POEMS AND STORIES : 13. STORY: THE DEBT-CRISIS, META-CAPITALISM THE ELECTRONIC VOTING PARTICIPATION DEMOCRACY AND LOCAL CURRENCIES ECONOMIC SYSTEM

STORY 2
THE DEBT-CRISIS, META-CAPITALISM THE ELECTRONIC VOTING PARTICIPATION DEMOCRACY AND LOCAL CURRENCIES ECONOMIC SYSTEM

(see overdebtmonetarysystem.blogspot.com )

"Markets are just a voting system to decide prices" Warren Bufett

The next ideas could be as well be described in a novel of not scientific fiction but rather economic fiction.

They can as well be considered a philosophy or vision for an alternative economic system where the old money are substituted with the electronic vote-money.

Contents of the post:

The current post is devoted to the design principles of a monetary system which would not suffer from over-debt. Such a monetray system should have two properties

1) Only the public state has the privilige to issue new currency (Ministry of Economics). No private for-profit organization can have such a privilige.

(This guarantees that the public sector will never be in over-debt)

2) The newlly issued currency each year, is circulated in society with less than 20% through debt and more than 80% through other non-debt channels of flow.

(This guarantees that the rest of the society will never be in over-debt)

As one of the best example of such a monetray system is the Gradido,

(see http://gradido.net/en/Book/c/1/the_book ) in which the ammount of money in circulation is constant!

The Gradido monetary system, besides the properties 1) and 2) above that make it a non-overdebt monetary system, has also four additional properties, which make it socialistic, egalitarian and ecological.

3) It creates a free basic standard of living for every body.

4) It stimulates, monthly, a basic finacial equality among the citizens.

5) It is very simplified egalitarian and efficient as far as taxes are concerned

6) It budgets directly for the ecology and environmental protection , and it is in fact based on the wisdom of nature

The rules of the Gradido are very simple

1) Each month the public state issues for each citizen , 3 amounts of money (A,A,A)

(let us say A=1,000 gradido, or in general an amount that allows for a free decent life in normal standards of living). The first A, goes for the living needs of the citizen, the second A, goes to the state as if a tax, and the third for the ecology and the environment.

2) As all natural resources , so the gradido currency too, and in order to avoid, inflation, due to the monthly issuing of currency, the currency loses in an obligatory way 50% of its value, annually (of about 5% monthly or 0.2% daily)

In this monetary system, the amount of circulating currency is in the average constant (assuming no diffusion outside the domestic economy) and if all monthly cash was saved each person would accumulate on the average about 20,000 gradidos. This amount is essentially depended on the size of the population and the standards of living. Variations where it can depend on the volume of produced goods and services in the society is discussed below. The reader is invited to download and study the book of gradido here

http://gradido.net/en/Book/c/1/the_book

A very similar or almost identical monetary system had been applied in the previous century crisis, in 1932, in the Austrian town of Worgl. It had great success, unemployment almost disappeared, and the town from severe crisis, passed to prosperity. Unfortunately as it was very early at that time and all currency had to be backed up with gold, the Central Bank of Austria forced the town to stop using their currency.

See e.g,

http://alt-money.tribe.net/thread/70e5eb29-853d-44ca-9faa-b789d1757037

http://en.wikipedia.org/wiki/W%C3%B6rgl

Further remarks and speculations about new electronic currencies.

Under the term VOTE-MONEY we mean , a currency with the properties

1) Only the public state has the privilige to issue new currency (Ministry of Economics). No private for-profit organization can have such a privilige.

(This guarantees that the public sector will never be in over-debt)

2) The newlly issued currency each year, is circulated in society with less than 20% through debt and more than 80% through other non-debt channels of flow.

(This guarantees that the rest of the society will never be in over-debt)

3) It is issued periodically at the start of each short period and it loses its value abruptly after the end of an equal or larger period. (. E.g. it is issued monthly and it loses it value at the end of the year, or after the end of 5 years. This gives it the function that leads to call it vote-money. Buying something is like voting it among other products)

4) It creates a free basic standard of living for every citizen.

