#62 What it Means to be Working for Your Own Money

This brief paper is in response to many discussions concerning the relationship between labour and money issuance in this blog's proposal. Briefly restated, the proposal advocates only two ways to issue Valuns; either one works for them, or they are allowed you to issue as an indigent. In either case, the actual number of Valuns will certainly not be unlimited. For the indigent, it will have to represent what the community deems to be a subsistence for themselves and their dependents. Each of those dependents will assuredly be allowed to establish their own accounts, but the details of how this will be allowed would have to be decided by a properly constituted International Valun Exchange Society or IVES.

We proposed that IVES be started two years ago and got no response, so we assume, and the figures support this, that as of this date we have less than 20,000 hits. That means our audience at this point in time is quite small. The motion to establish IVES remains on the table however and when enough interest is shown (e-mail me at venlead2013@aol.com) we will proceed further.

E. C. Riegel's solution was not intended to overturn society, to change work patterns, ethics, habits or efforts, to do anything other than to provide a money solution that absolutely trumps all others. His ideas of money confronts and destroys the presumptions of the “gold bugs.” All one needs to do is turn Gresham's Law upside down and make it say “the least expensive form of money will drive all more expensive forms out of circulation,” and since that is observably true as well as historical fact, it is established as a true normative law that has absolute effect on the subject of money. Paper is certainly cheaper than metal and performs the core function of money, to split barter between two people in a trade, and of course it's much easier to transport than metal.

People who rhapsodize about the intrinsic value of their metal and think it's the only money are lunatics! They never like to admit how frustrated they are by the absolute fact that all the value of their metal in terms of other money is controlled, not by them, but by people in far away cities over whom they have no power whatsoever. Fact is, at the point of this blog's proposed Valun's inception, 11/2/2011, an ounce of gold bought something like 35% more than it does now, while the Valun held onto that purchasing power quite nicely because it was designed to do so based on Riegel's concepts.

We began with a Valun worth $2.16 and it has now reached a fair trade value of $2.94. It can't fall below $2.16 by design. Should the value of gold suddenly become nearly priceless, something we honestly can't imagine happening, as there really is enough gold circulating around, but should it reach a value higher than at Valun inception, a properly constituted IVES makes the decision to raise the inception point of the Valun higher, by design it can never be set lower, and the purchasing power of the Valun is preserved as this would affect all extant Valuns immediately.

But Riegel's critical objection to gold, “we're pretty sure it's worth something, just not sure what it is,” would have to include somewhat objections to all who subscribe to the “Austrians” or the mainstream Libertarianism. To us, that branch of politics is just another of their dialectics. Rothbard, who called himself an “Austrian” in his economics, like calling yourself a Liberal in politics, fancied that only metal was money and we should return to a system that basically bartered metal. Well, this immediately begs the question, “just how much is your money today in other things?” You see, money seen this way is a commodity and of course the more rare it is the better. The better for whom? For them, not for you. You had nothing to do with it and you never will. You were just trying to use their money to trade something, which might have included your labour, for their money, so you could buy something you really wanted or needed in exchange for your work, your time, your attention, your labour.

To the “Austrians” or Libertarians out there: Anyone advocating usury as allowable in any form whatsoever is our intellectual enemy; they do not see the fraud in asking back that which was never created. The “Austrians” extol the practise of the taking of interest on loans and in fact many have written great papers describing the supposed positive connection between rising interest rates and rates of economic growth, as if financing something and expecting more in return doesn't in fact involve the destruction of wealth (because all true wealth must produce an income) and the enrichment of the few who happen to be controlling the means to issue money ... their money, not yours.

Riegel advocated a monetary system that would run in parallel with their system until their system falls. He never advocated overthrowing their system as he knew that it was based on fraud and would sooner or later fall. He was not some social idealist who advocated masses of people being forcibly moved into places they didn't want to go simply so some splendid idealistic society could be created by some group of social engineers who supposedly think better than the rest of us and therefore should be entitled to tell the rest of us what to do and when to do it. Riegel advocated free enterprise not capitalism. Capitalism is basically the earning of income through usury rather than free enterprise which is making your talent or goods you grow or produce available to whoever wants to buy them.

A free enterprise network that ultimately will use the Valun as money would be called the Valun Exchange Network or VEN. There are some scoundrels out there who insist that both the size of the VEN and the number of Valuns issued must somehow be planned and managed or inflation, social inequality, etc. etc. would be the result. People who think anything like this have clearly not read this blog, Riegel's works or understood that money is NOT a commodity and to the extent that it becomes one, that commodity actually interferes with the setting of prices. We abandoned all concepts of money as commodity when we took up this banner to spread the word that such thinking, which includes bitcoin and any similar money substitutes as sold to the public as scarcities, is bound to lead straight back to so called fractional reserve banking, etc. We need something entirely different. It is proposed to run parallel with their money until their money fails and to ultimately succeed their money.

Money is strictly speaking that which accomplishes the splitting of barter perfectly in half so that society does not have to fall back on whole barter to accomplish trade and its benefits. It doesn't have to have any intrinsic value, that's an irrelevant idea, and one the bankers sure love to use to hoodwink the public, when in fact the reasons for money being scarce are built into the present system so that those controlling the issuance of money always win. In fact the opposite of what you have been lied to think is true; the cheaper the money is, the more it circulates and the better it works as money.

What most people really want is money that doesn't inflate, that preserves its purchasing power so that what one bought today or in 20 years will be about the same measured by the same yardstick of value, which is all that money is supposed to be, a strictly accounting mechanism.

What working for your own money means:

Your own money is that which YOU issue, not someone else with a bunch of pretentious degrees or titles, or some bank. YOU yourself have value in a Valun system. What you choose to do, with whose help and under what circumstances may be determined by other outside entities and there's nothing anyone can do about that. Some state sets the laws governing what kind of job someone has and the taxes one has to pay at whatever pay level in their money. Riegel never advocated fiddling with any of that. Riegel understood the universal scarcity of their money. He reasoned that if workers were paid in combinations of dollars (since he was in the United States and that was their money in that country) and Valuns, which were to be recognized within a small but hopefully growing market, the VEN, that more people could find employment.

Briefly stated: each employed A member of a local IE would have a contract between himself and his employer, a B member of the same exchange. The amount of Valuns paid out would be on stipulated paydays. The entire amount of Valuns paid out on the contract would appear as a credit on the books of the B member employer from the A member employee's first day of work on that contract. This is the self financing of labour concept: the employer is always paying the employee with money that the employee issued in the first place. The employee buys his / her own job. But the amount of Valuns the employer pays out must be factored into the employer's production and price points in Valuns. Proper and simple cost accounting determines how much anyone gets paid.

Parallel pay contracts – paid in Valuns only – would usually run from a minimum 6 months up to some maximum number of years. We'd probably like to see contracts for no longer than five years. Most contracts are renewable.

As for taxes, they must be paid entirely in their money which is thus shepherded specifically for that purpose and all other uses where their money is the only option. For all other transactions, members would rely on their Valuns.

It may take a while for their system to fail but eventually, and we think when it does it will happen rather suddenly and take a lot of people by surprise, and then what will they do? Go back to whole barter with nothing but precious metals into the breach? What's the future in trading commodities for other commodities? We think it's a stone age concept that it's time humanity outgrows before it kills us all. No, Riegel's idea was strikingly different; money as the instrument to settle terms of barter, to split it equally between buyer and seller and nothing else. He never concerned himself with how much of his money would be circulating. He knew already that there is never enough money anyway because human needs and aspirations are insatiable.

