Wednesday, 1 July 2015

Transfinancial Economics, 2015 June Draft

Project by Robert Searle




Transfinancial Economics (TFE) is an evolving project nearing basic completion. It should be said that there has been a degree of interest in it from a number of people with economic backgrounds such as Warren Mosler, Andy Dennis, Stephen Monrad, David Axelrod, Trond Andresen (cybernetics expert), Prem Sikka, and the noted autodidact, and futurist Hazel Henderson. In April 2010, TFE was also a subject discussed at a major scientific conference (the ICEME, or International Conference of Engineering, and Meta-Engineering, Florida, USA).
It is important to add that TFE regards the financial system as a huge global IT system, and recognizes the reality that virtually all money exists as electronic,or digital data transmitted from one bank account to another. This means that the free flow of capital can be tracked, and controlled if necessary.
Essentially, TFE can be regarded as a form of Cybernetic Economics. Its scope, and scale is colossal....colossal enough to help deal with a whole range of multidimensional problems facing humanity, be it social, economic, or political.
It should be said too that TFE is ofcourse not a science in the strict sense of the word. Yet,it has aspects which may appear "scientific". Naturally enough, it also takes into account uncertainty in the economy, and indeed, the irrationality of the money markets. It has special super-flexible electronic controls that could help deal with serious economic problems.
It must be said that the serious, and full development of TFE will require the help of "open minded" experts notably in the fields of Economics, Computer Science, and Law.


Please note that the following has been going through a whole series of continuous drafts, and where, and when necessary may be subject to changes, additions, and possible corrections. It is still a "work in progress" project. Also, the Kheper version of TFE which appears at times on search engines is out-of-date, and is not as authorative as the presentation here.
It should be clearly stressed here in bold that TFE fully recognizes the vital importance of good efficient planning by businesses, governments, and NGOs in connection with many commercial, and "charitable" projects. Without that, money can be so easily wasted. Hence, excellent funding is of equal importance. to excellent planning. One cannot have one without the other. Thus, the two factors of Good Planning, and Funding are critical for success. The former can be seen as the "Brains" of a project, and the latter as the great Enabler.

IMPORTANT. It should be said too that references are made to supercomputers to possibly monitor, and control the economy within a capitalist system. However, quantum computers could do an infinitely better job than supercomputers if they are properly developed.








Towards Super Economics?


An Introduction to a Major Global Paradigm




The following may be helpful for new readers.


Essentially, TFE claims that new largely monitored non-repayable debt-free money, or Facilitation Finance could be created electronically by special transparent, and credible funding mechanisms, or Facilitation Banks (and/or by governments to some extent) This could notably fund in full, or in part environmental, and socio-economic projects of high ethical value. This would help to speed things up unlike repayable loans....though possibly interest free ones could also be created electronically when necessary. Ofcourse, such funding could be used to deal with projects that have little, or indeed, no commercial viability...and yet, more importantly, they may have great social, and environmental value.
The aim of all this is also to give powerful financial incentives to businesses. They could profit with genuine projects, and more importantly help save the planet, and its people notably in connection with climate change, and "irreversible" global warming.
Extra finance would not lead to serious inflation, or indeed, hyperinflation (eg. Zimbabwe) as the phasing in of newly created unearned money would be a gradual process, and the checks, and "controls" would be most effective in monitoring, and controlling inflation. This point is most notably true of Advanced Stage TFE explained a little later. Thus, there is no mad flooding of the real economy which ofcourse is absurd in extremis.

Strictly speaking, there are two forms of TFE, one of which has just been mentioned above. Firstly, Primary Stage TFE which is when the amount of new money created is very limited. It uses conventional Economic Indicators (eg.Consumer Price Index)to help decide how much could be created, and used directly into the real economy. Also, the conventional method of raising taxation, and interest rates could be utilized to help decrease the money supply, and hence, reduce any inflationary pressures.
Also, it is important to note that Primary Stage TFE could be skipped altogether in favour of Advanced Stage TFE. This could be regarded as genuine Transfinancial Economics as the latter would involve highly credible programming using relevant algorithms, and supercomputers, and their ilke.

In contrast to Primary Stage TFE, Advanced Stage TFE itself can create far greater amounts of new financial capital for projects mentioned in the first paragraph of this section. This should become clear shortly.
Among other things, Advanced Stage TFE can gain a "near perfect" knowledge of the entire economy of the country. Such Big Data as it is called would come about via full Electronic Transaction Monitoring(or ETM)and could be collected 24/7 in Real-Time. This is done via the ID codes, and barcodes of most products, and services at the electronic point of sale (EPOS), or later transactions with banks.

Due to comprehensive algorithmic programming, the Free Market Price comparisons are made in Real-Time, and inflationary pressures can be detected (ie. data mining). This transaction data could be vital to bring about wholesale sea change towards an environmentally more comprehensive sustainable, and socially ethical economy, as more, and more new electronically monitored non-repayable money could be created with real confidence, and without any serious inflation in Advanced Stage TFE.
As we would have a highly accurate understanding of the real economy inflation risks could possibly be more accurately assessed continually via continuous computer simulations of the economy itself. This is revolutionary when fully understood. However, it is worth repeating here that TFE would have to take into account uncertainty, and indeed, the irrationality of the money markets.

Another aspect of Advanced Stage TFE, and full ETM is taxation(and interest) itself could possibly be phased out. Moreover, fuller funding of many charitable NGOs would also become possible, and fundraising for them could ultimately be phased out altogether.

In Advanced Stage TFE there would be super-flexible direct electronic controls (similiar to "price controls" but far more advanced)to ensure inflation, and currency devaluation can never get out of hand. This would involve an instantaneous intervention with little, or no time-lag...This is more clearly explained later.

However, as far as the collection of income tax is concerned it would be allowed to continue for the time being via conventional means. It would not be undertaken by some form of "instant" electronic deduction(s)even though this is perfectly possible. Civil, and criminal fines (a kind of tax if such it could be called) would still exist ofcourse.


It is also important to point out that we are not discussing a full Soviet style top down command/control economy. The reason why is that the Free Market Price is largely determined by private businesses, and capitalism in an increasingly more ethical form (due to increasing powerful financial incentives notably created by non-repayable money, plus repayable money as loans if necessary)would still continue until there is "full" automation when money, and wage slavery would no longer exist, and hence, become unnecessary. This could with the right education lead to the "natural" phasing out of the financial elites, and lead to a more advanced non-hierarchical society based on cooperation rather than competition.

During the above process, pressure groups, or NGOs would become increasingly more influential as they would gain greater, and greater access to mainly newly created funds from independent grant making bodies, and possible other sources. Thus, the process of socio-economic, and political reform should grow apace as never before.
Hopefully, a more advanced technological, and more moral human civilization will largely emerge based on improved Democracy, Universal Human Rights, and greater fairness. In other words, Global Justice.As can be seen TFE is concerned essentially with a systems change to achieve these lofty goals.






