---------- Forwarded message ---------- From: Great Transition Network <[email protected]> Date: Fri, Jul 31, 2015 at 8:28 PM Subject: Common Wealth Trusts: Structures of Transition (GTN Discussion) To: [email protected]

From Bruce Nappi <[email protected]>

------------------------------------------------------- [Moderator's Note: I just wanted to remind everyone that the discussion of Peter Barnes's viewpoint will come to a close today. If you would like to post a comment, please do so by tonight. I look forward to reading your responses! - Jonathan Cohn] I want to thank the GTI effort for allowing me to join this discussion. I’d also like to preface my comments on Peter Barnes’ Common Wealth Trusts (CWTs) article by stating that my observations are based on studies of breakdowns in human communication. I believe that unless humanity figures out how to fix huge communication flaws that confound our ability to use logic, based on reality, then society will fall back into simple minded self-reliant feuding clans. A prior experience provides a simple example. In the 1980’s, there were over 46 “peace” groups in the Boston area. I met with many of them asking why they needed to be separate. They always had “good reasons”. The irony of peace groups unable to work together, was not overlooked by many in the general public. The movement was not successful. To be clear, the inability to work together is based on fundamental problems of communication that have infiltrated almost every part of our culture. The importance of this observation for CWTs is that most corruption in institutions, which I believe will be a major hurdle for CWTs, is due to communications flaws that prevent intelligent people from finding mutual agreement about issues. My studies also suggest, that the corruption is not due so much to a malevolence in human nature, as it is to limitations in human thinking ability and communications breakdowns. Barnes’s summary of Common Wealth Trusts includes two parts: 1. legal shells and 2. fiduciary responsibility to future generations. “The shells are necessary to enable managers of common wealth to bargain with profit-seeking enterprises in the marketplace. Fiduciary responsibility assures that the managers of common wealth act first and foremost on behalf of future generations—which, de facto, means nature.” CWTs propose using a non-profit trust structure. The U.S. is currently experiencing a major scandal with non-profit organizations. The concept of a “non-profit” organization is actually quite old, being described in ancient Greek literature. In the early days of our modern business culture, which accepts the rationale of motivational benefit through business profitability, there were situations, like orphanages, that could not be incentivized by profit. Not having a product to sell for revenue, these organizations, more properly termed “charities”, were sustained by philanthropy. Insufficient donations led to gruesome operating conditions. The “non-profit” corporate structure was codified and applied to charities to expand management oversight and fund raising channels, and to eliminate their “business” tax burden. There was also another requirement for early charities. They were expected to make a reasonable investment to eliminate the social problems that created the need for their charity with the intention of eventually eliminating their charity. In our recent business environment, the original intentions associating charity with non-profit structures has been corrupted. Non-profit businesses, like hospitals, have become multi-billion dollar enterprises. And while they don’t have “stock holders” to reward with “excess revenue”, they can route it without limits to executives and employees. Multi-million dollar salaries are common. Non-profits now exceed 35% of all businesses. What made this possible is the acceptance by the public that government should pay for services that were formerly accepted as philanthropy, without establishing new rules to guide ethical operations and accountability. The same corruption has affected many “commons” services, such as jails, that were formerly run by the government, but now by non-profit and for-profit organizations. The rules of competition, that were beneficial for “products “ – i.e. more is better – are completely reversed for a product like prisoners. Also, the requirement that the institution directly invest in eliminating the need for its existence has been completely twisted into advertising disguised as “educational” outreach services. Where has economics included inverted supply-demand curves that model the positive feedback loops introduced by this new economic structure? An inherent business assumption is organizational growth. Without making major changes in fundamental codified business principles, this will be in direct conflict with the intended goals of CWTs to limit the production of their “product” – i.e. resource - and eliminate the need that created the CWT. There will be no inherent incentive to control management income, or stop “conflict of interest” expenses. Specifically, without fundamental change in non-profit laws and corporate structure, the two parts set out for CWTs: 1. legal shells and 2. fiduciary responsibility to future generations, will be in direct conflict, anything stated in their bylaws notwithstanding. Barnes provides support for the need for CWTs with the statement, “Our present form of elected government is simply not designed to balance the rights of future generations against those of the living.” Why are elected governments allowed to exclude such a need? This is where I believe a serious communication flaw can be found. If we, as a study group, can find a way to structure CWTs to remove the conflict of interest between “business goals” and “fiduciary responsibility”, then why wouldn’t that solution be applicable to fixing corruption in government agencies? For example, we have clear evidence that most government agencies, which are set up like “trusts” with independence from legislator and executive authority, and protection from legal prosecution, are failing to enforce environmental and workplace protections. The whole Deep Water Horizon oil spill fiasco is a case in point. Oil drilling in the Gulf of Mexico is regulated by the Bureau of Ocean Energy and Management (BOEM). When the spill occurred, huge pressure came down on British Petroleum for cleanup and policy change. But BOEM was hardly touched for failure to regulate and failure to prepare for the disaster. What if U.S. oil production was put under management of an Oil Production CWT? How would the “trustees” resolve the conflicts between national economic needs, pollution hazards, climate change, AND extravagant gifts to board members from industry? That was essentially the role BOEM played. And what if we specifically added a provision for “future voices” to be heard? Who would have the “right” to speak for them? Certainly there will be many volunteers: hundreds of religions, many political parties, academics of all stripes, “expert” futurists, activist groups, future employers? Who will get the authority to sort all of these voices out? The media? The government? The people - through their democratic representative process maybe? We clearly just end up back where we are. Society doesn’t know how to communicate to resolve this. A non-profit example is the entire U.S. medical industry. Physicians traditionally take the Hippocratic oath as part of their matriculation. A related professional code of “ethical performance” does not exist as law. The medical profession, and specifically, medical professional organizations, despite many being non-profit organizations, are clearly run as “guilds” with the highest goals being maximizing physician and medical administration salaries, and immunity from malpractice. While concern for patient welfare is promoted foremost in their public message and bylaws, that welfare is tragically a much lower concern in practice. In 1998, due to the malpractice death of the niece of Senator Edward Kennedy, a government study was conducted to evaluate the extent of similar deaths. The study estimated a staggering 90,000 such deaths per year. Much academic funding was provided by the government to refine that study. The major medical organizations initially rejected the report. They later gave acknowledgement and also accepted large grants to research the problem. Changes that would reduce the number of medical errors were minimal. The latest update in 2014 put the number closer to 400,000 fatal medical “errors” – i.e. malpractice – making it the third leading cause of death to patients admitted to hospitals. The point is, placing the responsibility for this “social commons” – the life of citizens in U.S. hospitals – in non-government “shells” such as non-profit corporations, religious “trusts”, and for-profit businesses, in addition to government oversight, has shown similar inability to solve the problem. This is so even though these existing approaches, due to their high visibility, have been made ‘very visible to markets, been extensively organized and provided with clear property rights’, some of the key goals Barnes depends on in his trust model. When the U.S. Constitution was written, one of the highest concerns of the signers of the Declaration of Independence was that the power of government would be captured by wealthy land owners, banks, and large corporations. The three-element structure of government was specifically set up to obstruct this using a circularly limiting scissors-paper-stone game model. As we know, this approach failed from the beginning, not only in the U.S. but for many modern democratic experiments. Similarly, giving trusts “authority to limit usage of threatened ecosystems, charge for the use of public resources, and pay per capita dividends”, while being well-reasoned responsibilities, will only be achievable if they can be protected from internal and external corruption when also facing the “expected” business pressures to GROW the trust and reward its employees in competition with other similar or overlapping organizations. As leaders, the “founding fathers”, who were well aware of the “Age of Enlightenment” sweeping Europe, could have taken responsibility for codifying a structure for sustainability. The political swamp they were in, however, and the extent of new resources available to them to the west made it easy for them to kick the can down the road. Current political leaders, however, can no longer make excuses of ”natural abundance” in the face of overwhelming shortages and the impending potential for catastrophe. Yet, they still ignore and outright deny the problems. The implication to me is: elected leaders, and “thought based” institutions, while being well intentioned and appearing alert, don’t have the mental ability and communication tools needed to resolve the conflict of interest between existing business structures and social needs. A goal of the Great Transition should be to develop those tools. Whether they are used to construct CWTs or fix democracy depends on what tools are developed. Bruce Nappi ************************************ Tuesday, June 30, 2015

