Land ownership and pensions

Public-limited companies are a problem, I think, because the duty to provide returns to shareholders creates an unsustainable growth-imperative.

But if we were to end plcs, or at the very least try to extract our own lives from shareholder capitalism, what would we do about pensions?

It used to be that government pensions worked by working people paying taxes, and some of that tax money going to pensioners, straight away. That doesn't work any more because we've got so many old people, so state pensions act more like private pensions, investing the money and using stock market growth to deliver pension wealth.

How about this as an alternative.

Land-based pensions.

pic

Right now, "69 per cent of the acreage of Britain is owned by 0.6 per cent of the population", according to the New Statesman (2004). What's that about?

So, Land-based pensions work like this.

With your monthly pension payments, you gradually buy a bit of land.

When you get old, you gradually sell that bit of land to a youngster who gradually buys it off you. The income is your pension.

I can't work out the maths of whether it would keep you in hobnobs, financially, but it's worth a think.

"This land is your land, this land is my land", well it's not, is it.

"Who's is the Kingdom? The power and the glory? Forever and ever; will it be the same old story?" - Songline from the goose and the common by the Claque.

We should own it. Us. Us lot. All of us.

Humm.

4. Evidence on Governance, inequality, CSR and SRI

The GRI has an economic section
http://www.globalreporting.org/NR/rdonlyres/DDB9A2EA-7715-4E1A-9047-FD2FA8032762/0/G3_QuickReferenceSheet.pdf


Economic
ECONOMIC PERFORMANCE
EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.
EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change.
EC3 Coverage of the organization’s defined benefit plan obligations.
EC4 Significant financial assistance received from government.

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts.

http://www.globalreporting.org/NR/rdonlyres/E74AF64F-D559-433E-A35B-096D7A89C241/0/G3IndicatorProtocolEconomicFSSSFinal.pdf

Performance data generated in response to the
Indicators in this section are expected to illustrate:
• The flow of capital amongst different stakeholders;
and
• The major economic impacts of the organization
throughout society.

The GRI requires reporters to disclose their revenue and payments to capital providers.

They ask for information on:

Direct economic value generated
a) Revenues Net sales plus revenues from financial investments and
sales of assets
Economic value distributed
b) Operating costs Payments to suppliers, non-strategic investments,
royalties, and facilitation payments
c) Employee wages and benefits Total monetary outflows for employees (current
payments, not future commitments)
d) Payments to providers of capital All financial payments made to the providers of the
organization’s capital.
e) Payments to government (by country – see note
below)
Gross taxes
f ) Community investments Voluntary contributions and investment of funds in the
broader community (includes donations)

d) Payments to providers of funds:
• Dividends to all shareholders;
• Interest payments made to providers of loans.
• This includes interest on all forms of debt and
borrowings (not only long-term debt) and also
arrears of dividends due to preferred shareholders.


So what is the thinking behind this and who can I talk to to understand it? Is this diclosure required of all GRI reporting companies?


Anglo Platinum

Main economic contribution to society is discussed in terms of tax and wages, and some philanthropy. In 2007, Anglo's returns to capital providers exceeded wages and taxes combined. What is a good balance?

http://angloplatinum.investoreports.com/angloplatinum_sdr_2007/html/angloplatinum_sdr_2007_13.php

http://angloplatinum.investoreports.com/angloplatinum_sdr_2007/html/angloplatinum_sdr_2007_4.php Anglo Platinum - winner of the ACCA (check) sustainability reporting malarkey, ownership and distribution of wealth and power is a big deal for south africa. Ownership and joint ventures

Will the mining company achieve HDSA participation, in terms of ownership of equity or attributable units of production, of 15% in HDSA hands within five years and 26% within ten years? http://angloplatinum.investoreports.com/angloplatinum_sdr_2007/html/angloplatinum_sdr_2007_14.php#2 Anooraq Resources and Mvela Resources already have broad-based ownership structures and share Anglo Platinum's principles and objectives for the promotion of broad-based and meaningful participation of women, communities and employees. Anglo Platinum’s commitment to transformation and broad-based BEE (Black economic empowerment) has been expressed in a groundbreaking deal with Anooraq Resources and Mvela Resources. The sale by Anglo Platinum of mining assets Anglo Platinum, Anooraq Resources and Mvela Resources agreed on transactions that will result in the creation of two substantial, HDSA managed and controlled South African platinum group metal (PGM) producers, which will have critical mass and significant growth potential. In terms of the transactions, Anglo Platinum will sell an effective 51% of Lebowa Platinum and an effective 1% of the Ga-Phasha project for a total consideration of R3.6 billion to Anooraq. Following this transaction Anooraq, being the current owner of 50% of Ga- Phasha, will own an effective 51% of Lebowa and Ga- Phasha through a newly created vehicle. Mvela Resources will purchase Anglo Platinum's 50% interest in the Booysendal project and 22.4% direct interest in Northam for a total consideration of R4 billion. Anglo Platinum and Anooraq have also agreed in principle to transfer, in due course, their respective 50% interests in the Boikgantsho and Kwanda Joint Venture projects into the newly created vehicle. will transfer assets to the value of approximately R35 billion to HDSA control. (AP is establishing an ESOP plan that will cover 1.5% of APs issued share capital) establish an employee share ownership plan (ESOP) that will benefit more than 43,000 employees. The new scheme covers all employees who do not participate in any Anglo Platinum share scheme and will comprise up to 1.5% of Anglo Platinum's issued share capital. Aiming also for greater economic justice through procurement: In 2007, services and products worth R7.4 billion were procured from HDSA vendors.This represents 32.2% of the Group's discretionary procurement against a target of 28%. Our spend with HDSA vendors has grown steadily over recent years: • 2003 = R730 million • 2004 = R980 million • 2005 = R1.9 billion • 2006 = R4.8 billion • 2007 = R7.4 billion The number of HDSA-owned, empowered and influenced vendors on our registered vendor database increased by 225 in 2007 to 1,445 companies The following data represents the Group's output as a proportion of demand, as defined by Johnson Matthey as 'sales of new metal'. Market share of global demand, % 2007 2006 2005 Platinum 37 40 37 Palladium 16 18 20 Rhodium 41 41 42 Providers of capital Distributions to providers of capital, R millions Interest paid 402 240 387 Dividends 15,905 4,826 2,029 Total 16,307 5,066 2,416 Increase/(decrease) in accumulated profit (3,601) 7,209 2,674 http://www.sumocoal.co.za/procurement.php Sumo Coal subscribes to the policy of preferential procurement and the development and investment in Small medium enterprises (SME). Our procurement policy sets out short term and long term objectives for BEE procurement which are reasonable and achievable. We intend increasing our expenditure in HDSA owned and empowered companies so as to contribute to economic sustainable development. This approach will give HDSA an opportunity to participate actively in the mining sector. In our policy, unless the context indicates otherwise, Broad base black economic empowerment means the economic empowerment of all black people including women, workers, youth and people with disabilities and people living in rural areas through diverse but integrated socio-economic strategies that include, but are not limited to : Increasing the number off black people that mange, own and control enterprises and productive assets, Facilitating ownership ands management of enterprises and productive assets by communities, workers, co-operatives and other collective enterprises; Human resource and skills development, Achieving equitable representation in all occupational categories and levels in the workforce, preferential procurement, investment in enterprises that are owned or managed by black people. INteresting to check out other Acca shortlist - BP and BT BP - also uses GRIs G3 framework http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/e_s_assets/downloads/bp_sustainability_report_2007.pdf They record their payments to shareholders ($8,106m), employees (inc share ownership and benefits - $11,263m) and taxes ($13,267m). Very different distribution to Anglo. Don't know total revenues, profits or margins from Sustainability report. This information will obviously be in financial report. Interesting to compare the proportions of these distributions by company (why?). This is the extent of their consideration of their economic impact - a deeper look at their impact on environment and development - development angle focuses on investment in communities. Nothing on ownership and distribution of power and resources other than what's in the 5 year statement. BT http://www.btplc.com/Societyandenvironment/Ourapproach/Sustainabilityreport/section.aspx?sectionid=5aa1be8f-f6db-4918-a486-ec03e651e56d BT revenue of £20,704 million to employees: GBP5,358m to shareholders: Total dividend paid in the year to shareholders: £1,236 million. Net debt increased from £7.9 million to £9.5 million. Net finance expense payable £378 million. Total amount falling due to creditors within one year: £7,591 million. To government The tax charge for the 2008 financial year was a net charge of £238 million and comprised a charge of £581 million on the profit before taxation and specific items, offset by tax relief of £343 million on certain specific items. The value BT added to the UK’s economy was over £10 billion in the 2006 financial year and supported the employment of almost 173,000 people. 2006 - Accountability did a study of indirect economic impacts of BT Produced a paper on it concluded - “BT is an important player in the dynamic ICT market in the UK and across the world. Along with other ICT providers, BT’s converging services are changing the way learning is provided, products are devised, people are governed, teams are managed, services are consumed and entertainment is delivered. By managing is indirect economic impacts, BT can help build the responsible competitiveness of the host economies of the countries in which it operates, from UK PLC to the global village and from Brussels to Bangalore.” BT considers its wider impacts in its report in terms of employment and tax, and 'direct economic impact' in a separate category but i don't know what that means. http://www.btplc.com/Societyandenvironment/Ourapproach/Sustainabilityreport/section.aspx?sectionId=3752F85F-76A0-4B58-A8D6-44CEA2E01411 They've got a sustainable economic growth programme one of their four key objectives is this: To create business models that make a difference and inspire people to find new answers Clive Ansell, President of Strategy, Marketing and Propositions for BT Global Services is the champion for sustainable economic growth.

