Franz Hörmann on the Future of Money and Politics

It’s been a while since I translated any Hörmann output, so I thought I’d raise his profile a little once again, not because his profile or anyone else’s is important, but rather because the idea-domain he represents is gathering focus, generating momentum—at least, it strongly seems that way to me. It’s not that this or that person is totally correct, it’s that we all contribute, bring ourselves to the game, learn, teach, change, compromise. This takes time, discussion and effort. What Hörmann does particularly well is get across fresh perspectives quickly and incisively. He commands a broad landscape too, does not just speak from the position of an economist or sociologist, but rather as a human fascinated with all of reality, imparting what he has learned in as open, fresh and engaging a way as he is able.

There’s also though—in direct contradiction to my above assertion that the idea-domain Franz Hörmann, Charles Eisenstein, Peter Joseph, Jacque Fresco and others represent is coalescing, finding form—an apparent period of retrenchment, stability, business as normal, now taking place, which, somewhat eerily in my view, has been emanating from the mainstream these last few weeks. This is probably just me, but the world feels strangely fragile, on tenterhooks, as if it daren’t breathe too loudly for fear of waking the now slumbering monster under the bed. The markets are happy enough, with the Dow having achieved close to it’s highs of pre-August, prior to the 20% mini-crash that began in mid-summer. Europe limps on, bowed but not defeated, Japan floats above its floor somehow, UK markets vibrate robustly enough between US and European crises, while China continues to defy every doom-laden prediction hurled its way. Brazil, India, Russia and Argentina are also keeping up appearances pretty well. And Iran has not yet been attacked. At least not with bombs. Good stuff, I suppose. But it all feels very staged, troubled, fake, and hollow. The vital juice has run dry. Everything and everyone is a nervous paper tiger, wondering when the first rip will show.

Hörmann boldly predicted the end of the money system last year. It did not happen. At least, it did not happen in a way we can all agree on. My feeling is that the entire financial system is indeed broken beyond repair, that TPTB’s ability to lend it the mechanical appearance of life is itself evidence of this breakdown. Enormous amounts of money have been poured into the markets’ cup, given to the speculators to keep their game going, so the bewitching lights of the casino can twinkle on. Yet we know money is not air, not water, not food, that so-called ‘efficient markets’ do not deliver as advertised. We are in a twilight zone, an unreality, a post-dream fog we dare not disturb. Of those tasked with keeping this system ‘functional’ a while longer, then a bit longer than that, then just another minute or two, not one wants out of bed and into the work of building the new. In this lull, this eery hush before the storm, Hörmann is quietly putting together a political party, in Austria, with various scientists, to try and create a platform for introducing their ideas to a wider public. Part of that process is conducting interviews then posted on YouTube. What follows is excerpts from one of the most recent (recorded in Vienna on 19th December 2011).

Interviewer (I): You predicted a great crash which—and I don’t know whether to say ‘shame’ or ‘thank goodness’—has not happened yet. Your thoughts on this?

Franz Hörmann (FH): Well, that’s a good question. Did it really happen? It’s a question of how we define what we mean by ‘crash.’ The Euro, for example, still exists in its current form today only because the German Constitution and the Treaty of Lisbon and other agreements have been transgressed. The rules have simply been ignored. When we say ‘currency,’ we’re talking about a set of rules, with a particular priority which gets ranked one way or the other. Then there’s constitutional rules, and international rules, which have their own ranking. Then the question is, which is more important? Do we see the Treaty of Lisbon as more important than the Euro? Or, do we say the continuation of the illusion of the Euro, as a set of rules, is more important to us than some treaty that represents the people, then transgress there? Had we upheld the German Constitution and the Treaty of Lisbon there would be no more Euro in its current form, and we would have had a ‘crash.’ So it’s a question of how we define ‘crash.’ Politicians, and those who control—or think they control—the money system, take ever more ridiculous measures—for example falsifying national economic data and similar tricks—just to keep the illusion, the facade of a functioning money system going, for the people, or a tiny group of the people who benefit particularly well from it. But it’s as plain as day that this will lead to ever more absurd outcomes, and that this can’t be kept going much longer. The next question is how the broader public will take all this. The longer we draw this game out, the more absurd, the more grotesque the ‘crash’ will be.

[snip]

I: Aren’t you worried that a [political] party of scientists will be inaccessible to the broader public, a public which has not studied to the same level?

FH: Not at all. We’re pulling representatives from all social classes on board with us. One fundamental aim we have is creating a new form of language whose ‘job’ it is to help bring together the now divided classes. [Earlier in the interview Hörmann singles out the different way in which the different classes communicate as a fundamental societal problem, citing ‘information asymmetry’ as an ‘economic good’ generating profit, a term other members of society think of negatively as ‘deception’ and ‘fraud.’] This is a key goal of our political movement. One part of that will be psychological rehabilitation, healing our wounds. Regardless of which social class we come from, we come with wounds and a fixed sense of who the Enemy Other is. This has to be healed, transformed, and this has to happen with the help of specialist psychologists, who can help us heal our sense of injury and forgive those we see as our enemies. Only thereafter will it be possible for society to work cooperatively. We already know a deep level of cooperation is possible, as Open Source is showing us the way here.

[snip]

I: How can you prevent corruption and cynical manipulation of the new system, seeing as such an enormous network will have to be computer-controlled to a large degree?

