[Index]
Building the future with Natural Money

February 6, 2009 - March 20, 2010

Author: Bart klein Ikink
Introduction



Need for change

The destruction of nature and the depletion of natural resources is by far the most serious challenge humanity is facing. If this challenge is not adequately addressed, billions of humans may die in the course of the 21st century. The website Dieoff.org shows the choices humanity is facing as well as a number of possible solutions. Furthermore humans are not living under natural conditions. Currently society has become complex. Many people live in large cities and work in large organisations where there is little social cohesion. The natural condition for humans is to live in small groups. Because humans live in conditions that are not natural many people suffer of psychological disorders.

However those problems cannot be effectively solved as long as there is usury, which is the charging of interest on money. The economy based on usury has a short term view which has a destructive impact on our living conditions. Because of interest payments an amount of money in the future is valued less than an amount of money in the present. The Natural Economy will be focussed on a longer time horizon so resources will be saved and recycled. Nature will be respected more because our future living conditions will be valued higher. Interest on money is also the main driver behind centralisation. When using Natural Money with local currencies, people will prefer to buy locally produced products so the local economies and communities will be strenghtened. In this way humans will be able to live in conditions that are more natural.

Usury is also one of the main causes of poverty. As long a usury exists, poverty cannot be effectively combated. This does not mean that poverty will disappear when Natural Money is introduced, but the introduction of Natural Money will give more people the opportunity to take their destiny into their own hands. In the Natural Economy there will be constant economic growth at maximum potential without unemployment.

In the Natural Economy less resources are spent on activities that do not contribute to wealth. In this way the economy will become far more efficient and address the needs of people better. The aging population of the West needs care and attention, the quality of education may need improvement and more police may be needed in neighbourhoods that are ruled by gangs and criminals (the no go areas). Currently a large part of the workforce is unemployed or locked up in unproductive jobs in government, management, law, consultancy and financial services. Natural Money can help to restructure the economy in such a way that the workforce can be directed to the needs of society, such as caring for the elderly, education and policing.



Changing the direction

It is rational to plan for the future because a collapse of the financial system may result in a major calamity for Western civilisation. Currently our leaders do not seem to have a complete and realistic plan for the future. First we must set our priorities right. The current situation is critical. The economy is collapsing, food supplies are practically non-existent, nature is being destroyed, our social structures are unraveling and our leaders are clueless.

Politicians and corporate interests block effective solutions. It is important that the resources of humanity are diverted away from wars and weapons, financial activity, unnecessary production and senseless consumption to useful purposes such as preservation of nature, solving social problems, fighting poverty and preventing famine. The introduction of Natural Money will make this possible.

In the long run the Natural Financial System will create far more wealth than the current financial system based on usury. Natural Money may even generate the resources to turn deserts into forests and gardens. However in the short run only survival is important and therefore the following types of measures should be taken to ward of imminent threats:
- measures to safeguard food supplies;
- measures to switch over to sustainable energy supplies;
- measures to prevent an ecological collapse;
- measures to cope with the threat of a disintegrating civilisation.
Food supplies



Introduction

Because of efficiency considerations related to interest charges in the current economic environment, humanity is not thinking long term. Therefore the following problems with our food supply exist:
- there is only food stored to feed humanity for a few months;
- the possibility of bees going extinct poses a real threat of famine and mass starvation;
- our food is not produced in an efficient way;
- our food is not produced in harmony with nature;
- some people have moral objections against hunting;
- the keeping of pets consumes a lot of food resources;
- humans keep animals that hold dangerous diseases.



Only food stored is stored to feed humanity for a few months

Because interest is charged on money only minimal food supplies are stored. In 2007/2008 the stock to consumption ratio went below 20%, which means that less than 20% of the yearly consumption of the most important foods is in stock. Humanity has a food supply stocked for two months of consumption (see figure below).

World food supply
Source: FAO

This poses a serious threat to human survival. If harvests are disappointing, famine is imminent. Because of bees going extinct and climate change, this is a realistic possibility. It makes sense to store food supplies for bad times, just like the Egyptians did after the advice Joseph has given them. If there was a holding tax on money, people would be inclined to store as much food as possible to avoid the tax.



Honeybees are going extinct

Honeybees are going extinct due to the Colony Collapse Disorder (CCD) which annihilates bee colonies rapidly on a massive scale. If honeybees are extinct, humanity will face the threat of a worldwide famine. Possible causes of CCD are:
- the use of pesticides and antibiotics;
- genetically modified crops with pest control characteristics;
- parasites like the Varroa mites and the Israel Acute Paralysis virus;
- climate change;
- monocultures on large areas of land;
- the practice of breeding bee queens and introducing them into a colony;
- bee rentals and migratory beekeeping resulting in environmental change related stress;
- the use of cell phones.

As the situation is very urgent (see also: Prisonplanet.com - Ecological apocalypse: Why are all the bees dying?), we cannot wait for science to come to a definite conclusion regarding the causes of CCD. Therefore the practices that are the most probable causes for bees going extinct must be restrained and possibly stopped. More effort should be put in researching the possible causes of CCD. The use of pesticides is the most probable cause that humans can influence. In Europe different countries have different policies for the use of pesticides and the percentages of bees dying in Europe differ widely per country.



Our food is not produced in an efficient way

There is a threat of a worldwide famine so food production should be as efficient as possible to build food supplies. Inefficient food production methods should be abandoned or restrained until sufficient food supplies are present to ensure the survival of mankind.

The following types of food production are inefficient:
- the production of meat;
- dairy produce;
- the production of crops needing large amounts of irrigation or fertilisers.

