[Mike Morin]

Restructuring Financial Systems


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 both workers 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, discussed in a previous essay where equity sharing and not-for-profit equity investing 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.


Mike Morin
www.peoplesequityunion.blogspot.com


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 credit unions would have the option of investing 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 (what do you think?) 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 Community Development Credit Union and the funds allocated (equity grants) by a Board committed to community betterment and the likely success of the endeavor(s).


******************************************************************

A Local Discussion Regarding Peoples' Equity Union


The following interchange took place about a week ago:.

I'll keep you posted, if anything develops...

*****************************************************

Hi Mike,

(rest of letter deleted)

[By the way, I presently have more income than is best for my
lifestyle, and now have recently gotten my hands on some extra money.
I'm not used to this situation. Do you have any suggestions about
where to 'invest' for the greater good, keeping in mind that my main
concerns remain first 'global heating', and then generally shorter
paths to possible eutopias vs. possible extreme distopias?]

Dan
**********************************************************

Hi Dan,

(rest of letter deleted)

I, too, have some discretionary funds that I would like to put into trust
for public service and altruistic endeavors. Perhaps, you and I (and others if we can find them) should investigate creating a local Peoples' Equity fund. My idea on that is to see if we can open a group trust account in a Credit Union, where each trustee would have an individual account, yet allocations to community betterment projects could be done collectively, with each individual signing off on the amount that they want to dedicate to the project.

The idea would be that we would "invest" in community betterment projects with the care that we would expect to only get the par value of our "investment" back or we could choose to make individual and/or collective tax-deductible or maybe tax credit eligible contributions to "qualified" 501(c)(3) community betterment organizations (CBOs)

CBOs could be not-for-profit, non-profit or both.

That's enough for now.

What think?


Mike

[Quinny]

Spot on. The point you make (emboldened) also applies to nations.

Those who say Socialism is dead because the USSR was 'toppled' often don't acknowledge the point that they had a constant battle against 'higher living standards' in the West which even the Socviet Leaders fell for.

This will change with future resource constraints. As Marx said Socialism has to be an International movement for it to work!

$this->bbcode_second_pass_quote('Mike Morin', 'R')estructuring Financial Systems

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 both workers 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, discussed in a previous essay where equity sharing and not-for-profit equity investing 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.


Mike Morin
http://www.peoplesequityunion.blogspot.com


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 credit unions would have the option of investing 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 (what do you think?) 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 Community Development Credit Union and the funds allocated (equity grants) by a Board committed to community betterment and the likely success of the endeavor(s).


******************************************************************

A Local Discussion Regarding Peoples' Equity Union


The following interchange took place about a week ago:.

I'll keep you posted, if anything develops...

*****************************************************

Hi Mike,

(rest of letter deleted)

[By the way, I presently have more income than is best for my
lifestyle, and now have recently gotten my hands on some extra money.
I'm not used to this situation. Do you have any suggestions about
where to 'invest' for the greater good, keeping in mind that my main
concerns remain first 'global heating', and then generally shorter
paths to possible eutopias vs. possible extreme distopias?]

Dan
**********************************************************

Hi Dan,

(rest of letter deleted)

I, too, have some discretionary funds that I would like to put into trust
for public service and altruistic endeavors. Perhaps, you and I (and others if we can find them) should investigate creating a local Peoples' Equity fund. My idea on that is to see if we can open a group trust account in a Credit Union, where each trustee would have an individual account, yet allocations to community betterment projects could be done collectively, with each individual signing off on the amount that they want to dedicate to the project.

The idea would be that we would "invest" in community betterment projects with the care that we would expect to only get the par value of our "investment" back or we could choose to make individual and/or collective tax-deductible or maybe tax credit eligible contributions to "qualified" 501(c)(3) community betterment organizations (CBOs)

CBOs could be not-for-profit, non-profit or both.

That's enough for now.

What think?


Mike

[odegaard]

tl;dr

[odegaard]

$this->bbcode_second_pass_quote('Quinny', 'T')hose who say Socialism is dead because the USSR was 'toppled'...

[Mike Morin]

If only it were so simple as "two competing systems".

Socialist critics of the USSR and the Peoples' Republic of China call such countries "State Capitalism". I think that is partially what Quinny is referring to when he talks about "the Soviets" falling for the "higher living standards' dogma of Capitalism.