10. The Anthropology of money

The Eleventh Round - Bernard Lietaer - p50

Lietaer argues that "interest indirectly encourages systematic competition among the participants in the system."

"Once upon a time, in a small village in the Outback, people used barter for all their transactions. One every market day, people walked around with chickens, eggs, hams and breads, and engaged in prolonged negotiations among themselves to exchange what they needed. At key periods of the year, like harvests or whenever someone's barn needed big repairs after a storm, people recalled the tradition of helping each other out that they had brought from the old country. They knew that if they had a problem some day, others would aid them in return.

One market day, a stranger with shiny black shoes and en elegant white hat came by and observed the whole process with a sardonic smile. When he saw one farmer running around to corral the six chickens he wanted to exchange for a big ham, he could not refrain from laughing. 'Poor people,' he said. 'So primitive.' ...

He took a cowhide, and cut perfect leather rounds in it, and put an elaborate and graceful little stamp on each round. Then he gave to each family ten rounds, and explained that each represented the value of one chicken. ...

"In a year's time, I will come back and.... I want ou to each bring me back 11 rounds. That 11th round is a token of appreciation for the technological improvement I just made possible in your lives.' 'But where will the 11th round come from?' asked a man. 'You'll see', said the man with a reassuring smile."

"Assuming that the population and its annual production remain exactly the same during that next year, what do you think had to happen? Remember, that 11th round was never created. Therefore, bottom line, one of each 11 families will have to lose all its rounds, even if everyboyd managed their affairs well, in order to provide the 11th round to ten others.

So when a storm threatened the crop of one of the families, people became less generous with their time to help bring it in before disaster struck. While it was much more convenient to exchange the rounds instead of the chickens on market days, the new game also had the unintended side effect of actively discouraging the cooperation that was traditional in the village. Instead, the new money game was generating a systemic undertow of competition among all the participants."

Same thing with the bank. They create the £100,000 principle when they lend you a mortgage, but they expect you to pay £200,000 back over the next 20 years to pay the interest. "Because all the other banks do exactly the same thing, the system requires that some participants go bankrupt in order to provide you with this £100,000... In other words, the device used to create the scarcity indespensible for a bank-debt system to function involves having people compete for the money that has not been created, and penalises them with bankrupcy whenever they do not succeed."

So if there are ten of us borrowing £100,000, £1m has been created. but £2m needs to be repaid. It doesn't work.

Interest is prohibited in Islam, and was prohibited in Judaism and Christianity. Henry VIII legalised interest for the first time in the western world in 1545 (p48).

So, if bank debt and interest are key design features, how did money work when interest was banned? (And how did communities work?)

why

This summer in the queue for the showers at a music festival

i met a man called Soleil

he was from West Africa.

He was a sound engineer touring music festivals to learn stuff. In between festivals he was staying in Chiswick.

I asked him what he thought of the UK.

'Places like Doris (the festival), it's great, it's a lot like home. But Chiswick is strange. You do everything alone. You live alone. You raise your children alone. You eat alone. Your old people are alone. To do anything you need money. It's not like this in Guinea. If you don't have money you can still take part.'

I'm interested in togetherness and aloneness.

One morning I found myself locked in a hallway of a house divided into flats. I needed help. I knocked on the door to one of the flats. 'Hello?' called a wavering old voice. 'Hello', I called through the door. 'I'm locked in. Could you let me out please?' 'Hold on.'

Three or four minutes passed. I could hear shuffling. I didn't know what to expect. I was becoming a little nervous.

Then the old old man opened his door. He hadn't managed to button his shirt and his concave ribs shocked me. He grinned and moved slowly down the stairs to the hall to let me out. I had the feeling that I was the first person he'd seen for some time. Days. Longer.

There are some statistics about lonliness among the elderly. They make you sad to read them.

It's a shame because we feel that we need them. Some friends and I are having conversations about buying some land and creating a blended community, where there is a 'blend' of self sufficiency and participation in the formal economy. None of us want to retreat from interesting and important projects and work, but we want our lives to be less dominated by work. We want more time. A less hectic pace. And we want more togetherness.

We want older people to join us. We value our elders.

Then there's family time. Quality of relationships. The time that we have for each other. The fact that a house used to cost three and half times one salary and now it costs three and half times two salaries and so both parents have to work pretty much full time and fit in childcare along with the chores and cooking and trying to sleep and vaguely trying to squeeze in a bit of exercise if they're lucky and the quality of life is just shit.

Margrit Kennedy with her unsourced figures estimates that about 50% of our spending - the money we've squeezed so many other things to earn - goes on interest.

Which the graphs show makes a few people very rich.

I wonder what that's like for them. I wonder how much difference it makes to their wellbeing. I'm pretty sure that above a certain level it doesn't. The progress paradox.

I see big business like a bit of a cancer to be honest. It was amazing to come back into a town after being in Doris (the music festival) and be surrounded by junk food at every turn. Ads everywhere. Everyone looked the same. So did the buildings. Clone town Britain. Diversity and creativity had been squeezed out and standardised conformity took centre stage, along with people ill from all the junk food and insecure from all the ads protraying model people to aim to be.

I'm feeling anxious about the money project again today. It's back to the economics thing. I do my best work when it's about, for and with people. The money project pretty soon will become a people project but it has to start with a fair bit of political economy.

And that still feels like cold hard iron.

And difficult. It feels difficult.

But it's my loudest question. These are my loudest questions.


Shit they're too small to read. Back to the graphics anon.

And I think they're really really important. And answering them feels like the most important thing to do.

Because I think figuring out that side will enable us to live more sustainably and with more togetherness. Humm. I haven't articulated the link clearly but I feel it strongly.

My mother says we don't do that kind of togetherness here because it's cold and we need to stay indoors. In Africa they co-operate more because it's warm.

Humm. Alastair McIntosh describes super cooperative communities he grew up in, reciprocal economies etc, and that was on the Hebrides. Which has a much poorer climate than south east England.

Is this actually a project on profit?

write up notes from Tomorrow's Owners margin

http://www.hup.harvard.edu/catalog/WEINON.html

The Nonprofit Economy

Burton Weisbrod

'What motivates managers of nonprofits? Why are these organizations exempt from taxes on income, property, and sales?'

Or is it a project about interest?

And what would an economy that's not based on debt look like?

How to go about the project

• see notes on wall
• aim: the PhD sparks further research and change project activity
• Risk: PhD would be low impact if it were poor quality - methodology, readability, relevance, thinking, analysis, etc.
• PhD could be part of a collaborative project - how?

The expertise required:
stage 1 - economics
stage 2 - political science
stage 3a - business change management
stage 3b - policy - national economic and development policy, in both developed and developing countries.

Principle: participatory and collaborative wherever possible. Look everywhere for opportunities to make it so.

Bibliography

Banks, James et al (2000). Wealth Inequality in the United States and Great Britain. UK: Institute for Fiscal Studies and University College, London.

