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Our economy is suffering from a major systemic flaw: the private creation of liquidity by credit through banks. This results in the automatic siphoning-off from the economy of much of the plus-value created by economic activity, through the mechanism of interest. There is an urgent need for the development of a more equitable system that leaves the plus-value in the hands of those who created it.




April 22, 2008

The Story of How Humans Came to Live in Peace and Plenty

The story of how humans came to live in peace and plenty is a developing conversation. The initiator is David Braden, who proposes that we network, but with an additional dimension. Instead of only interacting on a flat, person-to-person basis, Braden says that we must also consider the larger system and our environment in what we do, and he calls it 3D Networking. You can get a good idea from his website 3DN Introduction, which explains three dimensional networking in its bite sized, linked pages.


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David Braden, initiator of 3D Networking


One particularly interesting proposal is what Braden calls the Self-help Corporation. Today's economy does not have any place for people that aren't directly involved in making more and more profit for the corporate players. At first, these were only the people who did not have the right skills, but more and more people are being laid off because the corporation that employed them is cutting costs. It is nothing for a huge corporation to buy its competition and then start "slimming down", laying off thousands of people who thought they had secured stable employment. Thus, the ranks of those who don't fit keep swelling.

Braden's self-help corporation (this link is to an abbreviated description) is a way of balancing the needs of these individuals against the focus on profit which is a characteristic of the corporations and which does not allow giving someone a job simply because they need to make money to live.


"The self-help corporation is a simple, practical and economical way to alleviate the resulting poverty. It does not require public consensus, expensive government programs or massive charitable fundraising. One can be started now, by anyone, anywhere in the world.

Poor people are poor because they do not have skills that can be marketed in the “market economy” or their labor is valued by the market economy at a level that does not provide them adequate resources for a decent standard of living. They are not, however, without skills and resources. In particular, they possess the skills and available labor to produce basic necessities."


The question is whether such an idea has real transformative potential. Will people actually come together in solidarity and contribute their money or their skills to make it possible for a whole group to take care of basic necessities in a way that's much more economical than today's 'everyone for themselves' way of doing it.

The vision is growing and it's becoming more focused. A part of this process is documented in a discussion around The Story of How Humans Came to Live in Peace and Plenty on the "open money" Ning group.

Continue reading "The Story of How Humans Came to Live in Peace and Plenty" »

March 08, 2008

The Gift Economy - Receiving stimulates giving

One of the alternatives to our current economic system, which is based on money created by banks as a debt and heavily laden with a cost called interest, is what has been termed the gift economy. Few would disagree that life could be much better if everything - or at least a good part of what we need for our daily survival - were freely available just for the taking.


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Silver 20-SIMEC coins issued by Italian law professor Giacinto Auriti in a monetary experiment


But alas - the current economic reality is just the opposite - scarcity rules. Everything has a price, and the more scarce something is, the higher the price. To obtain anything we need to pay that price - in other words exchange something of ours for what we wish to receive.

At times - actually I would argue more often than not - scarcity is brought about artificially to manipulate the price and therefore the "exchange value" of goods. Making a profit and paying the piper requires it.

Oil probably is sa good an example as any. Far from there being a physical shortage of oil, the price for this black gold has been successfully manipulated to raise from 10 dollars a barrel only years ago to over a hundred dollars now. The corporations that exploit our dependence on oil for energy are doing the manipulating.

But we were talking about giving.

Nature gives to us abundantly, and we have no problem accepting what is offered. We do have some problems with stewardship, with giving of ourselves to Nature. Traditional cultures included taking care of the land and other creatures. They also practiced giving as a routine economic activity. How is it that we have turned away from giving as a delightful and satisfying pastime? Genevieve Vaughan, author of For-Giving: A Feminist Criticism of Exchange analyzes the reasons from a feminist and largely psychosocial perspective in her article Introduction to the Gift Economy.

She sees giving as a distinctly feminine activity, and she may be right that women are culturally more apt to give, to nurture, than men. Our culture of male domination over the female, which creates a view of the sexes as opposed to and even in conflict with each other, seems to be at the bottom of this. This patriarchal bent of society, very much stressed in the Jewish and Christian tradition, seems to have made us men less inclined to consider nurturing or giving.

So what can we do to bring more balance, short of revolutionizing society and turning to matriarchy, which seems to have its own problems? Can we, in an economy that relies on scarcity and exchange as fundamental to its functioning, make a difference at all? Can we nudge the world towards more economic justice by what we ourselves are able to do?

I believe we can...

Continue reading "The Gift Economy - Receiving stimulates giving" »

February 12, 2008

The Peak Oil Deception: Squeezing Energy for Profit

While energy needs are set to grow inexorably for the next decades, production of hydrocarbon fuels is being throttled down to a trickle. The resulting shortage finds us - the consumers of energy - at a distinct disadvantage. We are paying the price for not paying attention.

The Peak Oil scenario was first announced in 1956 by a petroleum geologist - M. King Hubbert - who was at the time working for the Shell Oil company. Hubbert's prediction was that oil production would peak in the US between 1965 and 1970 and that internationally, the peak of production would be reached around the year 2000. Hubbert's peak, as the inexorable winding down of oil production has also been named, is universally recognized as a threatening reality, but is the theory based on actual physical principles?


