Economic Crisis
The current economic crises requires some new thinking. It will not get that. There will be a lot of analysis and references to the 1930 crisis.
The methods for influencing the local economy are very limited. There are interest rate changes and there are tax changes. If there is inflation you raise the interest rate. If you are in the eurozone you cannot do that because interest rates are set by the Central Bank in Europe and if other countries do not have inflation you cannot raise the interest rates.
It is assumed that if raising the interest rates stop inflation then the opposite should stop deflation. So interest rates may be reduced almost to zero. The effect is weak or absent.
The methods for influencing the local economy are very limited. There are interest rate changes and there are tax changes. If there is inflation you raise the interest rate. If you are in the eurozone you cannot do that because interest rates are set by the Central Bank in Europe and if other countries do not have inflation you cannot raise the interest rates.
It is assumed that if raising the interest rates stop inflation then the opposite should stop deflation. So interest rates may be reduced almost to zero. The effect is weak or absent.
Replies to This Discussion
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Permalink Reply by Frans van Wamel on -
Rather than inventing new currencies though quick fic’s, I would suggest we reevaluate what we actually do with our money. First of all I would suggest to do away with all the various taxes we have and replace it with a single electronic transfer tax. The idea behind this is that whenever you transfer money, 1% of that is collected in tax. That is all the tax you would ever pay. The tax would be automatically collected with every electronic transfer that takes place. It’s immediate, accurate and equal for everyone involved.
In Australia it is suggested that with such a debit tax it would generate twice the amount of revenue that is currently collected through all the different taxations imposed by federal, state and local government levels combined. It would enable the government to spend even more on stimulus packages to get the economy going again.
Against that it would do away with the need for the Tax Office itself and create a huge unemployment in the accountancy profession. However if at the same time the need for financial auditing requirements is replaced by the triple bottom line accounting principles, we can actually see what we do with that money in our businesses. The accountancy people could now analyze what the social and environmental impacts are of its throughput.
Think of it this way: all that money to bail out the banks is in essence social money. By earmarking that money with a social value we suddenly have a giant amount of money that can be allocated under the banner of Social Responsibility. Social and environmental values can be exchanged under a TBL taxation system which in turn provides money for environmental friendly products and projects.
Employing people is a social benefit to our society. Labour intensive companies have a high social value. In addition we can look at what the company produces. If a company uses a lot of energy or transport to produce and deliver their goods then that would have a negative impact on the environment. The combined positive and negative impacts can be subsidized or taxed depending on the effectiveness of the goods or services produced by that company in their attempt to make money.
This concept also opens up a new dimension to the stock value of companies. The combined social and environmental impact could be expressed as a percentage of their financial worth. This would then be way for people to select how they want their invest their money. People who value the environment could now accurately select those companies that have been audited to be environmental friendly and so on.
The benefit of this concept is that it tackles the three problems that we currently face. It would immediately create a surplus for all governments to combat the financial crisis. In addition, working people would have much more money to spend as they also would only be taxed on the same principle of the debit transfer tax. And companies are being encouraged to tackle their environmental impact head on.
Since triple bottom line principles are already a standard business practice it would not be too hard to start implementing such a system for the multinationals in our world. This would be a way to streamline business practices on a global scale and creates a corporate consciousness.
The triple bottom line principle can also be used from a personal perspective. If a person spends money to educe their own environmental footprint then that can be indicated in a similar manner of their financial worth. Volunteering time as a referee for your children’s football club can be expressed by the club as it is not having to pay for a professional referee. This is a social value and can be calculated against the financial worth of that person.
Or, companies could write off the losses for your volunteering to help elder people during working time as a social responsibility and offset that against their carbon output. Therefore this person can pay the electricity bill with it’s own social and environmental values attached. If the social and environmental values are interchangeable then the electricity company could use that money from this person in order to offset their own environmental impact it has.
This way the problem of combating our pollution becomes an issue from the ground up. Electricity companies would prefer to deal with people with a high environmental and social value attached to that person’s money. Your dollar would be worth gold for the polluters. Offcourse, you go shopping at those companies that recycle, produce environmental friendly products, look after their personnel in less fortunate times or adopt de Bono thinking tools as a part of normal day to day business.
