People who are looking for new ways in which we all, as individuals, can personally contribute to a resolution of the climate crisis are invited to consider joining this exercise in applied imagination, through which we are exploring the possibilities for bringing suit on behalf of future generations, and the future of current generations, against Pensions & Endowments, as institutional fiduciary owners of intergenerational fiduciary money, for breach of their fiduciary duties, of prudence in the exercise of their fiduciary powers in undivided loyalty to their fiduciary purpose, to programmatically provide a prosperous present and future financial security to evergreen, ever-changing populations of qualifying individuals, directly, that will also be, of necessity, a prosperous present and an evergreen, ever-changing future of physical security - including climate security - for all of society, consequently.
Our hypothesis is that Pensions & Endowments, individually and in collaboration, as institutional fiduciary owners of tens of trillions of intergenerational fiduciary money, collectively, worldwide, have the size, the purpose, the time and the technology to negotiate with enterprise, directly, so that it is a breach of their fiduciary duty to speculate, as they are currently doing.
We are exploring the possibility of using lawsuits to make Pensions & Endowments STOP SPECULATING and START NEGOTIATING, beginning by negotiating for the restructuring of our global energy economy by COMMISSIONING new energy choices synchronized with the DECOMMISSIONING of existing hydrocarbon energy extraction technologies, sized and timed to avoid crashing into catastrophic climate changes.
However, before we can get to the exciting details of finally taking effective action to bring an end to climate inaction, we first need to explore new learning about Fiduciary Money, and its accountability - through the law of fiduciary duty - to our common sense as reasonable people.
We begin with the simple rule that the law of fiduciary duty requires Fiduciary Money to exercise PRUDENCE in the use of its fiduciary POWERS in undivided LOYALTY to its fiduciary PURPOSE.
From here, we delve into a deeper examination of exactly what are the powers that society has invested in Fiduciary Money, and what is the purpose for which those powers are created and sustained by society, through the laws of Fiduciary Money and Fiduciary Duty.
When we look, we see that powers of Fiduciary Money, include:
Size - Pensions, especially, but Endowments, also, own as fiduciaries large sums of money held in evergreen trusts that are designed to just keep going, without end. These aggregations are designed to be used for investment to generate regularly recurring streams of income/cash flow to be used to support the fiduciary purposes of the investing Pension or Endowment, where Pensions are created for the purpose of providing income security in a dignified retirement to qualifying retirees, and Endowments are created to provide income to support the activities of universities (scholarships, professorships, etc.) and other civil society institutions and philanthropies (providing them with the money the need to make grants for mission). Individually, Pensions & Endowments own and control billions to tens of billions, and for Pensions, especially, sometimes hundreds of billions in Fiduciary Money. Collectively, worldwide, Pensions & Endowments own and control tens of trillions in Fiduciary Money, all for the same shared purpose of programmatically providing a prosperous present and a secure financial future to evergreen, everchanging populations of qualifying individuals. This prosperous present and secure financial future for qualifying individuals is inextricably linked with a prosperous present and secure physical future for all of society, of necessity, because financial prosperity and future security for such large subsets of our total population cannot be separate from the physical prosperity and future security of all of society, generally.
Purpose - This is a critical point in our exploration of the Laws of Fiduciary Money, because conventional wisdom wants us to believe that the purpose of Pensions & Endowments as investors is to “maximize risk-adjusted returns” on portfolios of trading positions on market clearing prices in the markets for maintaining market clearing prices. But this feels to us more like the purpose of professional portfolio managers in their professional management of portfolios of Pensions & Endowments: the metric by which they choose to be evaluated for performance, and the qualifications on which they choose to be hired. The purpose of Pensions & Endowments is, as we have seen, to programmatically provide a prosperous present and future financial security to evergreen everchanging populations of qualifying individuals: retirees, for Pensions; beneficiaries of various kinds for different kinds of Endowments. Is “maximizing risk-adjusted returns” the same thing as programmatically providing present and future income security? This, it seems, is a core question - perhaps THE core question - in our exploration. What do you think? Does your opinion matter? Should it? What do you say?
