Monday, August 20, 2012

Advantage 21 – No maintenance problems: single parents are provided for with their children

Excerpt from the book »Gradido – Natural Economy of Life«

»It is not work that makes human beings what they are.«
– Pope Johannes Paul II

More and more married people are getting divorced and an increasing number of children are being born out of marriage. We do not have the right to judge this development. Neither can we solve the problems between people which arise become of this. But we can solve the maintenance problems, which have hitherto led to extreme injustice and great suffering.

Like all other people, single parents and their children have a right to unconditional participation. They have the right to contribute to the common good and receive 1,000 gradidos a month. Single parents with two children, for example, together have the right to a basic income of 3,000 gradidos. Of course, children make a contribution to the common good appropriate for children – work that is fun and consistent with their abilities.

Hence, single parents and their children are no longer at a disadvantage. As equal members of the community they enjoy great respect, a good income and the satisfying feeling of belonging. 

Sunday, August 19, 2012

Advantage 22 – Open-source developers are provided for

Excerpt from the book »Gradido – Natural Economy of Life«

»At the beginning all software was free.«
– Georg Greve
German physicist and spokesman for the Free Software Foundation Europe

Have you ever heard the word Linux? It is the operating system that most internet servers in the world run on. It is open-source software, free software, with the source code being open to everyone so that they can use it. Thousand of programmers work on developing it without receiving any pay. No software company in the world could afford such a big international team of developers.

Up to now the developers have done this work in their spare time. They have to earn their living with other work, for example by working for commercial projects.

But what if a developer wants to concentrate on a still unknown project that requires his full attention? Such a project might, for example, be the development of a machine that uses a hitherto unknown source of energy, which is therefore not yet scientifically recognised. If he can only concentrate on it in his spare time, he may lack the time to make the breakthrough.

With the active basic income that would be no problem. He could probably explain the benefit of his development work to the community and receive his active basic income for it. And even if he did 50 hours of work outside his field for the community, he would still have enough time to continue working on his research. If he has a family, he will not be burdened with additional commitments to provide for their support since all members of the family themselves have the right to an active basic income.

Just imagine how many hitherto unrecognised geniuses would thus gain the opportunity to research and develop their projects! What fantastic progress humankind would make in this way. 

Saturday, August 18, 2012

Advantage 23 – Free research and development

Excerpt from the book »Gradido – Natural Economy of Life«

»Astonishment is the beginning of all research.
Suddenly something strikes you.«
– Wolfgang Wickler
German behavioural scientist and zoologist

The entire field of research and development can evolve free from commercial constraints, although there is no objection to developers being involved in the fruits of their work. It is good when companies have their development departments and pay their employees well.

However, there are also fields in which research does not at first appear to have any commercial use. It may possibly even run counter to the interests of some companies. An invention could make the products of an entire concern or even an industrial sector superfluous. The new invention would perhaps be a blessing for humankind and nature but no company wanting to finance such a product can be found.
With the active basic income researchers who work on unconventional subjects are not dependent on other people’s opinions. They are in any case provided for and can get on with their research work. 

Friday, August 17, 2012

Advantage 24 – National budget equivalent to number of inhabitants

Excerpt from the book »Gradido – Natural Economy of Life«

»With every new invention the masses ask what use it is and they are right to do so; for they can become aware of the value of something merely on account of its usefulness.«   

– Johann Wolfgang von Goethe
German poet and naturalist

Every major company has a human resources budget. We can assume that the costs of human resources for a company with 2,000 employees are twice as high as for a comparable company with 1,000 employees. The human resources budget should therefore increase or decrease in proportion to the number of staff.

We should also expect the same with the national budget. In a country with 200 million inhabitants the national budget should be twice as high as in a country with 100 million inhabitants. Ideally, the government is there for its citizens and the expenditure per citizen should be roughly the same all over the world. Unfortunately that has not been the case to date. There are extremely poor countries and rich industrialised nations. They are all in fact highly in debt and have grave financial problems but that is another topic.

In the Natural Economy of Life 1,000 gradidos are created per citizen per month for the national income. The national budget per person is thus exactly the same for all countries. A mini-nation has just as much money at its disposal per person as a gigantic confederation of states.

How high is the national budget in comparison with present-day conditions? In Germany we would have a state income of just over a trillion gradidos per year. This is roughly equivalent to the amount of the German national budget plus medical and social insurance.

