What is Open about Open Capital

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Text

Chris Cook:

“Our current forms of property rights are absolute. Either/or.

Either:

(a) absolute and permanent eg freehold land or shareholder value style (and inaptly named) “Equity” in the form of shares in Limited Liability Corporations; or

(b) absolute and temporary, with a defined duration, eg leasehold land, and debt finance.

Open capital, on the other hand is neither of infinite, nor finite duration. It is of indefinite duration.

It is in the same territory as the “Not proven” verdict we have here in Scotland between the absolutes of “Guilty” and “Not Guilty”.

It’s…Both/And

For as long as you use it you share the use value you create with it.

So “Open” relates to it’s open and indefinite duration.

But it is also possible to see it as an alternative to “closed” proprietary ownership.

My view is that the use of an “open” corporate to encapsulate the property relationship (ie the bundle of rights and obligations that links the subject individual to the object eg location, energy, knowledge) enables an entirely new property right, or tenure which I think of as “co-ownership”.

It is “open”, but not “free” in the way that a GPL licence is free.

So in relation to IP held by a custodian, it is possible for a partnership agreement between the stakeholders that is both closed -in that only members may use it, but also open, in that anyone who consensually agrees to the protocol may use it.

Likewise, “Open” capital refers to the accessibility of it. The user of open capital does not care who actually has the rights to (say) the redeemable Units of production he has issued, because the holders of the units have no control over what he is doing, other than the obligation he has to redeem the Unit as and when presented to him by way of payment.

“Open” also relates to its accounting basis upon a shared transaction repository to which all participants have access.

So you will see that the “open-ness” refers to duration, access and transparency. Also its flexibility, I think.”