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Tim MacDonald's avatar

“there was no one day when that happened”

Actually, there is. It is August 29, 1972. In Phoenix, Arizona.

That’s when and where the National Commission on Uniform State Laws promulgated the Uniform Management of Institutional Funds Act. This Model Law recommended the codification of the conclusions of the Cary & Bright Report to Ford Foundation on The Law and the Lore of Endowment Funds, that the Legal List is too constraining and the Prudent Person is the right standard of prudence and loyalty for Pensions & Endowments.

The Prudent Person soon became, in fiduciary practice, the Prudent Investor, where “Investor” came to mean “participant in the securities trading markets “, as a special pleading for the self-interest of securities trading markets professionals. That resulted in the expulsion of common sense from fiduciary accountability and the creation of a new accountability, to the expert knowledge of experts at outperformance in maximizing the highest possible purely pecuniary profit from volatility and growth in market clearing prices for securities in the markets for maintaining volatility and growth in market clearing prices for those securities.

This is illegal, and if the securities trading market professionals had failed in their campaign to exercise hegemony of society’s shared savings aggregated into social trusts for socially provisioning the social safety nets of Workforce Pensions and Civil Society Endowments as private benefits that are also a public good, those professionals would have been subjected to new regulation written to lock them into their authentic purpose, of mediating the tensions between individuals with our need for liquidity in increments in our investments and enterprise with its need for longevity at scale in their financings.

But the securities professionals did prevail, and that has locked humanity into a trajectory of financing of future of Growth in extraction, while recklessly not reckoning with the consequences of that extraction.

The good news is, there is still time.

We can’t go back, but we can correct that wrong turning, by reasserting our common sense of what makes sense as the proper lawful standard for fiduciary prudence and loyalty.

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