To produce 1 kilogram of meat, 7 kilograms of corn are needed. The production of meat is the most inefficient of all, using food supplies that could otherwise be used to feed humans. The animals used in meat production mostly do not have a life that is worthy of an animal. The practice of large scale animal keeping for meat production should be ended. Animals should be kept in harmony with nature, using the land to feed them. In times of food scarcety, meat production should be reduced.

The keeping of cows and goats for producing milk is also very inefficient, using land that could otherwise be used for growing crops. Sometimes the land will not allow the production of crops because of the climate. Those locations are ideal for the keeping of goats and cows. In all other places the keeping of cows and goats for producing milk can better be reduced when there is a threat of famine because milk and cheese are not necessities. Also cows may be a major source of greenhouse gasses (see also: Telegraph - Cow farts collected in plastic tank for global warming study).

Crops needing large amounts of irrigation or fertilisers are also not very efficient. The production of those crops can better be greatly reduced as long as the treat of famine exists. Also the production of wine can better be curtailed on places that could be used for other crops, as long as there is a shortage of food.



Our food is not produced in harmony with nature

Introduction

The following practices in our food production are not in harmony with nature:
- genetic manipulation of crops and animals;
- industrial scale animal keeping;
- the use of pesticides;
- monocultures on large areas of land;
- the use of fertilisers;
- intensive land use degrading the soil;
- industrial fishing methods.


Genetic manipulation of crops and animals

Even though genetic manipulation may have some benefits in specific situations, such as improving food production, it does pose a serious threat to Earth and humanity. Genetic manipulation will lead to uncontrollable plagues or diseases because at some point something will go wrong. Using calculus of probabilities, this is certain if you take a high number of experiments over a long timeframe (see also: Wikipedia - Murphy's law). Also genetically manipulated crops make farmers dependent on corporations and pose a health risk to consumers (see also: Women's Feature Service - Why GM crops are dangerous).

Genetic manipulation is already totally out of control. Scientists are now trying to breed humanimals (humans with animal genes or animals with human genes), making Adolf Hitler's genetic experiments look like child's play (see also: CBS News - Animal-human embryos questioned). The practice of genetic manipulation poses a severe threat to all life on Earth and should therefore be abandoned immediately and completely. All genetically altered crops and animals should be destroyed. The practice of genetical selection is not harmful and can be helpful in avoiding diseases and improving crops.


Factory farming

Keeping animals on an industrial scale is not in harmony with nature. Factory farm animals often are not kept in a situation that resembles their natural habitat. This affects the psyche of most animals in an unfavourable way. Often farm animals are kept in small spaces and are mutilated by castration or the amputation of tails. Some people treat pets in the same way. Birth control by castration and sterilisation can better be done in such a way that animals are not mutilated and can still enjoy the pleasures of life.

Food for factory farm animals often is transported over long distances. Often there is a manure surplus at the site where the factory farms are located. This will degrade the soil at the site where the animal food is produced and poison the ground where the meat is produced. To keep animals in harmony with nature means that the food for the animals is produced locally and the manure is used locally. In this way the manure is fertilising the soil and not poisoning it. Factory farming may also be the main reason for the recent outbreaks of avian flu and swine flu (see also: F. William Engdahl - Flying Pigs, Tamiflu and Factory Farms).


The use of pesticides

The use of pesticides is not in harmony with nature, even though the pesticides used today are not as harmful as the pesticides used in the past. Harmful pesticides and pesticides of which it is not certain whether they are harmful or not, can better not be used any more.


The use of fertilisers

The use of fertilisers is harmful because the application of fertilisers is generally not done in harmony with nature. Fertilisers are introduced because the soil is degraded by factory farming and animal keeping which deprives the soil from nutrients. Because the manure is produced at another location than the soil that produces food crops, manure is often not used as a fertiliser. However the introduction of local Natural Money currencies will automatically solve this problem to a great extent because food will be produced locally where possible.


Monocultures on large areas of land

Monocultures on large areas of land may lead to catastrophic crop failures because parasites and diseases can spread more easily. Also this may harm the bees. Therefore the parcels of land can better be made smaller. If needed, humans should work the land instead of machines. The introduction of local Natural Money currencies will facilitate this because food will be produced locally where possible.

Some 40% of the world's agricultural land is seriously degraded by flooding or poor irrigation, with the rest lost to winds. Farming practices such as ploughing also damage soil, as does repeated planting in fields, which depletes the soil of nutrients (see also: The Guardian - Global food crisis looms as climate change and population growth strip fertile land).


Industrial fishing methods

Industrial fishing methods, such as bottom trawling, destroy sea life. Bottom trawling not only decimates stocks of popular fish, such as sole and plaice, but it also results in a large amount of bycatch, which is thrown back into the sea either dead or dying (see also: Greenpeace - Boulders against bottom trawling). Bottom trawling is also very fuel inefficient. Far more environmental friendly fishing methods do exist.



Hunting

Some people have moral objections against hunting. Hunting is a method of obtaining food that is in harmony with nature if it is done in a sustainable way. Many animals in nature can be eaten by humans. Animals in nature have a better life than animals in a factory farm. If you have no problem with eating meat then you also should have no problem with hunting.



Pets

Meat eating pets like dogs and cats consume a lot of resources because meat is inefficiently produced. Therefore the keeping of dogs and cats can be harmful to other people if there is not enough food. People should consider taking a smaller pet or no pet at all if they want to contribute in a positive way to improving the food situation.