I'm not so sure that it was consumerism that toppled the "Soviet" Empire, although the old adage, "how ya' gonna' keep 'em down on the farm once they've seen the lights of the big city" was certainly a greed based propaganda weapon of the Capitalist "West".

The Soviets and the Chinese found that they had serious quality of life issues and that the reality of socialism was harder than the theory and they found themselves in an expensive arms race because they recognized that they needed to counter the Western economic and military hegemony (and the "West" (read USA and the wimps of NATO) recognized that the Communists seeked a worldwide (international) counter-hegemony).

Since the fall of the USSR, the USA led Capitalists have proven their worldwide hegemonic intentions.

Who knows what the Chinese are doing? Any and all information about that country needs to be filtered through the lens of Western propaganda. Maybe they are beating "US" at our own game. Regardless, the future is not ours to see in China.

What the world needs is "one cooperating system". That is what socialism is, in theory.

[pablonite]

$this->bbcode_second_pass_quote('Mike Morin', 'W')hat the world needs is "one cooperating system". That is what socialism is, in theory.

[Mike Morin]

$this->bbcode_second_pass_quote('pablonite', '')$this->bbcode_second_pass_quote('Mike Morin', 'W')hat the world needs is "one cooperating system". That is what socialism is, in theory.

[Mike Morin]

$this->bbcode_second_pass_quote('Mike Morin', '')$this->bbcode_second_pass_quote('pablonite', '')$this->bbcode_second_pass_quote('Mike Morin', 'W')hat the world needs is "one cooperating system". That is what socialism is, in theory.

[Mike Morin]

Reconsider?

Doesn't what I write make more sense than the Leviathan boondoggle that Bernanke is presiding over?

Einstein said that imagination was more important than knowledge.

Use yours. Don't give up. We have only one life on this planet earth why not do all we can to make it a better place?

By the way, Einstein was a Socialist...


MM

[evilgenius]

What you are talking about sounds a lot like what Nassim Taleb, the author of Black Swan, has mentioned. He suggests that the debt based economic model is going to have to change to one where the availability of credit is limited to those that can afford it, really afford it, not just usually afford it. He argues that the black swan events come from the obvious threat imposed when those that can usually afford debt, in the case of talking about debt blowups, sometimes find that, yeah, we can't really afford it, in large enough numbers so as to impact us all. For various reasons you can't trust regulators to keep this kind of thing in check, nor the very bankers for whom it has to keep working or they are hurt most. Both of those groups tend to get caught up in immediate payback cycles that ignore looming risk.

Marx did mean to say that the revolution would be world wide. He also implied that he thought it had to evolve out of capitalism, not come out of imposition on an unready world. The Soviets tried to impose communism on an unready world. As a consequence what they had was never communism. As a for instance under communism there should be no state. There was most certainly a state under the Soviet model. Sure, they tried to talk about how it was they were working their way toward a stateless model, but they didn't even believe that. Even under Lenin the Soviet example was a transfer of autocracy from the tsars to the Bolsheviks. Under Stalin that model was fully outed and calcified.

What you want to do is alter capitalism in an evolutionary fashion. To do this I believe you have to address the ownership issues that the current form of capitalism has allowed to develop. Under the current model the managers of corporations are the de facto capitalists, usurping the stock holders. Until you can address this, for this is where the immediate payback cycles originate, you won't get anywhere.

I suggest it can be handled this way; form a holding corporation that either by law or by purchase owns a percentage of all stocks which meet a criteria for a publicly traded corporation (there would probably thus be two types of corporations A and B. One would refer to large operations, the other to individual or family sized ones.). This percentage should be roughly equal to that which the bottom 90% of the people have traditionally owned, about 15% of all shares. The holding corporation will never sell its shares. The only income it will receive from its ownership would be that of dividends. Now, sell shares in the holding company on open exchange. Pass a law that states that no manager can receive a bonus from his/her company directly, only from the holding company. The holders of the shares of the holding company will vote on how much to give the managers in bonus money, either by industry/sector scale voting or more specific voting, The managers bonus has to comes out of the dividend receipts going to the shareholders of the holding company. The result is an inverse relationship. If the managers get too much the shareholders of the holding company will see a lesser return. If the managers get too little because the shareholders want everything for themselves then there emerges a situation where more must be given the managers because incentive is necessary for high levels of performance.