Beck, Thorsten et al (2005). SMEs, Growth, and Poverty: Cross-Country Evidence. Netherlands, Journal of Economic Growth. Volume 10, Number 3, p 199-229.

Beinhocker, Eric (2007). The Origin of Wealth. Evolution, complexity and the radical remaking of economics. London, Random House.

Bernard, Prosper M. Jr (2008). Varieties of Capitalism and Inequality: Canada from a Comparative Perspective. Journal of Humanities and Social Sciences, Volume 2, Issue 2.

Brewer, Mike et al (2008). Racing away? Income inequality and the evolution of high incomes. London: Institute for Fiscal Studies

Burkhard, Ross (2005). Democracy, capitalism and income inequality: cross-country evidence. US, Boise State University.

Davies, J et al (2008). The World Distribution of Household Wealth. UNU-WIDER

Douthwaite, Richard (1996). Short circuit: Strengthening local economies for security in an unstable world. UK: Green Books.

Enderle, Georges. A rich concept of wealth creation: beyond profit maximization and adding value. Indiana, University of Notre Dame.

Hall, Peter and Soskice, David (2001). Varieties of Capitalism. New York: Oxford University Press

Hoogvelt, Ankie (2001). Globalisation and the postcolonial world: The new political economy of development. Maryland, John Hopkins University Press.

Kay, John (2004). The Truth about Markets: Why some nations are rich but most remain poor. London, Penguin.

Kennedy, Margrit (1995). Interest and Inflation Free Money. Philadelphia: New Society Publishers.

Lietaer, Bernard (2001). The Future of Money: Creating wealth, work and a wiser world. London, Century.

Meadows, Donella (1999). Leverage Points: Places to Intervene in a System. US, The Sustainability Institute.

McMillan, John (2002). Reinventing The Bazaar: A natural history of markets. New York, Norton.

Pettifor, A (ed) (2003). Real world economic outlook. London, Palgrave Macmillan.

Porritt, Jonathon (2005). Capitalism as if the world matters. London, Earthscan.

Shephard, Andrew (2003). Inequality under the Labour government. London: Institute for Fiscal Studies

Spratt, S and Wallis, S (2007). From Old Economics to New Economics: Radical Reform for a Sustainable Future. London, new economics foundation.

Surowiecki, James (2004). The Wisdom of Crowds. US, Abacus.

(2008). Tomorrow's Owners: Stewardship of tomorrow's company. London, Tomorrow's Company.

Yunnus, Muhammad (2007). Creating a World Without Poverty: Social business and the future of capitalism. US, PublicAffairs.

9. Models of Business Ownership

Should be able to find good info on UK biz ownership proportions here
http://www.ons.gov.uk/about-statistics/user-guidance/lm-guide/concepts/employers/ownership/index.html

ESOP - employee share ownership plan

British govt introduced tax favours for Esops. The aim was to promote a 'Share owning democracy" (Banks et al 2000:22)

http://www.nceo.org/library/esops.html
Employees can buy stock directly, be given it as a bonus, can receive stock options, or obtain stock through a profit sharing plan. By far the most common form of employee ownership in the U.S. is the ESOP, or employee stock ownership plan. Almost unknown until 1974, about 11,000 companies now have these plans, covering over 8 million employees.

ESOPs are most commonly used to provide a market for the shares of departing owners of successful closely held companies, to motivate and reward employees, or to take advantage of incentives to borrow money for acquiring new assets in pretax dollars. In almost every case, ESOPs are a contribution to the employee, not an employee purchase.

In an ESOP, a company sets up a trust fund, into which it contributes new shares of its own stock or cash to buy existing shares. Alternatively, the ESOP can borrow money to buy new or existing shares, with the company making cash contributions to the plan to enable it to repay the loan. Regardless of how the plan acquires stock, company contributions to the trust are tax-deductible, within certain limits.

Shares in the trust are allocated to individual employee accounts. Although there are some exceptions, generally all full-time employees over 21 participate in the plan. Allocations are made either on the basis of relative pay or some more equal formula. As employees accumulate seniority with the company, they acquire an increasing right to the shares in their account, a process known as vesting. Employees must be 100% vested within three to six years, depending on whether vesting is all at once (cliff vesting) or gradual.

When employees leave the company, they receive their stock, which the company must buy back from them at its fair market value (unless there is a public market for the shares). Private companies must have an annual outside valuation to determine the price of their shares. In private companies, employees must be able to vote their allocated shares on major issues, such as closing or relocating, but the company can choose whether to pass through voting rights (such as for the board of directors) on other issues. In public companies, employees must be able to vote all issues.

ESOPS are used:
To buy the shares of a departing owner:
To borrow money at a lower after-tax cost:
To create an additional employee benefit:

Caveats: The law does not allow ESOPs to be used in partnerships and most professional corporation. Private companies must repurchase shares of departing employees, and this can become a major expense. The cost of setting up an ESOP is also substantial -- perhaps $30,000 for the simplest of plans in small companies and on up from there. Any time new shares are issued, the stock of existing owners is diluted. That dilution must be weighed against the tax and motivation benefits an ESOP can provide. Finally, ESOPs will improve corporate performance only if combined with opportunities for employees to participate in decisions affecting their work.

http://www.nceo.org/culture/index.html
Research indicates that employee ownership companies grow faster than they would have been expected to grow without employee ownership and that they are more stable than their counterparts. Many studies have found that employee ownership affects corporate performance only when combined with initiatives that create an environment in which employees are given the tools, training, and opportunities to take more active roles as owners--in other words, only when the company creates an "ownership culture."

http://www.nceo.org/options/index.html
A stock option gives the recipient (the "optionee") the right to buy a certain number of shares in the granting company at a fixed price for a certain number of years.

A related type of plan is the employee stock purchase plan (ESPP), which is used mainly in public companies. Note: stock options and ESPPs have nothing to do with ESOPs


Channel 4 is a publicly owned non profit.


http://us.ft.com/ftgateway/superpage.ft?news_id=fto101420081729506314
Johnson, Luke (2008). Why public ownership is a failed model. FT.com 14.10.08

There is another victim of the credit crunch: the publicly traded model of ownership. The near-collapse of many of the large banks in perhaps a dozen countries shows that such corporate structures do not work.

I have served on the boards of various public companies for more than 20 years and most such constructs were dysfunctional. Interests were not aligned and there was more focus on pointless, ritual corporate activity than underlying profitability and productivity. Everyone tries hard, but the disconnect between management and ultimate ownership leads to the profound issues our economy now faces.

Large public companies are mostly owned by a hugely fragmented shareholder base. Fund managers meet executive directors twice a year for an hour and expect to understand what is going on. Too often they judge management based on their ability to carry off a presentation rather than their true skills as leaders. Professional investors have stakes in 100 companies or more and expect to have real insight into all of them: a fantasy. Meanwhile, the top directors of a large public company can spend a fifth of their time visiting hundreds of actual or would-be shareholders.

If things fall apart at a company, asset managers cling to a naive faith in the non-executives, as if they are really able to change matters. But on most occasions institutional investors find it easier to run from the battlefield by selling their shares. So who has any incentive to fix the cock-ups?

After all, how can the non-execs really understand what goes on? They meet less than once a month for a few hours. Mostly, they are paid to conform. No one dares challenge the executive directors because the executives have all the information.

Under corporate governance guidelines, non-executives are not meant to have material shareholdings.

On stock markets the mad gyrations of a share price during a few days can determine the destiny of an institution that has been going for 200 years. If their shares had not imploded, would the government have stepped in to save RBS and the others?

I always thought it was a terrible sign when a chief executive had a screen in the office showing the company share price - but perhaps they were the clever ones. How can anyone run a business when hedge funds trade big chunks of their equity every day? Because hedge funds comprise up to 50 per cent of all broking commission and a fair portion of trading volumes, even though they only hold 2 per cent of all shares, they have a hugely disproportionate effect on market behaviour. One benefit of these troublesome times is that hedge funds are likely to be much less influential in future, since their resources will be greatly diminished.

