Banking In Common(s)
In the comments to my earlier post on The Commons Br. Kain wrote:
I would like you to expand not merely on this concept, but on how you see it implemented.
Now Br. Dave’s post on whether or not to nationalize the banks helps I think move the ball forward on this idea. He writes:
I believe that the execution of such a strategy [i.e. nationalization of banks] will not be clean. I worry about political influence interfering with the operation of these companies. Furthermore, how do we get out? How long is this going to take? If and when government decides that it can spin off healthy banks, can they sell 100% of the interest in banks to private investors or will government end up retaining a majority interest in some way? Will politics influence who gets shares in these newly constituted companies? It’s a can of worms that I would like to avoid if at all possible. (my emphasis)
I think Dave’s concerns are extremely valid. I think an institutionalized/legalized Commons proffers an elegant solution (or at least could be) to these potential structural govenrmental problems.
In response to the specific portion of Dave’s piece I boldfaced, I think the government should in this hypothetical neither sell off healthy banks to private investors nor retain control of the assets but become in some fashion entrusted to The Commons. I think a certain percentage (perhaps equal to taxpayer investment in the creation of said banks?) of funds could be setup which automatically dispenses an equal share to bank accounts amongst the citizenry.
Similar to Peter Barnes’ idea that the sky be declared public property (not government administered) and that to access public property, private enterprise needs to be a surcharge, the proceeds of which are evently distributed to all citizens.
I saw Nasim Nicholas Taleb (of Black Swan fame) on Charlie Rose recently and he said that in his mind banks are going to become public utilities companies. Given how accurately he predicted the mass failure of the banking system, I wouldn’t discount his forecasting offhand. But it would seem to me better that the banks, if they are going to go this way, not be public utitilies but commons utilities. They would not be government owned and operated–the government exists to set the regulatory frame for all players in the market and like Dave I’m for serious regulation on the amount of leverage an institution may carry–but would be Commons operated.
**I’ve still left unanswered the precise mechanism whereby a Commons operates, (in greater specificity), which I hope to get to sometime in the near future.