<nettime> MoneyLab material #3: Brett Scott/London School of Financial Activism

[Geert Lovink <geert@xs4all.nl>]

One of speakers at MoneyLab in Amsterdam (March 22/23 2014) is Brett Scott. He is a South African currently living in London who financial reform and alternative finance. This has included work on hedge funds, tax havens, the impact of agricultural derivatives on food prices, the economic aspects of climate change, and socially responsible banking. He is a Fellow at the WWF/ICAEW Finance Innovation Lab, a global initiative drawing alternative finance and sustainability practioners together. He is the author of The Heretic's Guide to Global Finance: Hacking the Future of Money (Pluto Press, 2013) and has written for publications like The Guardian, Wired Magazine, New Scientist, The Ecologist, The New Internationalist and OpenDemocracy, and appeared on shows such as BBC World Update, BBC Newsday, the Keiser Report, and Arte TV. Earlier he worked as a broker, barman and blues musician.

Brett: "A few years ago I was a member of the start-up team for an intrepid new financial brokerage specialising in illiquid derivatives and securitised products, developing the business in the midst of the financial crisis. I spearheaded the creation of a property derivatives brokerage desk, as well as being involved in a variety of special projects and sales efforts with other exotic derivatives (e.g. inflation, longevity). The company has since crashed, but it was a fantastic way to get both financial and start-up experience. Back in the day I also used to be an academic, working on issues related to economic crime, environmental sustainability geopolitics, and economic philosophy in international development. I was an analyst at a socio-economic policy institute working on the impact of globalisation on healthcare systems. I have a couple of academic papers out, related to international development."

Recently, in a piece in The Guardian on the future of pension funds he wrote: "The end goal of financial education is to cultivate an ethos of personal responsibility and connection to the investment process. This is missing from so many debates on sustainable or responsible finance, many of which seem to endorse the notion of the everyday person as a passive, apolitical "consumer" of financial services, to be protected by the regulators. We need to move towards a notion of the pension-holder as an engaged, creative participant in investment. Luckily, new technologies are also helping us to develop a sense for what that could look like. There is a rise in the popularity of new forms of peer-investment and crowdfunding, which can help people invest directly into areas such as renewable energy. We are seeing a whole myriad of creative platforms that are helping us to develop cultural acceptance for a more open form of finance."

One of his recent contributions on the topic is an article addressing the question “Are we witnessing an open source finance revolution
”? A term he coined himself, “open source finance” encompasses the wide range of initiatives in recent years that separate themselves from mainstream financial practices.

Brett argues for people (rather than big banks and payment service providers) engaging as financial innovators. The history of this role has arguably never been in citizens’ hands anyway. If anything, the historic roots of today’s money and financial system lie in the birth of state and was fueled by war – something which researcher David Graeber offers a complete anthropological account of, as does also Niall Ferguson’s history documentary “The ascent of money”.

Today’s money however is largely printed by private, not state banks, and Scott analogically refers to modern armies as that  “of young men and women wearing suits and ties, carrying Oxbridge and Ivy League degrees, sent off to battle it out in the capital markets and trading floors of global investment banks, commercial banks and hedge funds” (a complementary story to this would be that of the witty, tech college dropouts moving to Wall Street and starting off the giant financial bots in Scott Patterson’s “The Dark Pools: The Rise of A.I. trading machines and the looming threat to Wall Street”). The current, private financial system, argues Scott,  is a monopolizing power that restricts access and promotes passivity, reducing the roles of individuals to that of consumers. The portrayal of an undecipherable complexity dominating the rules of economy further discourages individuals from understanding the inner dynamics.

Counteracting these critical issues, Scott burrows 5 principles from open source technology and looks at how rising alternative revenue models are applying them to finance. The first is access to means of production. For example, one who uses cryptocurrency can join the network, mine the currency and help secure transactions in the decentralized environment. Thus the user is triggered into an active role. The second is access to common resource usage: crowdfunding and mobile money allow such access wherever a bank loan or payment providers refuses to.The third is the ability to monitor. Open data is an important factor of accountability; entities such as Charity Bank or initiatives like OpenCorporates adopt it to show where people’s investments are actually going. The fourth is the ability to be part of a collaborative, yet DIY-minded network. This is what timebanks and local currencies depend on. The fifth is the ability to move from one alternative to another. The open source code of Bitcoin, for example, has led to several other crypto-currencies creating their own fan base and activity.

Of course, some of the models and tools Brett Scott points out to are anything by neglected in media debate. Yet while Bitcoin and crowdfunding are subject to overrated coverage, the others are shadowed. This is why he argues  for empirically experimenting alternative currencies and then pinning those experiences to intellectual theories. Doing so is all about becoming aware of one’s potential in influencing mainstream finance.

After having been successful with his IndiGoGo crowdfunding he is now launching the London School of Financial Activism as a way to build on themes he developed in his book. LSFA will be a cross between a space for creative workshops, and a space for people to develop practical projects that challenge mainstream finance and economics.

For more information goto: http://suitpossum.blogspot.nl/


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