Riegel was keenly sensitive to the needs of the poor and unemployed. He knew that these people represented the only legitimate source of extra money that would fuel a sustainable economic growth and that ultimately as fewer people were poor, that this money issuance would shrink. This was and is his frank response to state socialism. It was a radical idea but it has far more chance of actually ridding the world of poverty eventually than any other solution. The only question is, if it was always this obvious why haven't they picked up on it and done it yet? The answer to that is all around you.

Riegel called for a kind of insurance to be set up to somehow manage how many new Valuns would be created by the truly indigent. To me, this was quite unnecessary as long as a set of somewhat uniform standards could be developed at the IVES level. These would have to do with a system of one time pegging of the income stream of an indigent, expressed as a contract between the indigent A member and the local independent exchange (IE). We could peg these monthly income streams to any point in the Valun's term since inception and some would perhaps wish to extend theirs back as far as the proposed date of inception – 2 November, 2011 – an easy date to remember.

Being paid in your own money requires others to recognize your money. It's no good to split barter with unless it is recognized. It should be pointed out that already a proposed International Standard Value Unit, Valun, which is designed to function as a unit of Value in a trade, has already proved its superiority to dollars and gold (silver too) in terms of holding its relative value. At inception, (11/2/2011) 1 Valun was $2.16. At the present time a Valun is $2.94 a gain of 78 cents or a 36% gain. Now, like it or not the other feature of money that people like to have is that it holds its value. The proposed Valun holds its value and it cannot fall below $2.16 without calling for a reset upward of its inception based on a higher price for an ounce of gold. We chose an ounce of gold on the close of business on 11/2/2011 (an ounce of silver too) as a reasonable high point in the prices of the precious metals so that the basis for the Valun in terms of purchasing power would always be above that of the precious metals. So the swings from $2.16 to the $2.90 are the result of the fall in the value expressed in dollars (or any other common currency) of the precious metals. In 2015, the precious metals clearly do not buy as much as they did in 2011. The dollar appears strong, but what happens during a Weimar meltdown?

To stave off such a crisis the present machine needs more debt to pay off previous debt to pay off previous debt which ultimately resides in the governments which can never charge people enough in taxes to pay off their debts. There is usually a bond collapse and then a general collapse where no one lends anyone any more money because either they have none or their money has become worthless. So how to get more people to pay into their Ponzi scheme? They go after the rest of the underdeveloped world and get all those people into their clutches. Of course it doesn't matter. None of these people can save them, because they are too small and too local and too indifferent to their system to even want to participate in it. They must somehow know that it's a fraud. Most primitive people are not easily fooled. Of course they are more easily disposed of and that's the real agenda for the “useless eaters” as these people are usually called by the elites who call the rest of us “the masses,” a phrase I wish our colleagues would cease from using.

I suppose at this time it's OK to bring up one of the reasons why I posted Congressman McFadden's testimonies. It had to do with the banker practise of lending of whatever national money, to foreigners. In fact McFadden described instances of lending done, products produced and sold in foreign countries which never saw entry for any reason into the trade of the United States. The practise of lending the national money to foreigners is like using a franchise -in this case the United States of America- as some kind of assurance to business transactions; that banking (usury of course since only the principal is ever created) can be transacted better in those currencies that can be sold to gullible foreigners as more worthy instruments of trade than any other money. I hope most of you see exactly how this fraud works. It's a fraud to base value on something that never sees entry into the national market represented by that money. But it's done routinely every day of the week and it's a scam that everyone puts up with, until they don't. But then what? This proposal is the answer.

What's anything worth -including one's labour? How does one find out? There are many people involved with planning, budgeting, determining how to do what with what, etc. but when it all comes down to it, each multiple is made up of dozens of individual transactions. We cannot say whether a gallon of gasoline will always be 1.25 Valuns. That's $3.68 right now. We cannot say right now how in the scheme of all that which one buys with how many Valuns per month, per week, per day, etc. what the prices for things will become in Valuns. That's strictly up to how the parallel economies develop; the taxes are paid in their money, the value in Valuns.

This totally private system (no governments or public corporations are allowed as members) is basically an accounting system with the only visible representations of Valuns being circulating checks between members. The cash variety we called V Checks. Personal checks would also be devised and would circulate where adequate trust had developed. The V Check format would be registered with IVES and on one side would have a design specific to each independent exchange or IE. The other would be business advertisements of the various members. Each V Check would have an expiration date six months from its date of issue. If a member has an expired V Check they can get a new V Check or deposit it into an account. The number of designs of circulating V Checks would make counterfeiting any of them a waste of time. They would be available in denominations beginning with a 1/2 Valun, 1 Valun, 2 Valuns, 5 Valuns and 10 Valuns. A Valun is nearly $3. Half a Valun nearly $1.50. 5 Valuns is around $15 and 10 Valuns around $30. Smaller change than $1.50 can be paid in their money as well as taxes. The rest is in your money.

If one has a lot of Valuns and wants to earn more they can always buy something for someone who can't afford it and sell it back to him on terms acceptable to you both. That's basic finance. Where usury departs from honest finance concerns the money issuance. The financier in a Valun system must have all the money up front to finance a transaction.

Let's say Mr. Brown wants a refrigerator selling for 100 Valuns (around $300) but he's only got 25 Valuns today. Mr. Green has the 100 Valuns and buys the refrigerator for Mr. Brown and takes his 25 Valuns as a down payment and gives him a simple contract so Mr. Brown can pay Mr. Green off in time instalments. Let's say they amount to Mr. Brown having to pay as much as 200 Valuns for that refrigerator because Mr. Brown wants as much time to pay off the refrigerator as the present use of that refrigerator offers him in making more Valuns through ... I don't know, selling ice cream or something. It doesn't matter whether someone like Mr. Green gets a refrigerator for its market entry and availability at 100 Valuns whilst a Mr. Brown requires the time to pay for it and ends up paying twice the price Mr. Green did for the identical thing. People use their money differently, simple as that and they should require no interference in their honest business transactions. Notice especially in this example that both Mr. Green and Mr. Brown were using Valuns that had already been created elsewhere. There was nothing about financing this transaction that required paying a percentage fee for the use of the money. That would have been usury as nowhere in the transaction can that fee be traced back to money that had already existed.

So how many degrees of speciality might result from financing of various kinds of business? These finance organizations might be quite small, quite local, specialize in some particular service or thing. They could become diverse entities (usually B members of their local exchanges) that would rise and fall as dictated by economics without disturbing the actual transaction clearing mechanisms of the independent exchanges.

Notice in the above example that the whole concept of how much should something cost being determined by some distant planners is rendered irrelevant and ridiculous. Who knows and who cares? Only LOCAL concerns should prevail as they stand the best chance of satisfying a truly diverse development, strengthening each local economy. We recognize that there are economies of scale for all kinds of products and would like to observe the law of perfect product permeability as far as is possible. But we are proposing to operate first and foremost as a parallel monetary system.

Others have asked how objects of any size or kind can be brought into the VEN and sold for Valuns. Well, how about a dozen fresh organic eggs? A Valun seems a little high, perhaps a half Valun would do. Lots of things will find prices like that because that's what money does naturally anyway; people take a few dollars out of their pocket, understand basically what a dollar is buying now and compare that to what a dollar can buy right now in a variety of places for a variety of things and the choices are made based on these comparisons. They are made all the time in a mindless manner that economists waste time chasing the particulars of. None of that matters. Money is a machine to drive commerce. If it is there and cheap enough, and stable enough, it will be used. We propose that our system be from the outset the strongest, sturdiest, most crime resistant money on the planet. It's going to be our money, not theirs. Eventually if they want any of it, they'll have to join us, on our terms. That is the only real road to independence, freedom and liberty and anything else you're hearing now as a way out is usually wrong and probably bunk. If you've already had enough, I look forward to hearing from you.