Time - Fiduciary Money is evergreen. It’s designed to always be there, always investing to generate cash flow, and always paying out cash flows as generated in fealty to its fiduciary purpose. Which means that the Fiduciary Owners of Fiduciary Money have all the time it takes to negotiate with enterprise of any kind or size the various details of various financings. It also means there is no end to the need for Fiduciary Money to generate through investment fiduciary minimum cash flows. Fiduciary Money is self-perpetuating, and in the absence of extraordinary circumstance, endlessly ongoing, as an institution with unlimited life.
When we combine the Size, Purpose and Time that society has constructed into the institutional social construct of Fiduciary Money with spreadsheet technology for modeling out expectations for future cash flows through an enterprise or business venture, we get an equation that sums to the Fiduciary Power of Fiduciary Money, to negotiate. Fiduciary Money does not have to speculate.
If Fiduciary Money does not have to speculate, because it has the power to negotiate, is it legally prudent for it to do so?
Who decides?
Who decides who decides?
The Law of Fiduciary Duty decides that it is we, as reasonable people, who decide, according to our common sense of what is properly prudent and loyal.
Shall we take back our personal agency?
If we accept the expertise of modern experts who tell us that the purpose of Fiduciary Money is to maximize risk-adjusted returns on portfolios of trading positions in market clearing prices in markets for maintaining market clearing prices, and that it is prudent for Fiduciary Owners of Fiduciary Money to use their powers of size, purpose and time to negotiate portfolio management agreements with enterprising visionaries whose enterprising visions are of different strategies for speculating on asset prices to maximize risk-adjusted returns on those speculations - transforming Fiduciary Owners of Fiduciary Money into Asset Owners Peer Benchmarking Asset Managers - then we will continue to give over our own, individual personal agency in social decision making through Fiduciary Finance to those experts in market pricing speculation.
If, however, we choose to challenge convention, and question the claimed expertise of these self-proclaimed experts, we open up new possibilities for taking back our personal agency in social decision making through Fiduciary Finance.
What is speculation? I don’t even know what that means.
We can begin this challenge by asking ourselves these two questions.
What does it mean for Pensions & Endowments as institutional fiduciary owners of intergenerational fiduciary money to SPECULATE?
What does it mean for Pensions & Endowments as institutional fiduciary owners of intergenerational fiduciary money to NEGOTIATE?
When we look, we will see that speculation by Pensions & Endowments turns investment into placing bets in the casinos of market prices, on future movements in market clearing prices in markets for maintaining a market-clear price. If we look more closely, we can also see:
that markets maintain clearing prices by generating transaction volumes, and growth in transaction volumes;
that these markets generate transaction volume and growth in transaction volume by generating growth in market-clearing prices,
that they generate growth in market-clearing prices by demanding growth in the scale of corporate bureaucracies and the cash flows that flow through those bureaucracies.
Then we see that institutional speculation with Fiduciary Money buying securitized shares in standard form investment agreements at one price for the purpose of selling them at some unknown future point in time to some unknown future buyer for some unknown, but hoped-for better selling price, in order to maximize risk-adjusted returns in each moment, from moment to moment, in a perpepetual present that sees the future as the forward projecting of historical trends, booming and busting through creative destruction and techno-optimism creates problems for fiduciaries, for the markets and society more generally:
dominating markets created by design for individuals, overwhelming the ability of the Invisible Hand of individual self-interest aggregating into society’s conscience to self-regulate and modulate the markets; and
financing an economy of
Short-termism;
Economic Elitism;
Corporate Gigantism;
Financial System Instability
Retirement System Unreliability
Corporate Capture of Politics and Public Discourse
Social and Environmental Injustice in the Conduct of Commerce
Political Divisiveness degenerating towards Violence Against the Rule of Law
Structural inability to take action on climate and other changes in our changing times that require Humanity to take action at the scale of climate.