I believe private ownership allows a more stable, long-term approach to wealth creation. Highly geared leveraged buy-outs may suffer in the coming downturn, but family or employee ownership offers advantages over the volatility of quoted companies. There is less minute-by-minute exposure to external scrutiny, and less obsession with immediate valuation. Organising such ownership structures for banks would not be easy, but it might lead to a healthy state of affairs.

http://www.nolo.com/article.cfm/objectID/6294EA66-70E7-4562-81AC734B34CAD352/111/182/ART/
'business ownership structures' - above. See also this book?:
LLC or Corporation? How to Choose the Right Form for Your Business

on employee ownership

http://www.ent.stir.ac.uk/Employee%20Ownership.htm

on mutuals

http://www.caledonia.org.uk/mills.htm

Community INterest Company

Public interest company

co-operative
http://www.co-operative.coop/aboutus/

in 2006 we returned some £19m of our profits to individual members.

In 2006 we had 1.5 million economically active members, making us the UK’s largest
co-operative. Just £1 allows anyone to be part of The
Co-operative, and each of our members has an equal right to a say in how the business is run and how we achieve our social goals.

Every year members receive a share of the profits that they helped to create. That is why in 2006 we returned some £19m of our profits to individual members.

http://www.co-operative.coop/aboutus/thecooperativemovement/
A co-operative is a group of people acting together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically.
Co-operatives are not about making big profits for shareholders, but creating value for customers ‑ this is what gives co-operatives a unique character, and influences our values and principles.

There are many co-operative businesses throughout the world, of which The Co-operative Group is the largest consumer co-operative.


There are many other types of co-operative such as housing, worker, credit unions, agricultural and even political.


http://www.co-operatives-uk.coop/live/cme0.htm
GOOD INFO

http://www.co-operative.coop/aboutus/thecooperativemovement/ICD/

http://www.employeeownership.co.uk/share-schemes.htm

Visa finally sold up...
http://www.reuters.com/article/newIssuesNews/idUSN1441588020080314

Visa was owned by the banks that issued its cards - it had a member ownership model
Visa planned to sell 406 million Class A shares at $37 to $42 each, for proceeds of $15 billion to $17 billion, according to a regulatory filing last month.

Visa share price today at $56.47
http://finance.google.co.uk/finance?client=ob&q=NYSE:V

http://news.bbc.co.uk/1/hi/business/7263156.stm
Visa hopes to raise more than $18bn (£9bn) from the listing, which would make it the largest Initial Public Offering (IPO) in the US to date.

The share offering would be the culmination of a restructuring process that began in October 2006.

It is currently owned by banks that issue cards carrying the Visa symbol.

Of the net proceeds, $10.2bn from the listing will be paid to the banks who own the network.

Meanwhile $3bn will be set aside to cover the costs of a variety of litigation that Visa is currently involved with.

Why did Visa restructure? Did it need to raise the capital for the litigation? Must be more to it than that?

Tomorrow's Owners

"Table 3 compares the market capitalisation of domestic listed companies with the GDP of our chosen countries at the end of 2005" (p29, table is on p30)

(I mapped this against data on % of national wealth held by the richest 10% of the population in these countries and found no correlation)







http://www.telegraph.co.uk/finance/newsbysector/utilities/2795061/Britain's-biggest-private-companies-The-raw-materials-of-everyday-life.html

4 Viridian

Revenue £1.02bn

Viridian is one of Northern Ireland’s leading pan-utility groups. It supplies electricity to around 780,000 homes and businesses in the province and is also a leading supplier of gas and renewable electricity to the industrial and commercial electricity markets across Ireland through its Energia subsidiary. Viridian also operates two gas turbine power stations at Huntsdown near Dublin, in the Republic of Ireland, that together provide almost 20pc of Ireland’s electricity needs, as well as operating transmission and distribution systems in Northern Ireland. The Belfast-based company was bought by private equity group Arcapita in December 2006 for £1.6bn.

General reading list / things to check out

Jen says

consider deeper questions about what wealth means, why we need wealth, what are the social values the system is built on and how do we change those?

International Comparisons of Wealth Inequality - article by edward wolff

Mark Gater - PhD in money systems with Britannia BS.. interesting topic and partnership model

Jak - swedish bank with no interest
Brazil - favellas - token system with boys given vouchers for menoring younger boys that they could then spend as university fees
Zopa, Time Bank
Guildhall - 'best price' - concept, negotiate on the fair price, not on the highest or lowest it was possible to get.


david.boyle@neweconomics.org

Mark Gater
bang on www.bath.ac.uk/carpp/msc/alumni/gater.html

The Quakers' Made of Money project

Richard Douthwaite

James RIchardson

David Boyle
david.boyle@neweconomics.org - done

Sargon at nef

Responsible debt book author

REOS dialogue interviews

Report (Chatham house)


Layard, Happiness



MBA text book section on business models - look on MIT reading list

ESOP - employee shared ownership

google cooperative movement and political economy / philosophy / history / economics of

Theory of Time

Imagine a pie chart totalling where our earnings go. It's split into 4 portions, A - D

A: our lives now, and our families if we have them
B: our future lives: savings, pensions
C: our society: other people, community, infrastructure: tax
D: money we pass to shareholders via profits on stuff we buy, including consumer goods and financial services - so including interest payments on mortgages and loans that become shareholder profits.

So my thinking is that under the current economic model, portion d is too large. If it were smaller, we would have either more money or more time for a, b and c.

This is why it's a sustainable lifestyle issue.

(There's a question of what would happen to tax income if d were reduced. More radical question of what would happen to required tax income if time for a and be were increased; eg, lower NHS bills).

One implication is that the money project is only really useful alongside broader efforts to help people to derive pleasure and meaning from less material things, that need time rather than money.

This means opportunities, like, FF, rural hub, community food gardens, kids club, 'special sundays' and so on. (NB need to ask charlie for a name for special sundays)

These things are a rich source of happiness and social health.

That's what I'm interested in.

But as long as D is large, we work a lot and don't have much time for the good stuff.

But NB the risk: without the other stuff, the money project simply has the potential to distribute wealth more evenly, rather than aiding the emergence of more sustainable lives and society.

It's a big lifelong social / environmental / economic experiment.

Eg, Student co-operatives in the US cost 40% less than average private student accomodation.

What does that mean? a) they get in less debt, b) they work for money less and have more time for studies and fun, c) they spend more money on other stuff

But, in sum, I think this thinking is central to addressing the work-life balance and family time issues.

The Fear

I am fearful.

The money project scares me.

I started to get fearful on the bus. I stopped my reading. What am I afraid of?

A cartoon came into my head. I saw a massive black block of stone with a little stick figure working at high speed, pushing and pushing at this big block, 200 times its own size, pushing in fast forward, pushing with the arms, the hip, pushing more, not a budge.

I looked up and saw a Take Courage sign. They're always there when you need them. I believe Life talks to me in wind and Take Courage signs.

I returned to the cartoon. What does taking courage look like?

The stick person sat down with it's back against the block, knees up, pulled out a book and started to read. Gradually lines of illumination started to appear within the block, starting to describe its internal forms and functions.

Other people started to gather around the reading stick man, interested, peering into the book, looking at the new lines of insight revealing the block.

More and more people gathered, the pieces of the block started to pull apart, different people worked on different bits, pulling them away

I smiled and felt better

and started to read again.

I am scared because I think the Money Project is economics.

I am scared of economics.

I am reading a book by an economist. It's about economics. I am enjoying it. I started to get excited about economics, because political science always stops short of that kind of tangibility. Yes the clash of civilisations might be a bit about Islamic political philosophy but isn't it more about oil, money and the enforced replacement of Iranian bread with white sliced?

I'm scared of economics because it is not me. It is not mine. It belongs to my sister. I am not the little girl who used to colour in complex geometric shapes, she is, that's what economists do when they're small. I sung and danced around. I still do. That's who I am.

I am not an economist so I can't do an economics project. Why do an economics project when all the people competing with you for PhD places will be way, way ahead of the game. It's like snowboarding goofy when actually you're normal. Which is exactly what I did.

I get tension in my jaw and shoulders because, why would you go into a race with half a leg like that? Why would you put yourself up for that kind of disadvantage?

I should have taken that place at Edinburgh and studied Psychology and by now I'd be running mental hospitals and revolutionising the way the sick are treated and they'd all be growing vegetables and making music and having proper conversations with their doctors. And life would be more comfortable and I'd be richer.

Instead I'm in a very weak and scary position competing with the economists for a training I'm not qualified to do.