David Burton

dpbmss@mail.com

[9-18-15: I am confused by your definition of commodity money, and non-commodity money. Can you elaborate more simply for me?
 

Read the rest of this blog, there is more than enough written on here already to explain it, John.

Do you think labor is a commodity?

No and I doubt Riegel would have either. “Human resources” is a department name in any big corporation so obviously they do.

Do you have any plans, if THEIR systems fails before the VEN system gains following?

Personal plans? Those are private. Everyone thinks they know what they'll do when the inevitable comes, but calamities reveal both heroes and cowards alike.

Was the Weimar crisis about inflation? I've been reviewing statements from bankers, and it sounds to me they are more afraid of deflation, and it sounds to me they would very much appreciate IF a Weimar type of crisis would happen, even if such a turn of events appears to be totally unrealistic, at this time. What do you think about that?

Bankers and governments far prefer inflation as that insures more profit more quickly for them and tends to keep business flowing as more people decide to buy something they really want rather than waiting with the expectation that prices will just get higher.  But deflation is a natural result of debt and adding more debt created money eventually brings about a total collapse brought about by governments and institutions of size failing to be able to cover their obligations leading eventually to a general repudiation of all debts large and small. Then you'd see some kind of mad rush back to precious metals whose prices could go stratospheric but only for a short time as there really is enough gold and silver to circulate, but it would mean the doom of over three quarters of the world's population were that to happen and needlessly, all because of money? Will humanity just take it?  I doubt it. So expect some chaos.

Isn't THEIR system, not only in charge of banks, but also in charge of most corporations? Said corporations, are indeed the parties who put together the assets traded in market places that we need, to live, right?

Do you think we can obtain these life essential assets from THEM, for the purpose of running a parallel system to THEIRS?

So, do you believe that the present structure has anything like that kind of monopoly on things yet?  Oh, they'd like it.  Know what mercantilism is John?  Look it up.  Soviet communism was mercantilism on steroids and fuelled by plenty of loaned foreign money at interest (never created) that they had to pay back. But those deals were settled in dirt cheap prices for vast amounts of things like rare earth metals and other materials lacking in other parts of the world. Eurasia was a huge prize for certain banking circles. But they were running two experiments long term (that's like 100 years for a banking establishment) simultaneously. This was revealed by Quigley and Sutton, but known by others. Communism lost because they realized they had to accord the working “masses” some modicum of comfort and freedom to keep production humming along.

Or do you think these life essential assets would need to be put together, from scratch, so to speak, in the VEN system?

 

I really do expect, John, that people around the globe are a lot better prepared to create, grow, supply, etc. anything they truly need, by themselves without any corporate, government or banking help, when the system fails. I have stories from folks in Argentina as well as stories coming in from other parts of the world that confirm this. Believe me, I have more faith in my fellow individual man or woman than I ever did in some behemoth organization whose size had outgrown its scale but had to be kept in business just to pay off the debt they had incurred.]
 

[9-19-15: John, the troll, asks whether I'll publish his further remarks since I have blocked him elsewhere. I'll ask others whether I should bother with John. But let's get a few things straight:

One thing I have counselled people to be aware of on this blog and elsewhere is how easy it is to fall into the habit of ASSUMING things and JEERING others. I have also admonished people of true intention to be on guard against those who jeer them. Any time someone laughs at you, be prepared for violence, as they intended that, but so far don't have the guts to do what they are inclined to do. I have sustained much jeering already from people who should have known better. These are not laughing matters. The ideas on this blog strike right to the heart of much that is wrong in this world and aim at a real solution. I advised to let a jeering person know when you have been jeered; let them know you are aware of their jeering and let them know that further jeering will not be merely accepted or tolerated. The best response is always to walk away from someone who jeers you; NEVER confront them. You have the freedom to leave the person jeering you. It may be one of the few freedoms you have left. In this case, John, someone old enough to be my son or grandson, without the knowledge, understanding or experience that I have, often jeers where he frankly does not know much. Should I wash my hands of John? Perhaps it would serve him better. But the actual practise is to encourage them to do as well as they can even when they can never do well. Their works will show who and what they are. John assumes much concerning me, this blog, etc. none of which happen to be true. I am not a paid agent of anybody. This was begun as an act of love and as a hobby. The resources for posting it here cost me nothing but internet access. I live on a fixed income, am retired (though could go to work doing something else at any time and probably will soon) and am legally blind, though I often see plenty. Occasionally I receive valuable comments from elsewhere from people who do understand exactly what this blog's proposal is all about. Sometimes I post their brief comments or questions. Someone like John, a troll, only wants to disrupt, discourage, destroy and dissolve that which he couldn't possibly control, as he has said of himself mighty things concerning his knowledge of “economics” which this blog soundly uncovers as itself a fraud.]

[9-20-15: Well, that didn't take long, this being a weekend too. I got 13 responses to my specific e-mail request which sustained my decision to block John from further postings here. Perhaps this said it best:

John you call him, I remember his name, if that is really his name. A golf professional has the same name, so you do not know. He is nothing but a young punk. I am probably close to his age and have been following your blog since 2012. People my age are looking for hope because there is not much from anywhere at all right now. We do not need to hear from someone who either does not get the proposal or more likely has his own agenda. He is just the kind what likes to screw things up and laugh. I told you he is just the kind that tries to tear down what he does not like or does not understand. Turn your back on him. We will all like it better if you do.

Bonnie in BC Canada]

#0 How Capitalism Robs the Working Class

Source: How Capitalism Enriches the Working Class

This is a refutation of an article by Tom DiLorenzo, who certainly should know better, and after this we sincerely hope he will know better, because otherwise Tom has contributed mightily to our understanding of certain critical periods in our past and certain important historical personalities who played crucial roles in the events which have led inexorably to our present place in history. The article appeared on September 7, 2015: his article is reproduced here in blue, with our commentary in black:

In the early days of capitalism there was a mass exodus from farm to factory. No one forced the masses to work in factories; they did so because factory work was better and more profitable than the alternative – sixteen hours a day of backbreaking farm labour for less money. Or begging, prostitution, crime, and starvation.

Two points: 1) Tom uses “the masses” instead of “the people.” Shame on you, Tom! “The masses” is what those who consider themselves better call the rest of us, as to them we aren't even people. Stop using their term! 2) What drove “the people” off their farms was the lure of money, their money thank-you Tom, certainly not money that ever would belong to the people as they had nothing to do with issuing it. If you don't happen to think that single bit of irony is important, may I suggest you start reading this blog beginning with the collected works of E. C. Riegel which appear here. We'd also like to point out that keeping people from begging, prostitution, crime and starvation begins and ends with just whose money we're talking about here or anywhere and how it is issued.

As Ludwig von Mises explained in Human Action (p. 615):

The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wages were, they were nonetheless much more than these paupers could earn in any other field open to them. It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchens and the children from their play. These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them in the strict sense of the term, from death by starvation.

Ludwig von Mises certainly never bothered to consider just whose money was being discussed either. When push comes to shove, all “Austrians” consider nothing but precious metals to be money anyway and just who is it that controls those? Yes, the precious metals, all of it, is certainly not your money either, never was and never will be. Gold and silver are just other commodities used to price other commodities. No commodity can possibly be money without its own value contributing to the price in a trade. Who controls the relative market prices of silver and gold? Right, it isn't you or me Tom and we made no agreement as to what that value any of it should be, so it never was and never shall be our money Tom. Precious metals aren't even wealth Tom because nothing is wealth that does not produce an income and no gold or silver (despite centuries of alchemy) can ever reproduce more of itself.