[pablonite]

$this->bbcode_second_pass_quote('Mike Morin', 'S')hould we be defeated before we start?

[Mike Morin]

$this->bbcode_second_pass_quote('pablonite', 'I') don't think we can identify and develop alternatives because they would manifest inside the box itself thus be dependent on the box..

[Mike Morin]

"The Latin American Alternative: A New Financial System" at http://www.greenleft.org.au/2008/771/39749 .

You may also want to check out: http://www.venezuelasolidarity.org .


The Latin American alternative: a new financial system


Tim Anderson, Caracas
17 October 2008


As stock markets crashed and a global credit squeeze threatened global economies, Latin American governments pushed ahead with plans for a new financial architecture, to replace the current bankrupt system.


The people of the world “no longer support” this privatised banking system, Venezuela’s President Hugo Chavez insisted at an international conference of political economists in Caracas on October 8-10, hosted by the Miranda International Centre (CIM) and entitled “Responses from the South to the global economic crisis”.

The International Monetary Fund (IMF) was one of those principally responsible for the financial crisis. It should “dissolve itself” and “disappear from the Earth”.

Ecuador’s economic policy minister Pedro Paez said society must “reclaim the leading role that has been kidnapped by the centres of political and economic power … the capitalist system is not the only option”.

Proposals for a new financial system also emerged from the CIM conference. In a joint report to the Venezuelan government (see below), conference participants urged immediate action to
socialise the banks and protect national savings without bailing out private investors.

The proposals emerging from Latin America differ in important respects from the bailouts taking place in the US and Europe, which seek to underwrite private losses and save the privatised finance cartels.


* * * * * *

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Such proposals require substantial political will and coordinated capacity, but such conditions may now exist. Latin America was “no longer” the weak and compliant region of the 1980s, Ecuador’s President Rafael Correa has insisted.

Emerging from the debt and structural adjustment policies crippling it, the region has seen sustained economic growth, expanding reserves and a series of new and independent governments.

Venezuela has already withdrawn most of its US$40 billion in reserves from the US, and has been creating new domestic and international state-run banks. It is still planning for significant economic growth, even if oil prices fall back to $60 per barrel.

Ecuador has just passed a remarkable new constitution that, among other things, prohibits state takeovers of private debt, such as those envisaged by the US “Paulsen Plan”.

After its own audit commission on “illegitimate debt”, Ecuador is strongly against any new round of debt and financial leverage.

The six Latin America and Caribbean countries that subscribe to Bolivarian Alternative for the Americas (ALBA — Cuba, Venezuela, Bolivia, Nicaragua, Honduras and Dominica) have created an ALBA Bank to finance regional social programs. Venezuela has recently created joint banks with Iran, Russia and China, the latter with $12 billion in commitments.

Chavez also wants to revive his OPEC proposal for an oil exporters’ bank.

The Bank of the South (Bancosur) has been planned over the past year, with broad South American support. The concept is that participating countries place 10% of their reserves into the bank. Such an institution could displace the Washington-controlled IMF, World Bank and InterAmerican Development Bank (IADB — the region’s chief proponent of capital liberalisation).

Brazil and Argentina’s support for Bancosur is crucial, but also compromised by those countries’ powerful private investment groups. Whether these governments will be able to commit to a powerful new bank that favours public investment and social projects remains to be seen.

With the onset of the Wall Street crash, Venezuela invited 40 political economists to Caracas for the CIM-hosted conference to debate the crisis and propose alternatives.

The conference was chaired by Venezuelan planning and development minister Haiman El Troudi and Luis Bonilla from the CIM. The political economists presented papers and debated for four days, before presenting the Venezuelan government with a joint statement.

Though wider issues were discussed, the first report focused on finance and monetary reform. It seems the group will meet again, in early 2009.

Following is a summary of the recommendations of the first report:

1. States of the region should take immediate control of their banking systems, without indemnification, according to the principle of the new Ecuadorian constitution (290.7: “nationalisation of private debt is prohibited”). These measures should aim to prevent capital flight.

There is a need for each state to shut down offshore banking mechanisms. Banking supervision must be strengthened. One of these services should be to guarantee a minimum national investment level of liquid assets.