Danger of diseases spreading from animals to humans

Humans keep animals that may hold dangerous diseases. Especially large scale factory farms pose a health risk. As GRAIN, an agricultural organization reports, 'the rise of large-scale factory farms in North America has created the perfect breeding grounds for the emergence and spread of new highly-virulent strains of influenza.' The pig faecal waste product is at the centre of the problem. The GRAIN study notes that, because concentrated animal feeding operations tend to concentrate large numbers of animals close together, they are ideal breeding grounds for toxins and virulent pathogens (see also: www.grain.org - A food system that kills). In 2003 Science magazine warned that swine flu was 'on a new evolutionary 'fast track' due to the increasing size of factory farms and the widespread use of vaccines in these operations.' It's the same story with bird flu, where huge industrial factory farms with tens of thousands of chickens breed toxic waste galore.

Especially the keeping of pigs is not without risk because pigs have much in common with humans. This makes it possible for diseases to spread from pigs to humans more easily than other from animals. Pigs are so much like humans that scientists even consider using pig organs for transplantation into humans (see also: BBC - Pig organs may be safe for humans). However this is not safe at all, as the recent outbreak of swine flue demonstrates. The transplantation of pig organs into humans is even more dangerous than the keeping of pigs. Because pigs and humans have many common characteristics, the keeping of pigs should be considered as a greater health risk than the keeping of other animals.
Energy supplies




Investment choices

There is much debate about whether or not we should focus our resources on alternative energy such as solar power and wind energy. The perceived need for alternative energy is based on the following assumptions that are not proven:
1. the existence of climate change caused by humans burning fossil fuels. Even though there are indications for climate change caused by humans there is no proof for human induced climate change (see also: BBC - What happened to global warming?).
2. fossil fuels are limited in supply and shortages will emerge soon (such as the peak oil theory). Especially oil discoveries are not keeping up with oil consumption and production is supposed to decline in the near future (see also: 321Energy.com - Energy crisis: Turning-point of humanity). On this subject there is also disagreement.

Health care costs per country Scientific evidence suggests that there is climate change caused by humans burning fossil fuels but a number of climate scientists have used unreliable data and exagerated the problem (see also: Times Online - World misled over Himalayan glacier meltdown). Probably a number of scientists have intentionally changed data and removed data that did not fit their assumptions.

Also business interests try to influence the debate by funding research (see also: Guardian - ExxonMobil continuing to fund climate sceptic groups, records show) so the incomes of some climate sceptics are also depending on denying the problem. In this way the scientific research on the subject is not always reliable.

Currently most of the research that suggests that there is climate change caused by humans burning fossil fuels is not seriously challenged. However climate science can prove very little because climate is a very complex field. Therefore science will probably not come up with a definite answer any time soon.

Regarding the truth and falseness of climate change and fossil fuel shortages there are four possible situations:
situation climate change energy shortage
1false false
2false true
3true false
4true true

Only in situation 1 the investments in sustainable energy sources will be a waste of money. In situation 2, 3 and 4 investments in sustainable energy sources are useful. The risk of investing in sustainable energy sources is wasting lots of money but the risk of not investing in sustainable energy sources is mass starvation when climate change or energy shortages take their toll. We cannot wait with making decisions until science finds definitive answers. This may be too late. Therefore it is wise to pursue sustainable energy resources.

The question remains whether governments should promote investments in sustainable energy resources with emission restrictions and government subsidies. Emission restrictions most likely will lead to fraud and only benefit oligarchic interests (see also: Daily Telegraph - Here comes the next bubble – carbon trading ). Government subsidies for sustainable energy developments will most likely benefit the developers of inefficient technologies. The introduction of the Natural Financial System will make investments in sustainable energy sources more attractive without the need for government intervention (see also: Money of the Natural Economic Order - Natural Money promotes sustainable investment choices). Taxing fossil fuels will further stimulate development of alternative energy resources while leaving the choice of which projects to invest in to the markets. Therefore government intervention apart from taxing fossil fuels most likely is not needed.



Storage

Until now, the storage of energy was an important obstacle for introducing alternative energy. The only options available were batteries, fuel cells and water reservoirs. However in the future new technologies may come available to store energy cheaply. The following technologies may come available for use:
- New types of batteries that can charge and discharge energy faster may become available in the future (see also: Battery breakthrough promises phone, car revolution);
- High pressured air probably makes it possible to store alternative energy cheaply. When the energy is created, it can be stored into a high pressure vault until it is needed.



Electric cars

Governments subsidise the use of electric cars and hybrids because it is assumed that electric cars and hybrids are more environmentally friendly. Bureaucrats sometimes focus on greenhouse gas emissions of the car itself and ignore other factors such as the greenhouse gas emissions at the site where the electricity is produced. Because most electricity is generated at coal fired power plants, there may be less reduction in greenhouse gas output by introducing electric cars than most people think.

Introducing electric cars on a large scale will pose serious challenges to the power grid. The power grid is not able to cope with the additional demand for electricity coming from electric cars and massive additional investment in the power grid may be needed. It is therefore wiser to invest in additional renewable energy resources than in electric cars. Also cars powered by high pressured air will probably be more efficient and environmentally friendly than electric cars. Cars powered by high pressured air are also cheaper to produce and may cost only €4,000 ($6,000). If this is true, investments in electric cars and hybrids may turn out to be a waste of money.

As long as most electricity is not produced by renewable energy sources, investing heavily in electric cars is not efficient. The most effective measure to reduce pollution is reducing energy consumption. This can be done in the following ways:
- Reducing the average number of kilometres between the place people live and the place people work.
- Reducing the average number of kilometres between the place products are manufactured and the place products are consumed.
- Reducing the weight of cars by removing unnecessary features.