The same can be said of the conditions in some of the poorer countries today. Labour unions that complain about “sweatshops” and “child labour” are not concerned about the well-being of Third-World children. Quite the contrary – they see them as competition for unionized labour and want them all thrown out of work and into the streets. Academics and clergy who assist labour unions in these crusades are viewed by the union bosses as useful idiots.

Well Tom, these are the “useful idiots” of one side of their paradigm or dialectic. Remember an idiot is someone who just doesn't know any better and can learn to not to be an idiot. A moron, on the other hand, is someone who it is impossible to teach, train or inform for any number of usually physical reasons. The “useful idiots” on your side of the dialectic Tom are those who still want to accept that their money is the only real money when it clearly is and has always been the biggest SCAM going throughout all of human history. Sorry to inform you but Rothbard was either a liar or woefully uninformed when he made statements to the effect that gold and silver were chosen naturally as best suited to use as money, when it can be asserted with definite historical certainty that both were FORCED into use by despots and trading associations going right back to ancient Babylon. Indeed the banking interests and the military industrial complex have always been closely associated – please read The Babylonian Woe by David Astle.

As capitalism developed, there was an inexorable increase in wages, thanks mostly to capital investment by entrepreneurs. Increased skill, education and experience on the part of the workers themselves (i.e., human capital development) makes them more valuable to employers by making them more productive and hence increases wages, but this is a slow and very incremental process. Capital investment, on the other hand, is capable of producing much larger leaps of productivity. Think of the productivity of a farm worker who plows a field behind a team of horses, compared to performing the same task on a tractor. He is no more skilled or hard working, yet he is infinitely more productive in terms of acres plowed per day.

This is acknowledged, but we will have to make a distinction between capitalism and finance because they are not necessarily the same thing. Also it matters who does the investing in capital improvements; the entrepreneur is usually a single individual who heads a team of workers or supervises or manages them to do something with a useful outcome to him / her. The number of workers is usually no more than a single person can manage, knowing all of the other people involved. But the characteristics of the investment and the organization itself are affected by just who it is that's doing the investing; if it's people outside the group actually engaged in the business, absentee owners, stockholders, “stakeholders,” etc. then these broad statements have a far different meaning.

When capital investment increases worker productivity, it means more profits for the capitalists who must them compete for the more skilled labour. They must pay them more or risk losing them to other employers – and losing the revenue that they can help generate as well. Under capitalism there is a strong correlation between the growth in labour productivity and the growth in wages.

Except that there is always the diminishing returns to scale to contend with. All globalists and really big manufacturers and those engaged in corporate farming would really like it if there were no end to their productivity, that all of their products could find a market, that all of their products could sell with a price capable in aggregate of covering the actual costs of production, etc. But as corporations get to be “too big to fail,” and since they are all creatures of states and banks, they will stay in operation whether they are actually profitable above a certain level or not, because certain "special people" matter more than “the masses” do Tom.

In addition to being responsible for higher wages, capitalism produces cheaper products, more products, and better quality products, thanks to the never-ending process of competition. The lowering of prices gives workers an even bigger pay boost with which they can purchase the increased array of products and services produced by capitalism, thereby enhancing their standard of living.

Except we're all supposed to accept that these cheaper products or more products are in fact really better quality which in fact they may not be and all because the capitalists (and the states and banks) must be paid back first. How do you know Tom that an entirely different kind of society with entirely different technical structure might have been possible if their money hadn't been the basis of it all? You don't and neither do I. But there are definite reasons to criticize capitalism on terms of actual quality of products rendered for the prices in any money asked for them.

Nothing benefits “the masses” economically more than the growth of capitalism, for capitalists have always understood that the way to become really wealthy is to provide more value at lower prices to the largest possible customer base. Thus, products like cars and refrigerators that were at first the exclusive province of the wealthy soon became available to everyone.

We'd like everybody to notice how the word “wealthy” is always used to connote those with “more stuff” rather than our narrower view that any and all wealth must produce an income or it is not wealth. Here's a way to render this:

Nothing benefits “the poorer people” economically more than the growth of capitalism, for capitalists have always understood that the way to become really rich is to provide more value at lower prices to the largest possible customer base. Thus, products like cars and refrigerators that were at first the exclusive province of the rich soon became available to everyone.

People with a lot of their money are the rich. Anyone with a useful skill that someone is willing to pay for has natural wealth.  You see how common words are twisted.

Productivity growth spurred by capital investment is also responsible for shortening the work week. The only way workers can work less but get paid more is by being more productive, i.e., producing more revenue per hour or week for their employers. Human capital investment plays a role here, but so does capital investment and risk taking by entrepreneurs. Thanks largely to capital investment, the work week in America is about half of what it was at the advent of what economic historians call “the second industrial revolution” that began at the end of the American Civil War (1865). The shorter work week is the result of capitalism, not lobbying by labour unions or federal legislation that only codified what already existed.

We'll accept most of this except to say that the reason labour unions become necessary is simply because the money in question was and never really is the people's in the first place. You have an artificially scare commodity pretending to be money (whether that be of metal or paper, there is NO difference!) and then you have people fight over how much of it they get in order to live their lives. They barter their labour for their life in terms of what that money will buy.

Capitalism is also responsible for the demise of child labour. Young people originally worked in factories (and still do in many parts of the world) out of economic necessity, for the alternatives were crime, prostitution, begging, or starvation. As workers became more productive and better paid, thanks to capitalism, they were able to take their children out of the factories and send them to school. Legislation banning child labour only codified what capitalism had already been hard at work abolishing. Moreover, such legislation was usually inspired by labour unions who wanted to throw young people, who competed with union labour, out of work. This kind of “child labour” legislation was designed to harm children by depriving them and their families of economic opportunities that they so desperately needed (and need).

None of this would even be necessary under a Valun based monetary system. True, there wouldn't be businesses of gargantuan size capable of putting all competition out of business, and destroying wealth in the process. There would be far more variety as true competition would be enhanced under such a system. There would be far more redundancy but any new idea would soon be taken up and used by more and more entrepreneurs / businesspeople. People would enter or leave business for reasons other than a lack of their money. Finance would likewise be decentralized and in almost as many hands as there are workers. Many things would be different and better Tom.

Capitalism has also made the workplace safer. In relatively “dangerous,” strenuous, or dirty jobs, employers must pay a wage premium because relatively few people want such jobs. Economists call this a “compensating difference.” The man who rides on the outside of the garbage truck at daybreak, in the winter, in the northern states, does so because he makes a very good salary – better than any of his alternatives. Profit-seeking capitalists have always understood that they need to pay more to get people to perform risky or dangerous work. Therefore, they have also always understood that there is profit in making the work place safer. A safer workplace requires a lesser compensating difference. Lower wages paid to the workers can mean higher profits for the capitalist. Thus, the American workplace had become safer and safer for generations before the Occupational Safety and Health Administration (OSHA) was established in the 1970s. Indeed, OSHA has often reduced workplace safety with its clumsy and stupid workplace rules enforced by government bureaucrats with no knowledge of the specific work that they are regulating.

We are with you concerning OSHA. In fact we include the following as essentially busybody PARASITE organizations that should not have the right to FORCE anyone to do anything: the FDA, the EPA, the DEA, the USDA, the various state organizations performing similar nannying operations. But we are living under a “beast” system, the current arrangement of states and BANKS, and for the time being we must live with it.