Present Day Economics.




Mainstream Neo-Classical Economics has developed a somewhat appalling reputation as the dismal "science". Most of its work appears to be largely theoretical, and based on highly questionable statistics, and mathematical modelling. Its economic forecasts often, or not turn out to be wrong. Moreover, there is still an obsession with the need for more, and more unsustainable growth even though the planet has finite resources. More startling though, is that there is little, or no real understanding of the importance of how money is created, and what it fully means in society, and the world.
Unfortunately, Neo-Classical Economics still has great influence over the economics profession. Essentially, it believes in the Free Market in which little, or virtually no regulation is needed. Thus, capitalism then appears to do well by being largely unimpeded by red tape. Yet, such ideology received a battering with the Great Financial Crisis, or GFC (2007-2008, and the following Global Recession) in which the entire world banking system practically collapsed, and was saved by massive bailouts. Many commentators claimed that this was in the main due to "too much" self-regulation given to banks. Hence, they could do "what they liked"......
Transfinancial Economics, or TFE itself is a form of Heterodox Economics which deals with mainly non-mainstream economic thinking.


The Creation Of Money.




In TFE ofcourse, money is recognized as being largely digital, or electronic data which can be transmitted from one bank account to another at the touch of a button. Governments create it as paper cash, and coins. This makes up a near non-existent portion of the entire money supply itself, and is spent into the economy as something non-repayable.
However, the rest of the money is created electronically out of thin air by mainly private banks via Credit Creation as repayable loans with interest charged on them. In other words, unlike what many people may think, they do not actually lend out existing money from their deposits. The amounts they can issue are supposed to be limited by a fraction of existing money held. Certain banking reformers believe that banks should not be allowed to create more money than they actually have.... But it is hard to see how this can ever be a reality in the foreseeable future. NGOs such as Positive Money, and the American Monetary Institute are concerned with such issues.

As can be seen the actual mechanics of money creation are subject to some controversy. But what does appear to be clear as day is the seeming fact that private banks can create money ex nihilo which gives them great power. But this money is something which is repayable(ie. a loan) as opposed to being non-repayable.
Anyhow, some radical monetary reformers believe (like the Muslims) that loans should be free of interest, and of "excessive" interest, or usury. Others though claim that interest should still exist, and could go to the government. A number of reformers like the idea of banks possibly being nationalized.
It is also claimed that new non-repayable debt free money could be created by governments, and this could help reduce taxation.As reasoning, and evidence seems to indicate if enough of it is produced it would not lead to serious inflation (ie Primary Stage TFE).

Certain radical monetary reformers believe in the development, and the usuage of free local currencies which strictly speaking are meant to be tax free, and interest free. These have obvious limitations, but they are easily set up, and are workable. However, new virtual crypto-currencies, notably Bitcoin have a far more global reach.
Another important initiative is the emergence of P2P lending companies that avoid mainstream banks. Zopa is one such example in which lenders, and borrowers are brought together. Crowdfunding is another, in which the internet notably is used to raise money directly from the people themselves for some business proposal, or charity.
Anyway, to return to TFE. It can be regarded by many as being very similiar to Social Credit(Socred), and Modern Monetary Reform, or MMT (formerly known as Chartalism). Both notably believe in the responsible creation of new non-repayable debt-free money.
Policy makers, and technocrats in Advanced Stage TFE are given full confidence that newly created money could be "safely" created.Instead of conventional "controls" of raising taxation, and interest rates to try, and control inflation the TFE ones would be electronic, and instantaneous. As a result, taxation, and interest rates could possibly be phased out altogether.
Some people would say that the notion of creating new non-repayable money is funny money. But as we have seen here in connection with banks they themselves create it ex nihilo as something repayable (ie as loans).
Moreover, in TFE itself we are not discussing easy money because controls on its electronic issuance would be legally credible, and transparent.
For some, the notion that new money could be created at the push of a button is socially unacceptable. Yet, social, economic, and political injustice is also unacceptable especially if there is a lack of conventional earned funding available to back up NGOs, (green) businesses, and governments to deal with it.This gives newly created money a new higher value, and ethical dimension as never before.



The Problem With Redistribution.



There is probably more than enough money to change the world. The problem is gaining legal access to it especially where there is a genuine social, economic, or environmental issue at stake. Apparently, most of the money of the world exists in financial trading, or "betting casinos" dealing with derivatives (eg. currency speculation). Indeed, the sum total of the capital involved may even be several times greater than the entire Gross Domestic Product(GDP)of the planet...
Some activist groups have suggested the implementation of the Financial Transaction Tax (FFT), or Robin Hood Tax to raise funds in the real productive economy. In TFE such an approach at "redistribution" in this context is ultimately seen as unnecessary, and frankly absurd when sufficient sums could be created at the press of a button. Incidently, it is interesting to point out that the Transaction Tax appears to be an instant electronic deduction in Real-Time.

However, redistribution of financial wealth using taxation is fine, and ethical as far as it goes. It is highly unlikely though that such capital will "ever" be fairly redistributed due to the present Capitalist System, and the Free Market Economy. Moreover, the problems facing humanity such as food security, climate change/global warming, population growth, and the like are colossal. To try, and solve this via earned money alone through taxation, and business investment will probably become increasingly difficult. Hence, the need for TFE to speed up, and facilitate change notably using in full, or in part newly created non-repayable money, or indeed, repayable finance as an add on where necessary to earned capital. In other words, direct financial easing by special Facilitation Banks, and/or by governments if absolutely necessary.




