Transfinancial Economics
Please note that the shorter, more accurate, and more authorative data on TFE can be found in the discussion section. It would be best for readers to examine this first, and it may shortly replace the old "paper" here. Please note too that corrections, and additions may be necessary.
http://p2pfoundation.net/Talk:Transfinancial_Economics.
However, an attempt to explain TFE in a Nutshell maybe the best port of call before going to the above link.It should be said that there has been a degree of interest in TFE from some economists.In April 2010 it was also a subject discussed at a major scientific conference (the International Conference of Engineering, and Meta-Engineering, Florida, USA)
TFE in a Nutshell
The following maybe helpful for new readers.
Essentially, TFE claims that new monitored non-repayable money could be created electronically by special transparent, and credible funding mechanisms, or Facilitation Banks to fund in full, or in part environmental, and socio-economic projects of high ethical value. This would help to SPEED things up unlike loans.... though interest free ones could also be created electronically when necessary.The aim of all this is also to give powerful financial incentives to businesses that could profit with genuine projects, and more importantly help "save the planet", and its people.
What has been suggested aboveis primary TFE, and the amount of new money created is more limited unlike advanced TFE.To avoid any serious inflation the planning of any large, or small project could if at possible take into account the productive capacity of suppliers. Thus, products, and/or services could be planned beforehand so that there is as far as possible no unexpected demand which might lead to inflationary pressures, and price rises.In other words, we have something akin to an Advanced Market Commitment, or AMC.
With advanced TFE it would be possible to gain a near perfect knowledge of the entire economy. The data via Electronic Transaction Monitoring (or ETM) would be collected 24/7 in "real-time" via the ID codes,and barcodes of products, and services at the point of sale, or later transactions with banks. Such data would not just be useful to the companies (which happens already to a great extent in the developed world) but could be simultaneously transmitted to a resource/inflation agency. It is there that supercomputers could be used to instantly check the Free Market Prices of goods, and services. Due to comprehensive programming price comparisons are made in "real-time", and inflationary pressures would be detected. Such data would be vital to bring about wholesale sea change towards an environmentally sustainable, and socially ethical economy, as more, and more new electronically monitored non-repayable money could be created WITH CONFIDENCE, and without any serious inflation. As we would have a highly accurate understanding of the real economy inflation risks could be accurately assessed via computer simulations of the economy itself. This is revolutionary when fully understood. However, it cannot totally rule out uncertainty within the economy.
Another aspect of all this is taxation itself could be phased out altogether. Moreover, with advanced TFE fuller funding of charitable NGOs would also become possible, and fundraising could ultimately be phased out altogether. However, as with primary TFE productive capacity is still taken into account as far as possible, and with advanced TFE a "clear" picture of it could emerge.
If, at all necessary there would be direct electronic controls to ensure inflation, and currency devaluation can never get out of hand.This would involve an instantaneous intervention with little, or no time-lag...Interest rates, and taxation could be phased out. The direct controls concerned would in the main would probably involve the electronic creation of subsides (ie. new money not earned from taxes at all) at the point of sale, and the cashier may inform the customer of it. In other instances, at the point of transaction, an instant inflation "tax" might be necessary in which the deducted amount could be recreated electronically in the bank account of the customer, and/or the retailer depending on the situation. However, as far as income tax is concerned it is allowed to continue via conventional means for its collection rather than by some form of "instant" electronic deduction.
It is also important to point out that we are not discussing a Soviet style command economy, because the Free Market Price is maintained, and Capitalism in an increasingly more ethical form (due to increasing powerful financial incentives)would still continue until there is "full" automation when money, and wage slavery would no longer exist. Hopefully, a more advanced technological, and more moral human civilization will largely emerge based on improved democracy, universal human rights, and greater fairness.In other words, global justice.....
The following links maybe of interest. Also, TFE can work for, or against the rich. What is presented here is to some extent "pro-capitalist". However, if the global protests are successful this position may have to be reconsidered....... RS October 2011.
It should be said that this is an online "work in progress" project and "inconsistencies" and repetition might appear in the text. However,most, if not virtually all of the presentations of TFE here are consistent, and maybe subject to further research. The following should also be stated
i) The present page has the old TFE "paper"as already indicated (though altered from the original).
ii) The link (below)to an introduction of TFE are three articles collected together to form a whole, and were serialised on the p2pfoundation blog.
iii) As indicated, and should be stressed it would be best to FIRST read the TFE presentation in the Talk Section. This gives a good overview of the whole subject.
http://www.p2pfoundation.net/Introduction_to_Transfinancial_Economics
TFE is very similiar to Social Credit. The following link maybe of interest, and a French version also exists.
http://www.michaeljournal.org/plenty42.htm
TFE is probably the most advanced form of monetary reform. At present though, interest has been growing on the implications of the seeming fact that private unelected banks create new repayable money out of thin air as loans with interest. The amount of capital created is based on a fraction of existing reserves held. This is aptly termed fractional reserve banking....
http://www.positivemoney.org.uk/
However, a minority of "experts" notably Steve Keen suggests that this is not the case, and that such credit creation is fully backed up in the main by loans notably from other banks, or indeed, the Central Bank. But official documents exist which seem to suggest otherwise.In other words, some form of fractional reserve banking may exist.