FH: In the new system, money has a different function, and cannot be anonymously exchanged between people, or companies, or institutions, etc. Such will no longer be possible. All exchanges will consist of a plan, a contract and a process. And plan, contract and process are parts of the same data structure. Each person is connected to this data structure via a unique identifier, and a person can only complete a process if the corresponding contract authorizes them to do so, and contracts can only arise if they mirror the [mumbled]. The whole thing is self-organizing, tightly interconnected, so it’s simply impossible, on a whim, to exchange some enormous money amount, anonymously transfer money somewhere... That just doesn’t make sense any more. [This is a very quickly spoken section, and, as the interview was conducted in a bar, there is plenty of loudly recorded background noise interfering too.] And for the daily needs of the people, we’ll set up, as quickly as possible, a comprehensive guaranteed provision, not income, since an income means we’d be furnishing people with purchasing power. Guaranteed income would be injections of purchasing power into an economy which might not be able to back it [i.e. it would be inflationary]. Obviously we want to avoid a consequent raising of prices by companies. We must, therefore, ensure price stability with regulated prices, by democratically deciding, within this system, to increase the production of required goods and services, and not raise prices, where demand is higher than supply. And in this rather careful manner, we can protect the people, then, in the next step, we can attempt to allocate resources optimally. Today we don’t have this at all. We have sub-optimal resource allocation, because the finance sector—which, in truth, contributes the least to society—is able to assign to itself ownership of the majority of the resources, and not, for example, to workers.

I: Isn’t there a danger that we’ll just be creating some monstrous Big Brother state, monitoring our every transaction and economic move?

FH: If we monitor everything, we have to be careful about who is doing the monitoring. When ‘democracy’ monitors itself, in a social network, monitoring then makes sense, because it prevents abuse. That should be our goal. It prevents abuse and, by extension, exploitation. Just think about the children forced into slave labour in Asia. That sort of thing would be flat out impossible in such a social network. We can only produce on the basis of democratically reached decisions. [I just want to point out at this stage that Hörmann realizes there is a danger of the tyranny of the majority over the minority; a deep revolution in education is the most important aspect of his project. Without the correct educational soil, everything he proposes is impossible.] Democratic decisions aren’t set in stone, are not laws made permanent because they are written down in hundreds of pages, they exist electronically as a database, a ‘rulebase,’ from which the contracts are generated. Thus it is impossible for the contracts to transgress the principles giving rise to them. This security concept is absolutely vital to the project. That is, rules will be decided in electronic form, with everyone’s contribution involved, small groups (areas) at a time [very mumbled section, and a machine makes a loud noise at this point], [guessed: in pyramid-like form, decisions pulled upwards…], or you can cede your decision to an expert you trust, as in the ‘liquid democracy’ concept… There are so many possibilities in this area we must experiment with, develop, to find out what works best. But this is an exciting new area. For the first time in history, we have the opportunity to make all laws transparent and simple to understand, to ensure that contracts cannot be transgressed. We actually have the requisite technology for this today, so we must take this opportunity to bring it about. This kind of opportunity doesn’t come around very often!

To transcend the foreseeable need of the people, we propose founding a democratic national bank, which would create money out of thin air, against its capital; a legal tender money with purchasing power for particular purposes democratically decided. That is, only on a scale and for purposes which are democratically legitimated. Because the bank’s capital will be distributed to the people, the bank furnishes the people with their purchasing power. Then, of course, the amounts in circulation must accord with the amount of goods and services available, so as to prevent inflation and deflation. This implies the price mechanism must be included [in the design]. If we want to take care of everyone, we take care too of businesses and business owners, who are no longer to be driven by the profit motive of today’s paradigm. On top of this we have the guaranteed basic provision, and we’ll also be able to, if necessary, distribute luxury goods in other ways, albeit with cooperative principles, not competitive. With cooperative practices, we can more rapidly render disliked work superfluous. [I suspect he’s talking about automation here.] We'll have first to apply ourselves most to those jobs no one wants to do, make ourselves redundant, as it were, for which successes we can reward the ‘guilty’ parties, and free many more to pursue other, more enjoyable careers in which they want to work harder, contribute more, thus benefiting society more.

Long-term, we could build a system in which a backend manages the resources, and only at the front end, at the user interface, would money be used (though it wouldn’t look like today's money). One day, perhaps there’d be no more money at all. Even in today’s system, money is, seen in a certain light, a user interface between person and society. When I do something for society, I earn money. When I want something from society, I pay money. Money is thus a user interface, and a user interface can be personalized! In our proposed system, we will, with the help of trained psychological assistants, be able to create, for everyone, an individual money system which corresponds to that person’s psychological development and stage of life. Whether he or she wants to [mumbled] and doesn’t need to buy that much, or if he or she selects some super qualification to take, they’ll be protected and financed by society, since society knows it is benefited by those it usefully supports.


And that’s enough from me (Toby). The interview, as I said, was conducted in a bar. It’s been very arduous trying to make sense of the various mumbled parts. My brain hurts. Obviously these are fragments of a much larger and very comprehensive programme of ideas, but I think there’s a benefit from such a fragmented presentation to the non-German speaker, in that we are forced to do more of our own thinking when there are gaps to fill in. Asking questions, trying to answer them via discussion and argument, is far more educational and constructive than being asked to follow, with 100% loyalty, some pre-written formula handed down to us by some Great One. As I argued in my recent post, we get the system we deserve. To deserve a better system, we have to build it. Obviously. And want to. And know how to (at least, have a good idea of how to). Hence, Hörmann’s ideas, even in bits and pieces, should (hopefully) encourage thought and debate, not blind loyalty, and, for those interested, inspire further learning and research.