The Emergence Of Facilitation Banks




Before proceeding further, it should be stressed that Primary Stage TFE may be largely avoided in part, or altogether in favour of Advanced Stage TFE. The reason for this is because of possible fears of inflationary risk even though a limited amount of new non-repayable money could be created directly into the economy. This though ofcourse would be carefully monitored by conventional Economic Indicators, and inflation could be dealt with by conventional "controls" of interest rates, and taxation rises to help reduce money in circulation. Ofcourse, new repayable money could also be created as well.
If Primary Stage TFE is undertaken the introduction of ethical Smart Banks, or rather Facilitation Banks, or FBs is a crucial start.They can be seen as "superbanks". They could become a part of the mainstream banking system but they would have a far tighter regulatory framework. Ofcourse, there are a few so-called "ethical" banks already such as Charity Bank,Tridos, and UK's so-called Green Investment Bank(GIB)concerned with environmental commercial projects as opposed to high ethical/social issues.
Anyhow, FBs would have powers to electronically create closely monitored new non-repayable debt-free money (ie. Facilitation Finance) as well as repayable interest free loans if necessary. The interest on loans does not have to come from the customer necessarily but could instead be electronically created by the Central Bank, or by some other independent authority. Something similiar could happen with the new non-repayable capital. In other words, an operating cost ideally, or more controversially, Grant Interest which could increase depending on the amount of new money created.
The basic aim, and purpose of such FBs is to create funds for projects which would be difficult if not "impossible" to finance by conventional means as indicated earlier on. Their remit though is largely targetted at investing in full, or in part in large, or small human-scale concerns to do with renewable energy alternatives, enviromental projects as well as social/ethical "entrepreneurial" businesses, or indeed, non-profit "enterprises".
The decision making process on all this must be largely, if not wholly be free from any undue influence from governments, and corporations.It must notably be transparent, holistic and "objective" as possible with all options for consideration for some specific project, or projects that could be vital for the social, and environmental "health" of the planet. In the main this would require bona fide experts in their respective fields. It could involve partnerships with governments, NGOs, and existing green businesses as well as Open Source interactions with the public.
Ofcourse, when ready, investors using their own earned money could put it in some commercial project in order to gain a return. Indeed, their assets could be financially protected by the FB should the economy of any country face any serious problems, and hence, could avoid capital flight where possible.
A interesting feature of FBs is that in theory at least, it could electronically create infinite sums of capital. As indicated earlier, mainstream banks are similiar in this respect except that they cannot legally create new money as something non-repayable.
However, quite unlike existing mainstream commercial banks, the financial dealings of FBs are continually, and fully tracked electronically to prevent fraud with specific algorithms for the job. Such a process could again be undertaken by a Central Bank, or by some other credible body which could also impose instant fines, and/or indeed, an instant freeze on targeted accounts as part of a legally binding contract.Also, during tough business negotiations with companies, and notably Corporations the FB would have access to an "infinite" sums of money to ensure the very best lawyers are always employed to ensure that contracts are genuinely enforeceable.

Anyway, the amount of funding which FBs can create is dependent on the cost of relevant resources, or products from suppliers. Essentially, it means that the amount of goods needed to be manufactured for some project would need to be planned well in advance. Ideally, if possible at all, checks on the relevant suppliers in the supply chain as to whether they have sufficient capacity to produce such resources could be undertaken ideally. Capacity though could be increased if necessary by the FB. Ofcourse, it would be possible to have the relevant products (and services) on order to be electronically monitored whenever money is transmitted. In effect, we could have to some extent a "protected" economy existing within the present Free Market system.
With the aid of experts it is hoped that Facilitation Banks, and indeed, Facilitation Finance in the context of TFE will become a serious proposition. This innovative financial model would certainly be more advanced than anything created by such controversial global institutions as the World Bank, and the International Monetary Fund.
Indeed, FBs would not lead to"competition" with "normal" mainstream banks as the latter could possibly have equal shares in the FBs, or some other legal arrangement(s). Understandably, some NGOs may regard them with suspicion but hopefully this will be dispelled if everything goes to plan "successfully".
Critics will probably point out that elected governments alone should have the power via an independent body to have Facilitation Finance created rather than mainly by companies such as the FBs (possibly existing mainly as private companies, or as indicated here be owned by the state in full, or in part). The reason for emphasis on the latter approach is that it is hard to see that a country notably like the US would frown on the idea of greater government interventionism in the so-called Free Market Economy...
Thus, something like FBs could be more acceptable, and their influence towards more environmentally, and ethically centred businesses would be more agreeable. Arguably, more regulations could do this to some extent, and this would be a more ethical approach rather than greater financial incentives (eg The European Union regulation for design of Energy Related Products Directive 2009/125/EC).
However, many companies including a number of Corporations are taking the initiative as they realize for example that recycling, and reusing resources in the Free Market makes good business sense as the planet has finite resources. A good example, of this is the so-called Circular Economy.
One more example of the Free Market at work is ethical investment. People can decide for themselves in which shares, or securities they could invest in. Such investments should ideally go into companies with a good environmental/socially ethical track record.
All this, is all very well, and good, but sufficient amounts of new non-repayable money (plus loans interest free ideally)could also be created to speed things up in a Free Market Economy. Ofcourse, to a very limited extent, a number of governments have been doing just that, but ofcourse using earned money from green taxes. A huge amount needs to be done though. Hence, TFE which may one day receive serious attention, and recognition which it dearly deserves.





Democratic Governments, And Taxation.




In TFE, taxation could be phased out overtime possibly. In other words, earned money from the people would be gradually reduced in terms of tax liability as new non-repayable money is slowly phased in. In other words, Facilitation Finance by democratic governments.
At the present time, democratic governments could arguably create money electronically directly. This could come about with the relevant legal changes as indicated earlier. However, an independent public body could also be ideally created to ensure that such funding was spent properly.
At present though, if there are shortfalls in tax revenues, governments can issue bonds. These are IOUs mainly sold to the rich, and super rich companies, and corporations in which money is lent to governments. When paid back the bonds also carry interest which act as profit for lenders in the private sector. In other words, a good example of our present debt-based economics.
In Quantitative Easing, or QE governments again create bonds, and these though are bought up by the Central Bank electronically creating new unearned money. But it may seem a little absurd for legal reasons that publicly elected governments cannot directly create sufficient amounts of new debt-free money into the real economy..via an independent public authority(ie direct QE). Instead though new money has notably been created for banks (ie indirect QE) to back up their reserves (during the Great Financial Crisis, and beyond)so that they have a new, and broader "basis" on which to create new repayable money for businesses.
Another area of finance is bond trading which is a huge global market. With TFE it could continue if necessary, or be gradually phased out (if desired). If the latter happened, investors could receive compensation, or alternatively other kinds of financial instruments, or investments could be found. These could be far more lucrative. In other words, vested interests would not find TFE a threat, thus making global change quicker, and easier to achieve. This seems to be the most sensible, and practical way forward. Trying to do otherwise would probably be too slow, and "virtually impossible" to do.




The Electronic Profile of the Economy, And Big Data In Real-Time/Advanced Stage TFE.



Most products, and services in the business world have codes for ease of accounting. Small shops, and supermarkets often, or not have barcodes which are used at checkouts to electronically account for sales transactions of customers. This is known as the Electronic Point of Sales, or EPOS. This notably gives retailers an accurate understanding of the demand of barcoded products along with their identifications, or IDs.
Such a method known as Electronic Transaction Monitoring, or ETM could also be used to create an electronic profile of the entire economy in Real-Time. What we are also ofcourse talking about here is Big Data,and instant Data Mining. Morever, even so-called Deep Learning, and Artificial Intelligence could also possibly play a part.
Anyway, under new regulations, retailers would not only account for their sales, but would also at the same time transmit their information to a public, or semi-public, or private inflation authority (which could be a part of the banking system, or independent of it). With modifications in barcodes,such transaction data (largely identified but not always..plus some legalized commercial confidentiality which could still have where necessary a high degree of commercial confidentiality, or possibly exempted altogether from ETM) would be able to build up a highly accurate electronic Global Domestic Product, or GDP of the entire economy on a daily basis (ie.24/7). Ofcourse, as indicated earlier most products, and services should be identified. However, where this is not so they could still be subject to "blanket" inflation checks but the origins of such transactions could be anonymous, and if necessary be untraceable in certain circumstances.
The question now is this. Why is it vital to know the Economy as far as possible in Real-Time? The answer is basically three-fold.