My fear is bigger. Economics will trap me. It'll trap me in a conceptual land I find hard. It'll trap me in numbers and mathematics and they'll be hard and cold and I'm the kid who sings and dances around.

But.

I am also the kid who did rows and rows of sums for fun. I am the teenager whos maths teacher said, 'you won't be fulfilled unless you study mathematics.' I am the economics GCSE student whos teacher said, 'you could be even better than Romily if you would only do some work!'

So, I just googled 'therapeutic psychology' and the third item that came up was all about inequality and it's relation to unhappiness.

My first dream was to be on the stage like Annie. I wanted that really badly.

Then I was interested in psychology.I asked my mum whether psychology or sociology was best. She said, oh, sociology's boring, it's all about society, psychology's really interesting, it's all about people.

Then I saw a documentary about hte way that mentally ill people were treated. I saw a doctor engage with a woman more superficially than a tesco's check out assistant and tick some boxes; then I saw a camera man start to sing with her and she came alive.

That day up in the attic aged 15 or so I vowed to become a powerful psychologist and change the way that we relate to and treat the mentally ill.

Then I wanted to be a film maker. I really reallly wanted to be a film maker.

Then it was documentaries. I really really wanted to be a documentary film maker.

Then it was sustainability. I really really wanted to help make the world more sustainable.

I ended up studying political science. I fell in love with the subject in the first or second lecture.

She was talking about world politics. I had sworn and blinded about having to do a module in world politics, but I went along and fell in love.

I realised that politics was about everything. About how we are able, and unable to live. It is about our freedoms and oppressions, why one person lives in freedom while another lives in misery; why one person ends up with three houses and another ends up in jail.

I found the stories Big and Bold and Fundamental. I read Hobbes and Nietzsche and Hannah Arendt oh how I loved Arendt and her distinction between Work and Action - she was a great seer of the truth that the best things in life are non materialistic - and I real about Wallerstein and got passionate about justice and came out the other end still not really having a clue what Political Science was but somehow having a 1st class degree in it.

and work since then has been bitty but ok and mostly pretty good and sometimes very exciting and often quite stressful but that's as much about the biscuits as it is about the work.

but it feels bitty

and it feels like it's time to settle into One Big Focus

and really do it.

but economics feels black and heavy

and on the other hand, it feels fascinating

it feels like it opens up and takes to the next level all of my questions about how we organise ourselves, how we do stuff and make stuff and trade stuff and meet our needs in a way that most maximises our personal, social and environmental wellbeing

see, i'm still fundamentally concerned with wellbeing

but in more of a preventative way now than the curative way of psychology

let's not be zero sum; i bet psychology can be fucking interesting; the insights you can get must be fantastic. But so is economics and political economy. It's what it's all about. I have a hunch that I'm seeing something important that people aren't paying any serious attention to, and things could get much better if we do

if we had more sustainable and just models of business ownership

we may be able to work less and play more

because less of our time would be sucked up by people making profit from our consumption and labour

ha! I'm a marxist!

and if land ownership were more equitable

people could do stuff, could make Action, with less pressure, and less unsustainability in their production and consumption

that's my hunch

so I'm going to check it out

and maybe if I do some work

in some years I can become as good as Romily

and maybe my knee will heal

but at the end of the day, it's a livelihood

and I've got to be comfortable with my livelihood

with my life.

With my days, and the ways I spend them.

So here's the deal.

I'm going to try and gain some insight into that block of Big Quesions that is the money project.

I'm not going to make any dark and lonely forays into such matters as econometrics

but i'm actually pretty happy with numbers, pretty comfortable

and i'm actually pretty hungry to read these books. I'm very hungry in fact.

and if I take a political economy route, I'm not starting at a major disadvantage, especially if I do a bunch of reading. And I can learn some economics as I go if I need to.

This money project has been bubbling in me for years.

It's time to take that energy somewhere.

That urge to solve mental health treatments was a manifestation of an essential characteristic

to try to solve problems

I love, I really love

imagining solutions

I really love

understanding problems

imagining solutions

and having a go at making them happen

i seem to be compelled towards

very difficult things

I seem to get bored otherwise

but completely captivated by very difficult things

and here, in modern capitalism,

is a very complex problem in need of a bit of solving

and it's a very difficult thing

and if it works for me,

maybe one day I'll end up at a university

teaching business students and poli sci students about business models and susatinability

but the most exciting thing would be working with businesses and entrepreneurs and governements

to try to figure out how to solve the problems

and then maybe one day I can do some work on the political economy of land ownership and lifestyle

and on the political economy of mental health treatment

maybe do something about that

through the yoga and the vegetable gardens and the way we design our economic organisation

they way we organise ourselves economically

man, it all comes down to how we organise ourselves economically

so here's the deal

if it's not comfortable,

i'll stop

i'll quit

and i'll live in a yurt and practice yoga and teach people and go teach in mental hospitals - nb - I have a promise to do that by the way that I have to keep

and I'll help the FF to grow

and i'll keep up with the social shamanism

the studying of problems

the imagining of solutions

and if I really want to read psychology, I can

but right now I'm far more interested in economics!

I do feel like political economy is the most interesting thing

why do we shut out our old people and mentally ill because they are economically inefficient?

we have so much to exchange with each other!

maybe if there were more embercombes there'd be fewer psychiatric hospitals.

if economics feels dark and heavy, perhaps that is because contemporary capitalist economics is dark

so what does light economics, an economics of light, look like?

i think it's time to gather some people (in a bit) around my book by the black block and do some thinking and talking together.

and maybe we can bring forward an economics of light.

an economics of light.

Business model design workshop

Alex Osterwalder

Understanding conservative businesses
Getting into their shoes, behind their eyes

Do good while doing well

Higher chance of success where the owners are – people who will be impacted by the business? People who will be involved in the business

Grameen phone

Wise – connect wealthy individuals with social entrepreneurs

Big green challenge – companies as case studies?

“if you want to go fast, you go alone. If you want to go far, you go together”

international capital markets

Blue Orchard – connecting the world of international capital markets with microfinance institutions like grameen

Myc4 – bridging gap between individual investors and lendors, and medium sized businesses in Africa

Investors: you’re getting 14%: where is that 14% coming from? Story telling...


methods for strategy analysis and design

few methods out there that help companies look at new ways of doing business

IBM CEO survey showing that business model innovation is top of the agenda – a lot of people are doing it, interested in doing it, don’t always know how

His methodology: reflect systematically on business models

Business Model Template – on his blog

http://business-model-design.blogspot.com

USP – seeing the whole thing on one piece of paper.

‘where is the money going to come from, to sustain this value creation’

in models – the power lies in simplicity, so people don’t get lost. The whole idea of a model is trying to represent reality in a simplified way.

Online football clubs where people can buy parts and shares online

He says, business model design is totally separate from organisational structure

You can have a variety of different organisational structures for the same business model design

Draw the line between the two

Unless the org structure is part of the design, eg, part of the relationship with the consumer or the partner etc

He knows of little work on that

Zameen aims to bring ownership further up the value chain

Eg, Cotton farmers owning factories, or mills

Trad model: buy from one source, sell it to another, make a margin on that

So big questions about the margin

Clear imperative to maximise the margin while you can – you will not always be able to. Make hay while sun shines

How much does ownership affect operations?

Skype – sim to telecoms – comms offer – has a completely different biz model to telco

The money project and the credit crunch

What's the relationship between the money project and the credit crunch?

It's not the building societies and the member owned mutuals that are going down.

It's the banks that maximise profit from their trade in money and shares with consumers and businesses

what's that about?

First non-profit bank in UK opened in 2002 http://www.guardian.co.uk/society/2002/oct/17/charityfinance

looks like there's no such thing as a non profit mortgage lender

what's the coop bank's ownership model?

why are there no non profit banks and mortgage lenders?

credit unions... why do they not grow and do proper services?

non profit doesn't mean not making a surplus

where do we draw the line?

http://c-resource.com/~creso2/view_article.php?aid=98

http://www.esrc.ac.uk/ESRCInfoCentre/index.aspx
Charitable donations are dwindling as recession spreads - while charities' services are becoming more in demand.

