The sharp-eyed will already have noticed I changed my tag line yesterday. My daughter's discovery of a free magazine in a 'green' store in Berlin has lent me the strength to be bold.
On this blog I've questioned economics' domain assumptions to the best of my ability, written oodles about them and the discipline's controlled refusal to deal with its base assumptions scientifically and openly. I have concluded it is so deeply flawed, so irretrievably rotten, the only way forward is to redefine the way humanity operates on planet earth as a species capable of civilization. Furthermore, Charles Eisenstein has convinced me with his writings that the depth we must go to in order to properly clean out our Augean stables is right to the notion of ourselves as separate beings isolated among 'other' separate and beings. The 'I'm alright Jack,' or 'me against you' core of our entire philosophical inheritance is wrong, not because it never made any sense – it did – but because we are writing a new story. Defining the way forward is our task now, as the old way rapidly collapses. The revolution is now, and is not being televised. It is, however, turning up here and there, and gathering momentum.
So, what is this magazine? It's called “Sein” (“To Be” or “Be”), and December's issue (no. 184) is called “Eine Zukunft ohne Geld?” (“A future without money?”) There are many articles for me to read, but I wanted to share with you (via my translation) the one that excites me the most. So, without further ado:
“Crash as liberation – life after money
The renowned Viennese professor of economics Franz Hoermann criticizes the economic sciences as political propaganda, says the current system has failed and expects a fundamental system change. The professor of the University of Economics of Vienna is respected by his peers, and a member of, among other institutions, “The Testing Committee of Accountants” [not sure about this translation – “Pruefungsausschuss fuer Wirtsschaftspruefer”]. Nevertheless, he has dared, in an interview with The Standard, to call our current financial and economic system obsolete, the economic sciences unscientific and “political propaganda” and banking a con game. Last but not least, Hoermann believes the final system crash is right around the corner, perhaps as early as next year.
Florian Roetzer interviewed the lateral thinker for Telepolis, and the interview appears here in a shortened form with friendly permission of the author.
Florian Roetzer: You say the current financial crisis is different from its predecessors.
Franz Hoermann: What we currently observe developing in the global economic system represents no single, unpredictable catastrophe which can be overcome in some foreseeable time frame, after which the old rules of the so-called free market system would work again. It is far more the case that the multi-millennia old monetary control of individual humans and whole societies can no longer be kept upright. I believe we are in the midst of the final systemic crisis, not merely weathering some temporary storm with standard political and financial skills. We therefore desperately need other base assumptions for a global, sustainable society.
The economic sciences don't offer these base assumptions, they would in fact be a “Great Scam” and an instrument of power of our Overlords?
Franz Hoermann: Sadly, the economic sciences have often been exposed as mathematically faulty, and therefore as unscientific and a pure propaganda tool of the financial elite, by, among others, Nobel Prize winner George Stigler 50 years ago (by the way, the details on this can be read in “Debunking Economics: the naked emperor of the social sciences” by Steve Keen). All these competent rebuttals were simply suppressed or ignored. Their logical consequences were never followed through, because such would have meant the end of an entire, and very politically powerful, profession.
What could replace the present system?
Franz Hoermann: The Internet, and the innovative transaction models enabled by it, are inexorably displacing the traditional money system. In our society money is becoming, increasingly quickly, obsolete – goods and services could be distributed in totally new and innovative ways, in which possession of a standardized medium of exchange would no longer be necessary. The possibility of (almost) instantaneous contact with (almost) any person through modern communication technologies, combined with the emerging spirit of cooperation rather than competition, further combined with continuously improving production technologies targeted to environmental health, can raise human society, sustainably, to their next developmental stage: peaceful coexistence on the basis of spiritual rather than materialistic evolutionary models.
The money masters are not going to be pleased with that.
Franz Hoermann: Of course. Since societal power in free markets traditionally lies, first and foremost, with the money masters, the financial elites try desperately to sustain the appearance of the necessity of money's continued existence – in the most extreme case even by reference to the ongoing global crisis, the very crisis so visibly raising questions about money worldwide. But since money is really only about the rules of distribution of goods and services in a society, and since these rules are made far simpler and more flexible through modern technologies such as internet-based databases, as opposed to the use of metal coins feigning intrinsic value, even this threatening scenario will not deeply unsettle ever wiser communities. Flowing on from simple changes in decision making structures, these communities will reorganize their provisioning of goods and services in the most efficient, fair and flexible manner possible.
That sounds like a soft transition and is very optimistic. How might such a smooth transition look, which preconditions would have to fulfilled.
Franz Hoermann: The most important precondition for this is first an honest and taboo-free information exchange between the financial elite and the wider public. On the one hand, the fear of loss on the part of society's pyramidal tip must be understood and soothed, and on the other hand we must try to prevent the broader public from suddenly seeing the elites as con artists and liars, then erupting into violence.
It's absolutely true that many members of the (political and financial) elites could not have foreseen the so called crisis, because their very education blinded them to it, an education which has for many decades now guaranteed that these people could not recognize the absurd basis of our economic system (money is only created as unbacked debt, 'out of thin air', which must then earn the banks profit through interest, interest which is not present in the money supply).
Is it not far more likely that a “final collapse” of the ruling system would lead to chaos, violence and the collapse of most production infrastructure, and worst of all the Internet?
Franz Hoermann: That depends on how the majority experience this collapse. Will the majority experience it negatively, as a collapse, or can the crisis initiate the freer development of creativity, individuality, and spirituality? If we can show ordinary people that cooperation yields better results than competition, as well as give them more freedom to decide for themselves (e.g. time management, how we do what we do, shaping of the social and technical environment etc.), then we really can see the opportunity in this crisis, and complete the long overdue transformation of western society.
You expect the ultimate crash next year, what will happen?
Franz Hoermann: When the US-Dollar can no longer fulfill its function (the Euro too by the way), the US will break down into individual states, as did the Soviet Union. They will then try again to introduce local currencies. Should you search the Internet for long enough, you will discover that the Deutsche Bundesbank allegedly has provisions for printing a new D-Mark, which some representatives from politics and economics have already openly called for. Whether a return to the old system (state-level currencies still created as debt by private banks) would be better (which we had before the introduction of the Euro), or if we'd just be going in circles, each can decide for himself.
As we've seen, a real systemic collapse would require the insolvency of the big banks. But can't this insolvency be continually prevented by governments and central banks?
Franz Hoermann: That's not entirely correct. There are two conditions, which, when they strike at once, can and will initiate systemic collapse. First, the states' or currency zones' money supplies must visibly come only from central banks, through the buying of bonds, the so called monetization of debt. The FED has been practicing this actually for a long time now, totally unabashed, and behind the scenes the ECB is already embarked on the same course.
This shakes the faith in the affected currencies so deeply and finally, that it can only be restored (if at all) through a consequent currency reform. The second condition lies in the inability of the indebted nations to make any more interest payments. This situation will arrive, viewed mathematically, in 2011, in the large indebted nations. When no more interest can be earned, and the central banks keep on printing money for government bonds, then the entire world will recognize those bonds as worthless, and simultaneously also money itself – this is precisely the situation central banks have wanted to avoid for decades, but they have nevertheless got themselves exactly there!"
That's my translation, word for word as it seems best to me.
Another thing I want quickly to mention from the magazine is 'Give and Take Centers' ("Gib und Nimm Zentrale"), shops where you go in and take what you want for free. You also deposit there what you no longer need. There are 3 of them in Berlin, and 50 in Germany. I had no idea, but think it is a wonderful idea, and embodies the nature of the gift as a flow from person to person, place to place.
I shall be writing more on this in due course.
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