66 Pages Posted: 16 Oct 2006
Date Written: March 27, 1992
A system of economic analysis based on cash-flows rather than profit is presented as a basis for integrating the economic values obtained from tenure (ownership, control or use of assets) with the values obtained from production and exchange of goods and services. The paper indicates how the integration of tenure and trade values provides a basis for analysing and designing institutional structures to create a more efficient, equitable and self-correcting economic system. A feature of the paradigm is that the structure of property rights, governance and money can become a variable, subject to analysis, rather than a feature which is assumed constant and so omitted from evaluation.
Markets are identified as one of four different communication and control mechanisms of social integration. The other three being hierarchies (command), symbolic (semiotic) and the natural senses. The contribution of each of the four mechanisms is considered to compare various types of societies from those existing over 10,000 years ago to current forms of capitalism and socialism. The paper argues that to create a self-correcting, ecological, sustainable society, the structure of property rights, governance and money would need to follow the dynamic feed-back control architecture found in living things and be guided by the characteristics of the host bio-region. This would create a Third Way and a more democratic form of capitalism.
To follow the example of nature, the perpetual, monopoly and static rights to property and money would need to be replaced with time limited, competing, and dynamic rights. Corporate bodies would then obtain the attributes of living organisms with all users and/or stakeholders of all types of property obtaining appropriate ownership and control entitlements. This would result in multinational corporations and central banks being replaced with many decentralised locally owned and controlled competing institutions. To maintain its existence, the World Bank would need to change its role from distributing credit to educating communities how to build and manage their own local banking and currency systems based on ecological principles.
Keywords: Capitalism, Cash-flow paradigm, Ecological systems, Governance, Procreative Assets, Property rights, Self-financing Development, Social capitalism, Surplus profits, Tenure systems
JEL Classification: B41, D23, D39, E42, F42, G30, O12, P51
Suggested Citation: Suggested Citation