Search terms, sources, things to check out

British Library


Anthropology of money
Anthropology and Politics of Commodity Exchange (Studies in Anthropology & History) by GREGORY

A History of Money: From AD 800 by Professor Forrest Capie and John F Chown

Maidens, Meal and Money: Capitalism and the Domestic Community (Themes in the Social Sciences)

Money and the Morality of Exchange by Jonathan Parry and Maurice Bloch


Corporate governance, wealth distribution

Corporate Governance and the Distribution of Wealth: A Political-Economy Perspective

Authors: Perotti, Enrico C.; von Thadden, Ernst-Ludwig

Source: Journal of Institutional and Theoretical Economics JITE, Volume 162, Number 1, March 2006 , pp. 204-217(14)

Publisher: Mohr Siebeck

Volume 162:Number 1(2006:Mar.)

Available

Lending Collection

5007.506000

Corporate governance: what about the workers?
Prem Sikka

Accounting, Auditing & Accountability Journal, 2008 vol 21 issue 7, pp 955 - 977

The effect of privatization on wealth distribution in Russia

Michael Alexeev

¹ Department of Economics, Indiana University, Bloomington, USA

SME, wealth distribution

The Corporation

Corporation 20/20

Jen says

consider deeper questions about what wealth means, why we need wealth, what are the social values the system is built on and how do we change those?

Mark Gater - PhD in money systems with Britannia BS.. interesting topic and partnership model

Jak - swedish bank with no interest
Brazil - favellas - token system with boys given vouchers for mentoring younger boys that they could then spend as university fees
Zopa, Time Bank
Guildhall - 'best price' - concept, negotiate on the fair price, not on the highest or lowest it was possible to get.


david.boyle@neweconomics.org

Mark Gater
bang on www.bath.ac.uk/carpp/msc/alumni/gater.html

The Quakers' Made of Money project

Richard Douthwaite

James RIchardson

David Boyle
david.boyle@neweconomics.org - done

Sargon at nef

Responsible debt book author

REOS dialogue interviews

Report (Chatham house)


Layard, Happiness



MBA text book section on business models - look on MIT reading list

ESOP - employee shared ownership

google cooperative movement and political economy / philosophy / history / economics of


'Your search term 'SME, wealth distribution' matched no records' (no exact word)

SME, inequality

Your search term 'SME, inequality' matched no records

Rik Donckels and Asko Miettinen (eds), Entrepreneurship and SME Research: On its Way to the Next Millennium

Brian Snowden and Howard R. Vane, Conversations with Leading Economists: Interpreting Modern Macroeconomics

A. G. Kenwood and A. L. Lougheed, Growth of the International Economy1820–2000

Google
business ownership models distribution capital



Ownership and Governance of Enterprises: Recent Innovative Developments (Studies in Development Economics and Policy) (Hardcover)

In Search of Secret India” by Dr Paul Brunton



Look at Tim Jackson and SDC re growth

Oatley, International Political Economy (2008) and Ravenhill, Global Political Economy (2008) by the end of the first term.
(IPE course recommended reading)

International Perspectives on Household Wealth
By Edward N. Wolff, Jerome Levy – business equity, p 183



Why does market capitalism fail to deliver a sustainable environment and greater equality of incomes?

* Autores: Christine Greenhalgh
* Localización: Cambridge journal of economics, ISSN 0309-166X, Nº. 6, 2005 , pags. 1091-1109

I argue that free-market capitalist economies are biased against inventing/using green technology and against supplying the basic needs of the poor. With no mechanism for setting globally optimal prices for non-renewables, entrepreneurs choose labour-saving resource-intensive production methods. Further pressure on labour costs comes from finite individual lifetimes combined with rising access to goods. R&D creates technologies/products geared to saving worker and consumer time, instead of conserving non-renewable resources. Demand for positional luxury goods by the rich crowds out the basic needs of the poor. Technology caters for the demands of the rich, accentuating inequality, as prices fall/quality rises with innovation. I conclude with policies to redress imbalances. Copyright 2005, Oxford University Press.

The Ownership Solution: Toward a Stakeholder Capitalism for the 21st Century by Jeff Gates, 1998/9

Employee Ownership in America: the Equity Solution (Issues in Organization and Management Series]) (1985)

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=661444
Profit Maximization versus Disadvantageous Inequality: The Impact of Self-Categorization



Co-operative, inequality
• http://hsepubl.lib.hse.fi/EN/wp/?cmd=show&wpid=1021 - more about inequality as a driver of co-operatives, rather than vice versa
• Social inequality in Vietnam and the challenges to reform – book – no explicit mention in contents page

Not focusing on inequality of national incomes. Focusing on inequality of wealth held by individuals

Layard, Happiness

Capitalism, inequality

http://www.springerlink.com/content/m54165748147g455/
- extremist persective, neo-marxist and aggressively so.

“The sanctity of private property ownership would need to be drastically interfered with in order to bring about the qualitative improvement of the living conditions and experiences of the world's peoples. It seems to me that we would have to entertain the notion that private property ownership must be abolished and a social ownership and control of the commanding heights of the economy established as a first giant step towards a humane world.”

Capitalism and inequality: The negative consequences for humanity
Journal Crime, Law and Social Change
Publisher Springer Netherlands
ISSN 0925-4994 (Print) 1573-0751 (Online)
Issue Volume 6, Number 4 / October, 1982
DOI 10.1007/BF00728232
Pages 333-371
Subject Collection Humanities, Social Sciences and Law
SpringerLink Date Wednesday, December 08, 2004

So, I’ll need to strongly distinguished my approach from the socialists because that’s who I’ll get lumped in with.

Also, everyone says ‘the top 10% blah and the bottom 10% blah’ – so, briefly recognise that ineq is growing (this is contentious) and move very swiftly on to introduce my angle, which is fresh.

Perhaps the literature so far has been divided into the capitalists on one side, the socialists on the other, and there’s a middle ground regarding the distribution of wealth that has yet to be explored fully.

- ‘Fruits of capitalism; inequality matters’ – Kim Petersen. Book, again quite extreme left

The case of China – capitalism and socialism – who owns the organisations and where does the surplus go?

YouTube - Inequality and Global Capitalism
Harvard labor economist Richard Freeman explores how social inequality and globalization are threatening the foundation of democracy in the United States in ...
www.youtube.com/watch?v=UKinQbBF1Ek

CiC, inequality

Community Interest Company, wealth distribution

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
Generally speaking, "wealth" is the value of everything a person or family owns, minus any debts. However, for purposes of studying the wealth distribution, economists define wealth in terms of marketable assets, such as real estate, stocks, and bonds, leaving aside consumer durables like cars and household items because they are not as readily converted into cash and are more valuable to their owners for use purposes than they are for resale (Wolff, 2004, p. 4, for a full discussion of these issues). Once the value of all marketable assets is determined, then all debts, such as home mortgages and credit card debts, are subtracted, which yields a person's net worth. In addition, economists use the concept of financial wealth, which is defined as net worth minus net equity in owner-occupied housing. As Wolff (2004, p. 5) explains, "Financial wealth is a more 'liquid' concept than marketable wealth, since one's home is difficult to convert into cash in the short term. It thus reflects the resources that may be immediately available for consumption or various forms of investments."

We also need to distinguish wealth from income. Income is what people earn from wages, dividends, interest, and any rents or royalties that are paid to them on properties they own. In theory, those who own a great deal of wealth may or may not have high incomes, depending on the returns they receive from their wealth, but in reality those at the very top of the wealth distribution usually have the most income.

Business model, inequality

Business ownership, inequality

• Steckel, R.H., Moehling, C.M. (2001), "Rising inequality: trends in the distribution of wealth in industrializing New England", The Journal of Economic History, Vol. 61 No.1, pp.160-83.

http://www.newsfromnowhere.org.uk/books/DisplayBooklist.php?BookListID=123 - long list of anti-capitalist books



SME, inequality

He said SMEs play a vital role in the country's socio-economic development, and aid in the eradication of poverty and inequality, an SME role that the government has realised.
http://www.economist.com.na/content/view/317/53/


http://www.oecd.org/document/38/0,3343,en_2649_34321_37130854_1_1_1_1,00.html

Economic Survey of Japan 2006: Income inequality, poverty and social spending

OECD Economics Department

Monetary flows

http://www.ingentaconnect.com/content/routledg/utis/1999/00000015/00000001/art00005

The World System of International Monetary Flows: A Network Analysis

Authors: Salisbury J. G. T.; Barnett G. A.

