Creating a New Society

Please start by watching Jake’s insightful discussion of Natural Law solutions to the problems threatening society, then come back here and contribute to the discussion.

Here are some of my ideas about how to create a new reality. First we must re-imagine the purpose of society and discuss the motivations that should drive it. I hope these foundational social principles ring true to you.

1) the earth and all of its resources and ecosystems were provided by Creation for all living things to share, protect, and enjoy. These natural rights apply equally to all species and generations in existence now and yet to come.

2) no being has any right to claim any ownership of the natural resources, ecosystems or innate chemical, biological or physical properties of nature or its operating systems

3) all beings are endowed at birth with an equal and absolute freedom to live as they choose so long as they cause no harm to, or limit the freedom of other sovereign individuals

4) no laws or regulations of any sort shall restrict or compel sovereign individuals who do no harm to others. Individual autonomy and freedom of choice is the supreme law of society

5) all initiation and use of force including physical, psychological or emotional is forbidden including all organized aggression such as war, invasion and military or police violence. Self defence however is a natural right

6) all people have a responsibility to respect the equal rights of others and to treat them as they would like to be treated themselves. All people have a responsibility to be truthful and to honour their word 

7) no association or group of individuals can claim or obtain legal rights of any kind that are exclusive or superior and not freely available to every individual. No legal immunities, special rights or status can be created by incorporation or by any government or private legislation. Only human beings can legally be “persons”

8) conspiracy or collusion to restrict or control the availability or free movement of goods and services in the marketplace will be ethically forbidden

9) human labour hours will be the basis of economic value. Money will be created instantly and automatically as a receipt for individual labour as it is being contributed to society. Receipts will be denominated in hours and can only be spent once. Money will not re-circulate.

10) debt, interest, profit and taxation will no longer exist or be necessary. Prices will equal the total cost of inputs in hours and nothing else. Major assets like homes and cars need only be paid for at the actual rate they depreciate, not 100% upfront.

After watching the video above, I got in touch with Jake and shared these thoughts with him:

The first step towards change is to help people identify the real cause of the problems in society.

The second step is to realize how our own motivations, beliefs and actions perpetuate the problems.

The third step is to create a vivid and alluring vision of how much better the world could be. This is where my current efforts are directed.

I would love to collaborate with you to bring an irresistible vision of how beautiful a Natural Law society would be… but first you need to complete your education into the true nature of the monetary and economic scams that enslave us. Until you understand that profit and debt are two sides of the same coin, that neither one can exist without the other, you will not be able to suggest a sound economic solution that is based on Natural Law.

Consider this simple example.

let A = all of the money PAID OUT to the marketplace by a business or government enterprise, including the cost of all production inputs, raw materials, components, overhead, utilities, and external services like financing, transporation, marketing etc.

let B = all of the money PAID OUT internally as wages, salaries, benefits, bonuses, etc.

let C = A+B = all of the purchasing power PAID INTO the marketplace

let’s set value of C=$100 and say there are a total of 10 organizations each with an equal 10% share of the marketplace

if Org 1 recoups costs and sells their 10% of C, the remaining outstanding value of C now = $90 (100-10),

if Org 2 recoups costs and sells their 10% of C, the remaining outstanding value of C now = $80 (90-10),

if Org 3 recoups cost and sells their 10% of C, but adds 20% profit to their prices, the remaining outstanding value of C now = $68, (80-12)

There is now only $68 of purchasing power left in the marketplace but $70 is needed for all of the remaining organizations to recoup their costs. To restore the Natural Economic Balance between costs and prices another $2 of purchasing power must be added to the economy. There are only 2 possible outcomes to this shortage.. either allow $2 worth of goods & services to remain unsold and idle OR use debt to create an additional $2 of purchasing power. The use of debt however does not solve the shortage, it merely postpones the effects of it. As the debt is paid back, the shortage returns and it is amplified by the additional demand for interest. Debt interest is never created when a loan is made, it must be diverted away from other purchasing options which creates an even bigger gap between the price of the remaining goods and services for sale in the marketplace and the remaining purchasing power available to buy them.

In our present system EVERY business adds profit to their prices and demands more money FROM the marketplace than it pays INTO the marketplace. Debt is essential to clear the production and to sell all of the goods and services produced. Profit is never paid INTO the marketplace but is always demanded FROM it.

But it gets worse… much worse. Like interest costs, profits compound as goods and services move along a supply chain. Consider another simple example.

Biz A produces a product that costs $100 to make, then adds a profit of 20% to create a selling price of $120

Biz B buys the product from Biz A and includes it in its input costs. When calculating its own selling price Biz B adds 20% to its costs. The purchase cost of $120 now becomes $144 ($120 x 1.2) and is embedded into Biz B’s selling price. 

Biz C buys the product from Biz B and includes it in its input costs. When calculating its own selling price Biz C adds 20% to its costs. The purchase cost of $144 now becomes $173 and is embedded into Biz C’s selling price.