When Natural Money is introduced, local trade will be strengthened. The economy will reorganise itself in such a way that the average distance between production and consumption and the average distance between living and working will be reduced (see also: Money of the Natural Economic Order - Stimulating local trade). Cars will become more energy efficient when fuel prices are higher. Therefore it may be better to tax fuel than to subsidise electric cars and hybrids.



Biofuels

To produce biofuels, rainforests are burned down. Also land is used for the production of biofuels that could otherwise be used for the production of food supplies. Food prices are rising because of the use of biofuels, leaving the poorest people without food. The production of biofuels can better be abandoned immediately and completely (see also: Earth Policy Institute - Why ethanol production will drive world food prices even higher).

However the cultivation of algae does not have the disadvantages other biofuels have. Many strains of algae grow in sites otherwise uninhabited, from salt-water marshland to deserts. They can grow 20 to 30 times faster than food crops. Algae may also undo the effects of global warming by binding CO2 (see also: India Times - Can algae save the world - again?). The algae probably can also be used to fertilise depleted soils and deserts, restoring nature and farmland.



Nuclear power

Nuclear power does not produce greenhouse gasses that are supposed to contribute to climate change but nuclear power has the following disadvantages:
- the risk of nuclear accidents and radio active contamination of the environment. It is certain that new accidents will happen in the future if the use of nuclear power by fission is continued (see also: Wikipedia - Murphy's law).
- the nuclear waste material that will be dangerous for more than 10,000 years.

The use of nuclear power should be stopped as soon as possible. However, the research into nuclear fusion should continue. Fusion is, overall, a safer process and produces less problematic waste. Any radioactive waste generated through fusion will be small in volume, with radioactive decay occurring over several decades with the possibility of reuse after 100 years, instead of thousands. Like fission, fusion does not emit greenhouse gases and is less harmful to the environment. It is hoped that continued research and development will lead to a usable product in the future.



Saving energy

Because energy supplies are limited until the massive investments in alternative energy will kick in, the use of energy for non essential purposes can better be seriously curbed. Governments may consider raising taxes on fuel and lowering or abolishing taxes on income. This will create a growing incentive to save energy, resulting in:
- people saving energy by traveling less and heating their houses less;
- the closing of energy intensive industries and services that are not essential;
- the use of labour instead of machines;
- the localising of production that can be done efficiently on a small scale;
- the recycling of products instead of buying new.
Handling the threat of a disintegrating civilisation



Introduction
Because there is a serious threat of the disintegration of civilisation (see also: It’s not going to be OK, Chris Hedges, February 2, 2009 and Prisonplanet - Celente predicts revolution, food riots, tax rebellions by 2012), measures should be taken to cope with the consequences of this. The following types of measures should be considered:
- measures to rebuild social structures in disintegrating cities;
- measures to cope with disintegrating states and governments;
- measures to reduce poverty;
- measures to handle migration problems;
- measures to prevent overpopulation.



Handling disintegrating cities

Natural Money can bring the local economy to life, just as it did in Wörgl, Austria in 1933. Local Exchange Trading Systems are already trying to achieve this (see also: Wikipedia - LETS). However the primary goal of LETS is not to provide for a financial system but to help the members of the community. Also LETS is based on trust and LETS systems are mostly practiced on a local scale. Therefore many LETS systems choose a form of free money that is not optimal. Without a government making Natural Money legal tender as Wörgl did during the Great Depression, LETS will not reach its true potential. Therefore a government backed currency at the local level is very important in rebuilding social structures.

Big cities will have a less meaningful economic purpose in the future. Less people can make a living there and cities will start to disintegrate. All kinds of businesses, such as financial services, lawyers, IT services, restaurants and shopping malls will be needed less. Some cities in the US are already disintegrating because sources of income have disappeared. Detroit is an example of this. As a result of this, many people probably will have to relocate to the countryside and find a living there (see also: Daily Telegraph - US cities may have to be bulldozed in order to survive).

To counterbalance this, the economic potential of cities should be maximised. Large scale production that cannot be localised, can better be concentrated in cities. Also the cities can become a source of scrap material for years to come. Many people can be employed in recycling these materials and restoring agricultural land. Social structures in disintegrating cities are very weak compared to those in the countryside. This situation needs special attention. Some good initiatives to achieve this exist (see also: WomensEnews - Schools pave new path for pregnant students and Detroit City of Hope). It is interesting to notice that honeybees do flourish in Detroit City Of Hope so we should examine the situation there to find a solution for CCD.

The relocation of people to the countryside makes the distribution of land and the compensation of land owners an important issue for the future. Much of the land is in the hands of large agricultural corporations. The land should become available to small scale farmers. Markets will realise most of this because in the Natural Economy it will be very difficult to operate a large scale agricultural operation for the following reasons:
- The existence of local currencies will stimulate the local economy. This makes it more difficult to sustain large scale agricultural corporations because food can be produced locally and the preference for the use of local currencies will erode the income base of large scale agricultural corporations;
- Because of the deflation in the Natural Economy, the value of the land tends to decrease in terms of money. This makes financing large scale land purchases with debt risky to the lender;
- Because of the ban on interest charges, there is no allowance for risk and therefore risky operations cannot be financed with debt. Leveraged large scale agricultural corporations will become risky because of the reasons mentioned above. Small local farmers will have the advantage. They can get financing via mortgages because in the case of failure their future income from labour can be used as additional collateral.

