Transfinancial Economics
Transfinancial Economics,or TFE is a concept for economic and financial reform developed by Robert Searle.
An Introductory Note.
At the time of writing this entry (April 2008)the existing kheper essay, or "paper" on TFE has not been updated due to a problem with the webmaster. This may change soon. I (ie Robert Searle) include the old link, and also a new one which gives the most up-to-date presentation on TFE, and may, or may not appear on the kheper website.
URL = http://kheper.net/essays/Transfinancial_Economics.html
The following link takes one to my email post found on the Global Justice Movement.net discussion group. The presentation found there should be seen as the most authorative introduction to TFE.
Introduction to Tax, and Interest Free Monetary Reform
This is a brief non-technical introduction to a "new" futuristic monetary reform. It is called Transfinancial Economics or TFE, or Non-Taxation Monetary Reform. It revolves around the concept that apart from earned money new non-repayable (ie.unearned) capital can be responsibly created without taxation for democratic governments,or indeed, fundraising by NGOs in many cases. This is a "revolution" in our understanding of money and the world. In the right hands, this concept could be one of the greatest breakthroughs of the 21st century and beyond.
There is arguably more than enough earned money to change the world. But, the problem lies with LEGAL ACESS to it. With TFE new non-repayable money can be created whenever, and wherever there is genuine need for democratic governments, and NGOs.The only limits to success in such matters is effective planning, and relevant resources.
In normal circumstances, the creation of new non-repayable money in a measured way would lead to hyper-inflation. However,advanced computer technology and programming could be used to deal with this effectively, and directly.
It is important to understand that Price Controls, and Price Ceilings are largely avoided especially the former. In TFE prices can self-adjust as much as naturally as possible, and this is vital within the present capitalist system. There are a number of electronic methods which could be used to control inflation levels.
i) Automatic Inflation Adjustment.
This is when the inflated portion of a product, or service is subjected to an instant inflation check at the point of sale, or later on at the bank. If whatever has been bought happens to be inflated to say 10% this amount is instantly created electronically into a subsidy which goes straight into the account of the customer. Thus, income, and nominal prices rise at the same time. This avoids devaluation.
ii) Automatic Inflation Deduction.
This is when the inflated portion of a product, or service is subject to an instant inflation check in which it is instantly reduced to its real value. In other words, the "inflated portion" is destroyed. This can be seen by some as a "tax" but it is not because money in real terms (ie.non-inflated) retains its purchasing power as if nothing had happened to it at all.
iii) Instant Electronic Subsidization Strategies.
If parts of the economy has persistent price rises this may disturb public confidence in the monetary system. It is then beholden by banks, and/or democratic governments to set up a programme of price subsidization created electronically ofcourse out of new non-repayable money. This could in part pay for the inflated portion of the market price of a product, or service,(upto a "flexible" Price Ceiling) and the rest is paid for by the customer with earned money. Another strategy is if prices go up their subsidies are progressively reduced to zero. Other similiar electronic strategies could be developed, and used.
iv) Controlled Hyperinflation.
This should be avoided ofcourse. This is when businesses deal amongst themselve in "hyperinflated" pricing. However, as soon as it enters the bank computers the money is reinterpreted into its real values rather than its "astronomical" nominal equivalent. The same is true with the retail pricing of services, and products. Businesses have to understand that this is just "a change of digits" in which the purchasing power is preserved without serious currency devaluation.
As indicated in the above we are essentially dealing with non-cash transactions. Cash itself may be phased out altogether, and other forms of anonymous transaction could be created.
There are many aspects to do with electronic inflation controls which we will not deal with here. Yet, the key points have been made, and what has been said is open to further research, and development by economists, and computer experts.
Many radical monetary reformers are interested in banks. These commercial enterprises create most of the money of the world out of thin air as a loan, or credit with interest ofcourse. Cash produced by governments only make a near non-existant portion of the present financial system. The aim of the monetary reformers in question is to try, and bring about interest-free money which would be beneficial to society, and the economy. Obviously, this is unlikely to happen because of the power of the banks.
In TFE this problem can be solved. Banks could continue to lend at interest but this would not be paid for by the customer but rather by an independent public body. However, when other highly profitable forms of business emerge then these can replace the creation of interest free credit, and only non-repayable money could be created at a small operational cost. Such a situation would also depend on the readiness of humanity to accept a new understanding of money.
= Some Important Implications of Transfinancial Economics, or TFE.
These can be briefly listed:-
1. There would be a huge a process of acceleration towards the research, and possible use of sustainable technologies backed up by interest free loans, and ofcourse grants created out of new non-repayable money.
2. Transnational Corporations especially in the Third World could be transformed into truly ethical, and sustainable businesses with powerful financial incentives for change including profit subsidization on a massive scale.
3. Universal healthcare would be possible irrespective of whether private businesses are involved or not.
4. NGOs concerned with poverty reduction in the Developed, and Developing World would be better financed as never before to bring about positive reform.
5. NGOs concerned with other social, and economic, and political issues would be better financed as never before. Such situations as this can be regarded as great boons for democracy, and global justice per se.
6. Corporations concerned with oil production, and indeed, the arms trade could be bought up in stages by new non-repayable money. At present democratic governments seem powerless to do much about them but with TFE we have a very powerful solution.
The above represent some of the major things which could be achieved in the world today.
Internet Resources
The subject of Non-Taxation Monetary Reform, or Transfinancial Economics is a rare and virtually unexplored area of human endeavour. However, there are at least three key internet resources that deals with it in some way.
They are:-
i) www.TIEA.us.
This is run by a prolific elderly emailer John Gelles who has been a lawyer, accountant, teacher and systems analyst. He has some reservation concerning my concept on electronic super-flexible pricing as being acceptable to business. However, there is a very powerful and indeed, highly lucrative means for encouraging compliance over inflation. This is the non-repayable Business Incentive Grant, or BIG which would be created out of new money and lead to greater economic growth.This idea is not mentioned in the article/paper. Gelles is also an avid follower of the economist Abba Lerner.
ii) www.Xat.org.
This is a LETS group which believes in non-taxation, and notably direct democracy. This site in 2004 hosted my two research and development projects of Transfinancial Economics and Multi-Dimensional Science. Due to a rift it no longer does.
iii) www.publicandprivateenterprise.org.
This is the site of John DeSantis but displays little grasp, or knowledge of real world economics. However, he has to be praised for his courage in trying to get people to discuss world change and the need for non-taxation. Also, one other website resource is included here which deals with global justice in general but well worth a visit.
iv) www.globaljusticemovement.net.
This is run by Peter Challen and Rodney Shakespeare who wrote the book The Seven Steps to Justice. Its Discussion Group received the highest record number of emails in August 2004 when I first introduced my concepts on Transfinancial Economics."
All the above is sourced by Robert Searle at http://kheper.net/essays/Transfinancial_Economics.html