employees’ wages in quid. The advantage of this is that it enables the council to avoid redundancies and reduce short-time working. Other positive LQN messages should also be adopted and communicated by the council, such as the extra quid given when users spend quickly.
Individuals and traders are rewarded when they accept quid for the first time, quickly spend the quid they have earned, increase their monthly quid turnover and have more quid dealings with more people. They will also be aware that although some of the quid they are given as a reward may be taken away if they fail to maintain the performance for which it was given, quid that they have actually earned through their wages or trading will never be taken except to pay the normal monthly account maintenance fee.
Limitations of the Quid
I noted at the start of this article that the quid is not a store of value. It is designed to incentivize local spending. Of course, individuals and businesses need to save — for retirement, to even out good and bad years and for capital purchases — but they will need to use currencies (or goods) other than the quid for these functions.
Nor is the quid suitable as a unit of account except within an individual LQN. Quid are not “backed” by the euro or by any other source of value. LQNs will not offer formal quid-exchange services between LQNs, although we expect to see such services being offered by LQN participants and would see their emergence as evidence of success.
Over time, quid will almost certainly lose their value against the euro. If the euro gets scarcer, its value in terms of quid will rise and the one-for-one parity maintained by a council will need to be broken. The quids used by different LQNs will acquire different exchange rates with the euro and thus with each other.
The Urgent Need to Get the First LQN Running
The Feasta group has already completed much of the groundwork to enable communities to get started on developing their own LQNs. We have written the basic software, demonstrated the transfer of quid from mobile phone to mobile phone, defined and modeled the reward algorithms and drafted the legal documents under which a local LQN and the national support organization would be set up. We also have an opinion from a senior counsel that an LQN would comply with Irish and EU law. All we need now is a sound, broadly based invitation from a community.
So far, though, community leaders seem not to regard their situations as desperate enough yet to overcome their reluctance to try novel solutions and risk failure. In fact, that was exactly what we were told at a meeting with officials from a Regional Development Authority. In any case, the officials said, the unions would reject the idea of their members being part-paid in quid even if they knew that all the major local shops would accept them.
Nevertheless, the group believes that the liquidity crisis will worsen and that communities will increasingly want to respond locally rather than wait passively for national interventions that may or may not arrive.
Sometime soon, then, we expect the first visionary community leader from among the councils and communities where LQN dialogues are taking place to ask for help. He or she will realize that the risk to their personal credibility is unimportant compared to the potential beneficial impact of an LQN to their friends and neighbors. They will see that “business as usual” is not an option. When they do, the LQN team will use all the energy, commitment and creativity at its disposal to make sure that these pioneer adopters gain the maximum benefit for the places from which they come.
Equity Partnerships: A Better, Fairer Approach to Developing Land
CHRIS COOK
The conventional way of financing property development entangles those involved in a web of debt and conflicting business interests. A new way of organizing developments promises better buildings, more affordable rents and a stake in the outcome for everyone.
We are accustomed to thinking that property is an object — typically, a productive asset — that may be bought and sold, but as Bentham points out above, this is incorrect. Property is the relationship between an individual — the subject — and the asset, which is the object of the individual’s property. So the productive asset of land is not property but rather the object of a man’s property or something that is “proper” to the man. It follows that property is the bundle of rights and obligations that connect the subject individual to the object asset.
The Land Equity Partnerships that I describe in this chapter (I’ll just call them equity partnerships from now on) are an example of the new types of arrangement that can be made when people think of property in terms of rights and obligations rather than ownership.
Land, or perhaps more accurately location, has a value when it is put to use. Its value may perhaps derive from crops that grow on it, or from animals or fish that feed there. It may also derive from its use by individuals to live there, or to conduct business there, or for use as public infrastructure such as transport. This use value then has a value in exchange; individuals are prepared to exchange something of value in return for the use of land at a specific location.
The bundle of rights and obligations relating to land/location is typically recorded in the form of legally binding protocols, although in less-developed nations the rights and obligations relating to land may be a matter of oral tradition. Some cultures are unable to understand that anyone can have absolute rights over land. Others insist that absolute ownership is God’s alone; but the convention in many societies is that the state has absolute ownership of land and that exclusive property rights may then be granted to individuals or to enterprises with legal personality (corporate bodies).
Conventional private-sector property development is transaction based. Landowners sell land to developers who obtain any necessary permissions, improve or build on the land and sell it to a buyer. Developers typically obtain as much of the development finance as possible by borrowing at interest from a credit institution or investor. Buyers typically finance their purchase with loans secured by a legal charge or mortgage. After a time, they will sell the property to another debt-financed buyer, or find a tenant, and so on through the years.
It is to be observed, that in common speech, in the phrase “the object of a man’s property,” the words “the object of” are commonly left out; and by an ellipsis, which, violent as it is, is now become more familiar than the phrase at length, they have made that part of it which consists of the words “a man’s property” perform the office of the whole.
JEREMY BENTHAM, “AN INTRODUCTION TO THE PRINCIPLES OF MORALS AND LEGISLATIONS” (1789)
In most cases a developer has no interest in high-quality standards or energy efficiency because he will not be associated with the site once the development has been sold. He simply wishes to maximize the transaction profit. He will therefore attempt to ensure that any investment in amenities, infrastructure or transport is made by the public sector rather than by him.
A New Legal Entity
On 6 April 2001, a new legal entity, the Limited Liability Partnership (LLP), came into effect in the UK and, despite the fact that its objective was to protect professional partnerships from the consequences of their own negligence, it made possible a new way of handling and financing property development. Confusingly, an LLP is not legally a partnership. It is, however — like a company — a corporate body with a continuing legal existence independent of its members. Also, as with a limited liability company, members cannot lose more than they invest in an LLP.
An LLP need not have a Memorandum of Incorporation or Articles of Association and is not subject to the laws governing the relationship between investors and the directors who act as their agents in managing the company. The “LLP agreement”