This concept has been created by using the principles of Simplicity to put forward an idea that can be done with current technologies, cost the least amount of money and has the highest impact.
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Permalink Reply by Frans van Wamel on
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Frans van Wamel said:Dennis Perrin said:There may then be more actual cash in circulation in order to avoid electronic transfers!
Thanks Dennis. After focussing on your comment for a little while I thought to myself: That is a typical Black Hat reaction. I would have thought that there would not many people who would bother to avoid the 1% tax compared to the the rate of upwards of 30% that they are paying now. Also, how many bills are there these days that you can pay in cash? Or, where did you get that cash from in the first place. It must have been paid to you into a bank account somehwere.
In addition, I find it amazing that people who contribute to this site only seem to rehash Edward's work in one way or another. There are not many people who actually contribute to put forward ideas and help to flesh them out. I am not a trainer in any sorts and don't want to blow my trumpet, but I would have thought that the reason why we like de Bono is to create something by using his tools constructively. If we were to do that, then collectively we may be able to make an impact to make a real change in our world. We all know we need it. Just look around you. Unless we practise what we preach, we won't get anywhere.
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Permalink Reply by Phil Bachmann on -
There seem to be several requirements in order to get better economic mechanisms legislated:
- Design them.
- Test them.
- Sell them.
Designing them is ebne.
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Permalink Reply by Frans van Wamel on
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Sorry Dennis, I took your comment the wrong way. I am delighted to see your suggestion about being able to direct taxes towards your own values.
I take your contribution together in the light of what Phil said: I see this discussion as part of the design and am very pleased that my concept is generating some interest. I have already done some testing towards possible legislation and it would be suffice to say that our (previous) treasurer for 11 years adopted the concept before his party lost the election. The current treasurer has written me a letter that my concept falls within the scope of our taxation review that is due by the end of this year.
Also I think that the concept should be further designed and fleshed out by many such as you did. To me a self organising system shouldn't be "controlled" by one person. I'ld like to keep that in there, it's a great idea. By directing it to ministerial portfolio's, politicians could create a budget according to their effectiveness. If they perform well it could benefit their longgevity. Or, we could vote them out of existence. Did anyone say participartive democracy?
I'm sure we can sell it together.
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Permalink Reply by Frans van Wamel on
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No need for appologies. I was puzzled by your request for a reply, I thought I had. But looking back to your suggestion I realise that I missed the fact that poorer people wouldn't pay taxes at all. I hadn't thought of that. That makes the argumentation even stronger. Fantastic!
You say that I am advanced in economics but I would argue that. I only took a backseat view to the point of triple bottom line business practises and the fact that we only audit the financial side of it. The social and environmental responsibilities are only used to make these companies look better in their annual reports. Like politicians; they say one thing and do another. No wonder that respect has gone.
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Permalink Reply by Markku Äijälä on -
At least what most ecobomists agree is that innovation is of utmost importance in beating the recession. Many of the big companies have started during hard times. Mostly they challenged the existing economy with fresh and innovative ideas. So the survival of the economies is really depending on how to think the unthinkable: can an industrialist save our planet, can the 1 €/day poor seduce investors with deep pockets, could someone redesign the delivery of electricity so that I could get rid of the dozens of cables in my house etc.
Recession is still mostly a state of mind.
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Permalink Reply by Lucas Gonzalez on
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Thinking is new when patterns that are new to the person are formed. This happens at the person level.
There's also a social level. Some people's old thinking about, say, local complementary currencies, moves to the center of the stage, and becomes a source for new thinking in other people's brains.
But old-timers may remain stuck in their personally old patterns, unable to find, say, new and more effective ways to move forward with their projects. Great ideas need small ideas if they are to hit the road. Great ideas provide the vision, small ideas move the muscles.
So idea ecosystems (ways to bring old ideas to new people, so that those ideas can be moved forward) and lateral thinking (old people having new ideas) are both needed at the same time.
The ecosystem exists already on the internet: wikis and other websites have lots of ideas. The workshops exist already in the shape of email lists and forums and social media such as twitter and what not. Some of those workshops have naturally creative people, and maybe some have formal lateral thinkers.