(This means that there is a rule that gives e.g. monthly, at least a minimum amount of it as subsidy to every citizen)

5) Part of the issued currency at every period is, under a rule, reserved for the environment and the external interactions of the domestic economy with the economies of the rest of the world. (e.g. like the gradido's third amount A, that goes for the ecology and the rest of the world)

Unlike Gradido a vote-currency is issued periodically, and distributed without debt to the citizens acording to some rules, and it expires abruptly and the end of a period. (E.g. it is issued annually at the start of the year, and expires at the end of the year. This means it has no value at all after the end of the year.)

Because of its resemblance to votes in decision making and their expiration after the decision, it is called vote-money.

"Markets are just a voting system to decide prices" Warren Bufett

VOTE-MONEY may define different electronic currency monetary systems, according to their further rules. Different types of VOTE-MONEY may have different rules about

1) Distributing the monthly issued currency equally or unequally according to some formulae among , households, enterprises, and the public state.

2) Having an inherent taxing rule (like gradido) or using the usual taxing-systems.

3) Depending the total amount of currency in circulation on the population size only, and basic standards of living (like gradido) , or/and on the volume of produced services and goods (GDP) or/and on the total wealth (including fixed assets) of all the society

4) Dealing with explicit or not rules with the diffusion of the currency outside the domestic economy. (e.g. 70% of the dollar currency is now at non-American hands, Arabs, Chinese etc. And officially 20% or more of the euro currency is outside the euro-zone. In the current monetary systems this is compensated with inflating the currency. But in a vote-money monetary system, it can be dealt with a fixed explicit rule of reserving a percentage of the monthly issued currency for all transaction with outside economies, imports and exports. In this way it will put an upper bound to the externally exchanged wealth as percentage of the inner wealth of the economy. )

5) Being exclusive currency for a domestic economy or being in percentage at each price , over a traditional currency.

Before we proceed to the details we state here some philosophical-sociological-economic ideas on which the next rules are based.

1) The economic structure is essentially a power structure from human to humans rather than from humans to the physical reality. Money (as well as votes) can be defined as a technology of exercising of power from human beings to human beings and objects.

2) In a distant future development of individuals and society, there would be no need of power structures, besides the individual and the society as a whole. Neither it would be necessary to utilize money at all. But this is not applicable in a current state of evolution, where many individuals have strong desire and will to apply power over other people (or have other people apply power to them). If in the current state of evolution an economic system would allow only the power of the individual and the public state, without any intermediate private sector, it would occur, totalitarian and tyrannical phenomena similar to those in the communistic Soviet Union and China.

3) It is therefore almost unavoidable that intermediate power structures (“private sector”) must keep the balance to avoid tyranny. The organization units of this intermediate structure are shaped because of a) the individuals strong desire of power over other people b) through the “free market” game of “private property” and c) after the social law of universal attraction, that leads to a Pareto distribution of volumes of power.

4) In the current system to regulate this “private sector” power structure can be done through two tools a) money b) voting. (Both are "technologies of transfer and propagation of rights of power from humans over other humans and objects", which create power structures. But the voting tool is a bit more advanced, it is used mainly by the public sector, as it involves principles, expression, etc versus mainly only action that money involves).

5) In a future more advanced evolution the regulation and creation of "private sector" power structures, can be done entirely through the tool of voting, while money may have been entirely eliminated.

6) A “private sector” with intense power (economic) inequalities creates unhappiness, crimes, and violence. Any improvement from the current state to more evolved would involve lessening the power (or economic) inequalities.

A. Morality renormalization at the scale of the individual and the household.

1) Money is essentially destined to be exchanged with objects mainly, not so much with abstract intangible services, or other abstract values as "value of an enterprise" or "value of the whole of the community" etc. The more advanced the community , the more it will refrain from buying even human labor, as it is nothing else than soft-slavery. The human soul is involved in the human labor, and human existence in personal time. The abstract-use of money occurs not at the scale of household, but at the scale of enterprise (surplus wealth=capital=operational power, buy an enterprise) , domestic economy (buy.....a nation), and global economy (buy....the planet). The more advanced and uniform the community the less the use of money, the more the demonetisation. The abstract power of money (from the enterprise and above,surplus wealth=capital=operational power) may be substituted with the political power of voting. The more advanced the community, the more the economic interplay is shifted from win-lose or lose-win, to win-win or lose-lose. The more advanced the community, the less the financial differences.