Biz D buys the product from Biz C and includes it in its input costs. When calculating its own selling price Biz D adds 20% to its costs. The purchase cost of $173 now becomes $207 and is embedded into Biz C’s selling price.

In just 4 steps along a supply chain a product that cost $100 to make now costs $207 in the final selling price. Global supply chains now criss-cross the globe many times and include far more than just 4 suppliers and profit margins are often far greater than just 20%. Consider the staggering effect of compounding profits. Interest rates compound gradually over time, but profit rates compound instantly as goods and services move along supply chains.

This is the most important secret of capitalism. People who earn 20% of their income from profits believe that they are better off with more money to spend. What they fail to realize is that if everything in the marketplace costs twice as much as it would cost without profits then they could purchase more if profits were abolished. Consider one last simple example.

Without profits, earning $100 entitles you to purchase $100 worth of goods and services that are priced at their true cost of $100. With profits, earning $100 and adding $20 in profit entitles you to purchase $120 worth of goods and services that are priced at their compounded cost of $200. Without profits, you get to purchase 100% of the true value of the goods and services in the marketplace. With profits, even with 20% of your income coming from profits, you only get to purchase 60% (120/200) of the true value of the goods and services in the marketplace. Only a tiny percentage of credit creators and market manipulators actually benefit from profits. With true costs hidden, the rest of us simply pay far too much for everything.

You cannot hack at the roots of our social problems without eliminating the concept of profit. Profits generates the massive wealth that gives our leaders the power and authority to control us. Profit necessitates debt, debt demands interest, and both drain income away from workers thereby limiting their freedoms, choices and independent productivity. 

Capitalism uses an important timing fallacy to achieve its objectives. It teaches us that we must pay for things before we are allowed to use them. We must arrange financing for major capital assets before we are allowed to build or enjoy them. Homes, vehicles, machinery & equipment, public infrastructure like roads & bridges, hospitals, schools, etc all must be fully paid for (financed) before their creation begins.

Now think about this for a minute. Money is supposed to represent real tangible wealth that is created in the marketplace. When a major asset is created that will last for years or even centuries, the new debt money that is created to represent that asset should remain in existence for as long as the asset itself. However, people desire to pay off a loan early otherwise interest costs will raise the cost of purchasing the asset exponentially. When assets are paid for at a rate that exceeds the actual depreciation rate of the asset it creates an imbalance in the money supply. When debts are repaid the money borrowed is extinguished by a keyboard entry, just as easily as it was created when the loan was made. As a result, the remaining undepreciated value of the asset is no longer monetized so an excess of assets, or shortage of money, arises.

In reality, there is no need to pay for things upfront at all. The people who produce new assets (including everyone involved in the supply chains) are paid in full for their time during the creation process. The natural resources used were donated freely by Creation. The only true cost left for the assets themselves is the depreciation cost that arises as they wear out from our using them. This is why the new money that is created by workers as assets are produced must remain in existence for as long as the assets endure. Extinguishing money prematurely would eliminate the means to pay for depreciation as it occurs over the entire life of the asset.

People have been taught to believe that they must pay for things fully before they have the right to own them. Exclusive, private property rights and land titles are granted only after things are fully paid for. This too is a fallacy that’s convenient only to lenders who retain the right to seize your property until your debt is cleared. Even after that, the government can still expropriate your land, assets and properties without your consent if they so wish (all for the public good, of course). There is absolutely no reason that simple possession, occupancy and usage rights could not be used to secure the same exclusive, private enjoyment benefits as ownership… all without any upfront costs, mortgages or interest charges.

The concept of profit relies on another timing fallacy, namely that profits are spent back into the marketplace. While this may be true to some degree or another depending on the whims of the investor, it ignores the indisputable fact that it is always spent back in a later business cycle. Profits are calculated and added to prices AFTER all costs have already been paid out to the marketplace. At the time the goods are offered for sale, the marketplace has received no amount of money that corresponds to the profit added by the seller. Profits remain locked in inventories until the production sells and only then are they released by capturing additional money that pre-existed in the marketplace.

This is not to say that profit as a reward for ingenuity, talent, danger or importance to society is wrong. Such rewards are necessary to stimulate human involvement in particular areas of the economy, but they must be paid out in the same business cycle in which the production occurs. Variable compensation rates paid out to the marketplace as labour is performed enter prices before sales occur and thus are available to balance prices with the purchasing power in the marketplace. Arbitrary and imaginary profits to reward non-productive investors are only useful to tip the balance in capital’s favour and to necessitate further profit through additional debt and interest creation.

To all readers, please think deeply about these things and question your own preconceived ideas and beliefs. You must recognize the propaganda and lies used to enslave us before you can disable their influence and control over your own beliefs. Please add your own ideas and comments to this post so that we can begin to collaborate together on designing a better path for humanity.