Source: The Information Society, Volume 15, Number 1, 1 January 1999 , pp. 31-49(19)

Publisher: Routledge, part of the Taylor & Francis Group

Abstract:

The emergence of the global service economy has altered the flows of information and capital among the world's nations. Electronic international banking networks now provide the economic infrastructure for the ''global village'' as millions of financial transactions are processed daily. This article describes the world system based on the financial transactions of an international credit card network. Using transaction data from the third quarter of 1995, a network analysis produced structural findings similar to those found for the international telecommunications and trade networks. These results indicate that the world's monetary flow system is composed of a single group with the United States, United Kingdom, Germany, France, Italy, and Canada at the core and the former members of the Eastern Block and less developed countries at the periphery. Additionally, a number of nations are marginal in the network with only a single link to a core member of the network.




Inequality, business

Business, wealth distribution

Business, surplus distribution

Surplus distribution, inequality

Profit, inequality

Shareholders, inquality

Stock market, inequality

Business ownership, inequality

http://www.statcan.ca/english/freepub/75-001-XIE/10904/art-2.htm - Canadian dept of statistics
Of total wealth inequality in Canada, 98% was attributable to inequality within provinces. The factors affecting family wealth inequality within provinces include homeownership status, business equity, financial asset components, employer pension plan savings, and mortgage and consumer debt.

Business equity, inequality

International Perspectives on household wealth… Edward Wolff

nstitutional Pathways to Equity: Addressing Inequality Traps (New Frontiers of Social Policy)
by Michael Walton (Editor), Anthony J. Bebbington (Editor), Anis A. Dani (Editor), Arjan De Haan (Editor)

http://www.amazon.co.uk/Inequality-Prosperity-Liberal-Political-Hardcover/dp/0801443512/ref=sr_1_1?ie=UTF8&s=books&qid=1221652641&sr=8-1
Inequality and Prosperity: social Europe vs liberal America

Journal of Corporate Citizenship

Google – ‘stock market, inequality’ – most references focus on income inequality
Wealth in America
By Lisa A. Keister

Looks a little at wealth.

Google search – journal of coproate citizenship, inequality

http://findarticles.com/p/articles/mi_hb1445
can do a manual search through the back issues

JCC March 2007
http://findarticles.com/p/articles/mi_hb1445/is_200703?tag=content;col1

nothing on inequality from the titles

Ethical Corp – search on ‘inequality’ produces 45 results
http://www.ethicalcorp.com/content.asp?ContentID=5337
Governance:
Shareholder voting rights – Equity ownership’s endemic inequality
European investors want corporate decisions made on the basis of one share, one vote, but some companies are not listening
Despite protests from investors, more than one in four companies in Europe restrict the voting rights of shareholders.

Google

‘CSR, inequality’

World of Work Report 2008: Income inequalities in the age of financial globalization, produced by the ILO’s International Institute for Labour Studies also notes that a major share of the cost of the financial and economic crisis will be borne by hundreds of millions of people who haven’t shared in the benefits of recent growth.

http://www.opendemocracy.net/article/globalisation/philanthrocapitalism/power_inequality_democracy
The new philanthropy: power, inequality, democracy
Geoff Mulgan
The sceptical scrutiny of "philanthrocapitalism" by Michael Edwards is welcome. But markets and social enterprise could help realise the potential of a new donor economy, says Geoff Mulgan.

(how demorlaising – being a charity recipient. Is it? At the nag was it good to receive charity donations?)

Consumer driven market mechanisms to fight inequality: the case of CSR/product differentiation models with asymmetric information

The bottom up pressure of "concerned" consumers and the rise of "socially responsible" products represents a new market mechanism to fight inequality and promote social inclusion. To analyze the new phenomenon of competition in corporate social responsibility (CSR) amid doubts on consumer tastes and of the effective corporate SR stance we adopt a horizontal differentiation approach in which the Hotelling segment is reinterpreted as the space of product SR characteristics and consumer tastes are uncertain. We find equilibria of the pure location and of the price-location games and show what changes when we move from a duopoly of profit maximizing producers to a mixed duopoly. Our findings illustrate that a nonzero degree of CSR is the optimal choice of profit maximizing corporations under reasonable parametric intervals of consumers’ "costs of ethical distance", corporate cost of CSR and uncertainty about consumer tastes.

http://www.socialfunds.com/news/article.cgi/1930.html
The revised and updated edition of this text (originally published in 2000) examines how excessive executive compensation contributes to the widening gulf between rich and poor.


Premodern Trade in World History (Themes in World History) (Themes in World History) by Richard L. Smith (Paperback - 15 Dec 2007)

A Concise Economic History of the World: From Paleolithic Times to the Present by Rondo Cameron and Larry Neal (Paperback - 25 Jul 2002)

8. Existing and historical approaches to redistribution

• Perameter interventions - eg, one off payments to help pensioners deal with high fuel bills
• “Britain’s leading tax experts - the Institute for Fiscal Studies – said that despite the billions of pounds spent on tax credits, Labour had yet to meet its 2005 benchmarks for reducing child poverty by a quarter.” Guardian 11.06.०८
• different approaches to income from ownership: Denis Healey put a 98% tax on unearned income in १९७८ (History of Modern Britain)
• cost plus' - form of regulation where companies are allowed to make back cost put a specified percentage and no more. Cap on profit essentially, sometimes used with utility companies

http://moneyterms.co.uk/cost-plus/

The problem with cost-plus pricing is that it pays no attention to market prices. This means that it inevitably leads to either margins that are lower than they need be, or less sales. In the extreme case, applying cost-plus pricing to a commodity (not that anyone would — not for long anyway!), could lead to no sales at all if the cost-plus price was above the market price.

A pricing method similar to cost-plus is sometimes imposed by regulators on monopolies such as some utilities (Ofwat's methods of setting prices, for example). This is usually somewhat different as the the price setting process is modified to give sellers motivation to be efficient: for example, by basing it on what the regulator calculates costs should be, rather than on actual costs.

Banks et al 200:27

• "prior o the mid 1980s in Britain there was a tax bias away from direct holidings of equity towards wealth held in housing or occupational pensions, since equity was more heavily taxed than consumption, and housing and pensions benefitted from tax advantages relative to consumption... The introduction of personal equity plans and employee share ownership schemes meant that, from 1987 at least, equity could be held in a more favourably taxed manner by British households."
• Dividend income is taxed in both the US and UK.
• Stamp duty - 0.5% levvied on all share transactions in the UK
  

3. Evidence on Enterprise governance and wealth distribution

• 'Welsh Water gives £27m back to customers' - Guardian headline, 12th June 2008
• (http://www.guardian.co.uk/business/2008/jun/12/utilities.consumeraffairs)

• "The company... is unique among UK utility firms because it has no shareholders and reinvests all its surpluses for hte benefit of Welsh Water's customers." Each customer recieved a £21 dividend this year. totalling £27m. The remaining £14m profit will be taxed and reinvested into the company.
  

• "The interest we pay on our borrowings is much lower than if we had shareholders" says Nigel Annett, chief exec of Welsh Water. "Unlike other parts of industry, we're looking at a service. We are removed from the profit bit, which gives us a legitimacy with customers. I think it has worked better than we thought it would."

• It has 'no shareholders' but does have investors. "We are regarded as a low risk company because we have removed risks," says Annett. "Our investors want a safe home for their money. Investors charge lower interest. Lower interest means lower bills for customers." "We spent two years in the city of London arguing our case to investors. We had to raise £1.9bn, which I think is still one of the largest corporate bonds ever."

• Welsh Water is owned by Glas Cymru
  

• http://news.bbc.co.uk/1/hi/wales/1433520.stm

• Glas Cymru launched what was described as a "people's bid" back in November 2000, pledging to take over Welsh Water from its present owners - Western Power Distribution - and run it on a non-profit making basis.

  Instead of paying dividends to shareholders, cash surpluses would be shared with customers.

  The company has promised to reduce water charges for Welsh Water customers, which are among the highest in the UK.

• Instead of shareholders the company will be controlled by a group of 200 or so members - led by some some prominent names from the business world.

• The purchase price - nearly £2bn - would come from selling bonds in the City of London.

