Friday, June 3, 2011

The End of Money

Franz Hoermann is a professor at the university of economics in Vienna, Austria. Recently he published a book entitled "Das Ende des Geldes". The book is in German and so is most of the available information about Hoermann. There is a good summary TV interview (16 min) he gave after the documentary presentation of "Zeitgeist - Moving Forward".

The title of his book is frequently translated as "The End of Money" or "The Death of Money". He presents some off-the-beaten path ideas of how to eliminate money and suggests a substitute solution that is more just and socially fair. His replacement for money is a new innovative social accounting system based on "units" rewarded for actions valued by society. Each individual receives a base "income" to which he adds more income received for the productive actions he performs. The received units are stored on a credit card like card and can be spent in any store, gifted, traded, etc.

Here is an English translation of an interview given to the Austrian newspaper Der Standard. This article covers several items mentioned in the TV interview. He briefly comments on his view of an unconditional basic income for everyone. Growth and full employment pressures are removed in his proposed system. People have more spare time and more freedom to decide on what they want to work on. This part is similar to concepts presented in the Zeitgeist documentary series.

The Thdrussell blog offers this article which talks about Hoermann's view of money and the currently used double entry accounting system. This article does not go into the suggested money replacement.

On the KeimForm blog is an article with 3 critical comments on the TV interview given after the Zeitgeist presentation.

Here is a 19-page paper of his entitled "Premises and Promises" in which he outlines how he wants to convert today's zero-sum economic "game" into a more cooperative system where everybody can win.

The Guardian points out that -- according to Hoermann -- money is rewarded with money. We don't reward accomplishment in our system, we reward property. The economists Gunnar Heinsohn and Otto Steiger proved that modern money – worldwide – is not backed by value. Rather, whenever money is created an equal debt is created with it. The systemic problem arises out of the fact that the debt is loaned at interest. The money for this interest is not created. The money for the interest doesn't exist at all. Hoermann's suggested solution eliminates interest completely and creates a solution that rewards actions rather than possessions (as is the case in today's monetary system).

There are several good ideas in his work. The unjust money creation process has been outlined many times before (e.g. The Money Masters). Money as debt and the impossibility to repay the interest is a well understood theme (e.g. Money as Debt). Money should not be rewarded with money. The rat race is equally absurd. We cannot and we should not achieve full employment. We do not need full employment in today's world. As a joke I saw a graffiti that says "We do not lack money, we just have too many thieves". It is so true, we have enough resources, we just spend them unwisely. The thieves are the bankers and politicians. Given our resources we could all live well without putting in so many hours of inefficient and unproductive work. A basic income as suggested brings many advantages, more so than disadvantages. It removes pressures, crime, oppression, not to mention stress and illnesses. No, his plan is not perfect. No system seems to be ever perfect. But we can cherry-pick. There certainly seems to be less evil and risk in his approach than in today's twisted money game controlled by a few bankers.

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