2. There is a need for monetary coordination to avoid a war of
“competitive devaluations”, which would worsen the crisis, blocking a regional response and undermining the integration process of Union of South American Nations (Unasur — a
South American integration process begun in 2007 that envisages a new continental currency).

There must be clear signals from a Latin American monetary agreement and the definition of a system of payments based on a basket of Latin American currencies, which would provide measures of liquidity for each country.

This in turn requires a substantial coordination of central banks and “overcoming neoliberal dogma”. In this respect we propose a South Fund (Fondo del Sur) as an alternative to the
IMF.

3. Taking advantage of the excess reserves of each country to create a payments system, we propose the immediate implementation of Bancosur, based on a democratic system of one country one vote. This bank can be “the heart” of the transformation of the existing network of banks.

It is necessary to establish exchange controls to protect reserves and prevent capital flight.

4. Countries of the region should consider a suspension of payments on public debt as a transitional measure to protect sovereign resources from the crisis and avoid an emptying of treasuries.

5. We propose an emergency social fund to back food and energy sovereignty, as well as to attend to migratory problems and a possible cutting of remittances. This fund could function within Bancosur or the ALBA Bank.

6. Following the principle of assisting the people and not the bankers, social programs must be maintained, the priorities being: employment security, universal income, public health, education and housing.

7. This is the opportunity for the countries of the region to get rid of the IADB, the IMF and the World Bank, and to
begin creating a new international financial architecture.

[Mike Morin]

ALBA 101


I apologize to thee all that know this.

I thought it was particularly pertinent given current affairs in Latin America and other parts of the world.

We, in the English speaking world need to promote our solidarity. More and more people in the world, including people in the USA are calling for economic and financial systems/restructuring. We, in the United States, need to come to grips with how we can spit Jonah out and then cooperate with him. It will take some of the best minds that the world has to evolve to a socialist system with the minimum of friction. The alternative is a failed Capitalist model that will lead to massive suffering if the competitive advantage of a minority is continued to be foisted upon the rest of the world at any cost.

MM

******************************

Alternatives to Corporate
Globalization: Venezuela’s ALBA


Since the election of Hugo Chávez as president of
Venezuela in 1998, a fundamental shift is taking place.
For the first time, oil revenues are being used to provide
health care, education, clean water, subsidized food,
electricity, and other basic services to all Venezuelan
citizens – and especially the poor who were
marginalized under previous neoliberal governments.
But the impacts of Venezuela’s new economic model are
not just benefiting the citizens of Venezuela. A
fundamental aspect of Venezuela’s vision for the future
of Latin America is creating an alternative to the
neoliberal model of corporate globalization that will roll
back the growing scourge of poverty in the region.
According to the UN, 222 million people - 43% of the
population of Latin America - are poor, with 96 million
– nearly one in five – living on less than a buck a day.


Failure of the Model

During the last 25 years, many Latin American
governments have followed the Washington Consensus
neoliberal economic model of corporate globalization,
which includes policies like privatization of public
services, lowering tariffs, opening up to foreign
investment, and eroding worker’s rights, usually under
pressure from “structural adjustment” programs imposed
by the International Monetary Fund. During this time,
exports have increased, and yet Latin America has
experienced a spectacular failure of economic growth –
less than .5% per capita income growth average since
1980. By way of contrast, the previous twenty years saw
80% economic growth or 4% per person per year.
A strikingly candid assessment by the Wall Street
Journal last November acknowledged that the “rise of
Mr. Chavez, and of other more moderate leftist leaders
in Latin America, reflects the disappointing results of the
so-called Washington Consensus, a set of marketoriented
policies like trade liberalization and
privatization that the region and parts of Asia embraced
during the 1990s.” Yet Bush and Condoleezza Rice still
talk in Latin America about the need to promote the
“twin pillars of democracy and free trade.”
Citizens in the region, however, are increasingly electing
democratic governments that prioritize economic growth
and development strategies, turning away from the failed
neoliberal models of the recent decades. This has been
the case in Argentina, Uruguay, Bolivia, and to some
extent Brazil, and particularly in Venezuela. Venezuela
has also worked hard to extend that model to the rest of
Latin America, through programs of regional integration.


