02/09/2016
Chapter: 6.
A New World Order (www.a-new-world-order.com)
Real And Electronic Money-To Solve Human Problems
Dual Monetary System – An Economic Technique To Implement The Theory of Democrism
“You can make even a parrot into a learned political economist all he must learn are the two words ‘Supply’ and ‘Demand’”
-Anonymous
“A review of this nation’s economic history reveals that bankers, in concert with traitors in Congress, gained control of the money system, set up private “national” banks, began implementing its mechanisms of usury and were then taken down”.
--“Thomas Jefferson on Monetary Policy”.
There are two economic techniques to administer economic machinery to maintain a perfect circular flow of money between producers and consumers at all levels of employment: one is ‘multi economic technique’ and the other is ‘mono economic technique’.
In the ‘multi-economic technique’ only one kind of money would be used in circulation to maintain perfect operation of circular flow of money i.e. to uphold monetary equilibrium in circular flow of money between producers and consumers. All the global economists pursue ‘one money system’ in circulation known as ‘Mono-Monetary System’. Mono-Monetary System means using only one kind of money. At present the existing consumption money’ is used to operate both the production and distribution activities of any economy.
In Mono-monetary system we use the present money which has to assume responsibility to operate two self-contradictory functions such as ‘medium of exchange’, a dynamic one and ‘store of value’, a static one. Since money has ‘store of value’ and the people are fascinated with ‘money illusion’, they always prevent the flow of money into ‘expenditure stream’ at the rate at which money flows in their ‘income stream’. This ever prevailing disequilibrium in the flow of money explodes all economic problems and the economists are crushing their brain to find a solution for how to solve it. This problem arose since the genesis of classical economy. This store of value of money not only prevents the spending of money by consumers at the rate required by producers but also stimulates the people to hoard and heap ‘black money to run a parallel economy with huge volume of billions and billions of dollars in each country as the value of money will not diminish in short period. Moreover it also encourages corruption in all sectors of economy.
On the existence of single money in circulation – mono monetary system-to controlling and regularizing all conflicting and muddling economic activities which are numerous heterogeneous. So that the economists are forced to practice ‘multi-economic technique’ through government budgetary policies and the Central Bank Monetary policies. This system has been extensively and indispensably used in all countries after Keynesian revolution though it could not succeed in its venture.
On the part of government it uses three types of budgetary methods known as deficit, surplus and balanced one to exert direct control over the expenditure and income of people through taxation, public borrowing, manipulating price level of goods, redistribution of income, offering subsidies, bailing out the collapsing industries by paying poor man’s taxation etc. People are agitating why the governments pay billions and billions of dollars to save one man’s wealth from the tax revenue of billions and billions of poor people. It is the fate of ‘capitalist economy’ i.e. capitalistic mode of production.
The government use three types of budgets known as deficit, surplus and balanced one to exert direct control over the expenditure and income of people through taxation, public borrowing, manipulating the price of goods, redistribution of money income etc.
On the other hand the central bank through its monetary policies by administering Bank Rate, Open market Operations, cash Reserve Ratio, repo rates etc., to exert indirect control over the supply of money through commercial banks. Usually the government and the central bank never cooperate with each other in controlling supply of money and goods and stabilize the required monetary equilibrium between producers and consumers. Both the techniques have failed throughout the world because people always behave in the market according to their erratic psychology but not in the desired direction of Government and central bank. In the midst of so many fiscal and monetary policies the economists ultimately confuse the administration of world economic systems. Consequently it is the poor people who are suffering at the end.
On the other hand Democrism (the economic system of People’s Direct Ownership of Capital) adopts only one economic technique known as ‘Mono-Economic Technique’. I term this technique as ‘DUAL MONETARY SYSTEM’ to effectively control replacing both the central bank’s monetary and government’s budgetary policies which are heterogeneously destructive for consistent operation of economic machinery.
