging to the right, unemployment is up almost everywhere and economic outlook is down as capital accumulates in bigger and bigger piles, but people can’t afford to buy the amount of products ‘the economy’ needs for bank debts to be paid back.  The climate is changing faster than most scientists predicted, and large media outlets are still willing to cast doubt on their legitimacy by denying the weight of both the scientific evidence and human experience around the globe.  While the evidence has been clear for the past 30 years, systemic environmental destruction has remained the predominant modus operandi globally.  This means we have little or no time left to save many of the natural species on the planet, possibly including our own.  The impacts of our inaction are real, and being felt today, and they are acting as the fuel of the engine that is continuing to strip liberties and rights from people around the globe.

 

Next Steps

Create Networks

The first step is to begin creating the networks of people to co-design the platforms that will bring this Next System to life, from a technology and process perspective.  As mentioned earlier, these networks are already in the process of being formed and mapped.  Alongside the development of interpersonal relationships, inventories need to be taken of existing community assets, projects and strengths.  Many communities will have pre-existing complementary currencies, which should be able to co-exist and be supported (even empowered) by the Next System.  Many communities will also have shareable assets that can be leveraged into bringing the Next System to life, whether Open Source currency Initiatives like Qoin, cooperative decision-making platforms like Lumio, or knowledge and processes, it is true cooperation that will give the Next System the competitive advantage over the extractive competition engrained in the capitalist system.

Design Platform

Establish working groups with representatives from the initial starter communities to design the processes and functionality of the Next System platform collaboratively.  Participatory co-design needs to form part of the DNA of the Next System from the ground up if these principles are to not only survive into the finished project, but also if the culture in the participating communities are to have a chance of incorporating these principles.  There is a reason why successful charity organisations operate more like for-profit businesses in the current system than like, well, charities.  The Next System starts with encouraging, promoting, and building the right culture.  A culture built on personal relationships to foster trust and collaboration.  With the right culture, the systems will succeed.  The wrong culture or mindset will pervert even the right platforms and processes.  Although Ford wanted his staff to be able to afford to buy the products they made (cars), the for-profit business model made it illegal for him to pay his staff how he wanted (see Dodge Vs Ford).  Now that Ford himself has long since left the building, the systems which survive him have created a culture in line with the expectations of shareholders.  Had the staff been the shareholders, they might have been more inclined to preserve the original culture as Ford (himself very much a capitalist) intended it.

Fund Development

Development should be funded in line with the core principles of the Next System – ideally through crowdfunding with enterprise currencies from within the starter communities and developing the platform and processes with skillsets found within the initial community network.

Develop the platform

Create the initial functionality and deploy to starter communities.  Work closely with communities to ensure the platform helps the community function.  Fine-tune over a 1-year period while establishing brand reputation among new economy initiatives globally.  Although the platform will continue to develop as new communities come on board and add their ideas, processes and policies, and the network as a whole can extend into new areas (for instance, once the network has scaled to sufficient size, the system itself can provide insurance, but instead of members paying premiums in advance, the system instead automatically collects 30 cents from every member after someone’s house burns down to pay for reconstruction).

Closing thoughts

Not ready to live out in an Intentional community, washing your clothes in rainwater and sowing your own clothes, and unsure what steps you can take while you wait for the Next System mobile app to be available at a website near you?

Well, you can start by buying local whenever possible.  For every dollar you spend at a local business, 48 cents is spent back into the local economy.  For every dollar you spend at the supermarket, that number is closer to 14c.  This ‘multiplier effect’ will employ your neighbours and prevent the kind of destructive cycle that a Walmart can bring to bear on a regional town… The dollars spent with multinationals go straight to offshore tax-havens and stay there.  If you can’t buy local, at least buy from a cooperative that does not exploit it’s workers or offshore the work to a 3rd world sweatshop.

You can move your savings account from a publicly listed bank to a Credit Union or a customer owned bank.

The next step is divesting your superannuation (eg 401K) from destructive and multinational corporations, and into local businesses that support your community – that way you not only make a profit to retire on, but your community thrives right now.

Next, you can see what community projects are going on in your neighbourhood – is there an Urban Micro-farm offering to grow food in your garden and pay you in fresh vegetables every week?  Are there tool-libraries where you can borrow tools instead of buying them?  Is there a farmers’ market nearby?

Educate yourself on how a society functions and how an economy actually works, and used to function before the current systems of interest-bearing fiat money being issued by private companies.  Learn how to grow vegetables and taste the difference for yourself.  Talk to your neighbours about why a kid straight out of school could get a job and support a family of 4 back in the 50s, but although revenue per employee has shot through the roof, families with two working parents are putting off having kids because they can’t afford them.

Finally, I will leave you with some words from Arundhati Roy:

“Our strategy should be not only to confront empire, but to lay siege to it. To deprive it of oxygen. To shame it. To mock it. With our art, our music, our literature, our stubbornness, our joy, our brilliance, our sheer relentlessness – and our ability to tell our own stories. Stories that are different from the ones we’re being brainwashed to believe.