Next, we can begin to imagine how negotiation by Pensions & Endowments can empower investment as the pre-funding of future cash flows that are expected to flow through social contracts between enterprise and popular choice that flourish for a time, then fade in the fulness of time, as times change, and humanity evolves prosperous adaptations to life’s constant changes, to adaptively evolve the right economy for keeping a good society ongoing into a secure future, through:
Individual curiosity, inquiry, insight and new learning;
Civil Society Institutions for perpetuating and adaptively evolving social norms and shared narratives;
Enterprise for putting learning into action, collaboratively co-creating surpluses of technology - as learning put into action for taking the world about us as we find it and changing it to be more a way we choose to make it to make the world in which we live, as our uniquely human way of living, out of the world of Nature into which we all are born - for sharing with others in exchange for a price paid in money or other value;
Finance for aggregating surpluses saved by individuals as money, and deploying those aggregations as investment in enterprise for evolving prosperous adaptations to life’s constant changes in the right economy for keeping a good society ongoing
Government for enforcing individual and institutional conformity to core social norms and narratives
AND we can see the possibilities for negotiating agreements with enterprising visionaries on prioritizing cash flows for:
Sufficiency of cash flow to meet fiduciary minimums;
Fair Trade through the supply chains;
Accountability to Society through compliance with the spirit and the letter of the Law, business ethics and community engagement;
Paying Nature to Make More Nature;
Fair Pay, Benefits and Working Conditions;
Fair Dealing with customers and competitors throughout all distribution channels; and
Fair Sharing between enterprising visionaries and their financiers (fiduciary and otherwise).
Which do you see as the properly prudent way for pensions and endowments to invest in undivded loyalty to their fiduciary purposes: speculate, or negotiation?
This is the question for our common sense of prudent fiduciary loyalty to a prosperous present and a secure future, both, equally.
It is the new inquiry that we each can and should undertake, as individuals, and the new social norm and social narrative that our civil society institutions can and should evolve, as we collaboratively co-create new enterprises for putting this new learning into action to finance a new economy for keeping a new society ongoing and new laws for enforcing conformity to these new social values that we can and should put in place as our new core values, as prudent stewards of a new Human-Nature partnership that is interactive and not extractive, if we want to take action on climate and other changes in our changing times that require humanity to take action at the scale of climate, the planet and all of humanity.
A Technical Question with Existential Consequences
What begins as a technical legal inquiry into our common sense of prudent fiduciary loyalty for Fiduciary Money quickly explodes out into a paradigm-shifting back-to-basics re-examination of what it means to be human, individually, and living together, in society, through an economy.
“Now, in June of 1921, I received the degree of Doctor of Philosophy in economics. It was a great occasion …. .”
– Sadie Tanner Mossell Alexander, Pioneer in civil rights and first African American economist in the United States.
What is our Philosophy of the Economy?
Several voices can be heard today challenging conventional thinking about economics and the economy, such as these word by Dennis J. Snower, President of the Global Solutions Initiative, policy advisor to the G20, and Professor of Macroeconomics and Sustainability at the Hertie School of Governance, speaking in conversation with David S. Wilson, President of Prosocial World and SUNY Distinguished Professor Emeritus of Biology and Anthropology at Binghamton University, as published in The Making of “Rethinking the Theoretical Foundation of Economics”, https://evonomics.com/the-making-of-rethinking-the-theoretical-foundation-of-economics:
“[in conventional economic thinking] the economy is pictured as a circular flow of commodities and factor services, moving endlessly between households and firms. Households’ behavior is explained in terms of the maximization of their utilities, and firms’ behavior is explained by profit maximization. To this picture, the government is added: its expenditures are classified as an “injection” into the circular flow and its taxes are a “leakage”. International trade receives similar treatment: exports are an “injection” into the circular flow and imports are a “leakage.”
…
economics can be reconceived as the discipline that explores how resources, goods and services can be mobilized in the pursuit of wellbeing in thriving societies, now and in the future”
This reconceiving of the economy is presented as a paradigm shift, but one can ask if a shift from a maximization of nation-state economies model of resource allocation to a wellbeing in thriving societies over time model of resource allocation is really much of a paradigm shift, since both remain models of resource allocation. What is not being said is that in both models the resources to be allocated are being extracted from Nature.
It may be argued that a change in humanity’s relationship to Nature is implied, of necessity, in any new model of the economy as wellbeing in a thriving society over time, but if it is only implied, and not expressly stated, how important is it, really to such a model?
We imagine a more forthright new vision of the economy as a Human-Nature partnership that is interactive, and not extractive, in our applied imaginings of Bank of Nature as a new kind fiduciary financing enterprise for Fiduciary Owners of Fiduciary Money investing through negotiation of agreements for prioritizing cash flows through enterprise and the economy in prudent loyalty to a prosperous present and a secure future, both equally.