I just read an interesting article about a paper by a couple of law professors who argue that three of the biggest recent financial scandals (junk bond fraud in the 80’s, Enron in the early 2000’s and the sub-prime mortgage crisis in 2008) were all down to a special accounting technique of using ‘special purpose entities’.

You can read the full article here: http://business.time.com/2012/08/15/the-accounting-trick-behind-thirty-years-of-scandal/

I think there is a deeper issue though, not just about SPEs, but about how in general we create fictitious legal entities to conduct exchange and hold assets.  These entities take the humanity from our interactions with each other… because the are not human.  We quickly become trapped in the complex rules that we have created to support these entities and huge effort and resources are put into maintaining the environment which supports these fictitious structures.

I think there’s a better way.  It involves doing away with fiction and returning to what is real.  This will take some effort as many of the fictions we have created as a society have become so embedded that most of us perceive them as ‘real’. There are of course also many highly intelligent people who understand the fictions behind much of our current societal structure, but because of the societal inertia behind the system they are also compelled to interact with them as if they are real.

As a society we need to recognize when our fictitious creations no longer serve us effectively.  I think recent world events indicate that we are now at that point and we need to rethink how we interact with each other.  It can be hard to change how you think and move from one paradigm to another.  When the change is complete though, the old paradigm often seems ridiculous and the new paradigm obvious common sense.

These times of change can be challenging as they involve doing things in ways that are new to us and so involve uncertainty and maybe even fear until the new ways have been proven effective.  To do things in a new way first involves at least imagining what those new ways might be and then having the courage to try them – even with the inherent uncertainty.  I believe that the ‘Give Freely, Receive Freely’ concept could be part of a paradigm shift and new way of interacting with each other.  I don’t think I’m alone in this, I know there are other people out there doing similar things, I just haven’t been very successful in connecting with them yet.