This article is a brief, non-technical presentation of a project referred to as Transfinancial Economics, or more simply TFE. It is an evolving concept which is now starting to be seriously accepted by enlightened academics conerned with cutting-edge knowledge.
1. The Basic Concept.
Transfinancial Economics, or TFE, or Non-Taxation Monetary Reform believes that new unearned money can be created to replace direct, and indirect taxation. Thus, future democratic governments would no longer have to raise funds but instead have them created responsibly via a genuine independent public authority known as a Central Treasury Bank. Every finance order from a government is carefully checked, and passed. The important point to understand here is that it makes overspending less likely as there is no existing lump sum of tax money from which to drawn upon. It is simply created in a careful measured way. All this ofcourse has immense social,economic, and political implications.
Apart from central government,(and indeed local government too) non-governmental organisations, or NGOs would also have new unearned money created for them via Grant Generating Banks. Many of them will be partly, or fully funded without the need for fund-raising. This has extraordinary humanitarian implications for various social,economic, and political concerns. Incidently, the Grant Generating Banks would be independent of governments, and transnational corporations.
In TFE there are two Systems. The Human Financial System is what has already been discussed above whilst the Economic Financial System is where money is earned in the normal fashion.
2.Hyperinflation, and Supercomputers.
With the electronic transmission of new unearned money as legal digits of value into our world there is the great possibility of hyperinflation. This, if unchecked can lead to total devaluation of the national currency. In other words,the amount of money would outstrip the production of goods,and services. Thus, the retail prices would shoot up, and those notably existing on a fixed income would find that they can buy less than before.
What is the solution? The answer is the development of a credible programme for supercomputers which could track retail price levels in banks. In the past, there have been attempts to bring about price controls but these proved to be unpopular, and had mixed results. However, in the case of TFE super-flexible pricing would be possible, and this would allow for competitive capitalism as we know it today. This would be “unimaginable” with the controls of the past.
3. Three Basic Electronic Controls Over Inflation.
They are discussed as follows.
a) Super-Flexible Pricing.
An entrepreneur, and his company tries to sell a product, or service to the public. It has to be priced. When this has been agreed upon it has to be registered with a legally accountable centralised, or decentralised independent public authority, and/or a bank. The business concerned then receives retail price confirmation for the product, and/or service, and higher price range levels are given until the ultimate one is reached where it is automatically fined. This appears on a bank statement. However, the higher price range levels allow for Super-Flexible Pricing.
By Law, most products, and services have to be registered. There are those ones which have no obvious value, and can be exempt from the electronic controls over inflation. Anonymous cash transactions would still exist if democratically desired. The reason being is that it makes up a near non-existent portion of the entire money supply, and hence, would have little, or indeed, no affect on inflation.
The introduction of such electronic controls would be be initially unpopular with businesses. At first, they may try, and cheat the supercomputer systems. Yet, they will fail as a graduated system of automatic fines could be temporarily brought in to make sure that retail prices do not rise too quickly. However, such controls would be relaxed when businesses learn to adapt to responsible pricing of registered products,and services but allowing at the same time a high degree of competition.
With TFE such legislation as explained would be a small inconvenience for companies compared with the imposition of Income Tax, and other taxes as these would no longer exist. Thus,their growth, and profits would expand as never before. Moreover, loans could be created interest-free. Civil, and criminal fines of one sort, or another would still exist.
These are specific bank deposit accounts in which saved money is indexed-linked to the inflation levels of an economy. When the monetary supply exceeds the production of goods, and services it is simply saved but does not loose its value. This can be a short, or long-term situation. In other words, the money cannot be spent simply because the resources are not there!! With greater economic growth though more products, and services become available, and thus, more of the saved money can be spent. In TFE such deposit accounts are said to be “in excess”.
This can be summed up with a simple example. If person T buys a registered product, or service which is 10% above the national inflation level this same percentage can be created as new uneared money by the bank. Thus, the purchase for the customer has not been devalued. This is referred to as Inflation Interest, and is an essential feature of the entire economic system.
The above constitutes the basic controls in TFE, but there are other aspects of this subject not discussed here. Indeed, it will ultimately require the aid of experts in economics, finance, and IT to hammer out a credible programme for controlling inflations levels.