The relocation of people to the countryside is not a bad thing because humans are designed to live in small groups. Humans are social animals but there is little social cohesion in cities. Large cities have higher crime rates than the countryside, while people living in cities suffer from all kinds of psychological disorders. Living conditions in cities are unnatural for humans. In The Netherlands the SIRE foundation has built the site Pasopaardig.nl that gives advice on how to handle friendly neigbours. The fact that people need advice on this subject illustrates the unnaturalness of modern living conditions.



The disintegrating state

Introduction

Governments have the tendency to disregard the interest of the people and become a playground for special interests (see also: 321gold.com - The Super Rich are Laughing). Officials spend money on pet projects that have little or no value for the citizens of the state. The cost of the state becomes a burden for the citizens while the wealthy evade taxes and profit from the state via their special interests. The tax base of the US has been eroded in the past by lowering taxes. At the same time spending increased under the assumption that borrowing would pay for the difference. Now the state cannot be funded any more because the economy is contracting and the expenses on social benefits are rising.

Therefore the power of the state should be reduced while some parts of it should be spinned off or dismantled. The following measures can be taken to handle the disintegration of the state:
- The tax system can be simplified and modified in such a way that taxing benefits the economy. Governments should not be allowed to go into debt or to change taxes without consent of the citizens.
- Governments are not protecting their citizens effectively and therefore governments should be reorganised in such a way that citizens are better protected.
- The money spent on social benefits may be reduced because the Natural Economy will lead to full employment. In this way more money can be spent on caring for the aging population.
- In the US health care reform may be needed.
- The pension systems may need to be adapted to the changing demographic situation.
- The military may have to be adapted to the lowering income of the state and may have to be transformed into a force that can effectively defend the country.
- Development aid by governments may have to be stopped. Ending usury will help developing nations to get on their feet. Sending money to governments in developing nations that are often corrupt, does not work. Also international organisations like the United Nations and the World Bank are not effective. Problems are rarely ever solved by bureaucrats or politicians in meetings.


Tax system, money supply and government debt

An effective tax system has a positive influence on society. It should be a simple without much administrative overhead. Many taxes such as sales taxes, income taxes and taxes on profit do not benefit society because they discourage people from being active. Those taxes can better be reduced where possible. The following types of taxes do benefit society and may be the source of income for governments in the future:
- A money tax on Natural Money stimulates the economy. Money tax cannot be evaded by the wealthy;
- An energy tax will encourage people to save energy;
- An inheritance tax will encourage people to become active in society. People inheriting money did not get the money by their own achievement and this will discourage them to become active. Also it doesn't hurt to be taxed when you are dead.

The Natural Economy will grow constantly at maximum potential. Therefore governments do not need to interfere with the economy. Government spending to improve the economy will not be needed. Government income and expenditures will be more predictable in the Natural Economy. It is now feasible that governments only have the capacity to make decisions within the limits of the existing tax regime and tax levels.

Governments should not be allowed to go into debt, to change tax regimes or to alter tax levels without consent of the citizens.

Should a government run out of money, it becomes clear that the elected officials are not capable of running the affairs. Such a situation can best be solved by new elections.

Capital is only of use when it is employed in productive investment. Profiting in the financial system is not productive. It is even destructive for the economy and this type of capital fleeing the country does not harm the economy. The Natural Economy will create a stable financial system with less opportunities to profit at the expense of others. The constant economic growth at maximum potential in the Natural Economy will deter speculative capital and will attract investment capital for the long term.

Social benefits should not be managed by the government because politicians may use social security money for other purposes. Social security trust funds should be independent from the government and have their own tax system based on income taxes. The citizens of the state may elect the officials of the trust funds based on their plans for entitlements and taxes to fund the entitlements. Because there is full employment in the Natural Economy, there is no need to tax employers for social benefits or pensions. Salaries will rise to a higher level when employers are not taxed because employees have a strong bargaining position.


Law

The state is not protecting its citizens effectively. Civil services such as justice, police and defence can better be localised as much as possible. Local governments are more in direct contact with their communities than central governments and therefore can provide better service. The current justice system does not effectively protect citizens from injustice and it also does not always punish criminals having money and the power. Governments may start wars on false pretexts, effectively putting their citizens in harms way to serve the interests of the corporations controlling the government. Governments donate trillions of Euros and US Dollars to banks, effectively stealing this money from their citizens.

Laws were originally intended to protect the citizens of a country. Because of the division of labour, society has become more complex and as a result laws have become more complex. In some cases politicians are bribed by special interests to create laws that serve them instead of the citizens. Legal requirements and the risk of litigation make products and services more expensive. Especially in the US the use of courts and lawyers has gone out of control.

Litigation often benefits lawyers more than the other participants in the lawsuit. The lawyers often keep 30-40% plus costs, making them the main beneficiaries of the the lawsuits. The cost of many products and services is higher than needed, because of legal requirements and the risk of litigation. Healthcare costs in the United States are far higher than in European countries. One of the reasons is that tests are done that doctors know they do not need, but are done because of lawyers advising them.

If we want to make laws more simple, we have to accept that accidents do happen sometimes. We should weigh the risk of accidents happening against the legislation and bureaucracy needed to prevent those accidents. A practical solution to enforce simplification of law, is making transactions in local currencies exempt from many national laws or to treat them as a legal equivalent of neighbours helping each other.

