Democratic Money is an old idea suggested by Keynes, Marx, and modern monetary theorists (MMT), among many others. The idea is to give everyone equal access to money for investment and trading.
Permanent Asset Markets implement democratic money for small communities and communities of communities by monetising assets with shares in a community-owned company. This contrasts with monetising assets with loans, where the loans (the money) give a return on investment with more money. With shares, the assets provide a return on investment with more shares.
The price of shares and the return on investment are the same for all investors and buyers.
Governments can use the approach to adjust the money supply by changing the investment rate in new assets and only allowing bank loans of existing money.
Any group wishing to start a Permanent Asset Market (PAM) can get shares from asset owners who sell their assets to the PAM. Investors, like superfunds, can purchase loans on assets and sell them to the PAM for shares. Alternatively, Banks can change their loans to single-interest payment loans.
Steps to Set up a Permanent Housing Market
- Recruit a community of owners, investors and renters who wish to form a PHM.
- Register it as a regular for-profit Pty Ltd company to easily fit into the existing financial markets.
- Determine what needs to be included in the constitution regarding cooperatives and companies, office holders, tenure, and duties. Use the Ostrom principles as a guide.
- Specify the operational functions of the company to operate as a closed market using democratic money embodied in its assets.
- Ensure that people and homes can be moved to another company without penalty.
- Specify the return on investment and how the internal market in shares operates.
- Specify the rules for occupiers to buy shares in the property in which they reside.
- Specify how services to the organisation are provided and whether they should be provided by organisations that use democratic money and operate their business as a PAM. Organisations that use democratic money mean the PAM acquires equity and a voice in future services with each purchase.
- Establish confidentiality rules and how information is verified but kept private. (For example, some members may not wish their income or assets to be known to other members.)
- Work with other groups using democratic money to share knowledge, skills and procedures.