The corporate revolution will collapse if we refuse to buy what they are selling – their ideas, their version of history, their wars, their weapons, their notion of inevitability.

Remember this: We be many and they be few. They need us more than we need them.

Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing.”
― Arundhati RoyWar Talk

“The great cause of inequality in the distribution of wealth is inequality in the ownership of land. The ownership of land is the great fundamental fact which ultimately determines the social, the political, and consequently the intellectual and moral condition of a people.” Henry George

0 Comments

13 + 4 =

“Our strategy should be not only to confront empire, but to lay siege to it. To deprive it of oxygen. To shame it. To mock it. With our art, our music, our literature, our stubbornness, our joy, our brilliance, our sheer relentlessness – and our ability to tell our own stories. Stories that are different from the ones we’re being brainwashed to believe.
The corporate revolution will collapse if we refuse to buy what they are selling – their ideas, their version of history, their wars, their weapons, their notion of inevitability.

Remember this: We be many and they be few. They need us more than we need them.

Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing.”

Arundhati Roy

Author

Cooperative Superannuation Funds

Empowering people to cooperatively invest their super into local projects

Enabling cooperative local superannuation investments:

We intend for communities to cooperatively invest their superannuation savings into their local community, supporting local, ethical businesses, securing employment for their neighbourhood, and transvesting from the extractive monopolies which dominate the business landscape and most super fund holdings (mining, insurance, finance, multinational food, pharma, logistics etc) into local, profitable and social enterprises.  This document outlines the research done to date.

Our facilitation of this will be by providing a platform for communities to use to invest their super into local projects, either including our own SMSF compliance reporting functionality, or partnering with an existing credit union for this [SMSF compliance reporting].  In addition, a bulk audit agreement would be advantageous, approaching an independent SMSF auditor for discounted audits of large numbers of similar portfolio SMSFs.

The goals of cooperatively investing super in local real estate and local businesses this way are:

  • Allow members to have greater awareness and control over their investments
  • Strengthen the local economy (due to the multiplier effect of money spent at local businesses)
  • Allow members to co-design the future of their neighbourhood (eg investing in retirement homes)
  • Move funds that could otherwise be invested in destructive industries like mining or extractive monopolies into areas that support local growth and employment.
  • Reduce the cost and complexity of ethically and generatively investing your super for members

Current status: Concept – preliminary research is underway.

Limitations of Self-Managed Super Funds (SMSFs)

 

The ATO’s website states that:

  • Self-managed super funds can have up to 4 members. A robust investment community looking to transform their neighbourhood is likely to need at least 20 members
  • Investments by a SMSF have to pass the “sole purpose” test – in that their sole purpose must be to provide the beneficiary with cash to retire on, and no prior benefits (you can’t buy yourself a holiday home)
  • You can invest in shares in a local business, and that business may be run by a member of the SMSF (cooperative), but there are some additional rules to adhere to – salaries and purchases must be at market rates to indicate an ‘arm’s length’ relationship.

Example investments a super community could invest in include, but are not limited to:

  • A local business incubator to help new ventures get off the ground (as well as assessing them for investment by the fund)
  • Local Retirement homes built to the specifications of locals
  • Community Renewable Energy projects
  • Setting up a local farmers market, Farm-to-Plate delivery service or CSA.
  • New business ventures members of the Coop wish to start (with any member of the cooperative entitled to suggest projects, and other members decide whether or not to invest).
  • The cooperative should aim to hire cooperative members where possible
    • Note that the fund must be able to demonstrate that all transactions are “at arms length”, commercial transactions taking place at market rates.  The fund cannot pay above or below market rates for goods or services.
  • A cooperative fund investment strategy will also be made available to ensure that people’s SMSFs comply with their investment strategy: http://www.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/s4.09.html

 

Structure

Aiming to register as a non-distributing cooperative, teaming up with an accountant/ethical financial adviser, designer, and a transition town representative to provide the platform to different communities.  Communities use the platform for a yet to be determined nominal fee ($50 p.a. per SMSF?) to cover administration and hosting costs.  Alternatively, a finder’s fee could be charged for the yearly audit* – yet to confirm if this violates any legislation around the auditor’s need to be independent (brief investigation hasn’t revealed any issues).

Funding for the initial setup and documentation will be sought from the Victorian Property Fund.  Where possible, existing software, processes, and models will be used (eg. Combining Loomio, ClicData, Slack, and communication models already in use within the communities).

Limits of SMSFs

  • Up to 4 members
  • Transactions with members of the Self-managed super fund must be ‘at arms-length’
    • This means goods, services and assets must be bought and sold at ‘market rates’
    • The SMSF must not purchase more goods or services from members or their families than it needs
  • The sole purpose of asset purchases must be to deliver cash to the investor at the time of retirement
    • You cannot buy assets to use now (eg houses to live in or art for your wall)
  • The SMSF must be audited every year.