The Natural Economy will arrange many affairs automatically. This will reduce the need for regulation in many areas, especially in the fields of employment, the environment and the financial system. Because there will be full employment in the Natural Economy, there is no need to protect labour from exploitation by employers. Unions can be dissolved because the market price for a job will also be a fair price. This should applies to salaries and entitlements of government employees. Governments do not operate in market conditions and therefore the pay of officials is not guided by the market. This sometimes has lead to outrageous situations (see also: San Francisco Chronicle - Outrage grows over Muni operators' pay).

Crime can better be analysed from a practical point of view. Drug related crime is taking up most of the resources of law enforcement and the prison system. There is essentially no difference between the mechanics behind Prohibition in the United States and the prohibition of drugs. Prohibition will not work because prices will rise and markets keep functioning. If demand for drugs diminishes, there will be less drug related crime. This does not mean that there should be a free supply of all kinds of drugs because many drugs are harmful. It is better to take drug addicts off the street and give them medication (naltrexon) and care.

Because states are not always able to protect their citizens effectively, and states sometimes pose a danger to their own citizens, citizens should have the right to defend themselves and bear arms. Restrictions to prevent accidents with arms from happening are needed, because not everybody is able to handle guns. Especialy children should not be able to get their hands on fire arms. Gun ownership is also promoted by extremists that are preoccupied with violence. This should not be used as an excuse for banning the right to bear arms. Issues regarding gun ownership probably are best decided at the community level. If a community decides to limit gun ownership because they are satisfied with the police force, this should be possible. There are large areas in the world with low levels of violence where the population is best served when gun ownership is restricted. However this should not be decided by the state, but by the people themselves.


Social benefits

National preferences with regard to social security and pensions differ widely but most nations like to assist the poorest by guaranteeing a minimum level of income for the disabled and unemployed, a minimal level of medical assistance for the poorest and a minimal level of pensions. Even though social benefits lead to economic inefficiencies, a minimum level of support is justified on moral grounds.

Social security, medical insurance and pensions can best be managed by special purpose independent institutions that have their own elected officials and taxing system. Those institutions should not be part of the government because politicians may be tempted to use the funds for other purposes. Those institutions should also not be privatised. A profit motive may lead to short term focus and mismanagement because the institutions will be bailed out with taxpayers money if they fail. If people want to have insurance above the minimum level offered by the government, they should turn to the private sector.

Because there will be full employment in the Natural Economy, the need for unemployment benefits will disappear to a great extent. Only people that are not able to work need benefits. The granting of benefits can better be done at the community level and the local community should bear a significant part of the cost. This gives those communities an incentive to employ as many people as possible.

Social benefits must be funded. In many Western European countries income of the government and government agencies such as social security trust funds is around 40-50% of GDP, while in the United States it is significantly lower. Therefore the US government cannot afford to provide the same level of entitlements as a European government can do.

Politicians in the United States made unrealistic promises such as low taxes (Republicans) and a high level of entitlements (Democrats). Estimates for the unfunded obligations of the United States government range from 50 trillion to 120 trillion US Dollars. The US faces difficult choices: taxes must be raised and entitlements must be reduced. Until now foreign countries funded the deficits of the United States because the US Dollar was the world reverve currency. However this situation will not endure.


Health care costs per country Healthcare

Many countries offer basic government healthcare insurance and governments interfere with prices of healthcare and medication. In the United States there is strong resistance to such a solution. This is somewhat odd considering the fact that heathcare costs amount for 15% of GDP in the US and around 9% of GDP in most European countries, while healthcare service in Europe in general is considered to be better than in the US. Government intervention in the economy is unproductive in many cases but not in healthcare.

The United States needs healthcare reform badly because of the poor financial condition the US is in. President Obama was elected on promising health care reform, but he now faces stubborn opposition even within the Democratic Party. Also some media are inflaming sentiments. The stakes are high because reducing spending on healthcare with 40%, while still improving service at the same time, will cut deep into the profits of specific businesses.

The coverage of a basic government healthcare insurance should be minimal. It should only include items people cannot do without if the need arises.


Pensions

Many countries offer basic government pensions that are mostly funded by taxes. However because the population in most Western countries is aging, the funding of those pensions becomes a burden on the finances of the state. It may be a good idea to take the responsibility for basic government pensions away from the state and create independent social security funds with their own taxing system based on income taxes. Pension funds should have their own responsibility because of their long term obligations. They should not be part of government finances because politicians often have a short term view.

Behind the issue of pensions looms a generational conflict. Currently the baby boom generation is starting to retire. The baby boom generation enjoyed a good life and left massive amounts of entitlements and government debt to be paid for by future generations. Government pensions that were affordable when the number of pensioners was low compared to the number of working, are becoming a burden because the number of pensioners compared to the number of working is rising. It is obvious that those pension systems become untenable. The retirement age may need to rise or the level of entitlements may need to be reduced.


Defence

The United States is highly dependent on a high tech army which is very costly to maintain. The United States has military bases all over the world. The expensive military of the United States could be funded because after World War II the US was the dominant economic power and the US Dollar became the world reserve currency. Now the United States is not able to sustain the military any more. A high tech army is also very vulnerable to hackers or moles getting control of high tech systems. If an enemy could get control of essential defence systems, the enemy could the control the military of the United States.

High tech armies have proven to be ineffective against motivated low tech armies of people that defend their home country. Countries like Afghanistan, Iraq and Vietnam are difficult to control by a foreign power. Therefore it is better for the European Union and the United States to be less dependent on high tech solutions and give the citizens a greater role in the defence of their country.