Labour unions, on the other hand, have never benefited anyone but the highly-paid union bosses and some of their members, who have never accounted for more than about one-third of the American labour force (less than ten percent today in the private sector). If unions are successful at raising wages above market rates with strikes, strike threats, shut downs, sabotage, or negative smear campaigns against corporate executives (“corporate campaigning”), the laws of economics dictate that some of their members will lose their jobs – usually those with the least skill, experience, and seniority. Employers will not pay workers more than they can produce in revenue for them and still stay in business. Thus, a new hire who can produce say, $500/week in additional revenue, is not employable if the union “succeeds” in negotiating a $700/week wage. This is the “disemployment effect” of unionism.

Again, this all rests on the foundation of their money not yours or mine Tom, and yes it certainly does matter.

In addition, labour unions in America have long been the main source of anti-capitalist propaganda, and of lobbying for anti-capitalist legislation (corporation income taxes, minimum wage laws, labour regulation, etc.). By weakening capitalism in this way, they weaken the main source of productivity growth and hence the main source of wage increases. The union bosses keep their high-paying jobs by benefiting at best a slim majority of their members, while harming the economic prospects of other union members and especially non-unionized workers, whom they demonize and slander by calling them “rats,” “scabs,” and much worse. Indeed, there is a very long history of violence perpetrated against competing, non-union labour by American labour unions, who are celebrated with their own holiday at the end of every summer.

This is all part of their dialectic Tom, don't you see it? They control the money and the size and composition of the organizations within which employment is offered. But there is something else wrong with Tom's analysis right from the beginning and it is capitalism itself.

Capitalism is basically making money on money. It is supposed to be a private matter else the state would be making money on money through running a command economy and that would be called communism, which does not work -except for bankers who make money no matter what the economic system because the money is theirs no matter what the politics or economic order happens to be. Capitalism is the making of money from the lending of money at interest. It is not just, as Tom would believe or have the rest of us believe, that entrepreneurs are the investors. Oh no. It is potentially anyone out there with a little extra cash that can be an investor in any big state sanctioned potential monopoly enterprise (public corporation) by owning stocks (pieces of the ownership in the business) or bonds (pieces of the debt of the businesses). In fact Tom, and you should have told everyone out there in your article, the principal investors have not been entrepreneurs but bankers. So let's get a few things straight.

All the money anyone knows of is their money Tom, not yours or mine. If it is credit as most of it is, then it was issued by a bank as a loan to a government at interest. The borrowed money was created; issued. It was loaned into existence from nothing, but that isn't actually as important as some make it out to be. The key point is that the money with which to pay the interest was never created, therefore no matter how much money any government spends into an economy this way, there is always a scarcity of money and there will be a natural “musical chairs” phenomenon when it comes to businesses; someone must fail – the system is designed to operate that way. In fact Tom, as economies of scale are allowed to grow in this way, with the higher centralization that seems required to manage them, it isn't just small businesses that must fail but whole countries, like Greece. What are they going to do about it? They'll resort to whatever they possibly can to take the heat off themselves; they'll start a war or threaten one, these attempts will generate floods of refugees who will come from wherever they come from into the advanced and developed places on earth and by their sheer presence shall destroy all that the humblest workers of “the masses” in these once advanced countries have managed to procure within a short time. What of the capitalists Tom? They will continue to live better than anyone else because no matter what they must be paid back their money or they shall use the FORCE of the states they have in their thrall to ensure that they do get paid.  Understood?

The solution is Free Enterprise; smaller businesses (some might be quite large), far more redundant, all truly privately owned and managed -no absentee owners allowed, truly competitive rather than the managed competition we have now, all of it operating best over much smaller areas. This puts an eventual end to all forms of imperialism as that form is no longer economically viable. Since all the labour (or most of it) and all the money creation in a Valun system is “self financed” the individual labourer become his / her only source of true wealth. The limiting factor is how much the end product or service costs and how much of that product can be produced under real economic accounting, not the inconsistent and frankly misleading accounting tricks used today to attempt to show that a business is or may be profitable when it really isn't. Never assume anything Tom. Just because a prospectus says certain things and would have the potential investor believe certain things does not necessarily make it so.

Capitalism, the making of money on money, never benefits anyone but capitalists. Anyone owning real property or doing any real work is usually impoverished by the practise. Free enterprise is the ability to go out and do what one wants to make a living using one's own wealth which always begins and ends with one's natural or acquired talents or skills, that's right one's own labour is his / her real wealth. Free enterprise presupposes that their money is unsuitable for real freedom. E. C. Riegel had the idea how to get out of it, by starting a parallel system. Until such time as your money is actually yours, you are a slave to capitalism and to capitalists. Everyone must start by accepting reality before one can ever have any ideas how to change it. If one accepts certain presuppositions which are not in fact correct, such as that their money can ever become your money, then you'll never get anywhere. Any money you have or have ever had, whether you willingly worked for it or not, is and was never yours. You just had the use of it while you possessed it, that's all.

PS: Persian rugs, the old fashioned kind, not those made by machines today, were made by children because small hands can tie tighter little knots. Most of those children were paid in their money of course and still lived at or near the poverty level else their rugs would cost far too much to sell to outsiders who would in turn contribute more of their money to the Persian (Iranian) economy. As they grew older they were naturally less fit to do rug making and in any case their hands were ruined to do anything else. Most died young ... and poor. Though I like Persian rugs, I have never been able to look at one the same way since knowing how they were really made.

[9-11-15: So since Riegel was a Democrat and you now have clearly indicated you and your proposal are not Capitalism, you must be Socialism, right?

No. Riegel may have been a Democrat, we don't know what his party affiliation was, though from his writings he seems to favour what most mainstream Democrats believe about social issues; after all, he was among the first consumer advocates, etc. But he was in favour of Free Enterprise which cannot automatically be associated with Capitalism.

We have stated elsewhere on this blog that Socialism is essentially hand outs from states given to those whom the system has sidelined, left behind or more importantly driven out of business through dishonest competition – that's right DISHONEST competition. When a going business fails and its income stream to its managers and workers is no more, wealth has been destroyed. Corporate capitalism, as most know it, destroys wealth, it does not create it.

Two points: 1) If you have a state sanctioned enterprise -a “public” corporation- that wants to be or become a monopoly holder of some commodity, good or service and then you have YOUR small business that's competing against it, who do you suppose is going to win in the struggle (pardon the use of this loaded word)? That's right, the state sanctioned business will win, and it will have the support of every BANK you can think of too because banks make more money on their money dealing with a business that's big vs. one that's small.

And 2) Due to the mathematical certainty of the perpetual scarcity of money that comes from having money created through bank loans whilst the interest to pay the loans back is never created, you produce a “musical chairs” economy whereby certain numbers of businesses must go out of business because they can't pay off their debts.

Now in any national or regional economy, who is the biggest debtor in the room? Who is most in debt to BANKS, particularly the CENTRAL BANKS? That's right, it's the governments. All states in the modern world are debt captives of the money power residing in the CENTRAL BANKS and MUST do their bidding accordingly. Bankers are hence “above the law” when it comes to getting what they want, which is the right to continue their puff and squeeze credit cycles and taking of that which didn't belong to them by having their debt slave states FORCE their other debtors into giving up their real assets to pay back their loans.