  Welsh Water, which supplies water and sewage services to nearly 3m people, was part of the Hyder group which fell victim to a hostile takeover by the US company Western.

  Welsh Assembly First Minister Rhodri Morgan welcomed the news of the go-ahead.

  "I particularly welcome the prospect of Welsh Water being owned once again by a company based, managed and controlled from Wales, based on a principle originated in Wales," he said.

http://www.dwrcymru.co.uk/english/company/Glascymru/index.asp
Glas Cymru is a single purpose company formed to own, finance and manage Welsh Water. It is a ‘company limited by guarantee’ and because it has no shareholders, any financial surpluses are retained for the benefit of Welsh Water’s customers.
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Kennedy 1995

Makes some interesting claims with no discussion of sources or methodology (and as a result I do not trust this source)

Interesting claims:

Figure 3 – p 23 – proportion of cost that is interest payments:

• Garbage collection fees: 12%
• Drinking water costs – example of a northern German water supply works, 1981 – 38%
• Use of drains / Sewage costs – example of the city of AAchedn, 1983: 47%
• Cost of rent in public housing: calculations of the German Federal Office of Statistics, 1979: 77%

“On an average we pay about 50% capital costs in the price of our goods and services. Therefore, if we could abolish interest and replace it with another mechanism to keep money in circulation, most of us could either be twice as rich or work half of the time to keep the same standard of living as we have now.” P25

- very sketchy calculations – the number is probably inaccurate but the argument is interesting.

Dieter Suhr argues that the money system is a government service (is it??) – and therefore it works against the constitutional rights of the individual in most countries, for 10% of the people continually receive more than they pay for that service at the expense of 80% of the people who receive less than they pay for.

She presents the graph shown in Lietaer but does not reference is properly. She says the figures are from Helmut Crutz. I am in email trail for full reference details.
margritkennedy@monneta.org, Helmut.Creutz@iit-online.de


Alternative argument:

• companies create employment, pay taxes, through section 106 contracts give back to the community. Building societies don't give loans to poor people.

producer surplus and consumer surplus

http://tutor2u.net/economics/content/topics/marketsinaction/producer_surplus.htm
http://en.wikipedia.org/wiki/Consumer_surplus

The producer surplus is the amount that producers benefit by selling at a market price that is higher than they would be willing to sell for.

So, it could be that:
companies are aiming to maximise producer surplus. This raises prices and the demands on the consumer, or, increases the flow of capital (financial, human, social) from the consumer to the company.

So, for the money project, we'll need to understand theories of pricing
If part of the argument is that excessive profit leads to excessive/problematic transference of human and social capital from the consumer to the shareholder via the company (money transferred below the line of producer surplus is not transferred to the shareholder because it is contributing to the costs of production, which is necessary) - then that debate will need to sit in the language of price, consumer and producer surplus.

A key question is how do you meet the need for fairness and for an organisation's need to make hay while the sun shines? That need seems fair and acceptable. How do we define when profit accumulation goes beyond acceptable haymaking?

What is the relationship between the ownership debate and the profit debate? They are separate yet related. For example, a co-operative could still make large profits and maximise capital transfer from consumer to shareholder.

In Adam Smith's capitalism, competition is what prevents producer surplus from becoming unacceptably or exploitatively large. Is that mechanism functioning adequately today?

http://www.ikeafans.com/articles/1000-ikea-corp/136-10-keys-to-ikeas-low-prices.html
IKEA's founder, Ingvar Kamprad, listed as one of the world's richest men

___

Douthwaite, Richard (1996). Short circuit: Strengthening local economies for security in an unstable world. UK: Green Books.

p125 - The Irish credit union movement began in 1958 and in 1993 had 1.3 million shareholders (out of a population of 5.14m including NI). The UK's started in 1964 and only began expanding significantly in the late 1980s, and membership in 1993 was 100,000, up 40% on the previous year. In the US, 66m people, almost 1/3 of the population, are members of a credit union.

"There are several reasons for wanting to end, or at least dramatically reduce, the involvement of outside banks in one's community. One is that using an external bank's services to do a job that can be done within the community causes a significant loss of purchasing power, which can only be restored if the community sells goods and services to the outside world and thus stays dependent on it. The farmers who lent £943 million to the Irish banks in 1993 would have been paid about £10 million in interest, while farmers borrowing the same amount would have paid perhaps £113 million for the privilege, making a net loss of £100 million to the farming community.

"Not all this different would have left rural areas become some would have gone to pya the bank staff and thus have been returned to the local flow of national currency. However, since branch operating costs are usually less than half a bank's income, using outside banks to effect a transfer from one group of farmers to another causes a substantial net drain from rural areas."

p125. I guess he did the calculations himself based on banks reported interest rates for savings and loans. The figures of amounts of savings and loans come from the Central Bank (of Ireland?) that collects figures annually for bank deposits from the farming sector, and that the figures reported are from 1993, discussed in Irish Farmers' Journal, 27 January 2004.

Beck, Thorsten et al (2005). SMEs, Growth and Poverty. World Bank / US National Bureau of Economic Research.

find no relationship between concentration of SMEs in an economy and the reduction of poverty or inequality. But they don't consider distribution of wealth.

i think firm size is important

they only consider SMEs in manufacturing

they find a statistically significant relationship between economic growth and the size of the SME sector

but cannot identify a causal relationship

they use a 'newly constructed database on the share of total manufacturing employment accounted for by SMEs (Ayyagrari, Beck and Demirguc-Kunt, 2003).

'it would be useful to have information on SME employment beyond manufacturing, but cross-country data are unavailable for the share of SMEs in other sectors."p10

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Porritt

"Production for profit, as opposed to production for human needs, was perhaps the simplest of the old ideological divides between capitalism and communism. Some socialists and radical greens continue to argue that it is 'the profit motive' (the pursuit of profit as the single most important objective in any economic exchange) which still lies at the heart of capitalism's inherently destructive tendencies.... it is the urge to maximise profitsthat causes some companies to cut corners if they can getaway with it and to externalie as high a proportion of their costs as they are legally permitted to do. In The Corporation Joel Bakan (2004) describes the modern corporation as 'an externalizing machine.'"

argues that only governments can force companies to internalise costs.

"Profitability has quite simply become the key measure of corporate success in a capitalist system..." p73

(we value what we measure and we measure what we value)

"This process of 'creative destruction' ensures the reallocation of capital and other resources from the less productive to the more productive, however painful such reallocations might be at both the micro and the macro level. And it is those profits that provide the dividends upon which the lives of hundreds of millions of people now depend in terms of their pension and other investments." p73

issue around boardroom pay rising sharply at a time when company performance was falling, and pay at other levels was rising far, far more slowly

"Defenders of such an astonishingly powerful accumulative capacity point out that none of this necesssarilly impacts negatively upon those on low incomes in the UK, or in terms of the global economy, upon the world's poorest people. All of that money still has to go somewhere, whether it's in terms of consumption, philanthropy, investment or anything else. There is, therefore, an unavoidable trickle-down effect, regardless of the scale of accululated wealth... However, it seems impossible to argue that the world is a better place for the concentration of wealth in the hands of so few; by implication, therefore, 'sustainable capitalism' would necessarily need to find ways of limiting the concentration of wealth." p74

(I don't like this language of 'limiting' - it's very unattractive. I prefer a language of improvement)

Jeff Gates in the ownership solution reviews ways in which 'a pragmatic ownership strategy could weave a broader web of personal, economic, and civic participation.'

____

Karl Marx, Capital

p148 - time of the working day - argues there is the time to generate sufficient value to sustain yourself, your family, and we generally work more than that. (I think he doesn't include the need to accrue personal, community and state level surplus - savings, pensions, rainy day fund, new stuff fund).

For Marx, the greater the surplus value output, the greater the surplus labour input, or, in other words, the greater the theft of life time, life value, from worker by capitalist.

Think it's not that simple. Social and physical technologies can increase productiity without a correponding increase in labour, I reckon. Surplus is also created by inputs from consumers, (investors?) social and natural capital, etc.

p120 - like Porrit says - he distinguishes between making boots to make good boots so that your fellows may wear good boots and your family may be comfortable - one on hand - and making boots in order to produce capital on the other.

(margin notes - being should not suffer in the process of creating value for others. But if i am boss, shared ownership feels better. (If I can choose who I'm working with :)