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Financial Group Recognizes Finance As A Global Commons Bibliography SEPTEMBER 13, 2010 ST. AUGUSTINE, FL, USA; SAO PAULO, BRAZIL; GREENWICH, CT , USA Financial experts, warning of future crises, call for re-affirming finance as a global commons, first recognized at Bretton Woods in 1945. Co-conveners, John Fullerton, President, Level3Capital Advisors, LLC, and The Capital Institute, former Managing Director of JPMorgan, and global futurist and author of nine books, Hazel Henderson, D.Sc.Hon., FRSA, said, “Our TRANSFORMING FINANCE group, as beneficiaries and active participants in global capital markets, affirms our responsibility to reform finance consistent with this reality.” They added, “Today, 24-hour global capital markets are dependent on satellites, internet and other technologies largely financed by taxpayers as public infrastructure investments.” The full TRANSFORMING FINANCE Statement, now circulating in their private networks, adds “Financial markets are founded on trust – now eroded by the irresponsible and unethical behavior of many players, including many of our leading financial institutions.” The signers, from the European Union, China, India, Australia, Brazil, Canada and the USA agree that “unbridled greed-driven speculation, the improper use of public infrastructure technology for activities such as high-frequency trading, together with a misguided self-regulatory ideology, damaged the financial commons and the trust on which we all depend.” The TRANSFORMING FINANCE group outlined necessary principles and conditions to operate the shared global financial architecture consistent with 21st century realities. Their Statement cites many agreements and institutions, global norms and rules that have evolved since Bretton Woods. It shows how markets for public goods can be expanded by pricing carbon and other emissions and external costs and accounting for un-priced assets, including: ecological productivity, biodiversity and other global commons, as well as social and human capital. The group pledged to continue their own efforts to modernize capital markets to serve human societies as one of the tools to manage the global commons, using the new accounting standards and national accounting beyond “efficient market” and “rational actor” models, now outdated by findings in brain and neurosciences. Prominent signers include: Graciela Chichilnisky (USA and Argentina); Zhouying Jin (China); Robert A.G. Monks (USA); Karl Kleissner (Austria, USA); Tessa Tennant (Scotland, Hong Kong); Ashok Khosla (India); Lawrence Bloom (UK); Christina Carvalho Pinto (Brazil); Woody Tasch (USA); Orio Giarini (Switzerland); Ladislau Dowbor(Brazil); Richard Spencer (UK); Rinaldo Brutoco (USA); Robert Shaw (USA); Susan Davis(USA and Ecuador); Eva Willmann de Donlea (Australia); Ross Jackson (Denmark); Ellen Hodgson Brown (USA); Steve Waddell (Canada); Terry Mollner (USA); Allen White (USA) and many others. CONTACTS: Hazel Henderson: President, Ethical Markets Media (USA and Brazil); Fellow of Britain’s Royal Society for Arts and member of the Club of Rome; www.EthicalMarkets.com, hazel.henderson@ethicalmarkets.com, Ph. 904-829-3140 John Fullerton: President, Capital Institute, Greenwich, CT, and Level3Capital Advisors, LLC; www.capitalinstitute.org, john@level3cap.com, jfullerton@capitalinstitute.org, Ph. 203-769-1191 Christina Carvalho Pinto, President – Full Jazz Communication Group and Mercado Ético (Ethical Markets Brazil) Multimedia Platform; christina.cp@fulljazz.com.br, Ph. (5511) 5507-5870 Graciela Chichilnisky: Managing Director, Global Thermostat, LLC; Professor and Director, Columbia Consortium for Risk Management, Columbia University; author of the carbon market of the UN Kyoto Protocol; chichilnisky1@gmail.com, Ph. 212-678-1148 Ashok Khosla, President, Development Alternatives, Delhi, India; President, IUCN; Co-President, Club of Rome; akhosla@gmail.com Stuart Valentine, President, IOWA Progressive Asset Management, Fairfield, Iowa; svalentine@fwg.com, 1-800-509-9096 Rosalinda Sanquiche, Executive Director, Ethical Markets Media; www.ethicalmarkets.com, office@ethicalmarkets.com; to arrange interviews phone at 904-826-1381 Transforming Finance Group’s Call Recognizes Finance as a Global Commons The Committee on Transforming Finance, a multinational network of career market participants: investors, asset managers, business executives, philanthropists, academics and financial authors, holds that the financial system is a global commons and calls for a new set of rules that would allow it to be governed in full conformance with this reality. We as beneficiaries and active participants in capital markets affirm our responsibility to reform them from within, so that all those still-voiceless stakeholders who are now excluded and exploited can be heard and their communities appropriately served. If we are to avoid future systemic failures in the global financial system, we must re-think the underlying design flaws that precipitated the financial crises. We must move beyond Bretton Woods, where this financial commons was first defined within a set of global rules and institutions in 1945, as well as beyond recent attempts at reforms that have not addressed fundamental questions, including:
Financial markets are founded on trust – now eroded by the irresponsible and unethical behavior of many players, including many of our leading financial institutions. Unbridled, greed-driven speculation, the improper use of public infrastructure technology for activities such as high-frequency trading, together with a misguided self-regulatory ideology reduced system resilience, damaged trust and thereby damaged the financial system commons. This led to unhealthy “financialization” now dominating vital businesses and activities in the world’s real economies. In order to re-build trust, the Transforming Finance initiative seeks to democratize finance and widen the debate on reform by including all stakeholders and the innovations of many experts and groups advocating deeper re-structuring and reforms. The key operating mechanisms necessary to build trust in the Global Financial Commons include:
The conventional wisdom of the “tragedy of the commons” articulated by biologist Garrett Hardin (Science, 13 December 1968, 1243) who maintained that common property is poorly managed, was based on outdated economic theory now challenged by endocrinologists, behavioral and brain sciences. This outdated view has been challenged by many scholars, who have documented how many societies over centuries have developed sophisticated mechanisms for sustainable decision-making and rule enforcement to handle conflicts of interest, allocation of common resources and rights. We applaud the progress made by many innovators and groups as traditional markets for what economists call “rival goods” have morphed toward serving today’s markets based on new common scarcities and needs of the now 6.8 billion member human family for: clean air and water, restoring lands, forests, biodiversity and providing sustainable ecosystem productivity and stabilizing our global climate. These new needs require a commons approach where markets, as tools, can be designed to allocate these indivisible “non-rival” public goods and infrastructures for equitable access and opportunities for human development. Traditional competition for private goods is complemented by cooperation in organizing larger markets for public goods and services. We will continue our own efforts to modernize capital markets to serve human societies as one of the tools for managing the global commons. As our Chinese colleagues say, markets are good servants but bad masters. Thus we will continue re-designing models of asset-management beyond outdated “efficient markets” and “rational actors” theories to expand use of “triple bottom line,” ESG (environment, social, governance), integrated, ethical auditing standards and the criteria of thermodynamic efficiency: Energy Return on Investment (EROI) as well as Social Return on Investment (SROI). Prices must include social and environmental costs of production reflected in company accounts. Corporate funds and private money should never corrupt votes in politics. Beyond these new company accounting standards, we support similar innovations to overhaul GNP/GDP money-based measures of national progress still using obsolete macroeconomics, ignoring social and environmental costs in national accounts (UNSNA). Beyond economics, systems metrics include the many indicators of health, education, environment, poverty gaps and quality of life, human wellbeing and goals of happiness presented at the European Union’s Beyond GDP Conference, November 2007 (www.beyond-gdp.eu), and the global survey, International Public Opinion Measuring National Progress: 2007, by Globescan and Ethical Markets Media which found huge majorities in Australia, Brazil, Canada, France, Germany, Great Britain, India, Italy, Kenya and Russia that favor including these new indicators of human development. The next survey update will be released by the BBC in late 2010, including China and the USA. We draw attention to many innovations to serve our common needs in stabilizing climate and creating equitable tools for the Kyoto Protocol beyond 2012, including: a floor price on carbon, removing the billions of dollar subsidies on fossil fuels, equitably allocating by auction all permits to emit carbon, reforming the Clean Development Mechanism and assuring that markets created for reducing atmospheric carbon and other pollutants damaging air, water, biodiversity and ecosystems are transparent, strictly regulated to prevent speculation. We recommend that proceeds from any sale of permits accrue to the public at large and to citizens of each country, and to finance the new 21st century infrastructure and public goods required in the global transition now underway from