Mar del Plata: Tomb of the FTAA

In spite of the obvious failure of the North American
Free Trade Agreement, NAFTA, to lower poverty or
unemployment rates, expanding NAFTA to the western
hemisphere through the Free Trade Area of the Americas
– the FTAA – has been the top political priority of the
US in Latin America for the last ten years. But in 2003
the talks faltered, and have been stalled ever since.
In November of 2005, Bush and Chávez both
participated in the Summit of the Americas, in Mar del
Plata, Argentina – a gathering of leaders in the region
that was intended to focus on creating jobs. Instead, the
summit turned into a referendum on free trade, with
Bush attempting to jump-start talks for the FTAA, while
Chávez headlined a giant rally with hemispheric social
movement leaders and proclaimed Mar del Plata the
“tomb of the FTAA.”


Regional Integration: the Bolivarian
Alternative for the Americas, ALBA

A key foundation of the entire Bolivarian project in
Venezuela is to strengthen alliances among southern
countries to redraw the global political map, and end US
economic domination in the hemisphere. Venezuela is
promoting concrete programs of regional integration that
are real alternatives to the failed model of corporate
globalization. These projects appear threatening to the
Bush administration, because they aim to reduce Latin
America countries’ dependence on the US, and build
stronger ties among the nations of the Americas.
Venezuela’s vision of regional integration is based on
the writings of Simón Bolívar, the Liberator of much of
South America, and is united under the banner of the
Bolivarian Alternative for the Americas, or ALBA.
ALBA is grounded in the principles of complementarity
(rather than competition), solidarity (instead of
domination), cooperation (not exploitation), and respect
for sovereignty (instead of corporate rule). And ALBA is
based on grassroots citizen participation, as the citizenry
are both the implementers and the beneficiaries of the
agreements under the banner of ALBA.


Venezuela’s Vision: Based on the Constitution

Venezuela’s vision of economic democracy is based on
their Constitution, which was popularly approved in
1999, and mirrors several key aspects of the social
movement critique of the corporate globalization model,
such as its erosion of democracy, privatization of
services, assault on development, and harm to workers.


National Sovereignty: the Right to Develop
and to Create Jobs

A basic goal of the neoliberal model is to reduce the role
of the state in domestic policymaking and increase the
control of foreign capital over domestic economies.
Venezuela has argued that the state must maintain a role
in promoting economic development through strategic
use of tariffs and government subsidies to protect
nascent industries and promote local development of
jobs. These are tools that governments around the world
– including the US – have used for decades to help
promote national economic growth and create local jobs.
Yet the FTAA, and the US and EU proposals in the
WTO would drastically reduce the ability of developing
countries to employ the same strategies we used,
effectively “kicking away the ladder of development.”
Venezuela has been investing oil revenues in national
projects to revitalize industries in an effort to diversify
production away from their dependence on oil. As a
result, unemployment has plummeted, and Venezuela
boasts one of the fastest growing economies in Latin
America. And it has increased its trade with other Latin
American nations, decreasing the region’s dependence
on the US as the top trading partner.


Services: the Right to Education, Health, and
Water, Not Corporate Profit

A key aspect of Venezuela’s opposition to corporate
globalization is regarding the privatization of services
like health care, education, and distribution of water,
which are guaranteed in Venezuela’s Constitution.
Education: For example, Venezuela has accomplished a
massive literacy campaign that has taught over 1.4
million Venezuelans how to read and write. Venezuela
has also built or refurbished over 9,000 elementary
schools, vastly increasing enrollment, and now provides
lunches to disadvantaged schoolchildren.
Mision Ribas allows adults to return to high school and
get their G.E.D. Roraima, a 36-year-old maid and
mother of two, said that she “had to drop out of high
school in 9th grade to work, so my brothers could go to
school. Now I’m getting my GED, and then I will go on
to the Mission Sucre to study to become a social worker.
Then I will be able to help others, and give back to my
community.” The college program Mision Sucre has
vastly expanded access to higher education.
Barrio Adentro, the health care mission, has provided
primary, prevention-based health care to over 60% of the
Veneuzelan population by placing clinics in
neighborhoods across the country and providing free
medicine, including to people with HIV/AIDS.
Water: Venezuela has been carrying out a large-scale
project to ensure clean water to all Venezuelan citizens.
Lack of access to clean water is the single biggest killer
of poor people worldwide, yet privatizing water is a top
agenda of the corporations promoting globalization.
At the same time, the Chávez administration has been
promoting regional projects focused on eradicating
illiteracy. A cooperation agreement with Cuba under the
banner of ALBA provides doctors and nurses for Barrio
Adentro, in return for subsidized Venezuelan oil. These
programs exemplify the right to basic services, and are
incompatible with privatized education or health care.
And Venezuela has resisted the privatization of services
regionally in opposing the FTAA, and in resisting the
expansion of Services coverage in the WTO.