3. Some Major Anti-Tax Arguments for TFE.
Here, we list the arguments for Non-Taxation.
i) Everyone has a basic human right to all their earnings, and these should not be compulsorily deducted by any government.
ii) Taxation is no longer necessary in the 2lst century as we now have the technology to control inflations levels. It belongs to the past, and not the future.
iii) It is morally reprehensible for people to fund the mistakes, and abuses of any government in power.
iv) Taxation has been the direct,or indirect cause of many wars, and revolutions.
v) Though it is right for people to earn money, and pay for most things in life they should also be REWARDED by a policy of Non-Taxation. The reason being is that they are the creators of REAL WEALTH (ie. products, and services). Without that money as a medium of exchange would be worthless if such resources did not exist.
4. The Question of Redistribution.
In TFE there is no redistribution of existing wealth. Instead, there is the massive creation via electronic transmission of new unearned money. Through the programmes and reforms of democratic governments, and NGOs such funds could finance old, and new ways of poverty alleviation, and fairer distribution of financial wealth as never before in human history. To try,and achieve this via taxation, and other methods is old hat, and is clearly not working to the fullest degree. The most effective approach is to create new unearned money where,and whenever there is a genuine need. The ultimate aim of all this is for the beneficiaries to become independent, and self-financing in some manner. Thus, new unearned money can lead to greater productivity, and economic growth as never before. The only limits to all this is ofcourse, effective planning, and natural resources.
5. Interest Free Monetary Reform.
Virtually the entire money supply of the world is created by private commercial banks as a loan, or credit. Super-normal profit is created by the interest paid on it by customer. Governments though create coins, and paper money as something which is spent debt-free into society. Banks create the rest of it “out of thin air” through what is technically called fractional reserve banking. Thus, the money exists on paper, and computer as an electronic transmission of digits which ofcourse have legal force.
Some people believe that it is possible to create money as loans without interest. This would have great benefits for society, and the economy. Yet, it is very limited compared with TFE, or Non-Taxation Monetary Reform the social,economic, and political implications of which would be totally remarkable. As such, Interest-Free Monetary Reform should be unified with TFE, and this would arguably ensure its success.
6. Green Transfinancial Economics.
Green, or Sustainable Economics makes the vital point that there is a finite amount of natural resources on the planet. At present, they are being used up at an unprecedented rate by humanitys greed notably in the rich countries. Ideally, everyone should radically reduce their consumer wants, and live in small self-organizing communities which would respect nature, and the earth. Such a development though is clearly not going to happen fast enough to “save the planet” from total resource scarcity. The only way forward is the creation en masse of various forms of complex, and simple sustainable technologies at record speed. With TFE this can happen with the massive influx of new unearned money as business grants/interest free loans, and the financial empowerment of relevant NGOs. A new, and advanced understanding of money is absolutely crucial if we are serious about a sustainable (but high growth) economy as it is the POWER WHICH CONTROLS THE USE, AND ABUSE OF LIMITED RESOURCES.
7. The Third World, and the Transnational Corporations, or TNCs.
This in itself is a complex subject. With the financial empowerment of Third World charities, or NGOs many many lives could be dramatically improved, and many deaths avoided altogether. An “indirect” factor in all this are the transnational corporations, or TNCs who have ripped off poor workers, and destroyed much of the natural enivironment in the name of profit. Those NGOs concerned with corporate responsibility (or the lack of it!) would at long last be able to challenge their power on a fair playing field as never before. With financial empowerment in TFE they would have a variety of business, and non-business tactics to make them more ethical, and ecologically more friendly as never before.
8. A Final Comment.
What has been presented here on Transfinancial Economics, or Non-Taxation Monetary Reform is only the tip of the iceberg. In the right hands, it will work wonders. Furthermore, it could prove to be very popular with people in general as it has all sorts of of social,ecnomic, and political benefits. Interestingly, the basic concept of Non-Taxation is not totally new but what is presented here is its most advanced expression.
Lastly, Humanity Politics which is associated with TFE is also in the process of research, and development.