Meanwhile, politics is just “smoke and mirrors” to hide the real villains in the piece; the bankers and their insistence on USURY, the loaning of money expecting a return in money that was never created and cannot be generated from nothing because that's a banker privilege. Capitalism -the making of money on money- has been sold to the public as necessary, even considered a patriotic duty to defend, to send your sons and daughters to foreign lands to die for. To die for? What is it about capitalism that's worth dying for? So someone who makes money on money without doing any meaningful work can live better than anyone else while others die? Think about it. Why is there Socialism? To keep “the masses” from revolting, pure and simple. Otherwise everyone would do what they needed to do to make a living using what money? Clearly anything coming from a CENTRAL BANK is their money not yours. States need more of their money in taxes, not to pay off the principal debt as some stooges think, oh no. Your taxes go to pay the INTEREST on the debt the government racks up, never the principal which can literally never be paid off. Remember that interest is paid with money that was never created in the first place so all your taxes are a SCAM to keep the bankers happy. Everything that is a real asset that is surrendered in such a system is STOLEN; so we have today a monetary system that we all must live with and under -since they are the true rulers not the figureheads we elect to office; another SCAM since they are selected and then that's the only choice we get- until it is finally discovered by the majority of the people to be fraudulent and then what? Whose money are they expected to run to? Precious metals of course. Who controls those? The same people! Get it? Capitalism and Socialism are two sides of THEIR coin and neither one is a solution to your problems, your children's problems, your grandchildren's problems, etc. Oh, and by the way these same people have always -going back hundreds if not thousands of years- had control over the military industrial complex, so they have more than enough power to FORCE anyone to do as they say, etc. You are all slaves of their system. All the bromides meant to make you think that little you have any part, any say, and control over any of it are ridiculous and outright lies which nevertheless happen to work pretty well. I once upon a time believed them too.

The solution is to set up a parallel system that runs by different rules and uses a different money that is NOT theirs but yours. The more people and businesses that wake up to their true situation, the more that the real future of this world can be decided by the majority of the people rather than a tiny self appointed few. Believe me, when the scales fall from most of the eyes of the people of this world, there will be something different. Doesn't it make sense to start NOW to build something worthwhile for the future? It's long past time to organize and the first step is to set up the proposed International Valun Exchange Society or IVES.

David Burton

dpbmss@mail.com ] 

[9-17-15: Here is a brief conversation between me and someone I'll call Bob. I live within a capitalist system..and without me they wouldn't exist. Marxists & socialists claim that workers are oppressed in capitalist societies. Yet workers in communist societies always try to sneak out into capitalist societies. No one in South Korea is trying to sneak into North Korea. The Berlin Wall was not built to keep West Germans from sneaking into East Germany's collective farms. Cubans in Florida do not steal boats to seek asylum in Cuban collective farms.

Yes, Bob, that is correct, but one is only marginally better than the other and it is all related to their money. Meanwhile anyone living in a Capitalist system is just a free range slave of that system. It's easier and more attractive to the powers that be to run than was Socialism. Neither of them is the correct course for the future and they are both based on the same fraud -usury- and two sides of the same coin -statism.

and yet...i dont feel like a slave...mmmmm guess its a state of mind when ya get down to it....

If you are in any debt or pay taxes then you certainly are a slave. In fact if you do anything against your will because of the fear of FORCE then you are a slave.

taxes & death are the two facts of life....i don't mind taxes long as my government uses them to protect my way of life.......and sadly i have no fear...concern yes but no fear...thats no way to live....

But you ASSUME that your taxes are for something they are not. You do not know what your taxes go for, and nobody does. If they bothered to look they'd discover things like that their taxes are paid back to the Federal Reserve before they are ever given back to the government(s) and why? Because that money goes to pay the INTEREST on money that those governments borrowed from the Fed. The actual "loan" is designed never to be paid off. Why? So THEY can have power over those governments as their debt slaves. Just look around you and see what's happening without anyone's consent. Also having people go around in actual fear is not the best way to get anything out of anyone else. They'd much rather have you feel "free" so they can continue their very long old scam. There's a LOT more to this and yes these ARE genuine conspiracies so anyone saying that I or anyone else are "theorists" is a lying scum! Hope you and yours get it and at least wake up.

I know my taxes go places they shouldn't ..but that's every where around the world......its a given.....but as far as my country goes, its the best place I've been.. I've been to a communist country and witnessed first hand people all dressing the same,all working the fields, all working for the governments elites......all slaves....we are far from slaves...... i dare say if you live in America and consider yourself a slave i would suggest breaking those chains that bind you and find a place that would be more of your liking...you're free to do that.....you're free to do that in this country whereas others places you wouldn't be.....denouncing ones citizenship is just some paper work to do.....

All that is so, and I've been halfway around the world to far worse places too, and certainly want to kiss this ground when I get home, but that does not make this place perfect and it does help them keep us in their slavery.

Then you know where I'm coming from..now just get that slavery thing out of your head and you''ll have more positive things in your life...i cant imagine thinking i was a slave.....live in the state ...of mind.....peace.....

I hope everyone gets the direction this conversation took. This explains better than I could any other way just what we face today. If free range slavery is just a state of mind to most people, then the powers that be can just slowly and surely turn their knobs and have things their way. That slow and steady march - it's called Fabian (cautious) Socialism - is visible around us everywhere as if there is no other possible solution. It was begun over a century ago in England and remains their solution to the problems concerned with governing “the masses.” Nevertheless, the Emperor (and the Empire) has no clothes; it's their money, stupid!]

#61.2: What We Know Now - Q & A

A reader we'll call John writes:

What is intelligence? Why should I think you's (sic) are so intelligent, that some group you's (sic) could negotiate a new city, where everyone gets their wish, to be left alone, and also, the earnings will balance to the costs, in terms of who orders who in the industries formed?

There is no fairyland advocated by this blog.

Do you's (sic) think that can just happen with little thought and planning?

We're not advocating any changes except to more economic redundancy and production to scale at every local level where any planning is done by individual businesspeople who know what needs to be planned and done rather than some state or board of overseers. We are not advocating anything like a social utopia here. We hold a particular distaste for what one of our French friends aptly described as “great useless plans.” All that inevitably fails and when it does many millions of lives are destroyed. Briefly stated, any kind of central planning is doomed to failure. It has been tried again and again and again with the same results. The only reason people like you (kid) fall for the allure of centralized planning as a solution is that YOU expect to be one of the BIGS entitled to a swell life for being so goddamned smart, which you clearly are not!

You's (sic) haven't really shown me compelling proof of your balance sought, but have only marred in your statements, haven't you's (sic)? Why should I trust that is, THE TRUTH? You's (sic) are speculating about the future; do you think it is intelligent to sprinkle in so many claims of TRUTH in a blog that is speculating of the future (sic)?

You're literally so stupid that you wouldn't know TRUTH if you fell over it tomorrow morning before breakfast! I'm only including what you wrote so the rest of us could have a good laugh.

Then there was something from someone we'll call Pete, who wrote,

I literally just last night was discussing with my friend that theory (that Keynes and the “Austrians” are two ends of the same banker preferred and predetermined dialectic), that this is two sides of a coin, but that there are plenty of coins we're not paying attention to.. can you give me an example or two of other forms of economic study that have

1. basis in reality

2. application
3. a substantial number of people who follow it 

First of all, with due respect, Economics is a closed system of indoctrination, not a legitimate science as this blog has more than adequately proved; there is really only one coin when it comes to present world trade and finance affecting all of the present forms of money -including bitcoin; the way of Keynes, which has the majority following, or that of the “Austrians,” which has a growing following, owing mostly to that this is the only other place to go, which has nonetheless enshrined in its ideas, actually taken for granted, the presence of loaning money at interest which in ALL cases is usury.

We apply a rigorous definition of usury on this blog. It apples to any and all requirements to pay a loan of money back with ANY interest. The reason being that the money that is loaned is created with which to pay it back but the interest never is. Business must endure ups and downs and planning does not help especially the bigger any enterprise gets. There are natural limits to scale which are constantly exceeded bringing eventual failure. But the interest must always be paid. Where does it come from since it was never created? This has been and always will be regarded as a fundamental and irreconcilable flaw in the monetary system which directly affects EVERY economy. Ultimately the debt cannot be repaid despite how many people are cheated or despoiled of their property in order to pay it. There are other and better methods of finance that do not require the payment of interest.

