This concept is used in different ways, but according to the Wikipedia:
Financial commons refers to an experimental methodology whereby an alternative currency is given freely in the form of a basic income to preserve a common resource, until the currency is exhausted once an exchange is no longer required to preserve its use, after productive output exceeds demand, surfacing a free use commons or free access to a resource without exchange currency." (http://en.wikipedia.org/wiki/Financial_commons)
"The UN Commission of Experts headed by Joseph Stiglitz recently made a similar proposal; to lay the groundwork for a Global Financial Regulatory Authority as the main instrument for the formulation of reforms of the global financial system (UN 2009: 15). According to the Commission, global financial supervision should ensure the safety of financial products — financial regulators should be mandated to ascertain the safety and appropriate use of financial instruments and practices. Global regulation should also be comprehensive — all types of financial institutions (including credit rating agencies) and instruments (including derivatives) should be supervised and regulated.
In my view, a World Financial Authority should have the clear evolutionary objective of becoming a World Central Bank. The function of a future World Central Bank should be to create and distribute liquidity to ensure global equity, stability and growth. In the same way as global regulation should limit CO2 emissions and other contaminants, regulation of global financial commons should limit ‘toxic asset’ creation, fraud and illicit financial flows (such as flows related to drug and arms trafficking, tax evasion, and illegal capital flight). Regulation of financial commons should generate global trust and liquidity in an equitable, stable and efficient manner.
There are several extant instruments and ideas that the World Financial Authority could immediately start with. The first is the expansion of the IMF ’s Special Drawing Rights (SDR) composed of all currencies participating in the system, as suggested since the 1960s by many developing countries and several international documents, and most recently by China’s central bank director. The Commission of Experts headed by Joseph Stiglitz proposes a New Global Reserve System, ‘what may be viewed as a greatly expanded SDR’ (UN 2009: 11).
Second, a greatly expanded SDR system under World Financial Authority management should help to definitively cancel the onerous debts of developing countries, once their legitimacy has been checked and their ‘non-odious’ character has been proven by the Authority. This should be the initial task of a permanent Sovereign Debt Restructuring Mechanism — a body proposed by UN (2009: 16).
Third, in the transition towards a global common currency — the natural evolutionary heir of a successful SDR system — the World Financial Authority should introduce the ‘Tobin tax’ on foreign currency transactions, as a main policy instrument for reducing volatility and instability in financial markets, increasing economic policy sovereignty, and removing the recessive bias introduced by unregulated financial flows. The ‘financial commons’ perspective of a World Financial Authority would imply that Tobin tax revenues, as emmission rights and/or carbon tax revenues, should be distributed according to the equal rights principle. James Tobin (1996: xvii), suggested that the tax rate ‘should not exceed 0.25% and perhaps should be as low as 0.1%.’ He estimated that at the 0.1% rate the revenue yield would be (in 1995) $94 billion. Since then and until 2007, the volume of foreign exchange transactions worldwide has increased by a factor of 2.5 (BIS 2007), so that today the revenue yield at a 0.1% rate should be somewhere between $200-250 billion a year.
Fourth, the Financial Authority should promote new rules for liquidity creation by all central banks. Equal rights to the commons of global trust and liquidity imply that in addition to international allocation of SDR, Tobin tax and other financial resources according to per capita shares, credit expansion at national levels should also follow an even pattern. Also within countries should liquidity and credit creation follow a per capita basis. A source of inspiration might be David Schweickart’s economic democracy model (Schweickart 2009; see also 2002), which allocates financial resources to a network of regional and local banks, each region getting its per capita share (adjustable by US Congress). Schweickart’s ideas are thought for application in the US, but short of a total breakdown of the multilateral financial system and a return to strictly limited capital movements, it seems that the real future of the financial commons idea is at the global level, managed by a democratically instituted and controlled body such as the World Financial Authority. As Barnes’ ideas on US emission rights, Schweickart’s are plausible and viable only at the global level." (http://www.paecon.net/PAEReview/issue51/Buzaglo51.pdf)
- Finance Commons
- Free Markets and Free Use Commons
- Wealth Generating Ecology
- Resource-based Economy
- Effortless Economy
- Category: Peer Property
- Nathan W. Cravens. Alternative Currency to Transform Financial Capital into Financial Commons into Free Use Commons. October 2009. http://groups.google.com/group/openmanufacturing/browse_thread/thread/4b806404154a512d