Man Money Turbo

Money Turbo 3 x 3 Measures out of the Crisis 

Dutch intro

De wereld is in crisis. Onze economie berust op een geldsysteem, waarvan Einstein heeft gezegd dat dat het 8ste wereldwonder is. Namelijk een systeem met rente op rente. Er zijn alternatieven. Ik heb mij rond de eeuwwisseling verdiept in de monetaire economie. De Euro kwam er aan! In die tijd heb ik kennis gemaakt met de inzichten van de Grauwe en Lietaer, twee invloedrijke Belgische proffen op dit gebied. Toendertijd heb ik mij - in de politieke arena - eveneens beziggehouden met herziening van het belastingstelsel. Een vaste-tarievenstelsel met sectorale tarieven kan werk scheppen en de economie saneren. Naar aanleiding van de Occupy-beweging heb ik mijn inzichten in deze sfeer in de vorm gegoten van een manifest. Niet dat ik een barricadeprovo ben, maar ik vind het belangrijk om opgedane inzichten in rij en gelid te zetten. Op dit interessegebied ontplooi ik vooralsnog geen actie. Ik ben tenslotte slechts 'doctorandus in de technische wetenschappen' (ofwel Ingenieur) en geen Drs Economie. Bent u geïnteresseerd, dan wil ik uiteraard graag mijn inzichten met u delen. Op het gebied van de Man-Money-Turbo neem ik als hierboven gesteld in principe geen opdrachten aan, omdat ik geen professioneel econoom ben. Wel zou ik graag in een multidisciplinaire denktank willen participeren. Indertijd (1994) heb ik een model gemaakt van een Vaste-Tarieven-Belastingstelsel. Een student zou dit kunnen actualiseren met nieuwe demografische gegevens. Dit stelsel lijkt veel op de 'sociale vlaktaks'(ik vind vlaktaks overigens een vreselijk woord) van CDA. 

English intro

We are in the middle of crises. Millions of young people in Europe are jobless! People have lost their trust in institutions. How can we get out of this situation?

I am very interested in these macro-economic issues. Around the turn of the century I have followed some courses on related topics; environmental economy, money markets, tax systems. These times I was active in the CDA, the Dutch christian democratic party. As my proposal for a Dutch version of flat-rate tax was not adopted, I shifted to Leefbaar Nederland. This political party was originally based on the many local and regional political parties. Hoped that my flat-rate tax scheme would be adopted. Although it was adopted, the campaign turned sour. Pim Fortuyn being ousted from Leefbaar Nederland, the party lost its swing. So, later I returned to CDA, but I do not participate very actively.

Ten years later the economy turns is still in troubled waters! Triggered by the Occupy movement I have put some of my concepts on paper. It surprised me that I couldn't find any Manifesto of the Occupy Movement. Well - I found something, but it was a bit over the top and too wordy.

I have put my thoughts on the web, as I am not in an influential position to lobby and acquire support. My focus is on Water and Energy. You can say that macro-economy is a preferred hobby.

So I cooked up my own manifesto. I hope that the Man Money Turbo may inspire people who are in the position to turn the wheels. Gradually I will elaborate on the sub-topics that are part of the Manifesto of the Man Money Turbo. By the way, one of the points of the manifesto - a low interest rate - has already 'naturally' been established. And politicians start to fulminate on excessive bonusses of bankers. And,,,, what about the bank tax? So, I keep up being optimistic!  

Economy as a natural system

In Man Money Turbo I compare the economy with a natural system. Most natural systems are cyclic. Jim Gamble of the Thrive Movement also discusses economy as a natural system. He depicts it as a huge torus field! I was pleasantly surprised, since this reflects the way I look at how the money system could be: the Magic Donut of Economy!

Another great thinker is Bernard Litaer. He introduces Civics, a local currency unit. These local currency units are basically a Man Money Currency Unit. These MMCU's have a value of X units of human labor. The local currency units are very sucessfull. So a relation between money and human capital could be very interesting. 