Basis in reality – that's a pejorative term, a JEER. Was that your intention? The people who devised bicycles, telephones, airplanes, etc. were likewise jeered as were those scientists who believed that rocks existed in outer space which were capable of falling into the earth. Nevertheless, these things are now widely accepted without any jeering. Jeers, cheap shots, etc. should be noticed and those doing the jeering shunned. In no other way do those with promising ideas move forward. If you honestly wish to know this blog's proposal's basis in reality, read the works of E. C. Riegel included on this site.

The basis of this blog's proposal is its definition of a Value Unit or Valun. This is to be an international standard of measurement similar to a metric unit or older statute measurement of distance. A Valun will always represent the purchasing power expressed as a relationship between an ounce of gold to dollars (or any other recognized currency) at the close of business on a specific date; our proposal is that date be November 2, 2011.

Application? This blog's proposal is an alternative to the present monetary system including finance and banking and would be applicable in any situation requiring money and finance. The role of a local bank branch is changed in a number of respects. We will call them exchanges instead of banks. These proposed Valun exchanges would all be local and PRIVATE (not just anyone off the street would even be allowed entry into these premises) and therefore membership in them is similar to joining a private club. Indeed from the beginning it will be required to have 2 sponsors in order to join). The entire system will run IN PARALLEL with the existing system and serve as the only alternative left when all the rest of the present systems are gone, which inevitably they shall be, though it may take a decade or so. We frankly believe we're close to the end of this cycle. Fool us once, shame on us, fool us again, shame on them.

We're looking for a substantial number of people to recognize the viability of these ideas which is the stated purpose of this blog. We are not offering merely another alternative that operates the same as all the other money, like bitcoin, but something entirely different; money that is NOT a commodity, but pure money, a device used to split barter.

[UPDATE 8/30/15: I was asked to explain precisely why centralized planning inevitably fails. Explaining why is frankly surprisingly simple. Everyone knows that decision making takes place at all levels simultaneously all the time, around the clock. Everyone, everywhere, is making a decision about something. As it turns out, most of those decisions prove to be correct, and usually the difference between the number of correct vs. wrong decisions remains somewhat the same as the level of the decision maker rises. The only problem is that the higher up in the decision making chain one is, any wrong decision affects far more people adversely than a wrong decision taken farther down the chain. That's why all central planning eventually fails; too many bad decisions affecting too many people adversely.

What chain? The chain of command of course. Why should there be any chain of command? In fact most things would work far better without a lengthy chain of command. Everyone knows that micromanagement is no way to go. Yet, conditions regarded as inefficient and counter-productive are allowed to continue, not due to what is done but rather who is doing it. There are special privileges allowed the very rich. The poor, though they may be individually quite talented and -were things a bit different- might be able to earn their living, nevertheless matter for close to nothing to the “special people” and their interests.

Social services as public policy; i. e. All forms or instances of socialism, are and were always intended as a means to keep “the masses” in order so that they wouldn't cause a revolt. If your view of socialism differs, perhaps you're suffering from idealism, in which case you'd best go have a good hard look in the mirror and decide to give it up and see how the world really works, right now. Socialism is a direct means of public control by the state, always was and always will be, because the state pays for it, the beneficiaries do not. Any other quibbles are quite frankly ... irrelevant.

I also would remind all my readers that with regard to the “special people,” I'm not including those who have managed to become moderately comfortable or well to do, I'm speaking of those whose power and fortunes are gargantuan, even when compared with the self made or family millionaires, who are often the leading lights of their local communities. These self made or family inherited people are in fact the real John and Jane Galts, the pillars of society, those without whose efforts, the life the rest of us lead would be far more arduous. These people deserve all the credit they get for what they do. The same cannot be said of the billionaires, the hedge fund managers, those involved in financial or legal plunder, anyone working for some government agency as a front for special interests run either by or for oligarchs.

Honestly made fortunes are usually recognizable and those who make them usually know how to recognize each other in the places where they meet. Most would be able to recognize, and a few have told me, of their run ins with oligarchs, government agents or special interests. They are usually aware of the differences.

Even if one is not in the John or Jane Galt social strata, yet aspires to it, one usually knows better who one is, how well one's business is doing, perhaps has some plans for maintaining it, expanding it or getting out of it. Most independent business people have been entrained to fear competitors and others who are not even in their line of business.

If one looks candidly at the reasons for these fears, they all boil down to money, the fundamental scarcity of it in order to maintain and grow business, etc. The reasons given for this scarcity are patently absurd, deliberately confusing and evasions of the facts, which are, that all money in the present system is created as a loan at interest, but none of the money to pay the interest was ever created. Just where is it expected to come from? There isn't enough. There never was and under this present system never can be enough.

But for the time being we have to live with it, knowing that each year, in order to sustain the growing debt burden -which can never be completely paid back EVER- a certain number of people must go broke or into foreclosure or asset seizure or bail ins, so that the money lenders can get control of those real assets -on the cheap- and reap a great profit if and when they can sell them. And all they had to do was lend the money.

This scarcity of money leads invariably to what we call the “musical chairs” business economy; that is that business failures are the deliberate result of the present monetary system; it's functionally designed to accomplish this, it can't help but do so, there is no way to fix it, it is a terminally destructive machine that has been tried for many thousands of years and carries within it one of the most significant inventions of mankind; money and the inevitable curse of humanity; the lending of money at interest.

How then should anything big be financed? People ask questions like who paves the roads? Let's look at things differently. Let's say one has to pave a stretch of road and it costs $20 million. Who has that kind of money? Well, some people who do really big projects like that might have that much money, but this is a public road and everyone is going to be using it. Typically the locality or state or country takes out a loan of $20 million for the road and gets the road done. This is important to the state or locality as someone, somewhere is collecting taxes from the people and businesses that live on or near the road. The better, more fit the road is, the more business is likely to get done and the more money transacted and more taxes paid. That's the idea anyway. The taxes are supposed to pay the interest on the loan, which could be as much as THREE TIMES $20 million, by the time it's paid off, due simply to compounding of interest, and the time it takes to pay it all back.

We have said before and reiterate that compounding of interest is usury on steroids, one of the most outstanding and popular SCAMS perpetrated on the public by the financial community. But, we'll leave it at that, because everyone must live with this right now.

The usual means of financing a road construction is through various public debt instruments, usually called bonds -sold in large denominations, transferable with an expiration date when they are considered entirely paid off and retired. The bonds are sold through a bank, an “underwriter.” The state collects taxes from the public in its jurisdiction and pays off the bondholders until all the bonds mature. They usually pay a dividend too so people can and do earn their income from collecting dividends on bond holdings.