Thursday, August 16, 2012

Advantage 25 – Freedom from tax and social security contributions

Excerpt from the book »Gradido – Natural Economy of Life«

»You have to be a philosopher to be able to file an income tax return. It is too difficult for a mathematician.«
– Albert Einstein
German mathematician and physicist

The national budget plus health and social services is funded from the second amount of money created. No taxes, compulsory insurances or social security contributions are necessary. The national income per capita is roughly as high as it currently is in Germany. A great deal of expenditure is no longer necessary:

       A debt-free state has no costs for either interest or repayment of debt
       Unconditional participation means that work is done that would otherwise be at the expense of the national budget
       Many social security contributions are no longer necessary because of the basic income.

Without the need to impose taxes we have a generous national budget with health and social services and with considerably lower expenditure. The surpluses can be used for the »nice things of life«, which further enhances people’s quality of life.

Wednesday, August 15, 2012

Advantage 26 – Much less state control

Excerpt from the book »Gradido – Natural Economy of Life«

»The masters see things as they are
but do not seek to control them.«
– Laotse
Chinese philosopher

A state that does not have to collect money from its citizens needs fewer controls. Although its citizens still have to be protected from criminal assaults, criminal potential will also decrease when people are contented. In turn, the additional freedom has an impact on people’s feeling of well-being, which means a further increase in quality of life, happiness and contentment.

Tuesday, August 14, 2012

Advantage 27 – Reduction of bureaucracy

Excerpt from the book »Gradido – Natural Economy of Life«

»Bureaucracy is the multiplication of problems
by engaging more civil servants.«
– Cyril Northcote Parkinson
British historian and publisher

Politicians seem to be in agreement on one point: they all call for a reduction of bureaucracy. The Natural Economy of Life needs much less administration, for most of the controlling bodies are not longer needed. The Inland Revenue may still be needed to pay out the basic income or perhaps this will be done by the former Social Services Department or the JobCentre, but there will no longer be a need for all three of them 

Not only state bureaucracy will become leaner but less administration will be needed in the commercial sector as well. The former medical insurance organisations receive their budgets from the second amount of money created. Clerical staff will only still be needed for dealing with claims for damages or health provision.

There need not necessarily be redundancies as the tasks of the civil servants and employees could be altered. The focus is away from control towards giving advice, with time being available for people again. And as there is a generous budget, this time can also be paid for.

Monday, August 13, 2012

Advantage 28 – Higher incentive to perform well

Excerpt from the book »Gradido – Natural Economy of Life«

»Nothing splendid has ever been achieved except by those who dared believe that something inside them was superior to circumstance.«
– Bruce Barton
American author

One might think that the incentive to deliver good work would decrease with a basic income. But is that really the case? In order to make a judgement, let’s look at the interaction of the following parameters.

It is correct that a basic income, be it active or unconditional, makes provision for everybody. This means that the sheer survival instinct no longer serves as an incentive. Hardly any applicants will be found for unpleasant, boring, dangerous and degrading jobs but most of this work will be rationalised away anyhow. Moreover, it does not serve to enhance the workers’ quality of life: on the contrary, most people who have to do such jobs today are emotionally detached from their work. They will quit their jobs immediately they find something better. Therefore we would do well to let machines do more of this type of work or at least make it more agreeable, more interesting and easier.

Motivation and the incentive to perform well increase in all other jobs. Why is this? People who are provided for by basic incomes only take up jobs they enjoy and/or which are well paid. They pick employers or customers who offer an excellent working climate and meaningful tasks. Conversely, this means that employers will make every effort to make the working conditions as good as possible. Good working conditions allow people to work well and with motivation; they are glad to perform at a good level.

Thus seen, all unfavourable circumstances which have hitherto been able to stop »normal« people performing in an outstanding manner have been done away with. It used to be exceptional people who performed in an exceptional manner. The Natural Economy of Life creates circumstances in which every completely normal person can develop their full potential and accomplish true miracles in their very personal field. And a high incentive exists on the financial level as all income is tax-free.

Sunday, August 12, 2012

Advantage 29 – Gross and net income the same

Excerpt from the book »Gradido – Natural Economy of Life«

»A human wants to receive gross and not net love.«
– Friedrich Hebbel
German poet

Gross and net income are the same as there are no taxes and other levies and what we earn belongs to us. In the Natural Economy of Life we are not accountable to anybody, not even the state. We can do accounting for self-monitoring purposes but we are not obliged to do it by the government.

Blue-collar workers and white-collar workers get their wages and salaries paid out in full. The self-employed and entrepreneurs do not have to include any taxes or levies in their price calculations. This makes life noticeably easier, increases incomes and decreases costs at the same time.

