Tuesday, April 21, 2015

Redivision of Wealth in the West, As Seen By a Muslim

What Went Wrong With the Role of Money and Property in the West
Economics isn't science. It's practicality, behavior and human scale. 
Westerners prefer contradictory designer table models, theories, and terminology imposed by governments for shifting around money.
We don't need collectivism, we need Islamic libertarianism.

Some two years ago, I wrote this article for the Yahoo Contributor Network. Alas, it doesn't exist anymore. Here, I'll place a few of my favs... because I sincerely think they are the truth. And economics are a very important, underestimated, and under appreciated topic.

There's a lot to say about economics, money, and redistribution of wealth in Western society. What is the core of the problem? I'll try to describe it here, perhaps in some black-and-white contrast tones. I'll admit, that some countries are less plagued by the problem than others. Coming to the core, doesn't involve high profile research projects. Complicated mathematical models don't belong in household economics. They should stay where they truly belong: Design and engineering. The core of economics is digging into ourselves, our own mind, our guiding principles, and common sense. What is the function of money in my life? Which part of my estate is for me, which part is for others, and who are those others? And: What do I want to do with my life, how do I want to sustain myself and family, how do I want to realize my dreams? What are the obstacles and opportunities? Money is about the individual and those next to him or her. Each individual has certain qualities and aspirations, and likes to see those put to work. And what role can government assume to support those aspirations--in stead of stifling them, as happens now.

The function of money now
Where does this leave money, in our lands? Money is naturally linked to individualism. It gives individual people and businesses freedom, because they don't have to supply an equal-value good in return to a supplier of a good they need. They can pay with a general exchange good, called money. That may be sea shells -- or a promise written on a computer page. For individual people, money should be a reflection of their property, a mirror. If individuals can safely rely on the value of their money, so can societies. This is only possible, if money, like water, can flow freely, without too many obstacles. Yet, governments allotted money a role way above its means. They have created artificial money streams by creating corporations to serve government monopolies on services that people could have done themselves. And money has been allotted a role below its means. Not enough are we allowed to set boundaries to protect our own property. We are demanded to share it with everybody else. Yet, we need to eat several times per day for sheer survival. So it's safe to conclude that property is important, that we deserve a healthy relationship with it, and that we don't have it now. Artificial redistribution of wealth has led to permanent debt on everybody. 
Now what if some people's income gathering gets hampered, even temporarily? The debt doesn't miraculously go away. What we see, is a water system where one or more of the waterways get blocked by an obstacle. The result is obvious and listens to names as "inflation" or "deflation." The river becomes a lake behind the obstacle. We also see, how much water is still present in the other waterways. Somehow, that money should also reach those waterways that are now bereft of supply. This is what we also see in our artificial tax-and-transfer economies. Governments fully control the streaming money system. They have a large chunk of tax money under them. When certain members or groups in society loose their income supply, the government must supply money, not only to them personally, but also generally. The government uses its central bank to supply this money, a process called money creation. We now see a process, where governments and corporations randomly levy and pay money. We could ask ourselves, what's the need for having a tax and contribution system at all, if institutions can supply society with freshly-printed money. This freshly-printed money might as well be directly spent on education, health care, infrastructure, the military, and other -- no tax payment necessary. The connection between money and economic performance has been broken anyway. 
The issue of money creation raises another one. How do we distinguish government-created money from so-called false money? Their function is basically the same. It's freshly pressed money, issued without parallel counter-performance. In a way, both false and created money are society's illegitimate child. It had no full economic status, in the sense that it was part of economic activity, yet it ends up functioning as a full means of payment. The big difference is, that in the first case, governments issued it, and in the second place, individual citizens did. Not a country is more centralized than mine, the Netherlands, yet small business owners told me they just use a false banknote like it's regular, and spend it. However, government monopoly is on this issue fiercer than on any other. Don't get me wrong -- it's good, that there's formal central government money. It has authority, individual people know it will be accepted everywhere. Yet, local trading systems can give considerable relief on stressed markets. An example is the Kaereti, a local currency on the Greek island of Crete, founded in 2011. The solutions to financial stress should be based on openness and practicality, but why should only governments bring them? And why should all transactions be carried out with money? What's wrong with simply giving, or with goods exchange? 