Under a Valun system, the locality or state would bid the road contract, it would turn out to be, let's see -today a Valun is around $2.93 so $20 million is ... let's make it 6.826 million Valuns. Now we have to ask a serious question: that road is worth 6.826 million Valuns today, but how much more would we expect to be paid by the state or locality authorizing (causing the construction to proceed) if we had to wait to be paid for 3 months, 6 months, a year? You see, if they don't have the cash up front, they have to borrow it. But in a Valun system, the result is that the eventual cost of the road is definitely more to everyone, but there is no interest involved as the payment schedule merely calculates the higher cost of the road over time and all the Valuns involved would have to have already been created somewhere else. The end result would be far cheaper construction costs as usury (especially including compounding of interest) is eliminated. From a purely accounting perspective, any actual costs of any big project would actually reflect the true value of those projects, as what is paid for them is nothing but their actual cost in materials and labour, not that of the loan of money,]

[UPDATE 9/1/15: You just called John stupid. Elsewhere on this blog, you sometimes call people idiots. I understand and agree with you in most cases. Had John read this blog and really tried to get the proposal, he wouldn't be asking some of the leading questions he is. But you might have heard about or seen this:

Trey Gowdy SAVAGES Jonathan Gruber

Notice that Gruber was asked if anyone else at the academic conference he was attending bothered to call him aside and suggest that his remarks were inappropriate and not one of them did. That should tell us something about the professors at MIT and frankly every other college. Just who do these people think they are! I just want you to be more careful. You sometimes have to deal with people like John in this world. If you don't like his line of questioning, maybe it's best to ignore him from now on.  Best,  

Bill in NC

Thanks for sharing this, Bill. I actually believe John is what is commonly termed a troll. I have no idea who he works for or what causes he has committed himself to, but he clearly has not gotten this blog's proposal and he's intent on foisting his own ... pardon the expression, beside the point issues, into the discussions here. I am considering posting more of his drivel here so I can give him, and any like him, the resounding thrashing they deserve. It is one thing to attract the worthy and quite another to fend off troublemakers. John is a disrespectful, “know it all,” pushing his own agenda, who gets off on jeering other people. If he thinks his centrally planned fairyland using just another commodity as money scheme is such a good idea, let him go off somewhere and do his own blog. But he wont get anywhere with that. He's interested in trying to get other people to argue with him. This is an attention getting technique used by a lot of very sick people, and yes I've just called John sick too, because he is. Now onto something different:

Your proposal about labour contracts has many interesting implications. Anyone in the VEN selling their labour has a contact that allows them to create money with which to get paid. They do their work and the money is paid back to them on a pay date. Since the money that buys labour is not from that business, that business runs without considering any cost of labour. This reduces their risk, but what's really interesting is all that any business would need consider is their costs of materials, utilities, taxes, etc. Whatever profit the business earns is over and above the costs of these things -minus labour costs. How does one then determine what any labour costs and where then is the competition for lower wage costs? Also, no matter what it is, what's to prevent people from wanting to work doing something menial and getting paid way more than their labour is worth?

Ben, TX

Let's look at this: the labour contract was the instrument that caused the issuing of the money. The A member only has this right under the proposed system. But the first place the money shows up is in the business account of the business that is the other party to the contract, a B member in the VEN. That business must pay the A member his wages on whatever pay schedule is stated on the contract. At that point the money goes from the B member's account to the A member's account. Since the money still began as an entry on the business's asset side, it must still be figured into everything that business seeks to sell, to the costs of goods sold. Therefore the labour any business contracts is a cost affecting the eventual price of the projected good or service the business offers for sale.

The only difference is that in most usual cases a business must come up with the money, they either have it or must borrow it, while under the VEN rules, all labour is self-financing; money is issued directly through offering to provide labour for it. Each business must still keep costs down, so this does not mean that a business would be willing to hire someone to do something trivial and pay them some exorbitant amount of money, whether that be in Valuns or any other kind of money, as labour costs must still reflect the eventual price of whatever is sold.] 

[UPDATE 9/3/15: Would I be stupid for asking you to explain your view of socialism? You stated rather bluntly, “All forms or instances of socialism, are and were always intended as a means to keep 'the masses' in order so that they wouldn't cause a revolt.” Aren't the proposal's intentions toward the indigent a kind of socialism? Please explain.

Gretta in Switzerland 

Very well. Socialism, of whatever form, presupposes the existence of a state to keep law and order in the societies they profess to govern. Sometimes the people are enlightened enough to demand that any state ruling them protects their lives, liberty and property. One example of socialism has been tried, where the state becomes the owner of the people, their lives and property and relatively speaking the people have no liberty. The result is a reinstatement of serfdom. A serf is a human being that is said to “belong with the land” he lives on. If the landowner were to sell the land, the people living on it would go with the land. That's traditional serfdom and it has been one of the unstated objectives of socialism as a means of political control, because most governments would like to know where all their subjects are all of the time. The bankers behind all governments especially want to know too, as to them people are merely things; chattel (cattle) to be used and abused as the overseers deem fit. 

But what if instead one looks at every human being as someone who has within themselves wealth, of however meagre quantity, determined as skills or talents to do particular things, which could be sold to produce an income? There are two ways to issue money in the proposed system: either one works for it, in which case the money is issued as part of the contract to do work, a simple labour contract, or if one is deemed too poor or disabled to do any work, a stipend, a minimum subsistence, is determined by the local independent exchange (IE) and that indigent A member is allowed to issue so many Valuns each month until their circumstances change or for their lifetime. 

We maintain that any and all instances of “blaming the poor” for this or that economic difficulty, as Ayn Rand and her supporters have attempted to do, are not only dead wrong and irrelevant, but actually would destroy the prospects for anyone else to acquire more money and become rich. There is as we have described it in this blog a difference between being wealthy, which is potentially a universal human condition, and being rich, which means one just has a lot of money. There certainly will be rich people in the Valun system. Rich people can become and sometimes are the pillars of their communities as their riches generate opportunities for everyone else. 

What the proposal does is take the “helping the poor” side of socialism down to the local level, to the level of what someone who is poor requires to carry on a level of life the rest of the community accepts as a subsistence level. For the time being, because that's what people must live on, we would accept the current amounts of money handed out to the indigent by governments as a basis for determining what this subsistence level might be. For instance, if one is getting a grant of $1,500 per month, a parallel amount of Valuns would be allowed to each indigent A member. The number of Valuns would change each month based on the fluctuations in prices of dollars and precious metals so that each and every Valun issued preserves the purchasing power it had at inception, right now at least $2.16 per Valun on 11/2/2011 the proposed inception date. At this time each Valun would represent the current purchasing power of $2.91 and under the proposal the Valun would never fall in value lower than $2.16 ever. It's built that way, something the present system can't claim

It should be clear then that under the proposal, “helping the poor” would no longer be something that can be used as a political issue to gain advantage for this or that politician or political ideology. It would not be something determined “on high” and dictated by any state (or bank) but would be something handled locally by each neighbourhood independent exchange (IE).]

#0 Lea's Story

 

“they took my license fer not bein' able to pay child support because i am disabled 'n they didn't take that into account ---- i have been desperately tryin to get this mistake fixed fer 8 yrs now (4 yrs w/out dr license) ---- i was livin' in my vehicle and traveled to fairs 'n festivals fer my work --- now i am homeless w/ NO income and am supported by taxpayers money.”

I've left these words exactly as she wrote them. There will be more to this story as it is an ongoing saga, one of countless tens of thousands out there because not everyone can or will fit into some cookie cutter system devised by the few at the top to keep the rest of us in line so that they can ... rule over us. This woman is significantly disabled but the “authorities” in her state (OREGON) seem oblivious to this fact and have demanded that she pay up or she's lost her drivers' license, so she can't even go anywhere to get any money to pay them. This is STUPIDITY and must be exposed!

Please send the link to this story far and wide: make it go viral!

Lea's Story Update

[UPDATE 8/30/15: "i met w/ child support DA this wk (w/ my advocate) to discuss makin' a real pmt agreement ----- the only agreement she will offer is the one agreein' to pay any amt fer first 6 mos. and then start full monthly pmts EVERY month ---- after 8 years of tryin' to come up w/ this and all the testin' 'n documentin' she KNOWS i have no way of gettin' that amount of money on a monthly basis ---- so she still holds my driver's license ---"

This is clearly an infamous extortion technique recognized by tens of thousands of people out there who have also been so affected.  Please spread this story widely and if you happen to live in Oregon, please send whatever short letters of complaint to get this STUPID and UNREASONABLE demand removed from this poor elderly woman and have her drivers' license restored so she can at least TRY and make a living!

[9/1/15

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