Saturday, August 11, 2012

Advantage 30 – Lower wage costs

Excerpt from the book »Gradido – Natural Economy of Life«

»Chinese labour costs would be economic nonsense in Europe. What money is the German employee supposed to consume with? This whole “stinginess is cool” mentality is in fact the real problem.«

– Wendelin Wiedeking
Former Chairman of Porsche AG

At present about half of the labour costs are needed for deductions and only the other half is transferred to the employees. This situation is disguised by the so-called »employer contribution«. Employees only have to pay half of their insurances and social security contributions from their wages and the employers pay the other half. This is of course just eyewash as the employers also have to include the employer contribution in their labour costs.

With the gradido gross and net incomes are the same. The deductions saved are shared between employers and employees with the employees receiving a higher net wage and employers having lower labour costs.

Friday, August 10, 2012

Advantage 31 – No definition for illegal work

Excerpt from the book »Gradido – Natural Economy of Life«

»”Saturdays and Black“ is the most flourishing firm in Germany.«

– Theodor 'Theo' Waigel
former German Minister of Finance

When there are no taxes and levies there is no black work. The gradido not only solves the problem of illegal work but there is no longer even a definition for it.

Black work is a big problem in the old system. The government loses tax revenue that it so badly needs. Service companies are faced with unfair competition because of black work. Many illegal workers are foreigners, which increases the migrant problem.

How liberating it is that there cannot be anything like black work with the gradido. Everybody can enter into economic exchanges with anybody else. Nobody needs to have a work permit or to file a tax return. Companies remain competitive vis-à-vis individuals and vice versa. 

Thursday, August 9, 2012

Advantage 32 – Rehabilitation of state finances and asset protection

Excerpt from the book »Gradido – Natural Economy of Life«

»Tax justice and sound state finances are not opposites.«
– Guido Westerwelle
German politician, FDP [Liberal Party]

The following sections are concerned with the transition from the old to the new system. We present solutions as to how the wealthy countries can restructure their state finances and be able to repay their debts. For the poor countries, there will be a debt cut. We will also show a possibility for safeguarding private assets in the case of a monetary crash so that they are available in the gradido currency after the changeover to the Natural Economy of Life.

In this way we take the wealthy states and citizens on board as long as they wish this. The less wealthy and the poor have only advantages from the changeover anyway. They just need to be informed, which is the purpose of this book.

If we humankind want to survive, we can only accomplish it together. All peoples and races, people of all religions and views, men and women, poor and rich must all unite to achieve the common goal. We are all in the same boat – the spaceship Earth. Nobody must be excluded and there must be no more enemy stereotypes. »Survival« is our common goal.

Why do I write that just at this point? Well, there are people who think it is completely unimportant if the states repay their debts and if existing private assets can be protected. This opinion is possibly based on the view that there are »good« and »bad« states and people. Only when we have rid ourselves of such hidden or openly articulated enemy stereotypes do we have the chance of surviving together and creating worldwide prosperity and peace and in harmony with nature. 

Wednesday, August 8, 2012

Advantage 33 – Repayment of state debt in just a few years

Excerpt from the book »Gradido – Natural Economy of Life«

»There should be an orderly state insolvency procedure,
in which the creditors are also involved.«
– Angela Merkel
German Chancellor, 4 May 2010

Since May 2010 at least there has been completely official talk about impending state bankruptcies in Europe. These are a result of the system and will come sooner or later in the old system. The bailout funds will not prevent this and they actually lead to even more state debt. There may also be a collapse of the euro or a complete financial crash.

You remember that the present money is created through borrowing and therefore debt and assets have to be roughly equal. Conversely, this means that the cancellation of debt also means the cancellation of assets, no matter if it be a haircut or repayment of the debt.

Our model for repaying the state debts starts with a step-by-step introduction of the gradido. Parallel to this, part of private assets are changed from euros to gradidos. The euros collected from the asset exchange are used to repay the state debts. The loss of money resulting from this is offset by introducing the gradido. The model can succeed in all countries where there are sufficient private assets. I would like to illustrate it with the example of Germany.

The state debts in Germany have now risen to some 2 trillion euros. The total assets in Germany amount to some 5 trillion euros. A gradual asset exchange can be arranged in conjunction with the plan for phasing in the gradido. In phase 1 one percent of all assets would be changed from euros into gradidos annually. In phase 2 two percent etc. up to a total of five percent annually in phase 5.

