The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
"Ownership" of "Productive assets" requires the legal concept of "Property" and the conventional mechanism requires two conflicting legal claims over the same assets.
(a) the claim of the Financier;
(b) the claim of the user of the Finance.
These claims are irreconcilable in our current defict Money "paradigm" and it is the conflict between "Debt" and "Equity" forms of "Financial Capital" which is the faultline in our current system.
I believe the "Capital Partnership" transcends thisthrough giving rise to a single continuous "open capital" asset class of proportional "equity shares" in GROSS revenues
When you think about it, both the financier, and the user of finance are sharing the output (or the revenues from the sale of the output) from the productive asset, and the legal protocols of the contract of Debt and the Joint Stock Limited Liability Company each give rise to imperfect sharing of risk and reward.
The problem is that the "Principal" provided by Banks is not based upon pre-existing "wealth" or "money's worth, but upon future "Money's worth" to be created by the asset.
Banks are literally providing nothing (other than a Guarantee) for something.
Renting an asset "owned" by someone is a very different thing to renting a guarantee.
The "value" that Banks provide is their Guarantee - backed by 8% of Capital. And there is no reason at all why that Guarantee should not be provided mutually, with bilateral "trade" credit managed by banks instead.
The "fair" or "natural" rate of "Interest" in respect of unsecured credit is the shared cost of administration and of defaults. Anything more is IMHO de facto inflationary.
A fair "Capital Rental" on the other hand is the proportion of production or revenues from sale of production, bearing in mind the certainty of that level of production being achieved.
If this return is based upon equitable sharing of risk and reward, the result is IMHO an optimal outcome for all stakeholders.
"The future is already here -- it's just not very evenly distributed"
by IdiotSavant - Sep 15 16 comments
by IdiotSavant - Sep 16 11 comments
by Oui - Sep 24 34 comments
by gmoke - Sep 24 4 comments
by Cat - Sep 19 45 comments
by Oui - Sep 20 37 comments
by gmoke - Sep 12
by gmoke - Sep 5 14 comments
by Oui - Sep 281 comment
by Oui - Sep 2842 comments
by Oui - Sep 2727 comments
by Oui - Sep 2434 comments
by gmoke - Sep 244 comments
by Oui - Sep 2348 comments
by Oui - Sep 22
by Oui - Sep 2037 comments
by Cat - Sep 1945 comments
by gmoke - Sep 19
by Oui - Sep 183 comments
by Oui - Sep 1616 comments
by IdiotSavant - Sep 1611 comments
by Oui - Sep 1524 comments
by Oui - Sep 159 comments
by IdiotSavant - Sep 1516 comments
by Oui - Sep 1420 comments
by Oui - Sep 149 comments
by Oui - Sep 1319 comments
by gmoke - Sep 12