i) To electronically monitor, and track, and compare price changes of specific groupings of most products, and services to check inflation.
If serious rises in prices occur they could be targetted by direct electronic controls rather than always using indirect controls of taxation, and interest on loans which could be phased out over time. This process would involve advanced, and highly credible algorithmic programming, and the possible use of supercomputers of the inflation authority. A more "decentralized" version of this could also exist.

ii) To create a highly accurate electronic "inventory" of resources used to make up products, or goods.
This will become increasingly vital as scarcity increases. Such data would be good for democratic government planners, and more importantly for private business planners who have a profit motive as their incentive. In other words, improved traceability.

iii) To bring about a greater understanding of the dynamics of the economy itself.
This may be very useful for future economists. With computer simulations, and projections garnered directly in Real-Time from ETM of the real economy itself it may be possible to "accurately" forecast the inflation risks involved in the creation of new unearned money for certain vital projects. It could also ultimately give us direct data of the capacity of various "small" companies, and corporations.
Indeed, the origins of potential business cycles of boom, and bust could be tracked, and resolved. This is a very important point. In other words, recessions, and depressions could become things of the past.
Unfortunately, IT Megaprojects such as the above often, or not fail. But there is no reason in the world why they cannot be achieved with total persistence in the future with greater, and greater insight garnered from the analysis of past experience. Thus, ETM on a national scale represents a real technical challenge, but it is one well worth undertaking as the social, economic, environmental, and political implications of it would be colossal.
Incidently, cash transactions, or something similiar could still exist, and be adapted to Advanced TFE in some manner, or other.
It should be added too that such an "electronic economy" would be "fully" protected against cyber attacks. Indeed, there would always be the funds to ensure that security is continually reviewed to the highest possible standards imaginable.



Super Flexible Instantaneous Electronic Controls.




It must be made very clear that direct electronic controls, or specific interventions in the economy are used only if necessary. With the continous electronic monitoring of the Free Market Prices of the transaction of most goods, and services the data which results is transmitted to the inflation authority where supercomputers are programmed to check any inflationary problems, and related matters.
However, economists would recognize the direct electronic controls mentioned above as being like "price controls," but a far more advanced version of them. The key feature of them is that in Advanced TFE they are super-flexible, and instantaneous. They are also notably super-sensitive to the changes in Real-Time to inflationary pressures in ways unimaginable to the old clumsy, and "rigid" price controls of the past.

Ofcourse, their correct programming using algorithms is absolutely vital, and this could be based with likely modifications on existing formulas, and equations known in Econometrics. Naturally, such an arrangement could take into account many factors in Free Marketing Pricing such as the value added to a product, or service. It should also be said that a producer of goods, or services would have to register online by law to ensure that their offerings can be correctly identified at the point of transactions by special barcodes, or like means.
Such electronic, or digital transactions would occur in the main with special smartphones, or indeed, by debit, or credit cards, or something similiar. These can transmit, and receive money electronically. To a limited extent, this already happens.

Anyhow, there are a number of things which the electronic controls (open to further modification, and development) could do, and they would naturally enough require specific algorithms to be programmed carefully, and properly :-


i) Above Inflation Adjustment.

A Free Market price of a product being bought at a checkout is found to be above the inflation rate. An example, should make it clear as to what happens. Lets say that the price of product X is instantly checked by the inflation authority using supercomputers at the point of sale. It is found that X is 2p about inflation. As a result, the 2p is instantly added to the customer's bank account electronically. However, the retailer still retains the 2p on product X. The extra 2p for the customer is an adjustment, or instant subsidy created electronically with new money.
Ofcourse, an instant electronic inflation tax could be created to deduct money in real terms. This though is avoided unless it is absolutely necessary. TFE aims to be as business friendly as possible.

ii) Below Inflation Adjustment.

This is when a price of a product may be below the inflation rate, and an instant subsidy, or adjustment is created electronically. Again, to take a simple example. A customer wishes to buy product Z at the point of sale. The price is checked instantly by the inflation authority. It is found that Product Z is being sold below inflation by 2p. As such, the retailer, and not ofcourse, the customer gets 2p straight into their account.
What is described above is deliberately "simplistic" as there may well be many aspects to all this that are beyond the scope of our presentation.


iii) Instant Price Drop Subsidy.

This may be necessary if the Free Market Price is rising too quickly. If so, a price drop may be undertaken instantaneously. At the same time, a subsidy, or adjustment is created with new money which creates a "progressive" profit to a certain level for the retailer instead of a profit "loss". In effect, it creates an incentive to drop prices if, and when necessary.


iv) Electronic Price Capping.

Here, a maximun price may be set by a government, or by an FB in certain circumstances. If the price of production starts to exceed the maximun price, the producers would recieve instant financial help, or compensation where necessary as long they stick to the temporary "controlled" price. Ofcourse, electronic price capping should be avoided at all cost as it could in certain instances lead to serious shortages, and price distortions.The aim in TFE is to allow as far as possible for the laws of supply, and demand to be maintained naturally.
It should be added here that similar methods to the above could be used to help control "bubbles" in the economy (eg."runaway" rising prices in the housing market being the classic example).'



The Question Of Economic Growth.



As many realize the planet has finite resources. Thus, continous exponential growth cannot go on indefinitely. In Advanced Stage TFE there is a long temporary period of rapid economic growth but it is heavily influenced notably by the power of FBs, and Facilitation Financing making the present capitalist system far more environmentally sustainable, more ethical, and energy efficient as never before in human history.
Yet, how finite is our planet really? This is arguably at present an "impossible" question to fully, or accurately answer. But, it has also been pointed out that most of the resources of our planet lie under the sea. To actually "mine them"(with robots) is prohibitively expensive but there appear to be small initial attempts to do so. With Facilitation Finance this process could be speeded up, but it must be undertaken in a responsible manner.
Apart from mining sea beds, there are other ways to deal with the potential resource scarcity question. They could include the following:-
i) The development of safe nanotechnology which could create new resources out of thin air via the manipulation of atoms.
ii) Space exploration with the aid of Facilitation Finance could find resources from other planets. These could be brought to our terrestrial world.
iii) Again, with Facilitation Finance it would be possible to create colonies on other planets, and hopefully, use their resources responsibly.
iv) Inventions could be developed to create more out of less, and less.
It should be said here that people (especially the young) should become more, and more educated in that we must live simpler, less materialistic lives. This does not mean going back to the "stone age" but instead to an advanced technological world in which higher values, or ideals should take their place of unnecessary overconsumption, or "affluenza". This is not a question of ideology. It is a question of practical necessity.