That means that 250 billions euros would be changed into gradidos every year in phase 5. 100 billion euros would be needed to pay the interest and 150 billion would remain for repayment of the debts. After ten years 1.5 billion euros would have been repaid. Strictly speaking, it is even more because the interest has decreased as well. The remaining 500 billion euros will have been fully repaid in another four years.

The advantage for the states is obvious: they repay their debts. And the advantage for the banks is that they get their money back. How does it benefit private individuals?

Tuesday, August 7, 2012

Advantage 34 – Protection of private assets

Excerpt from the book »Gradido – Natural Economy of Life«

»We tell people their savings deposits are safe.
And the government vouches for this as well.«
– Angela Merkel
German Chancellor, 5 October 2008

Anyone who goes around with their eyes open will have heard that our present monetary system will not long remain as it is. A financial crash is in store for us sooner or later. Some clever citizens are quickly buying some gold and others are hoarding food supplies for several months in their cellars. These may be sensible precautions for the moment when the crash happens.

But what about people who have invested their hard-earned money at a bank, in a building society, in life assurance, securities and so on? In the case of a financial crash their money will in all probability be gone. Perhaps they had saved it so as to be able spend a pleasant retirement. Perhaps they wanted to set up a business with their savings. Maybe they have saved for a new car or wanted to renovate their house. Hard luck! After the financial crash their savings are gone. Hopefully people are clever enough after the crash at least to introduce the Natural Economy of Life everywhere!

Then the second part of the asset exchange will take effect: people who declare their assets honestly and have changed the prescribed percentage into gradidos will get all their lost assets paid out after the changeover to the gradido. Their money is put into an annuity scheme to prevent it vanishing after a short time because of decay. Somebody who, for example, has lost 100,000 euros in the financial crash, will be paid out 5,000 gradidos a year for 20 years, thus saving their private assets. 

Monday, August 6, 2012

Advantage 35 – Capital flight is not worthwhile

Excerpt from the book »Gradido – Natural Economy of Life«

»Make yourself an honest man, and then you may be sure
that there is one less scoundrel in the world
– Thomas Carlyle
Scottish essayist and historian

Asset protection is, so to speak, the state’s thanks to its citizens who have declared their private assets honestly and contributed to clearing state debt. Their honesty is rewarded and they get their old assets paid out in gradidos.

But a person who has kept their assets secret or taken them abroad beforehand does not enjoy asset protection. In the case of a monetary crash capital flight will therefore not have been worthwhile. However, it does not need to be punished. In this case as well we prefer to work with positive motivation and reward honesty.

Sunday, August 5, 2012

Advantage 36 – Demographic change? No problem!

Excerpt from the book »Gradido – Natural Economy of Life«

»The inter-generational contract has been terminated demographically.«

– Kurt Biedenkopf, CDU [Christian Democratic Union]
Prime Minister of Saxony, 1996

People like to depict the so-called demographic change as a bogey. What does demographic change actually mean? On the one hand, the birth rate is falling in the wealthy countries and the younger generation is smaller. On the other hand, life expectation is increasing and people are getting older and older statistically. 

In the old system this means that the so-called »inter-generational contract« no longer works because fewer and fewer young people have to provide financial support for more and more old people. Here the emphasis lies on the word »financial«, for there is enough food for everybody. The politicians are trying to defuse this problem by raising the retirement age. This is a questionable approach when you think that we have unemployment On the other hand, we cannot make the politicians reproaches as the problem results from the system and therefore cannot be solved in the old system.

In the Natural Economy of Life old people contribute to creation of money like all other people. In addition, they also have the right to unconditional participation and hence an active basic income. 

Saturday, August 4, 2012

Advantage 37 – Old people are welcome

Excerpt from the book »Gradido – Natural Economy of Life«

»Old people are not all the same, probably even less than any other age group: for their long lives have made them into individuals. One of our current problems is that society refuses to understand that and treats all old people  'equally'.«
– Lily Pincus:
The Challenge of a Long Life

Unfortunately elderly people are often perceived as a burden. They no longer perform as well as young people and when they reach retirement age, society has to provide for them. If they become frail and ill, they are all too often shunted off to old people’s homes, which, in turn, cost a lot of money.

And, once again, things are quite different in the Natural Economy of Life. As old people contribute to creation of money and thus help to finance both the national income and the Equalisation and Environment Fund, they are welcome alone from a financial standpoint. In addition, they are lucrative customers for the business sector and thus welcome there as well, which constitutes the financial aspect.