In the Dual Monetary System new money known as ‘Investment Money’ will be put into circulation in addition to the existing Consumption money. I have scheduled a separate chapter for ‘DUAL MONETARY SYSTEM’ in which I have explained how the ‘Investment Money’ will operate the economic machinery with full steam.
a). Stabilization of economic equilibrium:
When the investment money comes into circulation it will stabilize the economy at all levels employment. Its main object is to prevent the erratic psychology of consumers in spending erratically the consumption money which is badly in need of producers as money income by selling their goods to equilibrate with their money expenditure on producing the goods. In short it will assure the producers for maintaining their required ‘monetary equilibrium’ to sustain the volume of employment at all levels of production.
b). Separation of dependency of ‘goods flow’ on ‘money flow’:
One of the serious impediments in the operation of economic machinery is the dependency of goods flow on the money flow i.e. G→ = f (M →). The producers venture into production primarily for maximization of profit in terms of money. The producers cannot realize their expected money income unless they sell the goods produced to the consumers. In other words the producers cannot realize their expected money income (inflow of money) unless they succeed in propelling the produced goods to flow towards the consumers. Since the consumers are in billions in numbers swarming the markets and are spending the money erratically and many a times hoarding the money, or creating time lags in spending the money the producers are horribly constrained to harvest the required money income to sustain the volume of production in succeeding rounds and are compelled to operate the economic machinery divergent velocities. This makes the producers to push the economic activities into recession and then depression. John Maynard Keynes attributes this economic terrorism to ‘lack of effective demand’ for goods. The interdependency of money flow and goods flow impedes the economic sustainment.
c). Strategic performance of Investment Money:
The only solution to sustain the level of employment and production is to separate money flow from goods flow and there by empower the producers to get monetary equilibrium between their money expenditure and their expected money income. In this juncture the DUAL MONETARY SYSTEM (DMS) occupies the predominant economic responsibility to keep the economic machinery to run in uniform velocity. Under Dual Monetary System new money known as “INVESTMENT MONEY” will be put into circulation without disturbing the present circulation of “CONSUMPTION MONEY”. When the Investment Money comes into circulation, at the very same moment it absorbs the Consumption Money from consumers who have hoarded or created time lags in spending it. The Investment Money exchanges the stagnated Consumption Money which is indispensable for producers to operate the economic machinery with required acceleration. This economic technique will drive the ‘money-flow and goods flow’ to circulate in separate orbits according to the need of producers and consumers. In other words even though consumers do not spend money for the purchase of goods produced, the producers will get required volume of money for smooth operation of economy for spending for the factors of production to maintain the volume of production, employment and income of workers.
When the Investment Money comes into operation, the out dated and ineffective numerous fiscal and monetary policies will disappear. I have reserved a separate chapter to explain how the dual monetary system will operate the economic machinery.
d). Interest-Free Economy and Creation of required Investment:
One of the vital functions of Investment money is to create required investment for solving poverty and unemployment. The investment money will function as ‘Side -Stream’ to flow off investment from the main ‘Income-Stream’ of consumers (workers/people) to the ‘Investment pool’ of producers (workers/people). For example, if an economy requires one trillion dollars for investment the economic commission of workers will put into circulation the investment money to that equivalent amount during a period and the investment will absorb the consumption money from the people by the same amount of one trillion dollar without paying an interest.
The investment money so absorbed from the people will be credited in INVESTMENT ACCOUNT of the workers in the INVESTMENT BANK S operated by the existing commercial banks as their subsidiary units. The workers will contribute ‘Investment according to their wage’. The investment money cannot be used as ‘medium of exchange’ to buy commercial goods and services in the market. It will be used as an economic technique to absorb the required consumption money which is firmly gripped by the consumers due to their money illusion or kept for speculative motive in terms of John Maynard Keynes.