early Industrial Era technologies based on fossil fuels and unsustainable resource extraction (www.GTInitiative.org). The shift to cleaner, greener, information- rich, more sustainable, equitable economies of the Solar Age is accelerating, as measured by the Green Transition Scoreboard. We support the carbon market of the UNFCCC and the proposed International Bank for Environmental Settlements (www.undp.org), both which were authored by Graciela Chichilnisky, and expanding the “common trust” models of Alaska’s Permanent Fund and the Norwegian Fund for holding revenues from oil in trust for all citizens and future generations, and that these trust funds (Peter Barnes, Who Owns the Sky?, 2001) include other energy resources: solar wind, geothermal, hydro, etc. Therefore, we the undersigned share a vision of a world in which the financial system serves a flourishing and sustainable human, ecological and spiritual future. We pledge to continue our efforts in Transforming Finance and invite all others who share and work toward these goals to co-sign this declaration. The full text of the Transforming Finance Group’s Call Recognizes Finance as a Global Commons The Committee on Transforming Finance, a multinational network of career market participants: investors, asset managers, business executives, philanthropists, academics and financial authors, holds that the financial system is a global commons and calls for a new set of rules that would allow it to be governed in full conformance with this reality. We as beneficiaries and active participants in capital markets affirm our responsibility to reform them from within, so that all those still-voiceless stakeholders who are now excluded and exploited can be heard and their communities appropriately served. If we are to avoid future systemic failures in the global financial system, we must re-think the underlying design flaws that precipitated the financial crises. We must move beyond Bretton Woods, where this financial commons was first defined within a set of global rules and institutions in 1945, as well as beyond recent attempts at reforms that have not addressed fundamental questions, including:
Financial markets are founded on trust – now eroded by the irresponsible and unethical behavior of many players, including many of our leading financial institutions. Unbridled, greed-driven speculation, the improper use of public infrastructure technology for activities such as high-frequency trading, together with a misguided self-regulatory ideology reduced system resilience, damaged trust and thereby damaged the financial system commons. This led to unhealthy “financialization” now dominating vital businesses and activities in the world’s real economies. In order to re-build trust, the Transforming Finance initiative seeks to democratize finance and widen the debate on reform by including all stakeholders and the innovations of many experts and groups advocating deeper re-structuring and reforms. The key operating mechanisms necessary to build trust in the Global Financial Commons include:
The conventional wisdom of the “tragedy of the commons” articulated by biologist Garrett Hardin (Science, 13 December 1968, 1243) who maintained that common property is poorly managed, was based on outdated economic theory now challenged by endocrinologists, behavioral and brain sciences. This outdated view has been challenged by many scholars, who have documented how many societies over centuries have developed sophisticated mechanisms for sustainable decision-making and rule enforcement to handle conflicts of interest, allocation of common resources and rights. We applaud the progress made by many innovators and groups as traditional markets for what economists call “rival goods” have morphed toward serving today’s markets based on new common scarcities and needs of the now 6.8 billion member human family for: clean air and water, restoring lands, forests, biodiversity and providing sustainable ecosystem productivity and stabilizing our global climate. These new needs require a commons approach where markets, as tools, can be designed to allocate these indivisible “non-rival” public goods and infrastructures for equitable access and opportunities for human development. Traditional competition for private goods is complemented by cooperation in organizing larger markets for public goods and services. We will continue our own efforts to modernize capital markets to serve human societies as one of the tools for managing the global commons. As our Chinese colleagues say, markets are good servants but bad masters. Thus we will continue re-designing models of asset-management beyond outdated “efficient markets” and “rational actors” theories to expand use of “triple bottom line,” ESG (environment, social, governance), integrated, ethical auditing standards and the criteria of thermodynamic efficiency: Energy Return on Investment (EROI) as well as Social Return on Investment (SROI). Prices must