The European Union and the United States may choose to remodel their defences in the way the Byzantine (Eastern Roman) Empire did when the empire lost its rich provinces to the Arabs in the 7th century. Under Constans the structure of the Byzantine army was fundamentally changed to deal with the new circumstances of the empire. As the traditional units, largely familiar from the 5th century, fell back from the collapsing frontiers, they were settled on the land in Anatolia, to be paid directly from local revenues instead of from the treasury, whose tax base from Syria and Egypt had disappeared. The areas set aside for particular units became the themes, which remained the military bedrock the Byzantine Empire until the end of the 11th century and soon replaced the old Roman provinces as the administrative divisions of the empire. Should a conflict arise, the armies of the themes and the small central army of the empire could be assembled to create a large army (see also: Friesian.com - Rome and Romania 27 BC - 1453 AD).

The United States can end its military presence in foreign countries. The defence force of the European Union and the United States defence force can do with the following:
- A small deterrent force of (nuclear) warheads that can destroy an enemy anywhere in the world;
- A small standing army that can be deployed anywhere in the world;
- Local militia defending the states, towns and countryside. They can be organised like the Byzantine themes.

In this way, the cost of the military in the United States can be reduced by around 75%. It also becomes very difficult for an enemy to control the country by getting control of the defence systems. Invading the European Union or the United States will be costly if a large low tech army awaits the enemy everywhere. If the United States and the European Union stop to interfere with other countries, the motivation for terrorists to attack the United States and the European Union will reduce. Getting rid of the military or nuclear arms completely is not feasible as long as there is potential for conflict.



Poverty

Introduction

The main causes of poverty are usury, globalisation, corruption, lack of education and attitudes. The greatest external obstacle to prosperity for developing nations is the usury financial system that sustains globalisation and blocks local development. Globalisation results in a world wide wage competition. Production is moved to the locations where the wages are the lowest.

Corruption can best be reduced by ending government assistance. Giving money to governments in developing nations only sustains the corruption in those nations. Non governmental organisations that are run by volunteers often do a far better job than governments. Governments and government agencies should restrict themselves to sending relief in emergency situations.

Introducing Natural Money and local currencies while reducing corruption by ending government assistance will create a better investment climate in developing nations. The people living there can best be assisted by investments in their local businesses using micro finance. If the investment climate improves, it will become more attractive to invest in micro finance.


Usury

Usury, which is the charging of interest on money, creates a flow of money from the poor to the rich. Before the existence of financial institutions the rich had money to lend and the poor needed money to make a living. Therefore the poor had to pay interest to the rich. In this way the rich became richer because they already were rich and the poor became poorer because they already were poor.

Currently everybody with a loan is paying interest on money that was created by financial institutions. Financial institutions have become very powerful and in recent decades they have amassed far more power because of the deregulation of financial markets.

Ending the usury system and assisting communities to introduce Natural Money currencies is a prerequisite to end poverty. Poverty is partly a systemic problem caused by usury. In a Natural Money economy people may still be poor because of their own choices but poverty will not the result of the mechanics of the financial system.


Globalisation

Globalisation is a very powerful force in creating poverty. Using our current industrialised production methods, less than 5% of the workforce produces all the food and products the people on Earth need. This results in wage competition. Jobs are shipped to the places with the lowest wages. Because of this people in the West could enjoy higher living standards for some time. However the industrial jobs of the West were be shipped to low wage countries so exports decreased while imports increased, which meant that the people in the west had to go further and further into debt to sustain their living standards.

Because money can be transmitted all over the globe in an instant, globalisation leads to a competition of everybody against everybody. If Natural Money local currencies are introduced, this process will be reversed. Those currencies can only be used locally and have a hoarding fee, which results in a surge in local trade. There is no world wilde competition for a local currency. Natural Money local currencies will create stronger communities. Those currencies will stimulate cooperation in stead of competition.

Transactions done in local currencies therefore should not have the full legal status of a business transaction. Those transactions can have the legal status of neighbours helping each other just like the transactions in a LETS system. Current legislation favours large scale centralised production because of the risk of litigation and the large investments that are needed to comply with legislation. The community issuing the currency should determine which regulation applies on transactions in the local currencies. The central government may only set a framework of guidelines and minimal requirements.


Corruption

Corruption is linked to government power and corruption hinders the functioning of markets. Several leaders of developing nations have amassed personal fortunes even as the governments they head have incurred large debts. Because corruption and government power are linked, it is not a good idea that governments are responsible for development aid except for emergency aid. Also it is not a good idea to send development aid to governments. Non governmental organisations that are trustworthy and funded by individuals may help developing nations to manage their own affairs.

Corruption is also existent in Western countries (see also: Naturalmoney.org - Political parties and Naturalmoney.org - US Congress is bought and paid for). The US Dollar based usury financial system is intertwined with the financial oligarchy of the US which has also penetrated US government agencies, the IMF and the World Bank (see also: 321gold.com - G20: US$ Funeral, US Failed Debtor). This corruption increases poverty in the West as well in developing countries.

The IMF and World Bank are used by US security agencies to look after the interests of the financial oligarchy. The security agencies are accused of performing operations that include collusion, kidnapping and murder for the benefit of the United States and its power structure. These espionage accusations are well documented in the book "Confessions of an Economic Hit Man" written by John Perkins (2004). In his book he provides an account of his career that included his hire by an alleged NSA liaison to become a self-described economic hit man.