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North Sea oil rig - Image Minerals UK


There certainly is a shortage of production and transformation, enough to have driven prices above the $100-a-barrel level for crude oil. Those oil price increases have elevated the profits of oil companies to undreamed-of heights. Shell's profit for 2007 is a record 31 billion Dollars, Exxon Mobil "shattered its own record as the world's most profitable publicly traded corporation" with a yearly profit for last year of 40.6 billion Dollars and Shevron, the second largest US oil company saw its yearly profit increase to 18.7 billion Dollars. (LA Times, 2 Feb. 2008)

The German Energy Watch Group tells us in a report released in October 2007, that Peak Oil is here now, that "world oil production has peaked in 2006". Official industry and government data on oil reserves do not support that conclusion, but Energy Watch has made its own estimates to support a result that it has been actively looking for.

Not everyone agrees that we are running out of oil. Peter Jackson, who conducted a study of world oil supplies for Cambridge Energy Research Associates says oil output will continue to rise over the next decade.


Peak Oil artificial?

My argument is that there is no actual physical shortage of hydrocarbons. There is indeed a drop in oil extraction, but it seems that this is more a forced reduction of output, rather than a consequence of having exhausted liquid hydrocarbons as a resource.

Continue reading "The Peak Oil Deception: Squeezing Energy for Profit" »

March 25, 2007

Share the Wealth ... with Socioeconomic Democracy

Imagine.... a world where things are very different from what you see now.

Imagine a world where you could do what you really liked, choosing on the basis of what you are passionate and inspired by and not by what is available or pays more.

Imagine a world where you and I unimpeded by choices dictated only by the need to survive, can truly dedicate our complete energies to the greatest interest(s) we have.


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Nicolò Bellia and Robin - Image: Robin Good


Sounds like utopia? Well, there is a man in Italy who has spent a good part of his adult life imagining and actually working out how this could be done. My friend Robin Good interviewed him and has published some of the highlights on his site, under the title:

Share The Wealth: Utopia Or Opportunity? Antropocracy - An Interview With Nicolò Bellia

Sending the link to some people I know are interested in matters of economy, I received an interesting reply from Robley George, the founder and Director of the Center for the Study of Democratic Societies, who says:

Considering your concern and effort regarding a meaningful democracy and the peaceful resolution of a variety of serious and unnecessary individual, societal and global problems, we believe you may be interested in the subject of our book Socioeconomic Democracy: An Advanced Socioeconomic System. I am therefore sending you a brief description of the book. Following that is a short article describing some of the major aspects of Socioeconomic Democracy.

What is it all about?

Bellia - and before him some other economic thinkers like Silvio Gesell in his "Natural Economic Order" - advocate a change to our economic system. Actually deep changes, that would fairly revolutionize how we provide for ourselves and how we approach economic activity.

The situation is, they say, that much of the value of what we produce ends up with others - by way of taxes, interest, and other mechanisms that syphon off value. The changes they want to see are summed up in

- a guaranteed basic income for all citizens or residents

- a regular (monthly) tax on the entire monetary mass

The tax could be collected by the banks. Imagine - no more tax collectors, no more tax inspections. The money so collected would provide the means to pay that basic income to everyone - but it could also replace most or all of the other taxes.

A guaranteed basic income would allow us to choose more independently what kind of work to do. All of a sudden, it would not matter any more if more and more jobs got lost to automation. Also, some joy might well be unleashed by the fact that not everyone has to either accept a job (they don't like) or get very creative about how to survive.

Robley George approaches the need for changes in economics from a more general perspective. He does not say where the money for such a basic income should come from, or indeed whether we should have one or not. All he proposes is that the question should be up for a democratic vote. And he also proposes that we should look at the possibility of not only providing a minimum but perhaps also limit the maximum of personal wealth. Again, he's only putting this up for a general vote. It would be ourselves to decide.

But see for yourself, an introduction to his book, and a paper explaining the idea of what he proposes - written for a Congress of the U.S. Basic Income Garantee Network ...

Continue reading "Share the Wealth ... with Socioeconomic Democracy" »

September 22, 2006

Free Money 'Replaced Almighty Dollar'

In a recent article, I asked "Will the demise of the US Dollar usher in Free Money?" Voices of the imminent demise of the Dollar have been with us for years, but for now the currency holds on.

So instead of speculating on the timing of the dollar's demise, let's take a look into the (possible) future. Silvano Borruso, the Italian teacher working in Kenya who wrote the "free money" part of the recent article mentioned before, has taken a look into his crystal ball. He sees that the demise of the almighty dollar and especially of the huge bubble of purely financial values it has promoted does not automatically mean the destruction of the real economy of production and exchange.

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Silvio Gesell - Image credit: Cooperative Individualism


If we only heeded the words of Silvio Gesell, German-Argentinian business man, monetary reformer and economic thinker ahead of his time, and if we followed the example of mayor Unterguggenberger of Worgl in pre-WW II Austria, says Borruso, we would be better off for it.

Day-dreaming of times to come, Borruso then outlines how our economy would change were we to introduce "free money". In accordance with existing models of local or regional currencies, free money can be issued by any economic player or group. The money would be interest-free because it is created as a credit, rather than as debt. It would circulate faster than any money we have now because of a special feature called demurrage, which means that hoarding currency would be subject to gradual loss of value. So "free money" would be different from what we have today in that it would no longer serve the "store of value" function. That function, today expressed as monetary savings, would have to move into investments in real values or useful things. Such a change would make our economic universe look quite different.

Anyway, let Silvano tell you how he sees our monetary and economic future...

Continue reading "Free Money 'Replaced Almighty Dollar'" »

More articles:




Will Demise of Dollar Usher in Free Money?
Canadian Class Action Charging Illegal creation of Money: First Anniversary
Economy - Earlier articles
Ripple Pay - Open Source Cashless Payment System
Banks and Money - The Mandrake Mechanism
OLEC: Global Cartel For Labor