Also, the kheper site version of TFE is out of date, and may be replaced shortly.
R.Searle...........
The Old TFE "Paper".
TEXT BEING REMOVED, AND COMPLETED SOON.
Basic Summary of TFE
Transfinancial Economics, or TFE believes that taxes, and interest on loans are no longer necessary in the 21st century................
Bonds issued by governments to raise funds would in TFE probably be phased out with compensation to traders in this market. This point is raised again with a little more detail on the section dealing with money markets. Also, taxation, and interest on loans are gradually reduced to Zero from a Debt-Based Economy to a Non-Debt Based one. This ensures a smooth transition. Furthermore,the financial system would not necessarily loose out as will become obvious if we proceed with further basic details about TFE.
Before proceeding further it would be best to point out that though there may appear at present to be an "over-emphasis" in connection with new non-repayable money....repayable interest free money also plays a part especially ofcourse in relation to commercial green/sustainability projects.
New Non-Repayable Money
This is created, and transmitted into the economy to gradually replace taxation of open democratic government, and grants which could partly, or fully fund NGOs, and similiar type organizations. It is like the non-orthodox method known in economics as Quantitative Easing notably used in the Global Financial Crisis(GFC).
Since reformed banks of the future would have a more accurate scientific understanding of the workings of much of the economy they would also be able to responsibly produce enough new electronically measured non-repayable money to ensure that serious inflation cannot occur. The "scientific understanding" just mentioned would be drawn from transactions (eg. utilising barcodes for Electronic Point of Sales,or EPOS in shops, and supermarkets) and other accounting data (using product codes, and other similiar IDs) transmitted ideally on a daily basis by businesses to the inflation departments of banks, or some other company, or alternatively by some government agency, or agencies.
Through specially programmed computers, and probably supercomputers it would be possible to build up an electronic profile of the "entire" economy. This could prove valuable to future economists, businesses, and governments. The prices of products, and services would be instantly compared as the transaction/accounting data is transmitted by business to the banks inflation department.
Specially programmed computer systems would be able to assess the short, medium, and long-term risks of inflation as new non-repayable money is electronically created. This is done through computer simulation in which projected new money is created to see how it affects the existing economic accounting/transaction data. The aim here is to see to what extent it would affect free market prices in future months, or years. Of course, in spite of a highly accurate understanding of the economy there is always the problem of uncertainty. Yet,TFE would be robust, and flexible enough to deal with any future problems.What we have just discussed here is referred to as full TFE.
It could be argued that a more simpler system to the above could be used notably the usuage of capacity checks mentioned shortly. However, full TFE does offer a more advanced approach which would have greater benefit especially in connection with a clearer, and more scientific understanding of the GDP.
Incidentally, what we have been discussing is the registered economy. A small portion of the economy could also be unregistered in which certain products, and services for whatever reasons are "unidentified" in the transaction/accounting process.
Direct price, or inflation controls would largely be unnecessary probably as the degree of "equilibrium", or balance between supply, and demand could on the whole be maintained. Hence,the Free Price System continues to exist.
Of course, as prices gradually rise the value of peoples money could also do likewise. This is undertaken by a so-called national adjustment to inflation which could be achieved "instantaneously", and electronically via the banks computers.Furthermore, if for whatever reasons prices in part, or in most of the economy rise "too quickly" they can be easily slowed down by an electronic inflation "tax" which is activated at, or around the time of a sales transactions. This is known as an Automatic Inflation Deduction, or alternatively, the deducted amount of money could be recreated in the bank accounts during the transaction process. This latter approach would arguably be more acceptable, and would keep excess capital out of general circulation "temporarily". This could be termed an Automatic Inflation Rebate.
Moreover, another method is a subsidy, or subsidies which could be instantly created electronically if absolutely necessary, and if appropriate to deal with any serious price changes.It must be remembered here that new non-repayable money (ie.unearned)is involved.
Again, it should be clearly stated that there is an electronically measured creation of enough new non-repayable money which cannot, and does not lead to serious inflation, or indeed, hyperinflation (eg. the Russian Revolution,the Weimar Republic, the French Revolution, et al). In other words, it does not flood the economy way beyond its rate of growth which is obviously insane.
It is also very interesting to point out here that in cases of hyperinflation there was a mass printing of new money which arguably more easily enters the general circulation of the economy unlike the creation of electronic money undertaken in TFE.