Some Other Key Benefits Of Transfinancial Economics.




Apart from the above section there are many other benefits with TFE. They would include the following list.

a) Poverty.
With TFE, NGOs concerned with this issue would become increasingly empowered financially by Facilitation Finance which could be had directly from a FB, or possibly a government agency. It could also come from one, or more "independent" grant-making body (ie. a foundation, or trust). It could also help to reduce inequality in the world.
Moreover, it could modify microfinance in the developing world to include an UBI, or Universal Basic Income, or subsidy of sorts without having to borrow money all the time (except possibly for the development of some form of self-employment/business ofcourse). It would be electronically created by FBs, or by genuine governments, or by both of them in partnership.
Also, it should be stressed that every effort would be made to ensure that new money does not go into the wrong hands especially in the developing world. What is required here is a very credible "full-proof" system for the electronic tracking of funds which could lead to instant fines, and/or freeze of relevant targeted accounts. This was mentioned earlier on in the text in connection with FBs, but is worth repeating.

b) Health Care.
Irrespective of whether health care is largely in private hands, or not,Facilitation Financing could help enhance the existing system in which everyone in spite of their economic status has access to high quality medical intervention.This process could happen in both the developed world, and the developing world. Efficient planning plays a vital role in all this ofcourse.

c) Food Security.
Here, innovative but safe production of more food could be funded in full, or in part by Facilitation Finance. Moreover,like their developed world couterparts, farmers in the developing world could receive in full, or in part subsidies notably via closely monitored new non-repayable money created electronically.

d) Population.

NGOs with ideas, and projects concerned with this matter could be funded in full, or in part by Facilitation Finance. These would probably be largely educational in nature (ie. family planning advice).


e) Climate Change, and Potential Global Warming.

This is probably the most important challenge facing the human race,(apart from potential resource scarcity) and could infact, threaten its very existence. A huge amount needs to be done in the quickest space of time. "Science Fiction" type projects should be considered seriously such as geoengineering, and various adaption, and mitigation projects such as special dams, underground cities, artificial underwater dwellings, underground agriculture(even), and the like could become serious possibilities with the aid of Facilitation Finance. Governments need to take climate change seriously, along with global warming irrespective of whether such "scenarios" prove ultimately true, or not. It is also should be stated that most scientists believe that climate change is largely man-made, and could lead to serious global warming.


Possible National, and International "Compensation"

One aspect of TFE notably in its Advanced Stage is that any "unethical" environmental activity undertaken by some company, or transnational corporation could if absolutely necessary be paid "compensation" (depending on the situation) to stop, or correct itself from going ahead, or continuing with something which may be "wrong" for the people, and the planet. Such an approach has already been undertaken by a number of governments on certain issues (eg. protecting threatened forests), but ofcourse using earned money (ie.via taxation) on a very limited scale. With TFE though such "compensation" can be undertaken on a massive scale by FBs, and possibly governments via an independent public authority.

In an ideal world there should be a credible global environmental agency which could ensure that corporations, and smaller business organizations are regulated in ways which are legally binding, and truly enforceable on an international scale. This is the high ethical approach.
Unfortunately, whether we like it, or not, the lower ethical approach of legally "bribing" them to move in the right directions would probably be necessary in a large number of cases. Incidently, this should not involve a "takeover" per se, or indeed, disinvestment. The aim is to be business friendly as possible without sacrificing many important ethical/environmental principles. This should speed up change.
Also, It should be said that TFE is not the panacea of all the problems of the world. But it can certainly help many of them....


"Full" Automation, The Future, and Global Citizenship.


During the transition from a debt based economic system to a non-debt based one in which taxation, and interest could ultimately be phased out, many momentous, and simultaneous socio-economic, and political changes would probably occur. But the rates at which this evolutionary process would happen will vary from one country to another.
One of the future momentous events is the phasing in of "full" automation on a huge scale. This could lead to growing "unemployment". However, something like an UBI, or Universal Basic Income (mentioned earlier on) could be introduced irrespective of whether one is employed, or not. This would not require means testing. Moreover, it could be financed in full, or in part by new non-repayable funds without fear of serious inflation.
In the light of the above paragraph, other kinds of "leisure-like" forms of work, or employment could come into being. Alternatively, for some, a green business could be created but with a high degree of automation included. The finance for such things would not be a problem. Ultimately, the only problem with developing such "enterprises" would no longer be financial capital but rather good efficient small-scale, or large-scale planning, plus relevant resources. Ideally, such "businesses" should also be genuine cooperatives.
Interestingly, TFE has great implications for NGOs. These Civil Societies could expand, and be able to bring aboard new recruits as money would become easier to find, and fundraising itself could also be ultimately phased out altogether in many cases. Hence, progress of socio-economic, and political issues (eg. Fair Trade, Human Rights, Poverty Reduction, Globalization, Racial Discrimination, Campaign Finance, et al) will gain far greater momentum, influence, and power as never before. Thus, Advanced Stage TFE can lead to greater, and greater Democracy.
Certain better financed NGOs would find it easier to challenge elitist plutocratic power structures if they feel that their activities to a certain extent are unethical in some manner, or other...
Yet, TFE may make the wealthy richer notably with green, and socially ethical type investments. It could also ironically lead to their own demise when automation begins to take over most work activities. This could be accelerated with new non-repayable money. When near "full" automation is achieved on a largely global scale money itself could become unnecessary...This is very important to try, and understand.It is revolutionary. Essentially, TFE can be seen as a transitional stage from a money based system to a non-money based one.
With the growing financial empowerment of NGOs for a new, and hopefully a better, and fairer world the following values could be included notably.

i) The continuance of Open Democracy, and respect for Universal Human Rights.

ii) Growing altruism, and more humanitarian action in society should act as the key incentive rather than the profit motive. This is very important. Indeed, so-called Hedonic, or Happiness Economics seems to indicate that money is not everything. As long as people have enough, they are found to be reasonably happy.

iii) Possible evolution towards direct/digital Democracy in which a Universal Debating Project could be part of a "Global Brain", or "forum" could be credibly created on the internet on a P2P Open Source basis to show clearly "all-known" arguments notably for, and against social, economic, and political issues (presented without too much verbal padding). In other words, an objective, and holistic approach to information. This could be updated continually in Real-Time.

iv) The need to move towards a society in which cooperation, and high ideals rather than competition, and greed should be the incentive to drive the world forwards. At the same time, there should be greater growth in the development of the Sharing Economy in which products, and services could be shared for financial, or non-financial gain.

v) There should be a greater emphasis for "smaller" human-scale communities which could be highly self-sufficient. This is important, but huge "smart" eco-cities could also possibly be developed, and expanded simultaneously. Also, there should be a drive towards more, and more decentralised energy systems.
vi) As already indicated, NGOs notably concerned with inequality would become increasingly empowered by Facilitation Finance in the form of grants, and interest free loans to improve the lot of the poor. One aspect of this is the creation of more social housing which could be funded in full, or in part with new non-repayable money.

vii) Greater decentralisation of power especially at the top.

viii) Society should become less, and less hierarchical.