The causes
The West is a society with strong innate political and economic contradictions. These led to concepts and theories that rather diffuse the discussion, than that they solve anything. The terminology naming these concepts could hence only become ugly words, almost swear words. The first swear word in Western thinking is individualism. "Individualism is destroying solidarity and togetherness in Western society". Much-heard it is. 
The Catholic Encyclopedia gives a nice overview of how the various concepts of individualism have changed and developed in the West, starting in ancient Greece. Individualism has always been seen as a negative quality: A danger to the co-operation between people for the greater benefit of a caring society. Individualists care only for themselves, lack morality, and have no healthy ties with family, friends, and neighbors, is the idea. Yet, the welfare state created individuals who have ties mainly with public offices. Most tax systems disable providing for family members, nowadays. The state is the only one that can take care of people, also morally. Is there an individual left? What is left, is a group of powerless individuals, unable to fend for themselves. They have been awarded with the counter-duty of payment for public services. Paying for service rendered is an act of togetherness and solidarity in a caring society, where individuals are part of a group. We are forced to pay a heavy tax burden over our properties and earnings -- thus heavy, that the majority of us can't obtain or keep property like real estate. It led to the situation where we must first pay to the public office, and then reclaim that money, or a service, from the same office. This purely to survive. The result is: Shifting of money and property to and fro, and we are all almost numbered state property.. The safe conclusion is: There is no individualism in the West, there's only fear of it. That's not all there is. The second swearword and angstgegner in the Western mind, is property.
Really nothing is feared more in Western culture than earthly possessions. They are not welcome in higher philosophy, nor truly welcome as a career goal in personal life plans. Starting with the ancient Greeks, there's always been a strong belief, that property distracts the mind from abstract philosophy and good morality. Western thinking understands concepts like love, altruism, or self worth, and how these are built from a healthy balance between personal needs and the need to be with others. It doesn't understand, that a person's relationship with money has this same need for healthy balance, simply because they need to work and live with help of these possessions. Also nowadays, people are ordered to spend their money and goods on altruistic goals and aren't allowed to keep much of it to themselves. In a very early stage of Western history, all this led to the thought that only special people can be allowed to manage the bulk of property in society. The Bible, for instance, allowed only few people inheritance. Women were excluded from economic rights as enterprise, ownership, inheritance, or paid work. The Biblical Book of Numbers, Chapter 27, explains how women were excluded from inheritance, unless there was no son. This rule doesn't exist in Islam, as shown in Qur'anic verses above. And the same Biblical Book of Numbers, Chapter 30, explains that women are not bound by their promises, unless their father or their husband allows them to make such, or stays silent. Another rule that doesn't exist in Islam, and that made it for Western women impossible to do business, acquire property, or work. Western inheritance traditionally was based on Biblical primogeniture laws: Only the eldest son could inherit the family estate, the same way as that only the King's eldest son could inherit the title and function of King. (See Gen 29:26.) In modern days, new legislation has enlarged the group of people entitled to inherit, enterprise, work, and own. But in practice, this is only a paper tiger. Also now, in most Western nations, only the government and its direct delegates, and spiritual leaders, are granted right of big ownership, which led to the need for the well-known tax-and-transfer economy. Why so? Because, obviously, if many people are denied the right to own, work, inherit, and enterprise, those same people aren't able to sustain themselves. To sustain yourself, you need tools. Either financial and material property, or the right to obtain property. How else can you feed yourself? If you can't feed yourself, others must do it for you. In the West, also now, most people are fed by those who represent them: government and its immediate delegates, large institutions. In the past it was called feudality; then communism, corporatism, fascism, and nowadays it's called collectivism or "social democracy." Thanks to traditional primogeniture laws, centralization of property emerged in a very early stage of Western history. It's true that civil law and contracts could enable women to make prenuptial contracts or to inherit, but in practice, these were exemptions.