include social and environmental costs of production reflected in company accounts. Corporate funds and private money should never corrupt votes in politics. Beyond these new company accounting standards, we support similar innovations to overhaul GNP/GDP money-based measures of national progress still using obsolete macroeconomics, ignoring social and environmental costs in national accounts (UNSNA). Beyond economics, systems metrics include the many indicators of health, education, environment, poverty gaps and quality of life, human wellbeing and goals of happiness presented at the European Union’s Beyond GDP Conference, November 2007 (www.beyond-gdp.eu), and the global survey, International Public Opinion Measuring National Progress: 2007, by Globescan and Ethical Markets Media which found huge majorities in Australia, Brazil, Canada, France, Germany, Great Britain, India, Italy, Kenya and Russia that favor including these new indicators of human development. The next survey update will be released by the BBC in late 2010, including China and the USA. We draw attention to many innovations to serve our common needs in stabilizing climate and creating equitable tools for the Kyoto Protocol beyond 2012, including: a floor price on carbon, removing the billions of dollar subsidies on fossil fuels, equitably allocating by auction all permits to emit carbon, reforming the Clean Development Mechanism and assuring that markets created for reducing atmospheric carbon and other pollutants damaging air, water, biodiversity and ecosystems are transparent, strictly regulated to prevent speculation. We recommend that proceeds from any sale of permits accrue to the public at large and to citizens of each country, and to finance the new 21st century infrastructure and public goods required in the global transition now underway from early Industrial Era technologies based on fossil fuels and unsustainable resource extraction (www.GTInitiative.org). The shift to cleaner, greener, information- rich, more sustainable, equitable economies of the Solar Age is accelerating, as measured by the Green Transition Scoreboard. We support the carbon market of the UNFCCC and the proposed International Bank for Environmental Settlements (www.undp.org), both which were authored by Graciela Chichilnisky, and expanding the “common trust” models of Alaska’s Permanent Fund and the Norwegian Fund for holding revenues from oil in trust for all citizens and future generations, and that these trust funds (Peter Barnes, Who Owns the Sky?, 2001) include other energy resources: solar wind, geothermal, hydro, etc. Therefore, we the undersigned share a vision of a world in which the financial system serves a flourishing and sustainable human, ecological and spiritual future. We pledge to continue our efforts in Transforming Finance and invite all others who share and work toward these goals to co-sign this declaration. Co-conveners of the Committee on Transforming Finance Hazel Henderson, D.Sc.Hon., FRSA, author, President and Founder, Ethical Markets Media (USA and Brazil), syndicated columnist, InterPress Service, member, Club of Rome * John Fullerton, MBA, Founder, Capital Institute, former Managing Director, J.P.Morgan * Prof. Leo Burke, Mendoza School of Business, University of Notre Dame * Steve Waddell, MBA, Ph.D, author, Societal Learning and Change: Innovation with Multi-Stakeholder Strategies, Principal of NetworkingAction * Drafting Committee on Transforming Finance Ellen Hodgson Brown, JD, author, Web of Debt, columnist, Huffington Post Prof. Graciela Chichilnisky, Columbia University, UNESCO Chair in Economics and Statistics, author, Saving Kyoto, creator of the International banks for Environmental Settlements and the carbon market of the Kyoto Protocol. Prof. Zhouying Jin, author, Global Technological Change, Chinese Academy of Social Sciences, Beijing Alan F Kay, PhD, founder AutEx, author, Locating Consensus for Democracy Karl Kleissner, PhD, Co-founder KL Felicitas Foundation Rosalinda Sanquiche, MA, Executive Director, Ethical Markets Media Katie Teague, MA Counseling Psychology, founder Storm Cloud Media LLC, director/producer Money & Life Stuart Valentine, MBA, President, Iowa Progressive Asset Management Signatories Rebecca Adamson, Founder and President First Peoples Worldwide, USA Michel Bauwens, P2P Foundation, Thailand Lawrence Bloom, Executive Chairman, Bhairavi Energy; Chairman, Connolly & Callaghan, London Rinaldo Brutoco, JD, Founding President, World Business Academy, USA Christina Carvalho Pinto, President, Full Jazz Communications Group; and Mercado Ético/Ethical Markets Brazil Sam Daley-Harris, Founder, RESULTS the and Microcredit Summit Campaign, USA Sami S. David, MD, Author and Director, Fifth Avenue Fertility, USA; co-host Susan Davis, President, Capital Missions Company, USA and Ecuador Mark T. Donohue, Babson College, Clean Technology Entrepreneur-in-Residence Ladislau Dowbor, Prof. of Economics, Catholic University