From Paul Raskin <[email protected]>

----- Dear GTN, Our JULY DISCUSSION will focus on a new GTI Viewpoint: “Common Wealth Trusts: Structures of Transition.” In it, Peter Barnes forcefully indicts capitalism as the driver of ecological stress and social disparity (the C-word has barely been mentioned in recent discussions). But rather than analysis or critique, Peter’s interests are practical: designing institutional mechanisms for countering the profit motive and promoting equitable sustainability. Specifically, he advances “common wealth trusts” as an effective means for safeguarding the biosphere, and for sharing the benefits generated from the natural and social resources that are our collective inheritance. Please read Peter’s constructive and provocative piece at www.greattransition.org/publication/common-wealth-trusts, and share your comments by replying to this message. The window of opportunity closes JULY 31. Confused about how GTI works? See the primer below. Looking forward, Paul Raskin GTI Director PRIMER ON GTI PUBLICATION CYCLE: GTI publishes bi-monthly (in even-numbered months). Three new pieces are displayed on our homepage ( www.greattransition.org), distributed to 10,000 subscribers, and publicized through social media (and often republished on other websites). GTN discussions are also bi-monthly (in odd-numbered months), taking up one of the pieces prior to publication. Selected comments drawn from this discussion are edited and published alongside the original piece (along with a response from the author). You can review all GTN discussions at www.greattransition.org/forum/gti-forum, and post comments to an active discussion. ------------------------------------------------------- Hit reply to post a message Or see thread and reply online at http://www.greattransition.org/forum/gti-discussions/165-common-wealth-trust... Need help? Email [email protected] -- Check out the Commons Transition Plan here at: http://commonstransition.org P2P Foundation: http://p2pfoundation.net - http://blog.p2pfoundation.net <http://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-foundation>Updates: http://twitter.com/mbauwens; http://www.facebook.com/mbauwens #82 on the (En)Rich list: http://enrichlist.org/the-complete-list/