The issue of corruption is very difficult to tackle because there is a large area of practices that are more or less corrupt but may be needed. Contractors often do business with officials and there is a level of trust between them. Often officials and contractors meet in clubs or restaurants and sometimes gifts are exchanged. It would be more efficient if the level of trust depended solely on the quality of work and not on social issues. However if contracts were distributed in a public tender, price becomes the main determinant which will often will result in inferior jobs done. A solution for this may be the following:
- Small projects should be done by the local community that hires local contractors. Local businesspeople will less likely let their own community down. Should a contractor abuse the trust of the local community, social control can correct the issue. Citizens are expected to actively oversee the affairs of the local community.
- Larger projects should be done in public tenders that comprise the life cycle of the project outcome such as a building. A good product will result in lower maintenance costs so there will be an incentive for contractors to do a good job for the specified price.


Education

Education gives opportunities to people. Science and technology offer solutions for problems and those solutions can only be accessed via education. People lacking the money for their education may remain in poverty and therefore education is one of the main areas in which help can be given. Making information freely available on the internet is a great step in reducing the cost of education.


Attitudes

People make choices based on their culture and upbringing. Those choices impact the wealth of the people making those choices. The following types of attitudes affect wealth:
- Work attitudes: Some people want to work harder to get a higher standard of living than others. In many developing countries people accept a lower standard of living and stop working as soon as they have enough money to live on. This is not bad because living in this way does take less of Earth's resources. However people with an indolent attitude will also accept unfavourable living conditions like corruption and pollution more often and do nothing about it.
- Financial attitudes: People going into debt for unnecessary expenses may find out after some time that they have become poor. In Western economies governments and banks try to lure people into adding more debt to keep the economy going. People in the West have become accustomed to high levels of debt.
- Herd mentality: People that do not think for themselves and follow the advice of others may find out that they have been robbed. The financial industry is full of fraud. The following types of fraud are very common: manipulating stock prices (see also: New York Times Blogs - Did Jim Cramer cross the line?), investment banks advising people to buy stocks they want to sell, pyramid schemes such as the Madoff fraud. Many people lost their savings because of Bernard Madoffs fraud (see also: The Guardian - The victims of Bernard Madoff's fraud). The perceived need for investment advice and investment bankers stems from the instability of financial markets which is caused by usury and credit (see also: Naturalmoney.org - Money of the natural economic order).

People should take more interest in their own affairs and take matters in their own hands because governments cannot bring solutions. Workers should become actively engaged in planning the future of the companies they work for. In the US it is not common for workers to do this. This makes it possible for financial interests to run their lives more than needed.

In Europe workers often try to influence the decision making of their employers. An example of this is the strike at the Dutch auto factory NedCar in Born, The Netherlands in 2006 (see also: European Industrial Relations Observatory On-line - Threatened job losses at NedCar automobile plant). The involvement of the workers resulted in a new car model being produced at NedCar and the continuation of the plant.



Migration

Introduction

Migration may destabilise civilisations because the influx of people from different backgrounds brings problems of adaptation for both the migrants and the inhabitants already living in the country. Migration issues combined with economic uncertainty revive right-wing and nationalist feelings, especially in Europe. Some people are affraid that Western Europe will become Islamic due to demographic factors such as a low birth rate of the existing population and the higher birthrate of Islamic immigrants. However right-wing nationalists do not have real solutions for the situation because the root cause of migration is ignored.

The main cause for migration is poverty and lack of prospects in the home countries of the immigrants. Immigrants often live in a desparate situation. In many cases the families of immigrants have saved all the money they could spare to enable them to go to Europe or the US. Many immigrants die on their way to Europe and still they take the risk. They are strongly motivated not to let their family down. Sending immigrants back or other harsh measures will not bring a solution. If the difference in wealth remains as it is, the EU and the US may become overwhelmed by immigrants.


Root causes

The migration problem has a supply side and a demand side. The supply of migrants is the result of poor living conditions in third world countries. The demand for migrants is the result of economic inefficiencies in the EU and the US. These inefficiencies are the following:
- Inhabitants of rich countries do not want to do dirty jobs for a low pay.
- Rich countries see the need for constant economic growth because of interest payments on debt. To enable economies to grow, additional labour is often needed.
- Because of the existence of interest and credit, economic cycles with booms and busts exist. When the economy is in a boom phase, there is a shortage of labour. Employers then try to attract workers from foreign countries. When the economy turns to bust, many immigrants do not return to their home countries.
- Especially in the EU the population is aging. An aging population needs care while the workforce is reduced. This will lead to a structural shortage of labour.


Solutions

Solutions for poverty have already been discussed (see also: Poverty). The need for immigrants in the EU and the US can be reduced using Natural Money in the following ways:
- When using Natural Money, there is no need for constant economic growth to pay interest on debt.
- When using Natural Money, there will be no economic booms and busts. The demand for labour will be more stable.
- Because less people will be working in inproductive sectors such as government, financial services, law and consultancy, labour becomes available for the care of the aging population, reducing the need for immigrants.



Overpopulation

Earth is currently overpopulated with humans. The optimal number of humans on earth depends on resource consumption per human (see also: Dieoff.org - Optimum Human Population Size). Population growth is stimulated by governments because of the supposed need for economic growth. Religious leaders also stimulate population growth because of the texts written down in The Bible and other religious books. Those texts in The Bible were written down when there were very few humans around and are definitely not applicable today.

Overpopulation is becoming a serious problem because of the limitations on food supply (see also: Peopleandplanet.net - Bringing population back into focus at World Bank). To correct the problem of overpopulation, governments must stop stimulating population growth and policies should be introduced, like the one-child policy in China, to bring back population to sustainable levels. This can better be done with great care as some cultures prefer boys to girls, which could lead to an unbalanced population composition.
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