2) There is a minimum household wealth that everyone has the right from birth till death. And there is a maximum household wealth (which is also protected from any bankruptcy) . Any surplus wealth above the maximum household wealth, can be used for enterprises and business but not for the private household. Surplus wealth is a weaker form of ownership compared to household wealth.

B. Monetary system macroeconomic re-humanization

3) If the community or federation of communities is to issue their own currency, then no private group can have this privilege other than the collective of the communities. There must be an reasonable frequent inventory of the objects of coins and paper-money, (not financial value) so that each time the communities "print" new money, to replenish from the diffusion to external social environment or for other reason (increase of the population of the community etc) , only a limited percentage of it can be lent (e.g. <20%). The newly "printed" money is to circulate mainly through investments, subsidies, payments etc. The above rules garantee that the currency will not be led to non-solvent over-debt by printing and lending 100% of the printed money by any private subgroup. The currency is issued by the community with the following rules: For each person it is printed every month 3 equal amounts of currency (A,A,A) e.g. if A=1,000, then 1,000+1,000+1,000=3,000. The first 1,000 it is for the unconditional monthly income for the person, the second 1,000 for the community, and the 3rd 1,000 for the environment and the rest of the world. Each year the currency loses 50% of its value ( about 5% monthly or 0.2% daily). We call this rule the gradido rule. The quantity A, can be defined by the formula A=(a*W)/(3*20*P) where W is the total wealth as assets of the public state, in current prices, a is the percentage of the assets that should be in money (liquity), e.g.a=20%-33%, and P is the total number of individuals in the society. The coeficient 20 , is set , as if all money are saved simple mathematics prove that with 50% annual decrease of the value of money, the accumulated money per individual is 20*A. And the coefficient 3 is set, as money are issued in three amounts of A. The coefficient a and its adjustments, may be the object of political decisions.

3.1) There is a minimum size and a maximum size for a community that issues its own currency. The main reason is so as to avoid a big size difference from the wealth of each individual and the common wealth of the community, so as to avoid phenomena of totalitarianism as those in the ex Soviet Union. This is also in accordance with the wisdom of the ancient Greek civilization, that considered cities not larger than a maximum size, as a basic feature of rational, balanced ensouled, and democratic civilization as contrasted to monstrous size cities, kingdoms, and steep Pareto distributions of wealth distribution that eventually create crime and violence.

4) No classical banking business based on fractional reserve rules, is to occur with the currency of the communities. The only "banking business" intended (called here safe-keepers) is the historic initial role of the banks, in other words , individuals or groups may give their valuables and money, for safe keeping, and for this they must pay the safe-keepers reasonable fees. The safe-keepers do not have the right to lend any of the valuables that are deposited to them. The absence of the greedy banking fractional reserve rule eliminates the classical instabilities of the financial system. As enterprises issue public-co-ownership (shares) and public-borrowing (bonds) the role of banks for public lending of enterprises is reduntant. The lending compared to investments is kept low (e.g. lending=0.25*investments) and it is always with zero interest rate. This guarantees that money circulates perpetually compatible with a sustainable permaculture, and not exponentially which is incompatible with natural recourses long term behaviour.

C. Enterprise, micro-economic re-humanization

5) Enterprises in the communities may be shaped, but to avoid the classical psychological and financial alienation, the shareholders mainly are the employees of the enterprise, External share-owners may exist up to e.g. 20% of the equity, and have less rights compared to internal shareholders.

Even better if all enterprises are non-profit type of enterprises.

The liabilities of the enterprises are limited always to less than 25%. The liabilities plus the external owners cannot be in total more than the 33% of the assets.

5.1) Enterprises are of 3 sizes. Small, Medium and Large.

For medium and large size enterprises, in order to avoid decision domination of a small group of shareholders to the rest, a quantitative rule, prohibits of individuals having significantly larger percentages from the rest of the shareholders. The above rules make sure that the legal owners of an enterprise are also the real financial owners of it, so alienation is avoided. For the medium and large size enterprise to function in a democratic way (like democratic state rather than a totalitarian oligarchic state) the decision of a manager to take a position must be a double confidence election : Both from the higher rank managers, and from the lower rank employees.

