Increasing Productivity

Kevin Cox
5 min readMar 1, 2024

Humankind has forgotten that their success as a species is to treat the natural world as a Commons. This has happened because its greatest invention, money, has been perverted from a Commons into a tool to exploit other humans.

Humans learnt to share their surpluses with others in a tribe, then with limited trading, then with extensive trading with the invention of money. However, they forgot to share their money profits or surplus from trading. Sharing is productive because it requires the least money to create the greatest value of goods and services.

If humans share profits and make money a Commons, the productivity of Capital or the surplus will at least double, and they will have enough money to address existential crises.

Here is an attempt to start a substack magazine as a Commons by sharing any surplus it generates.

The Productivity of the Financial Economy

As a country gets wealthier, its productivity tends to drop.

How can that be? Intuitively, the wealthier a country is, the more it can invest, which will drive innovation and productivity improvements. Our intuition is wrong because, in today’s world, most investment is not an investment in productivity improvements but the transfer of assets from one party to another. For example, the stock market is notorious for the size of the secondary market compared to the size of new investments in new assets. Another example is that today, in Australia, the Big Four banks provide 90% of home loans. In contrast, before bank regulations were changed in the 1980s, 70% of loans were from credit unions and mutual societies.

It is easier to make a profit by buying assets that are making a profit than creating new assets. Most investors buy existing assets, which require finance and loans that cost money. The buyer has to find ways to get the company management to increase the profits to pay for the finance. Often, making a profit on existing assets is aided by increasing the price of goods, services, and companies or through inflation and locking customers into buying unnecessary or never-used products with subscription services.

The cheapest method is to buy a company and make it private. You then use its assets to get a loan of new money to pay you back. You then sell the company by refloating it onto the stock market. Money is a promise which is cheap to make but expensive to fulfil. Making promises and getting someone else to fulfil the promise is a quick way to riches.

Bank loans are promises made by the bank that the borrowers fulfil. Banks do not share in profits, so loans are a way to make money with little effort. Even if the loans go bad and the bank is big enough, the government will bail out the bank.

These activities go against the idea of a sharing Commons, as people become rentiers who enclose money. Enclosing money in static piles of stationary wealth is the antithesis of a Common and will lead to the extinction of humankind.

Addressing the expense of loans

Lenders can share the profits with borrowers by reducing the amount owing by a share of the interest payments. This speeds up loan repayment and is a productivity improvement. Sharing is an “overnight” change and, along with an increase in interest, will increase the profit made by the lender.

However, a better way to transfer existing assets is without loans through Permanent Asset Markets. Removing the need for loans removes the need for interest and the cost of asset markets, as the asset is always for sale.

These two changes will increase the rate of capital movement and the productivity of an economy as new money through loans will move to finance new assets, improving productivity. It will mean the productivity of wealthy communities will continue to improve.

Replacing Taxes

Australian federal and state government budgets have large social security transfers and infrastructure expenditures. Reducing the loans needed to transfer existing assets will reduce the injection of new money into the economy and reduce taxes. The money supply can be kept up with long-term government investments in infrastructure, community assets and other public goods.

When we buy a house today, we borrow money from the bank, and we use the bank money to buy a house.

A loan is a word for renting money, where interest is the rent. The difference between the interest and the cost to the bank of providing the money is the profit the bank makes on the loan. Banks lend government money, and government money is a commons, and the bank keeps all the profit from the loan. The bank should share the profit with the borrower as the money belongs to us all as it is government money, not the banks.

Banks can immediately (tomorrow) share the interest according to their costs of providing the money and our costs of providing the money to pay them. Step one in reforming the financial system is for banks to share profits from interest. How banks can increase profits and lower payments. Everyone with a mortgage in Australia should be very angry with the Government, the Reserve Bank, and the banking industry because they knowingly do this. Sharing the profit will immediately lower the cost of mortgages by about 25% while increasing bank profits, and it could be implemented overnight if the government ordered them to do it. (What it does is eliminate the capital gains obtained by bank shareholders that come from inflated house values)

However, there is no need to rent money from a bank. We do not have to borrow money from a bank to buy a house. We can buy the house from the previous owner incrementally. When we do this, we remove the cost of bank interest and the cost of the real estate market. One method of doing this is with local Permanent Asset Markets(PAMs) of which a Permanent Home Market is an example. This will result in investors getting a higher return and borrowers paying less to buy assets. Home buyers never pay more than 25% of their income to buy a home. The more income and the less deposit, the more expensive the home. Investors will get a flexible inflation-adjusted income stream that lasts twice as long as current superannuation-allocated pensions.

PAMs are a financial innovation. The old credit unions and mutual associations are versions we had before computers and modern communications. PAMs are a modern version that eliminates the cost of finance, an overhead we do not need, and shares profits. These changes will leave disparities in wealth but reduce the obscene disparities we have today and will democratize money, and with democratic money will come social democracy as money is the source of power.

Wealth distribution will remain but flatten as more businesses and enterprises — particularly government-owned infrastructure convert to sharing profits.

The capital cost of hospitals, roads, light rail, schools, electricity, water, etc., will be half as we will not pay unnecessary financial costs of interest, dividends, and capital gains.


Humankind has forgotten that their success as a species is to treat the natural world as a Commons. This has happened because its greatest invention, money, has been perverted from a Commons into a tool to exploit other humans.



Kevin Cox

Kevin works on empowering individuals within local communities to rid the economy of unearned income.