However,limited TFE,(as opposed to full TFE) or creating "enough" money is perfectly possible without any comprehensive electronic inflation monitoring (explained later in with some detail). Evidence does seem to suggest this. Thus, urgently, and dynamically tackling something like global warming/climate change in the Developing World, and indeed, in the Developed World would be a serious possibility. This approach is referred to as Facilitation Finance, or Facilitation Banking. It is like the concept of Advanced Market Commitment.
Moreover, objective capacity checks of relevant suppliers, or companies would be necessary to make certain that there is enough spare capacity (which could be increased if necessary) to ensure that there are no misallocations of resources thus avoiding shortages, and price rises. Via a legal agreement for funding it might be necessary to introduce temporary price controls but this would probably be unlikely. NGOs, green businesses, and possibly governments could work in partnerships in order to see whether a project has been carefully, and effectively planned. They could then apply for grant funding from a special Facilitation Bank which would have legal powers to do this.Also, transmissions of new money should ideally start to phase in the development of electronic inflation monitoring on a national, and international scale.
This concept of newly created non-repayable capital may to some be "socially unacceptable" but so are many of the problems of the world "socially unacceptable". New financial thinking is desperately required to accelerate positive change...
It should be added that the noted financier George Soros has suggested a "novel" usuage of the SDRs (or Special Drawing Rights) These can be seen as form of "new money", or reserve asset created by the International Monetary Fund, or IMF. They could in part be donated as something non-repayable.
Earned Money
This is simply money which is in circulation, or saved in the economy. This is received by business people, and their employees as profits, and/or wages through productive commercial activity, and work. Both new non-repayable capital, and its earned equivalent exist together in the economy.
It is interesting to point out here to that there is a huge amount of non-repayable money already spent into circulation. Here, we are referring to funding given by open democratic governments notably in rich countries such as the EU,and the UK.This, of course, is earned money. But, interest bearing loans which exist in today's economies are created largely out of thin air electronically by banks via the process of fractional reserve banking also more commonly known as credit creation in economics. This is not earned money but is like non-repayable money of TFE except of course it is repayable over a period of time.
Huge donations also exist for NGOs. These can be seen as being non-repayable but obviously they originated as earned money.
What we are trying to say here is that it is clear that if enough new non-repayable money is created it would lead to some inflation but to nothing more serious (ie. hyperinflation). Incidentally, cash could still exist, and as in today's world it would make up a near non-existent portion of the entire money supply. These claims, of course, support what has already been suggested about funding global warming/climate change project.
Four Key Implications of TFE
1. New non-repayable money (partly, or largely monitored electronically, and possibly paid in installments) as commercial grants, or as repayable interest free credit would be able to successfully increase productivity, and prosperity more quickly for businesses in a continuous fashion. The ideal as far as possible is to bring about a high degree of "simultaneous" growth so that supply, and demand are largely in "equilibrium".However, such growth in the economy would in time be largely influenced by the Facilitation Banks concerned with environmental issues. Their powers could also extend to important social ones as well.
Moreover, the boom, and bust cycles would become a thing of the past if advanced electronic inflation management is undertaken properly.
2. Carefully targeted comprehensive financial incentives or schemes where necessary would ensure that businesses become genuinely sustainable, and environmentally friendly. Those projects which are commercially unviable but vital to the world would receive the "right" subsidies, grants, and interest free loans created, of course, out of new non-repayable money. This could in part come from governments, and more often, or not be created electronically by Facilitation Banks. In other words, we would have something akin to a very advanced form of "Neo-Keynesian Economics".But if desired the private sector could play a far greater role as far as this "interventionism" is concerned as already indicated. FBs, and their financial interactions could be ideally monitored electronically by an independent body, or by the Central Bank (to prevent fraud, or indeed,creating too much credit!) could profit by issuing non-repayable finance for mainly "non-viable" projects notably in the environmental arena.
In fact, financial incentives would increase if any company seriously considers a green approach to their business. This would encourage others to follow suit.Going green is already something appreciated by business to some extent but a TFE stimulus package from the private, and public sector would be far more advanced, and comprehensive than anything else seen before in our world. Admittedly, this could lead to some market distortion which is partly deliberate (to notably encourage the vital need for sustainable green growth which is all-important), and could be addressed to a certain extent with the electronic creation, and tra
PS A paper on TFE was actually accepted by a peer reviewed journal. However, due to a dispute with the editor/publisher I withdrew it from publication, and at the time of writing a new version has been sent elsewhere.
Robert Searle is the originator of this "work in progress" project. His email address is dharao4@yahoo.co.uk
Intelligent and const http://thoughtsandvisions-searle88.blogspot.com/2010/08/introduction-to-blogger-robert-searle.html
PLEASE NOTE. Apologies for any errors in the above text if they exist.