[GJM] TRANSFINANCIAL ECONOMICS, A BRIEF, AND LUCID INTRODUCTION.

[robert searle]

Transfinancial Economics, or TFE is a new paradigm, or
radical concept of immense importance. If offer a more
advanced understanding of money, and how it can
seriously help the world, and its problems such as the
credit crunch, global warming, poverty reduction,and
the like. This exposition is brief,and "simple", as
well as  to the point even though there are certain
other aspects to it which we cannot discuss here.


Central to TFE is that apart from earned money new
unearned non-repayable funding could be created
responsibly. This would not lead to damaging
inflation, and huge currency devaluation as this be
directly controlled by advanced programming of private
bank computers.


1. Legal Access to Financial Power.


There are three key organizations that could gain with
newly created  non-repayable money:-

(i) Democratic Governments:  

These would no longer need to raise taxation for their
social,economic, and political programmes. Instead,
capital could be responsibly created for them by a
special private bank, or genuine independent public
body.

(ii) Local Democratic Governments:

Like the above taxation of a local kind would no
longer be necessary, and new funding would be created
responsibly.

(iii) Grant-Making Bodies: 

These along with certain government agencies could
recieve new non-repayable capital, and decide to
finance NGOs in full, or in part This would ofcourse
mean that charities notably with strong humanitarian
causes would no longer have to rely on fundraising.

The only limitations to the successful use of new
unearned money by democratic governments, and NGOs are
NATURAL ones that is effective planning, and the best
use of limited resources. However, money an ARTIFICIAL
creation would still be earned in the normal fashion.
This constitutes the Economic Financial System whilst
the Human Financial System is what we are discribing
in the main.


2. The New Vision of Capital.

TFE aims to maximize the power of money for the
greatest possible good for humanity. Its moral
foundations for new unearned money are briefly
explained:-


A.Earned, and Unearned Money have Equal Value.


a. All money originates from an unearned source of
creation, and becomes earned in the Economic Financial
System. From an objective  viewpoint, such unearned
funding is just as valuable as its earned counterpart
because it is legal tender.


B.Free Money Already Exists.

b. It is said that nothing is free in this world. This
is not true as free money exists to a limited extent
as prize cash, government grants, charitable
donations, wills leaving money, and so on. It is
important to also realize that so-called "passive"
incomes of the Economic Financial System require
little, or no effort (ie. almost "unearned")on the
behalf of the individual. Examples could notably
include investments in "safe" shares, and property
rents.


C. Gradual Human Evolution from Earned Capital to a
Gift Economy.
 

c. If new non-repayable money can be easily created
then why should it be earned? The answer ofcourse is
that society, and the economy would collapse, and
chaos could ensue. 

TFE represents a TRANSITIONAL, or EVOLUTIONARY PROCESS
in which we need to have the MENTAL MATURITY to
understand the point that earning money is still
essential until the time comes when most forms of work
would become fully automated with advanced technology.
This process is ofcourse happening, and with a new
understanding of capital new kinds of productive
activity notably "leisure-like" pursuits would be
possible either in a profit, and/or non-profit
setting. Ultimately, in some future world money itself
would be abolished, and an advanced Gift Economy would
emerge.


D. "Funny Money" already exists..


d. Critics might well regard the creation of new
non-repayable funding as "funny money". However, it
already exists as banks can create it OUT OF THIN AIR
as electronic data, and make a loan with it. Thus, as
soon as it is produced it is new UNEARNED money. The
key difference though is that it is made repayable as
a loan with interest ofcourse! This can be seen as
"funny money" which has to be paid for by EARNED money
from the customer!


E. Money,or Humanity? The Higher Human Value of
Capital in the World.


e. Most people realize at heart that capital has no
real intrinsic value as it is no longer backed  by
gold. In other words, it is a token acting as a medium
 of exchange, and our collective confidence in it
creates its great power. 

In TFE we are dealing with a form of ethical economics
because capital is seen as having a HIGHER HUMAN
VALUE. This adds another deeper dimension to the
nature, and purpose of money, and one which gives it
far greater power than at present exists. 

In the light of this, it becomes clear that if new
non-repayable money can be created responsibly without
serious inflation it should be seen as something of
great worth, and power  even if it is something
unearned. It means that many social, economic, and
political problems would be sorted more effectively
especially if good planning is put in place by
democratic governments, and NGOs....

It should also be said that there is arguably enough
"earned" money to change the world to a large extent.
The problem is LEGAL ACCESS to it especially in
connection with NGOs.


3.Advanced Computer Programming for the Direct
Super-Flexible Controls over Inflation.


In TFE there is the realization for the need to
develop advanced computer programming to directly
control levels in inflation. It is not our intention
to go into too much  detail as this can be a somewhat
technical subject. 

It must also be stressed that we are not discussing a
command economy but rather a capitalist one in which
there is little government intervention. What follows
is essentially "simplistic", and is only a very
partial presentation on super-flexible electronic
controls over inflation. Anyway, some key points can
be given out.

I. Since money in the main exists as electronic data
transmitted from one bank account to another it can be
tracked, and controlled. 

II. Most products, and services could be subjected to
a mandatory super-flexible price registration (or
indexation)for businesses. With modern technology the
degree of elasticity, and changes in prices would be
possible in ways unimaginable when compared with
incomes policies. This is necessary for  the present
capitalist system.

When a maximun market price, or ceiling  for a
registered product is reached it can go no further and
if there is an attempt to do so the new inflated
portion is automatically deducted (ie."fined"). Such
administration of inflation control could be carried
out by private oommercial banks. A government
organization replacing the tax authority could help
ensure that all goes well.