Thus, in Western thinking, a strange discrepancy grew between thoughts on everyday material needs, on the one hand, and abstract, emotional, and philosophical idealism, on the other. In the past, not much freedom existed in either category, but only the latter group was seen as worth fighting for as an individual. You want to stand up against a government that doesn't allow you your religious practice, live with a partner of your choice, or feel whatever you want to feel, but you demand the same government's protection when you need a house, a job, or a doctor. Power to the people became known under the name "democracy," but it was and is an incomplete power. Though democracy isn't a swear word, it's rather an affirmation. 
Freedom and Democracy 
What is democracy in Western civilization? It is said to be the freedom to think, speak, meet, assume leadership roles, and act as you want. Since individuals couldn't fend for themselves, they needed the right to voice their needs to the authorities. This right didn't come automatically -- it took several centuries to achieve it, and the history of our lands has known many revolutions as its loud witnesses. The first important revolution in the West took place in France. It didn't strive for freedom only; it also wanted equality and brotherhood. This is where the bottleneck narrowed even more, only to stay. This is because another contradiction wasn't solved: How to define citizenship. The ideal citizen is an independent personality in a society, able to fend for himself, herself, and able to contribute to society from his, her own opinions and lifestyle. How can we rhyme this with a heavy duty to pay for everybody and everything else as ordained by a government, without own priority or choice? This is an internal clash in our present idea of democracy, that hasn't been solved. The unfortunate result is, that government and citizens have become too much entwined, there's too much conflict of interest, it isn't possible anymore to protest successfully against harmful policies or politicians. It is impossible to get rid of a government that also pays your monthly social security benefits. 
After the revolutions in the eighteenth and nineteenth centuries, freedom remained restricted to abstract, high-brow philosophical, religious, artistic, and political topics mainly. Economic topics like inheriting, buying, owning, and selling were restricted to a male minority group in society, like before. Only the few who payed taxes, called citizens, could take part in business and administration. They paid taxes, because they belonged to the small group of people with enough income and property to make that worthwhile. Initially, only those men were entitled to a role in governance and business in many countries. Later, that led to more revolutions and war, finally leading to a much larger group of people being allowed in the brotherhood of equal citizens with political rights. Yet important elements of business life, such as land and many economic activities -- construction, health care, education -- remained in government and corporate hands. Before this long era of revolutions, which started in the eighteenth century and was sealed off by the first and second world wars, tax paying citizens, the king, church, and nobility owned these. The working class was excluded. After that revolution, they were transferred to the hands of public officials, banks, and idealistic corporations. As if no revolution ever happened. Now, formal citizenship means owning a passport, the right to vote, and speak your mind, but it still isn't the right to live and work in freedom. It isn't the true right of satisfying your own needs, because it doesn't include right of big ownership. 
Okay. Maybe it's not entirely true, that right of ownership for the small man and woman was wholly ignored in history. Since Margaret Thatcher, it was recognized as such, but in many countries in the West, mainly in Europe, still not implemented. And in a sense that led to another dire problem, a problem the West denies having: Corruption.
What is it? Generally we understand by this ugly phenomenon a money stream without a counter-performance, or only a vague, protective counter-performance. Usually it's levied by powerful organizations, with great force. It's a problem with two sides: Perversion and the tragedy of human weakness. Firstly, it should be reiterated, that people lack unlimited moral discipline. Also leaders. There hardly ever is a magical, omnipotent, infallible, prophetic leader. Certainly not the general manager of the bank office in Birmingham, or the Welfare office in Rochester, Washington, or Copenhagen. And certainly not the Minister of Finance in office from 2008 to 2012. They have a great freedom to act, and to determine which price ticket may be adhered to that decision or account. They also get severe criticism when their decision is wrong. Therefore, not many people wish a position like that. Candidates aren't easily found. Why is that? People are not cut out to fully represent a customer group of two million people, which is the case with corporations that handle other people's interest. Politicians are better protected than leaders of corporations. Kings and presidents don't decide on their own. At least that is a result of our violent history: A more democratic system under trias politica. We care for good morals in politics, but are indifferent to finance, in the West. So both their performance and their leaving can only be rewarded with a tremendous sum of money: The infamous bonus. Laid off, failed managers may have to literally run for their life, if they really screwed up. It means that not many people are willing to do the job. That makes a huge dismissal bonus inevitable. 
