economics to save our civilisation
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Presentation - This analysis andaccompanying ideas comefrom the Critical Thinkingproject at the Free Universityand build upon the work ofmany different groups andindividuals.TRANSCRIPT
Economics to save our civilisation
Clive Menzies, FCSICISI presentation, 9th April 2013
No Effective Demand
No Growth
London Riots - Summer 2011A foretaste?
Greece, Italy, Portugal, Spain
Global Contagion
US concentration camps built to hold 2,000,000 people
Great Depression in 1930s led to WWII
US unemployment peaked at 21% in mid-1930s
In the US today 47.8 million on food stamps – 15% of population
Cause for optimism
Knowledge is power
Flaws in the economic system were discovered decades ago
Extensive diagnosis completed
Prescriptions based on study of past civilisations
Growing awareness of the issues and solutions
Internet - information
Global communication – people to people
Desire for change
First flaw in the economic systemWrote Progress and Poverty in 1879
Abject poverty accompanies prosperity
Location value is created communally but not shared
Resources are gifts of nature but extracted for private gain
Dispossession from the land has subverted our ability to think clearly - Fred Harrison, The Traumatised Society
Economics - dominated by vested interests 18 year property “boom and bust” cycles In England during 1500s, 100% of the bounty from the
land was used for the public good By the early 19th century, less than 4%
Second flaw in the economic system
Means to Life is conditional on employment
Mythology of full employment
Technology driven explosion in productivity meansfull employment is neither achievable nor desirable
Third flaw in the economic systemInterest on money - usury
Margrit Kennedy shows in her book Interest and Inflation Free Money
Everybody pays interest Interest doesn't treat us equally Interest drives exponential debt
growth Demands exponential economic
growth – unsustainable Discounting our future Interest drives inflation which is
why we demand a “time value” for money
Banks create money from nothing and charge us for using itBank created (debt) money equals 97% of the UK money supply
FromInterest and Inflation Free
Money
West Germany 1982
FromInterest and Inflation Free
Money
West Germany from 1968 to 1989
Economic system demands exponential growth
A = Natural growthC = Exponential growth
The exponential function
Doubling the number of grains on each square takes
18,446,744,073,709,551,615 grains to fill the chessboard
Discounting our future
Discounted cash flow (DCF) is calculated, using interest rates, as the basis for valuing future income, dividends or receipts
A forest is thought worth more as logged timber today than as a thriving forest in the future
Why should money have a “time value”?
Fossil fuels
Food production relies on oil Source of pollution and conflict
Hazardous mining Environmental impact
Exponential function poorly understood – reserve estimates unrealistic and optimistic
Cheating in the economic system
Two billion people in the world suffer from various forms of malnutrition
Land and property owners collect rising rents and capital increases, created by the community and public infrastructure, without working or creating wealth *
Banks create money from nothing and charge us for it *
* Parasitical behaviour
A New EconomyFundamental Principles
Sharing the surplus (free) bounty of land and resources
Interest free money
Citizens income
Solutions
a) Interest Free National Currency (possibly backed by land) – spent into the economy by government to create infrastructure
b) 100% of land rents accumulated for the common good – to fund public services and citizens income
c) Citizens Income for all adults
Independent, democratically accountable Central Monetary Authority
A World without Interest Infrastructure – national currency created to fund development – running costs paid from land and resource rents
Private Enterprise – funded by equity investment, co-operative and mutual models
Housing – security of tenure subject to payment of land rents
Employment and Enterprise alongside a Citizens Income
Abolition of state pension and unemployment benefits – basic standard of living provided by the citizens income
Abolition of income, corporation and employment taxes
Work becomes voluntary – equalising the power balance between employer and employee
Initial proposals
Land backed national currency – land held in common, backing the national currency. Spent into the economy. Rent payable on all land according to location value to fund public services and a basic income for all adults.International trading currency – one (or more) international trading currencies, backed by a basket of commonly traded commodities and resources.Local and community currencies – to foster community activity.Private investment and enterprise by equity participation - sharing both the risks and rewards.Banking - simple utility - record values held and conduct transactions; technology will release valuable talent to work creatively for a better future.
Major obstacles to change
Banking Interests – global power over politics, business, media, economics and public institutions
Exclusive land and resource rights for private accumulation
Means to Life is conditional on employment
Only by thinking differently can we avoid Collapse, and Thrive
Thank you...This analysis and accompanying ideas come from the Critical Thinking project at the Free University and build upon the work of many different groups and individuals. I'm conscious of the enormous debt owed to many for my enlightenment, including the Critical Thinking group, Janos Abel (left), Fred Harrison, Margrit Kennedy, Michael Mainelli and the Occupy movement which has created the opportunity for change.
Contact: [email protected]
SourcesInternetfreecriticalthinking.orgwww.henrygeorge.org/pcontents.htm (Progress and Poverty)freecriticalthinking.org/daily-pickings/323-the-traumatised-societyuserpage.fu-berlin.de/~roehrigw/kennedy/english/ (Interest and Inflation Free Money)positivemoney.orgdouglassocialcredit.com/webofdebt.com
Other booksDebt, the first 5000 years – David GraeberCollapse – Jared DiamondLosses of Nations – edited by Fred HarrisonRicardo's Law – Fred HarrisonThe Shock Doctrine - Naomi KleinVulture's Picnic – Greg Palast
Essential viewingCrossroads: Labor Pains of a New Worldview
20/20 Hindsight: CENSORSHIP on the Frontline