Agriculture: Food Sovereignty

Agriculture is another sector that exemplifies how
Venezuela’s Constitution challenges the dictates of the
corporate globalization model. Venezuela has focused on
agriculture as a key sector for moving out of dependence
on oil exports and towards food sovereignty, a basic call
of the global farmers’ movement Via Campesina.
Venezuela has been carrying out a massive program of
land reform, because historically 5% of the population
owned 75% of the land, a latifundio situation that
resulted in unused land, rural poverty, and a dependence
on food imports. Land reform programs, combined with
credit and technical assistance for farmers, have enabled
Venezuela to increase food production. Substantial food
subsidies for the poor have increased food security.
Likewise, many of Venezuela’s regional integration
programs include the trade of Venezuelan oil for food,
such as Argentine meat or dairy and Bolivian soybeans,
which benefit struggling farmers in those countries.
Yet the failed model of corporate globalization treats
food as any other commodity, to be traded on the global
market, rather than in the context of the human right to
food. Along with developing-country political allies in
the WTO, Venezuela has called for the right of countries
to support their agricultural sectors to preserve food
sovereignty, food security, and rural livelihoods.


Challenge to US Economic and Political
Hegemony and Corporate Globalization

Venezuela is leading efforts in regional and global
spheres for alternative models to corporate globalization
that are more successful in promoting development and
regional integration. This is a fundamental challenge to
US economic hegemony and the corporate model. The
Bush administration and its corporate backers will likely
become increasingly concerned about Venezuela, and
will likely continue to couch their concern about the
opposition to the economic policies as if it were a
concern about “democracy.”
US citizens can help preserve the survival of the
Venezuelan vision of Another World Is Possible, by
helping stop US intervention in Venezuela, so that
generations to come may benefit from a world beyond
US economic and political hegemony, and an economic
system based on human need, not corporate greed.


2017 Mission Street, # 303 • San Francisco, CA 94110 • tel 415.255.7296 • fax 415.255.7498 • www.globalexchange.org

[Mike Morin]

>Robin wrote:

The idea that you can challenge capitalism by starting up businesses oneself is about as plausible as wanting to strike a blow for pacifism by joining the army.

Mike Morin replies:

This leaves us between a rock and a hard place.

The only ones who can start businesses in today's Capitalist environments are well endowed individuals and/or Corporate Capitalists who are diversified and can afford to take a loss in the new sector in the short run with the (illusory) hopes that the economic system will "recover". It won't. So what we have is a lot of irrational dysfunctional Capitalist businesses running their course and withering away. It is our remote hope that we can transition to something better before the world is totally destitute.

It is my pipe dream that we can enlist the holders of equity and assets to reallocate their holdings not to businesses but to community betterment organizations and or workers' cooperative (or as in rare cases functioning within the Capitalist systems community/worker hybrids). But we must do more than that we must organize the workers in socialist solidarity within and among communities, regions, and world wide. We must organize workers within and among economic sectors. There needs to be democratic ecological economic planning to radically alter the way in which resources are allocated to and within communities and within and among economic sectors.

My dream seems to be consistent with the orientation, plans and programs of the Latin American leaders of ALBA (Latin American Bolivarian Alliance). Hugo Chavez and associates have been using oil wealth and other equity and assets to finance such programs and there appears to have been some hopeful success thus far.

Where we are at significant disadvantage in the English speaking world is that our resource holders, Capitalists and Capitalist lackey Governments are not hip to this plan.

>Robin wrote:

It is only by engaging in and helping to expand activities that transcend commodity-productio n and by pushing forward with a clear vision of a future ouside capitalism that you stand any chance of actually realising that future.

Mike Morin replies:

Agree'd...

MM