There's another, perhaps more dangerous side to corruption, that we choose to wholly ignore, in the West. "Corruption exists only at the top", is the wishful thought. Thinking big didn't only lead to large corporations. It also led to large worker unions. How honest were they? Here in Europe, the demand is: "Now that I got in, you may never fire me, no matter how unneeded my presence is." Full job protection is demanding payment without performance. I hate to say it, but that's another face of corruption. No one is ever too small or too insignificant for being corrupt. How could it -- why would lower rank workers be less corrupt than top rank workers. The thought is, that the small person is seen as too incapable of managing his or her own interests, and that makes him or her automatically incapable of corruption.
Corporation, Liberalism, Neo-Liberalism, Bank, Insurance Company 
Three other almost-swear words to the Western mind, when it comes to money and economics, are these: Corporation, liberalism, and bank. This is because they all have double, conflicting meanings. A corporation can be a large organization designed to serve self-interest. A large multinational company selling shampoos or computers can be such a corporation. It has become big, because many individual people choose to spend their money on the product -- a win - win situation, leading to natural growth. Or a corporation can be a large organization designed to serve other people's interest. A pension fund, a housing corporation, an office for social security benefits. This last category is the cause of a malfunctioning economy, because it usually isn't founded on a precisely measured current need. It is founded on political idealism and wants to easily levy and spend money on a not precisely measured current need. There are a lot of ifs and maybes. Yet, governments everywhere in the West have enabled this latter category of corporations to act on the market on their behalf, especially since the fall of Marxism. The thought was, that governments should no longer manage consumers' interests and that non-governmental organizations should. They are funded by compulsory member fees, or directly by tax money. Here, the disliked concept behind it is called "neo-liberalism". We forget, that under neo-liberalism we've really seen a resurrection of the feudal lords -- who we thought were dead and buried. Also in America! This is because the consumers still aren't allowed to independently manage their money and property on the fields these corporations work. After all, who is allowed to make their own retirement fund or buy some land and build a house for themselves? So liberalism has come to mean "non-governmental" instead of "free". Liberalism is seen as freedom on non-financial issues. In practice, there still is no leading concept for financial liberalism in the West.
Banks, Insurance Companies
They deserve their paragraph, because no creature in society is more contradictory and therefore more crippled by nature than they are. At least corporations, or, before, feudal estates, had some non-profit goal for the benefit of society. (That in practice they perish under their own heavy weight of profit gathering officials, is often seen as collateral damage, see above.) However, banks are corporations with a beneficiary goal for society and a profit goal. So on the one hand, they are supposed to lavishly and unselfishly spread their wealth, which they are supposed to gather back for their own good. Same goes for their protective function of other people's wealth versus their profit gain. Something obviously doesn't add up here. I'm not elaborating on the damage they caused here. The papers are filled with their sad story. Just this: Bankers and insurers freely play with other people's money as if they were non-profit corporations, yet they stumble upon the fact that their companies can go bankrupt, as private organizations. Since they manage so many people's money, the result of their collapse may ruin a large chunk of a nation's GNP. They must perform well. Truth is, we don't know how to define a proper role for money lenders in the West. They hold the most ungrateful scapegoat position in society, which may explain why especially "banker", or moneylender, traditionally weren't gladly sought-after, prestigious jobs. 
This is the West's final, perhaps most disliked swearword. It's a sensitive concept, for it involves non-Western cultures, which are often more informally organized. Informality is an embellification of what is really meant: Backwardness, underdevelopment. Formalism requires, that the state has to organize economic life. Then it gets stranded in the impossibility of building an entire society on its own, with a few corporations as its only helpers. Society must be a well-polished, refined, designer table product. Even the smallest action must be planned and documented. Hoped is, that an ingenious water system emerges -- yet the bottleneck lies in the word "refined" versus "emerges". The West has always thought, that "technology" is the beautiful formal answer to the economic woes of the dispossessed masses. But what can technology do for them, if, every month, they have to pay a chunk of costs for services they'd better produce themselves, and they have been disabled to set up a livelihood the way they like? A big cost saver it would be, if we didn't have to pay rent, mortgage, social insurance and inheritance tax; could breed and produce our own poultry, solar energy, and more. It is possible--it just isn't allowed. In this country, it isn't. People shouldn't have to pay for corporations, which are merely politicians' whimsical inventions. "Informality" is often mentioned in one breath with "corruption", where it's usually assumed that "those people" are "through and through" corrupt. It's true, that a country like Egypt knows straightforward corruption. A customs officer at an airport may offer to carry your suitcase and ask a ten euro note, which he isn't allowed to do. But at least he carries your suitcase, doesn't he. Here, corruption usually is not connected to any service, and it's morally applauded under names as "workers' rights" or "risk charge." 