It is ultimately envisaged that something like an advanced technological world will emerge. The Venus Project inspired by Jacque Fresco, a noted populariser of Technocracy is an example of what could be done in the future but arguably has no real, or credible transition plan unlike Transfinancial Economics.
The ideas above could help form the basis of a new global order of existence. They are progressive, and humane. They also indicate the need for the entire world to move towards Global Cooperation, and Global Citizenship.
Indeed, there should over time be the creation of Global Education Movements (or GEMs)which could inspire the young especially, to bring about change in the world. Ofcourse, there are many groups already which are similar to GEMs. They could join in, and work together more, and more to bring about a "saner" reality in the spirit of genuine cooperation. This could notably occur with P2P-like computer networks.
Naturally enough, GEMs could be funded in full, or in part with new money electronically created.
PS. It should be stressed that automation (including robotics ofcouse) should be totally suited to a low carbon, or "zero carbon economy," and as such would be eligible for Facilitation Financing.


Campaign Activism For Transfinancial Economics.


In order to bring about the serious possibility of change from our present debt based economy of taxation, and interest to one which is largely non-debt based, a campaign would be necessary. Unfortunately, a grassroots organization(s) at the present time to challenge banks, and their kind is unlikely to work....though we may be wrong.
To promote this campaign it is suggested here that a professional website would be set up to spread the word of Transfinancial Economics as a serious, and credible proposal if the world is to successfully "survive" the global problems of the future (especially climate change, and possible global warming). It could be sent to people, and organizations that have real power, and influence such as government policy makers, financial companies, progressive think tanks, et cetera. This is probably the way forward.
I. The TFE website itself could include the following features.

II. News update about the campaign progress, notably the lobbying of certain governments.

III. Commissioned papers (initially) by willing forward thinking economists (and others, notably computer scientists) possibly using econometric models to show the efficacy of TFE in technical terms, including detailed studies on various facets of the subject.

IV. A scholarly online Journal of Transfinancial Economics.

V. A powerpoint presentation of TFE for downloading.

VI. Monitoring advances in technology, notably in connection to dynamic algorithmic pricing, and developments in Big Data would help to give TFE greater, and greater credibility. Indeed, it aught to be added that there are now initiatives to electronically track to a limited degree, the Free Market Price of products, and services in Real-Time.

VII. Possible field trials of the electronic technologies involved in TFE. This could be partly, or fully funded by governments, and/or by corporations, or by some other source such as an NGO(s).

At some point, the concept of TFE would probably have to go before the US authorities,the European Parliament, the UK Parliament, and other democratic governments. Ideally, most countries especially in the developed world should work in consort to introduce something like TFE.
More controversially, a "good" idea may be to try, and market the new global paradigm to certain corporations(and ofcourse, other smaller businesses) as a huge global "business opportunity" of colossal importance. Such powerful businesses though should have some serious, and genuine interest in sustainability. They could form a special alliance to put pressure on governments notably in Washington to at least phase in Primary Stage TFE to some extent.
Advanced Stage TFE (ie. full, or limited Electronic Transaction Monitoring, or ETM)though would ofcourse be more difficult, and controversial to become law on a national, or more international scale.
However, it should be noted that the huge global benefits for humanity far outweigh its risks for phasing it into society, and the world. This must be emphasised as it is vital for people to appreciate TFE in its advanced stage of development.


Basic Glossary


What is presented here are the basic definition of key terms in TFE. New terms may be added in the future, but most of the terminology would ultimately come from mainstream economics.




  • Transfinancial = The latin word trans implies something above, or beyond. In this case, it can be interpreted as being beyond conventional finance, and indeed, economics itself (ie Transfinancial Economics). In another context, transfinancial can imply money being transferred across borders to other countries.


  • Facilitation Banks = These are quite unlike their mainstream "counterparts" in that they have a licence to create new non-repayable money directly into the economy. Moreover, their regulatory framework is far more tighter than an ordinary bank. They can among other things closely track, and monitor electronically where newly created money goes, and can instantly override, and fine an account holder if it is deemed that certain funds have gone to a "wrong" account (ie. fraud prevention). The aim of FBs would be notably concerned with creating finance for environmental projects, and high ethical concerns.


  • Primary (Stage) TFE = Here, very limited amounts of mainly new debt-free non-repayable money could be gradually created electronically into the economy directly. Repayable money, or loans could be created as well if necessary. Economic Indicators (notably the Consumer Price Index) could be used to decide whether more new money could be created, or not. If inflationary pressures grow the conventional methods of raising taxation, and interest on loans could be undertaken. This is intended to help reduce the money supply, and hence, inflation.
(One vital potential application of Primary Stage TFE is that it could fund in full, or in part new antibiotic drugs to help save the lives of huge numbers of people in the present, and in the future. Such medicines make little, or indeed, no real profit for the big corporations, and their ilke, and hence, an "unconventional" approach to funding may be required. However, the focus is now on the creation of an accurate diagnostic which could help "seriously" reduce the demand for antibiotics for patients. This is a good ethical idea as it would also reduce the demand for the resources necessary to make antibiotics. But it would still require conventional, or indeed, "unconventional" funding arguably.)


  • Advanced (Stage) TFE = This is when most goods, and services would be tracked electronically, and have instantaneous checks undertaken at the point of transaction. This is done to find out their inflation status, and also to ideally discover the IDs of most goods, and services. The latter aspect is used to build up a profile, or electronic GDP of the economy in Real-Time. At the point of transaction electronic checks are undertaken by supercomputers when the relevant pricing data is sent to an inflation authority. It is then that the inflation status, and IDs of most goods, and services can be ascertained. The resulting data is transmitted to the cashier, and certain "unconventional" electronic controls may be used to adjust the Free Market Price.


  • Electronic Transaction Monitoring (ETM) = This is explained above. It is simply the monitoring of most goods, and services of products, and services.


  • Facilitation Finance = The circulation of mainly new debt-free non-repayble electronic money by special Smart Banks, or Facilitation Banks(FBs), and/or possibly by governments. This Facilitation Finance can be seen as the result of a money creation process known in economics as Quantitative Easing, or QE. Ofcourse, repayable money could be created electronically sans interest.


  • Grant Interest = A highly controversial concept in which an independent authority (eg. the Central Bank) could pay on behalf of the customer, or company the interest on the amounts of electronic creation of new non-repayable money (ie.a commercial grant) by Facilitation Banks. A more ethical approach to Grant Interest is a one off payment for the electronic production of new money. Another controversial aspect of all this is that repayable loans could also have their interest paid by an independent authority (eg. the Central Bank). In other words, they would be interest free.