The investment money will release the arrested consumption money to flow towards producers to maintain aggregate monetary equilibrium between expenditure and income of producers. This aggregate monetary will sustain the economic growth at all levels of employment.
e). Corruption – free economy:
In mid-November, 2009 the United Nations, the World Bank and other watchdog groups gathered in Doha, Qatar, in an effort to curb world political corruption costs and grant concrete authority to enforce the 141-nation UN anti-corruption agreement.
Lost monies hidden in corruption move from country to country and are placed in anonymous investments estimated to total up to $6 trillion.
“There’s an estimate that $20-$40 billion a year, in terms of corruptly stolen assets, leaves developing countries to go to developed countries each year.”
-Okonjo Iweala, managing director of World Bank, said (Reuters).
The enactment of ‘anti-corruption laws’ and International agreement on anti-corruption’ will not eliminate corruption. In India 80% of elected representatives, educational institutions and government officials are listed to be most corrupted people. Why they throng for corruption and why they are so hungry for gulping bribe? I think no man of wisdom so far contemplated correctly for the reason of it.
The basic reason rests on the bottom line of corruption is that if a man gets bribe he can spend that money to buy goods and services. Suppose the economic system is such that no man can spend his black money or corruption money or bribed money even to buy a single safety pin, he will not go for getting any corruption money. If he cannot buy anything with corrupted money, the money with him will be nothing but a waste paper. We want an economic technique that will convert all the corruption money to be useless or mere waste paper. What is that economic technique?
It is nothing but launching ‘Investment Money’ into circulation under DUAL MONETARY SYSTEM. As soon as the Investment Money is launched into circulation it will regulate the erratic flow of consumption money into expenditure stream towards producers to maintain ‘monetary equilibrium in respect of producers’. How this technique will work and eliminate corruption at its very origin?
1. Every worker/every person will have a Savings Bank Account as well as investment account in its bank for the principle of Democrism “Investment according to Wages”. (All the persons should be the depositors in his bank especially middle-income and rich people as they are the indispensable persons who always indulge in corruption in huge volume. These persons are always in the domain of politics and bureaucracy.
2. There should be transparency and accountability in every one’s bank account. Therefore the monthly and annual income should be specified in each account periodically as everyone’s income changes though insignificantly in a year for example.
3. Beyond all perceptions it is indispensable to establish a ‘business internet network’ among the banks in coordination with distributive centers like super markets. A software technique will execute the internet network system.
4. The application of technology (Investment money): suppose if a person goes to a computerized market to buy goods he will pay the bill. As soon as he paid the bill by debit/credit card (electronic money) the amount will be debited from his bank account. When he uses corrupted or black money to buy goods beyond his accounted money the bank account will send alarming signal to the distribution center that corrupted money is used to buy goods and stop billing the account. With zero time lapse the purchaser with corrupted money (black money) will be caught by police.
5. In consequence as the people could not use the corrupted money to buy goods and services, the money received as corruption would automatically become waste paper to be discarded in the dustbin. Moreover these corrupted people will be severely punished. Even if they give the corrupted money as gift to others no one will receive it. They know what kind of fate will be waiting for them. There will be no receiver and giver for corrupted money. The world societies will automatically become a just and ideal one.
In their book Wikinomics (2006), Don Tap Scott and Anthony Williams explore the potential of Peer production for advancing business enterprise. As they observe, the emerging consensus is that business models that are based on mass production are slowly being eclipsed by new models based on mass collaboration.
Throughout history corporations have organized themselves according to strict hierarchical lines of authority. Everyone was a subordinate to someone else—employees versus managers, Marketers versus customers, producers versus supply chain subcontractors, companies versus the Community. There was always someone or some company in charge, controlling things, at the “top” of the food chain. While hierarchies are not vanishing, profound changes in the nature of technology, demographics, and the global economy are giving rise to powerful new models of production based on community, collaboration, and self-organization rather than on hierarchy and control.
International Socio-Economic Research Bureau 1. ‘Democrism’ means ‘Democratization of Economy’ or ‘Democratic Capitalism’ or ‘Creation of People’s Direct Ownership of Capital’.