There may be need to have the ecosystem and the lateral thinking workshop both in the same place (or easily linked to each other), so that ideas coming out of the lateral thinking workshops and that, at the same time, are also new at the social level, may be tagged as such, and developed further.
One way to have ideas going back and forth easily is through open licenses. Just as an example, I declare this post to be in the public domain, so that anyone can use it as they see fit and no one can prevent others from using it.
I'll love to see more and more activity in this area, because my red hat has a sense of urgency, coupled with a sense that it can be done so it should be done. Just my red hat speaking, mind you. :-)
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Permalink Reply by Duane Baas on -
For me, I also see the comparison between the 1930 and today. If we look at what truly caused both "depressions", it was the destabilization of the banking system that caused this. People were more concerned about their own profit increasing potential that they began to eliminate the idea that other people deserve to be paid for their work. For the United States in the 1930s, it was hard for the people who had less money to survive on because the prices of items went up. It was also partially due to the idea that the people who would hire would only pay people close to nothing to do hard labor. This is also beginning to show in the culture today. As the markets began to shift in the United States, many companies began to seen the potential to send their jobs to under-developed countries were they can pay them less money in order to maximize the profits that they receive from the products. Now if we begin to think of moving the idea to globalism, that the world begins to work together, then the solution to this problem will become more effective. It is time that all people are paid equally for the amount of work that they do, no matter who they are or the country that they come from.
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Permalink Reply by Frans van Wamel on
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Lucas Gonzalez said:Hi Lucas. Hi Lucas, I liked your idea so much that I have taken you up on your idea here at Vuzion dot org. Got myself a Twitter too. You have to know: I'm reletaivly new to technology so it may take me a while to make the different linkages and connections. Programming is not one of my favourate past times. Is the world becomming conscious of it's own? Technolo gy has made it possible for this to happen, just as Teilhard wrote about 50 years before computers and internet were even thought about. Dennis made me wear my Black Hat for a while: it made me look inwards to myself. So that's not too bad, as a Black Hat can be good too. It gave me an OPV of myself, and I am a little like that too: an innitial emotional reaction. But in the end, everything you buy is eventually an emotional decission. And if brains have plasticity, then you would have to take in account that old patterns are hard to shift, as self organising patterns. The conscious wearing of the hats feels a little silly at first. But as Vitaly said: you have to take your black hat off with respect to the shining sun to put on your yellow hat, and stay of the grass. Dennis suggested that we could allocate a code. If we look at it from a DollarValue/Social+Environmental=Value point (from each personal/business/national level) of view we might be able to give each other the same value. That's how I see Duane's suggestion. Balances international trade to me.
We still have to deal with the Carbon Stuff. For the first time in a long time we have a reason to work out a better way of doing things. How else do you get progress? It's part of a cycle that we go thru. I find it rather exiting to be quite honest.
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Permalink Reply by Robert Maher on -
New realities are required.
For example; "governments are smart , forward thinking and work speedily and efficiently for us".
Personal attention given to such provocative statements make our own beliefs supporting the opposite visible.
Responsibility towards how we actively support the realites we reject will lead to insight.
There's suggestion we're all linked through a web of something, why not experiment with it?
Would anyone care to offer some specifics they wish to change?
I'm in.
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Permalink Reply by jf on -
Hi !
I am a victim of the economic crisis. In Spain the crisis is almost a chaos. I have no work. And I have little money.
I eh had an idea for your solution. Spain must stop having army.
against the crisis, extinguish the army.
Sell arms to the United States.
Economic funds that go to the army be sent to the population.
Send to the military of Spain that wish to continue in the army to the United States. And then all together to bring peace to the East next.
Spain should be brave and take up the challenge.
It is a different war, in which the army not painted nothing.
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Permalink Reply by Kim Jones on
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It's a bold idea, Juan
what worries me is that Espagna may not be able to make such a decision for herself, being bound by the common treaties that bind all the EU countries. It would have to go to the European parliament.
And in the event that Spanish territory or interests come under attack in the future? You don't repel the intruder?
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