It is also important to realize that traditional mainstream banks would still exist to lend money. Unlike the FBs, they are not as well regulated, and furthermore, they are unable to create new non-repayable finance legally.







Some Key References



The following is not exhaustive ofcourse. The literature on finance, monetary reform, economics,and sustainability, is vast with an array of well-known, and little-known authors.

Steve Keen, Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned? Zed Books, 2011

David Colander (Author), Paul Ormerod (Author), Dave Ramsden (Author), Paul Seabright (Author), John Sloman (Author), Edward Glaeser (Author), Andrew Haldane (Author), John Kay (Author), Andrew Lo (Author), Diane Coyle (Editor), What's the Use of Economics? Teaching the Dismal Science after the Crisis, published 2012.

L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems, Palgrave Macmillan, 2012

Stephen Zarlenga,The Lost Science of Money: The Mythology of Money, The Story of Power, AMI, Dec 2002

J.W. Hughes,Major Douglas: The Policy of a Philosophy, Wedderspoon Associates,2002

Ellen Hodgson Brown and Reed Simpson, Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free, 2012 edition (among many other interesting things, it includes some rare info on "experiments" used by early American Colonists to create "enough" new money to fund various projects)

Josh Ryan-Collins (Author), Tony Greenham (Author), Richard Werner (Author), Andrew Jackson (Author) Where Does Money Come From?: A Guide to the UK Monetary and Banking System, New Economics Foundation, 2012

Jeffrey D. Sachs,Common Wealth: Economics for a Crowded Planet,Penguin Books, 2009

Jeffrey D. Sachs, The Price of Civilization: Reawakening American Virtue and Prosperity, Random House Trade Paperbacks, 2012

Joseph Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy, W. W. Norton & Company, 2010

Noreena Hertz, IOU: The Debt Threat and Why We Must Defuse It, Fourth Estate, 2010

Mckenzie Funk, Windfall, The Booming Business of Climate Change, Penguin, 2014

Jeremy Rifkin, The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism, Palgrave Macmillan, 2014

Naomi Klein, This Changes Everything: Capitalism vs. the Climate Simon & Schuster, 2014



Some Links Of Possible Interest.


The following links may be of interest.


1) TFE is notably similiar to Social Credit. The following link may be of interest, and a French version also exists. http://www.michaeljournal.org/plenty42.htm

2) An introduction to MMT, or Modern Monetary Theory which is also very similiar to TFE. http://ralphanomics.blogspot.com/2011/02/introduction-to-modern-monetary-theory.html

4) Trond Andresen connects electronic money to MMT in his working paper. He seems to have drawn something of his inspiration from TFE. http://www.itk.ntnu.no/ansatte/Andresen_Trond/econ/mmt-electronic.pdf


5) The following link to a NGO is concerned with how money is created, and used. http://www.positivemoney.org.uk/

6) The idea of businesses working in a real-time economy is nothing new. Ofcourse, TFE ultimately goes beyond this to include a deeper, and far more accurate understanding of the actual workings of the economy itself. This is revolutionary, and turns economics on its head. Indeed, it could be argued that TFE is the most important breakthrough in the history of economics, and this may one day be recognized. http://en.wikipedia.org/wiki/Real-time_economy Certain initiatives are being undertaken to a limited degree to track the Free Market Prices of goods in Real-Time. Some examples are as follows http://theeconomicrealms.blogspot.co.uk/2014/11/real-time-economic-data-tracking.html http://theeconomicrealms.blogspot.co.uk/2014/11/mit-launches-real-time-inflation-indices.html http://theeconomicrealms.blogspot.co.uk/2014/11/raging-inflation-narendra-modi.html
7) In the future smartphones could be used on a common daily basis by most of society, to transfer, or transmit money. This has great relevance to TFE as one can imagine. Barclays came out with their model phone called Pingit http://www.guardian.co.uk/money/2012/feb/16/barclays-pingit-money-sending-smartphone

8) In contrast to the Developed World, Kenya, of all places have been using the mobile phone as the main means to transmit, and indeed, recieve funds electronically. http://www.bbc.co.uk/news/business-11793290

9) A growing, and comprehensive blog on economics in general. http://theeconomicrealms.blogspot.co.uk/2012/12/how-can-anything-rival-threat-of.html http://theeconomicrealms.blogspot.co.uk/2012/11/paradise-or-oblivion.html

10) High Frequency Trading is an example of the power of advanced automated computer technology. http://www.en.wikipedia.org/wiki/High_frequency_trading

11) The idea of something like a cybernetic economy has been around for sometime. The following links may be of interest, and appear to offer "techno-economic" ideas within an "extreme" socialist, or communist type system. With TFE though we are discussing an economy that exists within the framework of a more "ethical" futuristic capitalist system which would ideally have genuine open democracy, and respect for universal human rights rather than some dystopia, or totalitarian system. This is always important to remember. Yet, if society decides it can evolve into a "higher," or more "advanced" social structure similiar to one envisaged by Technocracy. In this respect, TFE can seen as a "credible" transitional system to a "better" world. http://p2pfoundation.net/Towards_a_New_Cybernetic_Socialism http://blog.p2pfoundation.net/why-you-should-read-the-essay-red-plenty-platforms/2013/08/20 http://p2pfoundation.net/Cybernetic_Communism http://p2pfoundation.net/Cybernetic_Revolutionaries http://p2pfoundation.net/Cybernetic_Planning http://encyclopedia2.thefreedictionary.com/Economic+Cybernetics Reference is also made to Paul Cockshott, and his Cybersocialism https://www.youtube.com/watch?v=LtlZys7QOO4

12) Professor Richard Werner was the originator of the term Quantitative Easing, or QE. But it has been completely misinterpreted as the following link reveals http://www.bbc.co.uk/news/business-24614016#story_continues_3

13) The problems facing the management, and possible success of Megaprojects, notably IT ones.http://blog.budzier.com/me-research/ http://www.mckinsey.com/client_service/public_sector/latest_thinking/mckinsey_on_government/seven_imperatives_for_success_in_it_megaprojects


14) The use, and develeopment of Big Data appears to be growing apace in the world. It has huge significance for TFE http://en.wikipedia.org/wiki/Big_data

15) The use of dynamic pricing, and algorithms is becoming a serious reality. http://en.wikipedia.org/wiki/Dynamic_pricing


16) Serious problems may be faced with ageing bank computer systems. With TFE it may be possible to help in full, or in part the financing of new IT systems.http://theeconomicrealms.blogspot.co.uk/2013/12/banking-it-crisis.html

17) The Resource Based Economy may be of interest. http://www.theresourcebasedeconomy.com/

18) The Universal Debating Project http://www.p2pfoundation.net/Universal_Debating_Project

19) The idea of the Industrial Internet is similar to the concept of ETM in TFE. http://gelookahead.economist.com/industrial-internet/ http://en.wikipedia.org/wiki/Industrial_Internet

20) The Internet of Things has great relevance to TFE. http://en.wikipedia.org/w/index.php?title=Internet_of_Things&redirect=no





PS A paper on TFE was actually accepted by a peer reviewed journal. However, due to a dispute with the editor/publisher I withdrew it from publication, and at the time of writing a new version has been sent elsewhere.
Robert Searle is the originator of this "work in progress" project. His email address is robertsearle46@googlemail.com . Admitedly, my bio below is to some extent "unconventional," but it is hoped it will not detract from any interest in the above project.

http://www.p2pfoundation.net/Robert_Searle

Friday, 19 June 2015

The Ragged-Trousered Philanthropists

A novel that has social, and economic implications.....