A healthy society, that gives room to innovation, has a large chunk of informality. It is built by its inhabitants, and government has a supervisory function. Government sets rules and sanctions individuals who transgress. Government is there for those tasks that are too big or too dangerous for citizens to handle, such as long distance infrastructure, also for wild life; large scale environmental protection; water management, the military, protection against natural disaster, nuclear programs, or the most expensive and complicated health care programs. And government should be there for the weakest citizens who have no one to fend for them. Everything else should belong to personal responsibility. It means, that the public office can't decide for citizens how to take care of health issues, how to build a home or business. It should only act, when someone or something gets really hurt or damaged. It shouldn't automatically and beforehand act on every issue that arises -- which is the case now.

In this respect, I want to make a recommendation not everyone may like. The West should reconsider President Mugabe of Zimbabwe. The news reporters have burnt him down to the ground, to use a Dutchism. But someone should defend the principle he stands for, which has ensured him of re-election by his people. I hate the violence he used disowning white Zimbabweans. But he was right to disown them. Now, the large majority of Zimbabweans have their own land to support themselves with. He should, however, have granted white Zimbabweans their own, much smaller piece of land, because they are Zimbabwean citizens. In short, as a world community we shouldn't look at the West anymore as our moral compass. The West can't colonize the world anymore. It can only colonize Mars, for which plans are made now. But it will lead to the same problems as here, when (not if) those plans are feudal. The West must, like everybody else, learn to live within it's means and grant everybody economic freedom. Who is the West anyway? Does it exist at all. That brings me to a final conclusion.
There is no West
I think many people, no matter their background or skin color, see the West as their moral compass. Even in those countries and cultures, where people try to offer an alternative, such as Islamic countries. I remember an Egyptian businessman; he came with a remarkable saying: " The further North you go, the better it gets." Now, where is the world's superior Nordic nation? In Scandinavia? Or is it Siberia, Greenland? And why aren't Brazil or Chile ranked among the West, when their geographic position requires a long westward voyage from Amsterdam, and a sharp southward voyage from Oklahoma? And why isn't China seen as West. It's even further west, seen from Santiago the Chile. And the Chinese economy performs light years better than Amsterdam. And so do Japan. And maybe Brazil too. Could Western economic superiority be the last racist hurdle we still have to cross? This is where it all gets chaotic. It reminds me of Protestant churches in this country, whose bell towers are usually decorated with a wind vane, the top of which is decorated with a copper rooster, always facing towards the wind. Western superiority is like that rooster, fallen off during a storm, now trying to climb back, while all the other roosters just walk as they like.
Now what do I want?
I want my true democratic right. This is what it means: Being able to say "Ffx$ solidarity and participation. I participate if I want, on a project that I choose. I want to turn my back on society, live like a hermit, if I want. I don't want to pay for a stranger's leaking roof, or his doctor bills. I hate groups anyway." Without the usual accusatory replies. I want to believe and speak as I want, which is allowed -- and I want economic freedom, which I'm deprived of now. Heavy taxation and compulsory solidarity payments to corporations have become yesterday's empty symbolic phetishes of a society that doesn't need them anymore, thanks to money creation. Finally, in a society where land and property have been returned to individual owners, where governments create money, money doesn't need to "circle" anymore. People can or cannot pay with money among each other. The amazing things is -- from then on it's possible to have one world currency only, as people can also pay with other means than the official currency. The one world currency could function as a credit card. It means the end of Keynesian slavery. I think this has some resemblance to how Italy works. Many highly innovative small-scale businesses, many private home owners, a small government, low taxes, and a huge government deficit. And Italy survives creatively.
That's how it's done.

The Official King James Bible Online http://www.kingjamesbibleonline.org/