The community can also greatly benefit from old people’s experience and wisdom, particularly from a human point of view. What a blessing it is for a family when the grandparents are still alive. Children adore their grandparents: they are more serene and indulgent, more generous and always ready to help – be it only with good words. This does not make them better than their biological parents, whose strictness is important for the children’s upbringing, but they are a great enrichment for everyone. A visit to their grandparents is like a holiday for many children.

What applies for the family applies even more for the larger community: old people enrich life in many respects. If they receive an active basic income, thus enjoying the right to unconditional participation, they also have social commitments, which give them the certainty of being needed. In this way they contribute actively to the common good. That keeps them young and fresh, they stay healthy longer and can therefore serve the community longer so that everybody concerned benefits.

Friday, August 3, 2012

Advantage 38 – Sure provision for old age

Excerpt from the book »Gradido – Natural Economy of Life«

»This sentence is true – and let me spell it out to you:  your pension is safe.«

– Norbert Blüm, CDU [Christian Democratic Union]
German Minister for Employment and Social Welfare, 1994

It has been clear for a long time that the statutory provision for old age is no longer sufficient. The state pension scheme may possibly collapse completely – even though people have paid contributions to it their whole life long. The »inter-generational contract« ceased to function a long time ago. This problem is a result of the system and cannot be solved in the old system.

In the Natural Economy of Life pension provision is assured through the basic income alone. Creation of money takes place in the here and now. We do not need an inter-generational contract, for old people contribute just as much to the good of all as everybody else.

It is also to be expected that people will be more healthy than today on account of the more favourable living conditions. Many people will still be fit and spry at an advanced age and enjoy taking on tasks. The strength of the active basic income is also shown here: while today a lot of people fall ill shortly after retirement because they no longer feel needed, unconditional participation guarantees everybody the right to contribute to the community in accordance with their inclinations and abilities. There cannot be a better health provision for elderly people than this.

So people will remain active in accordance with their inclinations and abilities up to an advanced age. Their basic income is only the foundation that assures their existence. Like everyone else they can also use their diverse skills to earn extra money – naturally tax-free!

If the money is not enough, some people may have granted interest-free loans in their young years which will provide additional income. 

Thursday, August 2, 2012

Advantage 39 – No overpopulation problem

Excerpt from the book »Gradido – Natural Economy of Life«

»Nativity varies and it is a well known fact that people tend to produce more offspring during war and poverty. Some, more well off, European countries are suffering from declining populations, bringing a threat to pension schemes, for example.«
– Einar Du Rietz
journalist and communications consultant

Here we come to a curious phenomenon: rich countries complain about the so-called demographic change or fall in the birth rate and poor countries about overpopulation. Apart from the fact that an outside observer might get the idea that we humans complain about everything, one perhaps not so obvious advantage of the Natural Economy of Life can be seen here.

If the birth rate in rich countries is falling while poor countries are inundated with new-borns, a monetary and economic system that results in worldwide prosperity should lead to a fall in the birth rate as well. This fall in the birth rate would be completely voluntary. No measures are necessary such as are currently in force in China, where (with some exceptions) a family is only permitted to have one child.

Isn’t it wonderful when problems are solved by themselves and completely voluntarily? Alone this one advantage that the overpopulation problem is solved by itself in an agreeable and voluntary manner should be sufficient reason for introducing the Natural Economy of Life.

Wednesday, August 1, 2012

Advantage 40 – Only interest-free loans have a chance on the market

Excerpt from the book »Gradido – Natural Economy of Life«

»The sin called “usura“ (charging interest), which has its actual origin in the loan contract, consists of demanding back more from the borrower than the amount he received. [... ] Any profit that exceeds the borrowed sum is therefore not permitted and usurious.«
– Pope Benedict XIV
Encyclica of 1 November 1745

Charging interest and compound interest is prohibited both in Christianity and Islam. But how effective is this prohibition?

The Natural Economy of Life manages without a ban on interest as money is plentifully available and subject to planned decay. The number of loans on offer will be very high as people will try to preserve the value of their money. The advantages for the lender are still great even with an interest-free loan: if the money is not lent, half the amount will be gone within a year because of the built-in perishability. After two years only a quarter of the original amount will be left and after three years only an eighth. So in any case it is better to make a loan than to keep the money in an account. That applies to everyone who earns more than they spend.

Interest would have no chance on this market. Loans with negative interest are much more likely: it is still better to have 80% left instead of all your money being gone after ten years.