III. A better approach to II is that only those
manufacturers, importers, and other suppliers
concerned with raw materials could be subjected to a
mandatory price registration. Thus, retail, and to a
certain extent trade prices would be free to rise, and
self-adjust more "naturally". In other words, they
would  not require registration, and moreover, it
would be possible to develop a system in which there
is hardly any "central planning" . 

IV. Anonymous cash transactions would still be
possible, and certain products would be exempt from
mandatory price registration.

V. Though at first businesses  might not like the
introduction of super-flexible inflation controls
(replacing taxation)they would be able expand as never
before because there is NO taxation, and indeed, NO
interest on loans............ 



4. Interest Free Monetary Reform.

There are those who believe in interest free loans to
help humanity, and the economy. Ofcourse, the banks
would naturally enough resist such a move as it would
mean a very serious loss in their super-normal
profits.Yet, there is another approach to this issue.

Banks could continue to create super-normal profits
because the interest on their loans could be created
by an independent public body. The  principal though
would ofcourse be paid off by the customer.

Start-up capital in TFE could be wholly created as a
grant if a business plan is acceptable. To a very
limited extent, this already occurs with earned money.
As soon as the new business becomes self-financing
interest free loans could be taken up. Ultimately
though when the time is "right" for humanity such
capital could be replaced by grants altogether...thus,
abolishing credit.


5. Working with Banks, and Corporations.


It is unlikely that interest free loans could be
introduced with banks just asking for an operating fee
(as opposed to interest ofcourse). In TFE this whole
matter is regarded as being of less importance
compared to the growing need to find the means of
creating, and transmitting new non-repayable money
(ie. grants ofcourse). 

It is probably best to work with banks, and
corporations to bring about a tax, and interest free
economy. It is in their own interest infact, as it
would lead to greater profits, and greater business.
Thus, they can put pressure on the rich governments to
bring about the necessary legislation (after research,
and development trials have been successfully
undertaken for super-flexible  inflation controls by
economists, and computer experts).

It is clear that the rich would get richer but the
poor would also get richer. This is because NGOs, and
democratic governments would have more money to spare
to step up change leading to greater poverty
reduction.

It should be said that it does not matter much whether
the rich get richer because with a growing
(sustainable) economy there will in time be less, and
less in the way of commerical investments that have
either short, or long terms profits. Moreover, certain
NGOs could if necessary seriously  challenge any
monopoly if it was felt they had become too powerful
in certain respects. This is possible with their
greater financial empowerment.

Anyway, there are many aspects to all this which we
shall not enter into here.


6.Some Implications of TFE.

The brief listing below gives us an idea of what
remarkable things could be achieved with this new
vision of capital........


i) Universal healthcare of the highest quality would
be possible irrespective of whether private businesses
are involved, or not.

ii) NGOs that have high ethical issues such as
political ones (eg. human rights abuses in other
countries, or for example transparency in government, 
etc etc) would have far greater public influence in
the world  as they would be better financed as never
before. This is arguably a boon for democracy.

iii) NGOs concerned with poverty reduction notably in
the Developing World would be able to do so much more
at the grassroots level as they would receive in most
cases full financial empowerment.

iv) NGOs (and democratic governments) concerned with
fairer wealth distribution  would receive new
financial empowerment to try, and fullfil their goals.

v) A huge influx of grants, and interest free loans
would be available to ensure that businesses  are
sustainable. To a very limited extent this is
happening in the rich countries using earned money
ofcourse..

v) The behaviour of Transnational Corporations, or
TNCs  would become more ethical as their corporate
strategies would be transformed, or re-developed  by
gargantuan commercial grants (transmitted in
instalments). These would legally "bribe" them into
becoming sustainable, and environmentally friendly
with huge profit subsidization, and other such
incentives. 

Moreover, the Developing World would no longer be
ripped off by the super-rich TNCs as it would be in
their own interest that the domestic economy of the
host nations would be fully developed.It would mean
that though the retail prices would be lower  than
those in the West, and difference in terms of profits
would be made up by subsidization on a huge scale..

vi) A stunning aspect of TFE is that the Oil Industry
could be successfully bought up in stages. Thus,
shareholders could be paid off, and the
super-capitalists at the top of the tree could still
be paid huge profits, and benefit more if they develop
new corporate strategies that could lead to the mass
production of advanced sustainable tecnologies.
Powerful financial incentives could be used to achieve
such goals. 

The same kind of approach similiar to a "friendly"
takeover could be used for the arms industry. They
could be given other business projects of a
sustainable character, and possibly develop large
scale non-lethal weapons if the financial incentives
are great enough. 

vii) Evidence increasingly shows that the economic
costs of Global Warming could prove to be utterly
colossal. Capping carbons emissions by taxes (in TFE
they would be reinterpreted as special civil
charges)is certainly a step in the right direction.
But with a more advanced system of finance much more
could be done to save the planet, and ourselves from
possible disaster,destruction, or even the possible 
extinction of our race. With TFE massive environmental
projects could be successfully financed, and as
indicated in vi) Corporations could be reformed using
powerful financial incentives.

In the light of what has been revealed it becomes
painfully clear that TFE has massive relevance to our
world. It needs to be taken seriously,and we need to
be open-minded enough to understand some of its
implications.

For more info there is an essay on the internet(to be
updated with more ideas, and new research material). 


http://kheper.net/essays/Transfinancial_Economics.html


A paper was written on TFE for a journal of repute,
but it was withdrawn from publication due to a dispute
with the editor. A new one should be sent off soon at
the time of writing (December 2007).

R.Searle.















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