Dofuss3000
Golden Member
Money
© Paul Cooijmans 2004
Introduction
The essential flaw in current economy is that money has itself become subject of trade. In other words, the existence of interest. The phenomenon of "making money with money", without actual productivity. There is nothing wrong with trade, so long as you don't trade in money itself.
The obvious solution is to abolish interest and related phenomena, and restore money as a means of buying goods and labour, saving and as a unit for calculation and expressing values. Various aspects of this solution are discussed below.
Money itself
Money should be as concrete as possible to avoid emptiness and artificially inflated economies. Therefore paper money, let alone transferable money, are abolished. Better are coins with the value of the material they are made of. Banks may still exist to keep safe the coins of people, and to do long distance payments. They may charge money for both tasks. They do not pay interest, as interest is abolished.
Lending and borrowing
Lending and borrowing in themselves are allowed, but as interest is abolished no one in his right mind will lend money, unless as a friendly service. People will only buy what they can afford. It is impossible to spend more than one has.
Lotteries
Lotteries are allowed only when arranged so that participants with higher IQs have greater chances of winning. Thus lotteries become a valuable means of redistributing money in the best possible way.
Insurance
Insurance is abolished because it mainly serves to generate money for the insurance companies. The need for insurance is an artificially created need. Most risks in life don't require insurance (note that with the abolishment of insurance prizes will go down that were previously artificially inflated because "insurance pays anyway"), and the one serious risk - medical cost - is better handled by providing free medical care paid from tax money.
Inflation
The measures described in this article guarantee a constant value of money. There is no inflation, after an initial period needed for prizes to settle. The laws of demand and supply still function.
Growth
Economic growth, in the new system, only occurs insofar it is real and needed; the current pressure for ever more growth for the sake of growth disappears. The reason so many people now want growth is that they thrive on the money that emanates as a side-effect of growth in the form of dividend, interest and the like. They need growth for its side-effects, not because growth itself is required in society. They need growth because investors and speculators make money in a growing market only.
Shares
Owning and trading in shares are allowed, but shareholders remain personally responsible for the (bankrupt) company's debts and there is no dividend.
Tax
Tax is paid over money made through work, trade, enterprise etcetera. The guiding principle is that the greater the value of the work in question for society (as judged by the government), the lower the tax percentage will be. The tax percentage does not depend on the amount of money made. The latter is currently the case in many countries, but counter-productive as it discourages good work.
Work
Payment is based on one's output (productivity, result) rather than time spent on the job.
Income Differences
Differences in income and wealth will result from natural differences in ability and achievement and reflect those. These differences will be smaller than those in current capitalism, where differences in income and wealth are artificially inflated by the phenomenon of "making money with money". In current capitalism, those who possess money can easily make more money without any actual creative output, via interest, dividend, insurance and so on. The abolishment of "making money with money" will lead to more natural differences in wealth, based on ability and achievement.
© Paul Cooijmans 2004
Introduction
The essential flaw in current economy is that money has itself become subject of trade. In other words, the existence of interest. The phenomenon of "making money with money", without actual productivity. There is nothing wrong with trade, so long as you don't trade in money itself.
The obvious solution is to abolish interest and related phenomena, and restore money as a means of buying goods and labour, saving and as a unit for calculation and expressing values. Various aspects of this solution are discussed below.
Money itself
Money should be as concrete as possible to avoid emptiness and artificially inflated economies. Therefore paper money, let alone transferable money, are abolished. Better are coins with the value of the material they are made of. Banks may still exist to keep safe the coins of people, and to do long distance payments. They may charge money for both tasks. They do not pay interest, as interest is abolished.
Lending and borrowing
Lending and borrowing in themselves are allowed, but as interest is abolished no one in his right mind will lend money, unless as a friendly service. People will only buy what they can afford. It is impossible to spend more than one has.
Lotteries
Lotteries are allowed only when arranged so that participants with higher IQs have greater chances of winning. Thus lotteries become a valuable means of redistributing money in the best possible way.
Insurance
Insurance is abolished because it mainly serves to generate money for the insurance companies. The need for insurance is an artificially created need. Most risks in life don't require insurance (note that with the abolishment of insurance prizes will go down that were previously artificially inflated because "insurance pays anyway"), and the one serious risk - medical cost - is better handled by providing free medical care paid from tax money.
Inflation
The measures described in this article guarantee a constant value of money. There is no inflation, after an initial period needed for prizes to settle. The laws of demand and supply still function.
Growth
Economic growth, in the new system, only occurs insofar it is real and needed; the current pressure for ever more growth for the sake of growth disappears. The reason so many people now want growth is that they thrive on the money that emanates as a side-effect of growth in the form of dividend, interest and the like. They need growth for its side-effects, not because growth itself is required in society. They need growth because investors and speculators make money in a growing market only.
Shares
Owning and trading in shares are allowed, but shareholders remain personally responsible for the (bankrupt) company's debts and there is no dividend.
Tax
Tax is paid over money made through work, trade, enterprise etcetera. The guiding principle is that the greater the value of the work in question for society (as judged by the government), the lower the tax percentage will be. The tax percentage does not depend on the amount of money made. The latter is currently the case in many countries, but counter-productive as it discourages good work.
Work
Payment is based on one's output (productivity, result) rather than time spent on the job.
Income Differences
Differences in income and wealth will result from natural differences in ability and achievement and reflect those. These differences will be smaller than those in current capitalism, where differences in income and wealth are artificially inflated by the phenomenon of "making money with money". In current capitalism, those who possess money can easily make more money without any actual creative output, via interest, dividend, insurance and so on. The abolishment of "making money with money" will lead to more natural differences in wealth, based on ability and achievement.