Will we introduce the Hero (Hellas Euro), with which one can pay in Hellas/Greece only? Does one Hero have the value of 15 minutes of Hellenic human labor? Or the Fraero, the French Euro for internal use at the market place, with a value of 10 minutes of French labour?

When I hit upon an interesting item, related with my MMT, I will comment on it - when time allows. 

Germany as a prelude for a Man Money Turbo (130323)

Reading my favorite weekly 'Elsevier' (23-03-2013, #12,, p10), I hit upon an article with the title 'Duitse les'. The column on economic issues explains the reason behind the success of the German economy. When in the 90-ties Germany - and the rest of interest-paying Europe - were having hard times, it was Schröder who from 1998-2005 redirected Germany into prosperity. One of the most important policies was to curb inflation and unemployment. While - in the period from 2001 to 2011 - in the Netherlands the costs of labour increased by 36%, labour costs incresed only 19%. Germany showed the importance of controlling both inflation and labour costs. 

Now, what has this to do with the Man Money Turbo?  Well, infact part of the concept of the MMT is based on examples from Germany. When I studied about economics of currency unions, back in 1999, one of the book we consulted was 'The Economics of Monetary Integration', af Paul de Grauwe - an influential Belgian professor. We see that tensions can occur, when one country (A) is doing well and another competing country (B) has a weak stae of affairs. When the instrument of de/revaluation is not available - as in a monetary union - what mechanisms can restore the equilibrium between the two countries? De Grauwe explains that two mechanisms can occur: labour moblity and wage flexibility. Well, one of them - labour flexibility - is still a weak instrument in the Eurozone. But the second mechanism is just what Schröder has implemented! tame inflation by restrained wage increases. 

In the margin of the illustration 1.2 on page 7 I have scribbled: Suppose that the average value of the Euro is linked with a certain amount of labour (average wages). Than the increase of average wages are not in the hands of labour unions, but can be controlled by the government (to a certain extent). And also, an increase of average wages will increase the amount of money (M3). But, since controlled by the link with the currency unit, inflation is controlled by political forces. Schröder reigned in wages and thus inflation, making the Mark a strong currency.

This is why it is a good idea to link the Euro to an average value of labour. And not back to gold or as Keynes once alluded to oil or energy. And...Germany again: in many regions and cities of Germany LET-systems act as an economic stabilisor. That is why I propose to transform the Euro into a Man Money Currency Unit. It will help us out of the crisis. 

In combination with another lesson from Federal Germany. The country knows a solidarity scheme amongst their states (Länder). If one state is doing better than the average, it pays a certain amount of it's tax earning to a fund that supports the weaker states. In my concept of the Man Money Turbo, I propose to CREATE money to finance solidarity for long-term unemployed people from a European Solidarity Fund. The same amount of meney is DISCREATED at the top of the economy (Bank taxes or skimming of the Forex). The skimmed off, discreated money is not given to banks. It is handed in the form of paper mony from tellers to the unemployed. This money will circulate at the lower levels of the economy - in the markets and the shops - first, before it will strengthen the buffers of banks. Lietaer proposes the Civic as a digital kind of Man Money (LET-system). I opt for the paper money version, because it will first support small job creation. And through the solidarity fund it will ease the burden of the weaker southern countries in Europe. They can restructure their economy in stead of paying high interest on increasing debt. 

So I propose CREATION of paper money at the botom of the economy and DISCREATION of money at the top. This Turbo has a REDISTRIBUTION facility - much like Germanny's own scheme - to ease the pain of the rules of the currency unification upon weaker economies.

And to complete the concept: The Euro is linked to the average wage level in the Eurozone. Countries can choose to issue a national Euro, but only in the form of paper money, that is introduced at the bottom of the economy. For example: the HERO (Hellas Euro) can only be used for cash payments. Once deposited to banks by shopkeepers, it is used to strengthen the reserves of the bank. Only then can it be transformed into normal digital Euro's. 

Suggestions?

Do you have suggestions? Please write me on caspar@pompe-advies.nl.

'met vriendelijke groet', Caspar Pompe