For medium and large size enterprises, the decisions to elect a board is not taken through voting only by the owners, but through voting with appropriate weights of all the stakeholders (much as is done the voting and elections in Universities) In other words, the owners, the employees, appropriate samples of suppliers, and customers, and agents of the public state vote too.

If a medium size enterprise grows to a large size enterprise, then automatically, shares from the private owners (preferred of week ownership not strong ownership, see 2)) are transferred to the public state, as a type of donation, so that the public state owns at least 51% of he shares.

5.2) The total accumulative assets of the private sector, P, cannot become larger than m-times the total assets of the public state. Or conversely the public state cannot become less than a particular size compared to the private sector.

5.3) The enterprises have also the right to issue currency as the public state has. (Actually a public state service, does so for the enterprise). In this way they do not have borrow from the state, or individuals, and so the private sector is in equal setting as the public sector. If A is the amount that the public state issues currency for each person in 3 amounts (A,A,A) , then the enterprise also issues every month for each person of the enterprise (employees, owners etc) three amounts (B,B,B) to be used respectively as 1) persons salary, b) enterprise needs c) the environment and the rest of the world. The formula for B is as the formula for A, in other words B=(a*We)/(3*20*Pe), where We is the total assets of the enterprise, a is the percentage of assets as cash, and Pe is the total number of employees, owners etc of the enterprise. All enterprises utilize the same coefficient a. This currency too which is identical with the currency issued by the public state, loses its value by 50% every year so that we have asymptotically stable amount of currency and no creeping inflation. With the above rule the amount of money depends both on the population size and the volume of good and services produced in the society, so it is a mixed monetary system.

These rules are intended to a) give sufficient liquidity of money to the enterprises so that they do not resort to borrowing, b) decrease the economic inequalities c) make sure that no private sector enterprise becomes stronger than the public state.

D. Stock exchanges and "free market" macroeconomic re-humanization

6) Stock-Exchange phenomena may occur between enterprises, but as the historic term signifies, they are for the purpose of creating stable portfolios of business for each enterprise. (exchange of inventories)

To protect this original intention the next rule applies: Each share (security) is bought or sold only at the fixed accounting value. This value never changes or fluctuates, Thus any one buying shares cannot lose , only not gain(he will buy them and a price and will sell them at the same prices). What is expected to gain is the dividend from the operational profits of the business. The above rules make sure that enterprises are open up to some degree to the public, but at the same time there is no risky game that makes the majority losers and a very small minority winners.

E. Cross currencies exchange rates global re-humanization

7) If different communities issue different currencies within a federation , their relative cross exchange rates is always equal to 1. This rule avoids unfair abrupt devaluations or overvaluations simply from a minor demand supply interplay, to the currencies of whole communities.

Final remark: The previous rules of re-humanization, restrictive as may be, will have the effect to eliminate over-debt, economic bubbles, and instability. But they will not eliminate the economic inequalities, as this is the result of a) The "hunger" from people to have power and dominate other people, b)The existence of the game of private property c) a "free market" even restrictive as it is set-up as above.

To set an example of a chorological estimation for the required time in global planetary evolution relevant not only to economics but also to all the principles and values in this Blog here is an example that covers all of the Aquarius Age of 2,000 years from 2,000 till 4,000 A.D.

(The timing and evolution ideas are inspired by the visionary book by Paul Amadeus Dienach with title "The valley of the roses")

2000-2300 A.D. Gradual resolution of the problems of overpopulation, ecological destruction, CO2 emissions and climate change, nutrition, tyranny brutal or subtle and local wars. Through a new nobel prize in physics, the physical science discovers the equations of the unified aether-field (unification of electromagnetism, static gravitation, aethorodynamics or antigravity). It become also more clear that most of the energy of the gravitational field comes from the infrared solar radiation. In this way the old energy model with the CO2 emissions is substituted with a new from clean and cheap ubiquitous renewable energy. Not only science can photograph now the aether , but also a large number of people have sufficient high frequency in their physical bodies, that can "switch to aether vision" with their naked physical eyes. The economic systems is gradually renormalized to more human, wise and really better intentions and implementations. People gradually get free from the hastily race and slavery for financial survival, which does not leave time and energy for inner and spiritual self-development. The challenge here for the earthly civilization, is resolve the above difficulties as fast and as smooth as possible, avoiding a great scale war and disaster during 2000-2400 A.D.