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The Ragged-Trousered Philanthropists
TheRaggedTrouseredPhilanthropists.jpg
First edition
AuthorRobert Tressell a.k.a. Noonan, born Croker
CountryUnited Kingdom
LanguageEnglish
PublisherGrant Richards
Publication date
23 April 1914
Media typePrint (Hardback & Paperback)
The Ragged-Trousered Philanthropists is a novel by Robert Tressell first published in 1914 after his death in 1911. An explicitly political work, it is widely regarded as a classic of working-class literature. It placed seventy second in the 2003 The Big Read survey conducted by the BBC.


Background[edit]

Robert Tressell was the nom-de-plume of Robert Noonan, a house painter. Although born in Dublin (and baptised with the surname Croker), Noonan settled in England after living in South Africa at the beginning of the twentieth century. He chose the pen name Tressell in reference to the trestle table, an important part of his kit as a painter and decorator. Based on his own experiences of poverty, exploitation, and his terror that he and his daughter Kathleen — whom he was raising alone — would be consigned to the workhouse if he became ill, Noonan embarked on a detailed and scathing analysis of the relationship between working-class people and their employers. The "philanthropists" of the title are the workers who, in Noonan's view, acquiesce in their own exploitation in the interests of their bosses.
The novel is set in the fictional town of Mugsborough, based on the southern English coastal town of Hastings, where Noonan lived, although its geographical location is described in the book and is well away from the actual town of Hastings. The original title page of the book carried the subtitle: "Being the story of twelve months in Hell, told by one of the damned, and written down by Robert Tressell."
He completed The Ragged-Trousered Philanthropists in 1910, but the 1,600-page hand-written manuscript was rejected by the three publishing houses to which it was submitted. The rejections severely depressed Noonan, and Kathleen had to save the manuscript from being burnt. She placed it for safekeeping in a metal box underneath her bed.
After Noonan died of tuberculosis, Kathleen was determined to have her father's writing published and showed it to a friend, the writer Jessie Pope. Pope recommended the book to her own publisher, who bought the rights in April 1914 for £25. It was published that year in much abridged form in the United Kingdom and in an even more abridged form (90,000 words, from the original 250,000), in 1918.[1] It was also published in Canada and the United States in 1914, in the Soviet Union in 1920, and in Germany in 1925. The publisher removed much of the socialist ideology from the first edition; an unabridged edition with Noonan's original ending was not published until 1955, edited by F.C.Ball, who also wrote two biographies of Tressell, Tressell of Mugsborough (1951), and One of the Damned:The Life and Times of Robert Tressell (1973).

Plot introduction[edit]

Clearly frustrated at the refusal of his contemporaries to recognise the inequity and iniquity of society, Tressell's cast of hypocritical Christians, exploitative capitalists and corrupt councillors provide a backdrop for his main target — the workers who think that a better life is "not for the likes of them". Hence the title of the book; Tressell paints the workers as "philanthropists" who throw themselves into back-breaking work for poverty wages in order to generate profit for their masters.
The hero of the book, Frank Owen, is a socialist who believes that the capitalist system is the real source of the poverty he sees all around him. In vain he tries to convince his fellow workers of his world view, but finds that their education has trained them to distrust their own thoughts and to rely on those of their "betters". Much of the book consists of conversations between Owen and the others, or more often of lectures by Owen in the face of their jeering; this was presumably based on Tressell's own experiences.

Major themes[edit]

The book provides a comprehensive picture of social, political, economic and cultural life in Britain at a time when socialism was beginning to gain ground. It was around that time that the Labour Party was founded and began to win seats in the House of Commons.
The book advocates a socialist society in which work is performed to satisfy the needs of all rather than to generate profit for a few. A key chapter is "The Great Money Trick", in which Owen organises a mock-up of capitalism with his workmates, using slices of bread as raw materials and knives as machinery. Owen 'employs' his workmates cutting up the bread to illustrate that the employer — who does not work — generates personal wealth whilst the workers effectively remain no better off than when they began, endlessly swapping coins back and forth for food and wages. This is Tressell's practical way of illustrating the Marxist theory of surplus value, which in the capitalist system is generated by labour.
The house that is under renovation in the book, referred to frequently as the 'job', is known by the workmen as 'The Cave'. Given the author's interest in the philosophy of Plato, it is highly likely that this is a reference to Plato's "Allegory of the Cave". A major recurring theme in Tressell's book highlights the inability and reluctance of the workers to comprehend, or even consider, an alternative economic system [other than free market capitalism]. The author attributes this inability, amongst other things, to the fact that they have never experienced an alternative system, and have been raised as children to unquestioningly accept the status quo, regardless of it being potentially inimical to their own interests. In Plato's work, the underlying narrative suggests that in the absence of an alternative, human beings will accept and submit to their present condition and consider it to be 'normal', no matter how contrived the circumstances.

Criticism[edit]

Writing in the Manchester Evening News in April 1946 George Orwell praised the book's ability to convey without sensationalism "the actual detail of manual work and the tiny things almost unimaginable to any comfortably situated person which make life a misery when one's income drops below a certain level." He considered it "a book that everyone should read" and a piece of social history that left one "with the feeling that a considerable novelist was lost in this young working-man whom society could not bother to keep alive."[2]
Jonah Raskin has described The Ragged-Trousered Philanthropists as "a classic of modern British literature, that ought to rank with the work of Thomas Hardy, D. H. Lawrence, and James Joyce, and yet is largely unknown...Tressel's bitterness and anger are mixed with compassion, sympathy and a sharp sense of humour." [3]

Adaptations[edit]

See also[edit]

References and notes[edit]

  1. Jump up ^ Oxford World's Classics edition, 2005, edited and with an introduction by Peter Miles
  2. Jump up ^ George Orwell, Smothered Under Journalism, pp.256-257
  3. Jump up ^ "A Great Socialist Novel",In These Times magazine, August 22-28, 1979. (p. 17)
  4. Jump up ^ "Sony Award winners and nominees 2009" RadioAwards.org (Retrieved: 7 September 2009)
  5. Jump up ^ "Classic Serial: Mugsborough 1917" BBC.co.uk (Retrieved: 7 September 2009)

External links[edit]