of São Paulo, Brazil Riane Eisler, author of The Real Wealth of Nations, President, Center for Partnership Studies Prof. Orio Giarini, Director, The Risk Institute, Geneva – Trieste, EU – Zagreb, Croatia Gijs Graafland, Director, Planck Foundation (research institute for energy politics and energy finance), Amsterdam, Netherlands Prof. Heitor Gurgulino de Souza, Vice-President, Club of Rome; Former Rector of the UN University Michael Haradom, President, Fersol and ALINA (Latin American Association of National Chemical Industries), Brazil Prof. Dr. Margrit Kennedy, Founder, MonNetA – Money Network Alliance for the Development and Implementation of Complementary Currencies, Germany Ashok Khosla, Chairman, Development Alternatives, Delhi, India Ross Jackson, co-founder, Gaia Trust, Copenhagen, Denmark Alejandro Litovsky, Director, Volans Innovation Lab, UK David Loye, author, Bankrolling Evolution, Measuring Evolution, co-founder, General Evolution Research Group and The Darwin Project Marc Luyckx Ghisi, Senior Advisor, Business Solutions Europa, Brussels, Belgium Jordan MacLeod, Founder, Partner and Director, Cornerstone Global Associates; author, New Currency: How Money Changes the World as We Know It Tony Manwaring, Chief Executive, Tomorrow’s Company, UK Susan Meeker-Lowry, Author, Economics as if the Earth Really Mattered and Invested in the Common Good; Publisher, Gaian Voices, USA Paul E. Metz, PhD, co-founder European Business Council for Sustainable Energy; speaker of Dutch Alliance for a Fair & Green Deal, Brussels, Belgium Terry Mollner, Co-Founder, Calvert Social Investment Funds and Foundation; Chair, Stakeholders Capital, Inc.; Member of Board of Ben & Jerry’s. USA Robert A. G. Monks, Founder, ISS, The Corporate Library, the Lens Fund, a founding trustee of the Federal Employees Retirement System, author of Corpocracy and other books, USA Herman Mulder, Board Member, GRI, TEEB (the Economics of Ecosystems and Biodiversity) and Tomorrow’s Company; initiator of the Equator Principles, NL Ron Nahser MBA, PhD, Institute for Business and Professional Ethics, DePaul University,USA Ann Pettifor, Fellow of the new economics foundation, and co-founder of the PRIME network of economists, UK Simon Rich, Educator (Duke University), Investor, Farmer, former CEO; board member, Capital Institute James Robertson, Working for A Sane Alternative; author, Creating New Money: A Monetary Reform for the Information Age, UK Philip Sadler, CBE, Senior Fellow, Tomorrow’s Company, Vice President, Ashridge Business School, UK Elisabet Sahtouris, author, A Walk Through Time: From Stardust to Us; consultant on ecological finance, EU Robert W. Shaw, Jr., President, Aretê Corporation, USA Rena Shulsky David, Founder, Green Seal; CEO Shire Realty, USA; co-host Richard Spencer, Co-convener, Finance Lab; editor, Journal of ICAEW, UK Woody Tasch, Founder, Slow Money; board member Investors Circle, USA Tessa Tennant, Co-Founder, Association for Sustainable & Responsible Investment in Asia, ASrIA, UK and Hong Kong Tim Toben, President, New Economics Institute – NEI, USA Shann Turnbull, PhD, Principal: International Institute for Self-governance; Founding life member and Fellow, Australian Institute of Company Directors, Australia Allen White, Senior Vice President , Tellus Institute, Boston Eva Willmann de Donlea, MBA, Director, Sustainability Intelligence Pty Ltd, Australia We the undersigned ask you to sign our petition.Co-conveners of the Committee on Transforming Finance Hazel Henderson, D.Sc.Hon., FRSA, author, President and Founder, Ethical Markets Media (USA and Brazil), syndicated columnist, InterPress Service, member, Club of Rome * John Fullerton, MBA, Founder, Capital Institute, former Managing Director, J.P.Morgan * Prof. Leo Burke, Mendoza School of Business, University of Notre Dame * Steve Waddell, MBA, Ph.D, author, Societal Learning and Change: Innovation with Multi-Stakeholder Strategies, Principal of NetworkingAction * Drafting Committee on Transforming Finance Ellen Hodgson Brown, JD, author, Web of Debt, columnist, Huffington Post Prof. Graciela Chichilnisky, Columbia University, UNESCO Chair in Economics and Statistics, author, Saving Kyoto, creator of the International banks for Environmental Settlements and the carbon market of the Kyoto Protocol. Prof. Zhouying Jin, author, Global Technological Change, Chinese Academy of Social Sciences, Beijing Alan F Kay, PhD, founder AutEx, author, Locating Consensus for Democracy Karl Kleissner, PhD, Co-founder KL Felicitas Foundation Rosalinda Sanquiche, MA, Executive Director, Ethical Markets Media Katie Teague, MA Counseling Psychology, founder Storm Cloud Media LLC, director/producer Money & Life Stuart Valentine, MBA, President, Iowa Progressive Asset Management |
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| The text being discussed is available at http://www.ethicalmarkets.com/2010/09/12/transforming-finance-groups-call-recognizes-finance-as-a-global-commons/ |