Can you make an example for conditions you would like to apply. Something that the bank can reasonably accept? Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
The municipality says "OK, you can build a factory on the bit of land, subject to these or those criteria for construction, and provided that you're not a nuisance to the neighbours. As long as you stay within the limits laid down here, the owner of the factory has the right to use the land."
Now you go to your local, friendly loan shark an investment banker and take out a mortgage on the factory that you are going to build. Note that since you don't have to buy the land (presumably, you're paying some kind of rent to the municipality instead of a one-off sales price), you don't have to borrow as much.
After a couple of years, the factory becomes unprofitable, and you decide to close down the factory. If you had owned the land, you could have bulldozed the factory and sold the land to some other dude, who could (subject to local planning restrictions) have built something else on it. But instead, the use right just goes back to the municipality (and you cease to pay rent).
What has happened in this example is that access to a piece of land has been separated from the stuff that's built upon the piece of land. Of course, there will have to be a very transparent and easy to understand way to award those use rights, because otherwise you'll get a thriving shadow market in gaming the access rules, and that would work pretty much like an actual property market for real estate, except completely out of reach of the regulators. But it should be possible.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Suppose that all land is owned by the municipality instead of by private individuals. You want to build a factory on a bit of land, so you go to the municipality for permission (you have to do this anyway, because they have to approve emissions levels, noise levels and so on and so forth and etc.). The municipality says "OK, you can build a factory on the bit of land, subject to these or those criteria for construction, and provided that you're not a nuisance to the neighbours. As long as you stay within the limits laid down here, the owner of the factory has the right to use the land."
The municipality (the Custodian) maybe gets a rental for the exclusive use of the location aka land. For a commercial or agricultural use this could be some sort of proportional share of production. (there are precedents for tithes....)
For individuals one could be a bit more imaginative. There are several options open, but a Georgist tax on Land Rental Value is the effective result.
JakeS:
Now you go to your local, friendly loan shark an investment banker and take out a mortgage on the factory that you are going to build.
No mortgage.
You go to the contractor and get a quote, broken down into costs and profit margin. You offer him the chance to invest his costs, but he probably needs cash. His profit margin he must invest, or there's no deal.
What he does invest gets him an agreed proportional equity share in your gross revenues as a Capital Partner.
Having minimised your cash requirement you find a punter/ venture capitalist to put up the money, in return for which he gets x% of your gross revenues, if there are any.
Once it's built, the contractor and the VC can sell their Units in your (now existing) gross revenues at any time at a market price, and you really don't care, because your interests are aligned with the investors, whoever they are, and they have no say in the management of your factory.
And note here that it's a damn site easier to get a handle on gross revenues than net profits, which is why Income Trusts became so popular in Canada, and Australia before that.....
If the factory closes for whatever reason, then a new Occupier can come in once he's made his peace with the municipality, found investors yada yada.
What has happened in this example is that access to a piece of land has been separated from the stuff that's built upon the piece of land.
Close, but maybe not quite. We are separating the use of the value of the location (the Commons), from the use of the Capital invested in that location. We are sharing risks and rewards and aligning the interests of stakeholders in a new way, and in fact created a new "co-ownership" property right, which is a sort of "evergreen" leasing arrangement of indefinite duration.
I reckon such a Capital Partnership is probably an optimal enterprise model. But it's not magic. It can't make a silk purse out of a sow's ear.
There are some enterprises that won't stack up using any enterprise model. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
