Not The Grub Street Journal

Exegesis Hermeneutics Flux Capacitor of Truthiness

via Leadership battle in the Green Party

I have not even got a whiff of a Green Party election? The green party has ceased to be even remotely relevant.
I made this FIlm in Support of Shahrar two years ago, I think its tongue in Cheek critique of Green Identity Politics portents to the irrelevance the Green party has now attained!

September 10, 2020

Porrige Served.

Darius Guppy: Since serving his prison sentence he has slipped, quite deliberately, off the radar CREDIT: Photo: PA
In the year 1994 there resided in the cell next to mine a certain ‘Tommy.’

Now Tommy had been imprisoned for counterfeiting Dutch Guilders to such a high standard that he had fooled the banks themselves.

As was customary among prisoners who became friends, Tommy allowed me to read his legal papers and I quickly became fascinated by the Judge’s sentencing speech, the gist of which was that Tommy’s activities had been parasitical. By creating money out of little more than thin air he had reduced the purchasing power of more deserving members of society. What would happen if everyone behaved like him?

Immediately I thought of arguments used, in a different context, by Thatcherites and neo-liberals in general regarding inflation. Inflation, just like counterfeiting, dilutes the value of the community’s hard-earned wealth and as such constitutes a terrible social evil. Creating too much money – ‘real’, just as much as ‘fake’ – can wreck an economy. Such indeed was the reasoning of the Nazis when, during World War Two they came up with a plan – that came close to implementation – to ruin Britain’s economy by flooding the country with near perfect counterfeit bills.

A lot of nonsense has been written and said about the world’s current economic woes – how the crash is the fault solely of the banks and how, by implication, Governments are blameless and in particular how it could all have been avoided and will indeed be made right by greater financial regulation, and so on. All of which constitutes a classic example of what the philosopher Alasdair MacIntyre terms “the fallacy of managerial expertise”: an attempt by ‘experts’ to blind us with science in order to justify their own over-paid existences and mask their confusion. After all, if they had been so skilled, then why is it that not one of them – either politician or finance minister or financial journalist or just plain financier – was able to predict the current debacle?

These ‘experts’ will tell you that the present difficulties are simply the result of abuses and excesses in a system that is basically sound. In short, all that is required is for some faults to be corrected. But do not believe them. For the reality is that the problem is systemic and a little tinkering here or there will achieve nothing in the long term.

In fact, what is needed is a root and branch re-evaluation of that most curious of cultural inventions – money – how it is created, how it circulates within an economy and how it can best be used to serve the interests of the community itself.

To begin then, the experts owe it to the people to explain to them in the simplest terms how it is that money actually works.

Such is the task I propose to undertake in this essay and for this it seems to me that the layman must grasp two fundamental concepts above all others:

First, that the confusion should not be made between ‘legal tender’ and ‘money’ as a whole. In particular, were one to ask the man on the street – indeed were one to ask most politicians and even most bankers – who it is that actually creates the money which rules our lives they would no doubt reply “the State.”

And in this they would be wrong.

For while it is true that Governments create legal tender – which is to say the physical notes and coins that circulate in an economy – that legal tender represents, at its absolute highest, only 3 per cent of the total money in circulation in the global economy. It is in fact the commercial banks, largely unaccountable and privately owned, that create the world’s money in the manner I will describe below.

Indeed, even were Tommy responsible for printing every single note in circulation throughout the world his power to dilute the rest of our wealth would amount to only a tiny fraction of that of the real manufacturers of money – which leads us to the second most fundamental point of all – that the activities of my friend Tommy and the activities of the bankers are in essence identical: the creation of money – which is to say claims on the rest of us – out of nothing.

Without knowing it, therefore, Tommy’s judge punished him for usurping not so much the role of the State as the role of the banks.

More to the point, the very same mistake – namely the mis-identification of where money truly originates – has been made by virtually all our politicians, economists and financial commentators.

Consider the absurd contradiction at the heart of neo-liberal, Monetarist, Thatcherite economics which has constituted the Western orthodoxy for the past few decades: to emphasise on the one hand that the money supply should be brought under control whilst simultaneously allowing banking – where the money is actually manufactured – to run riot!

To grasp how the global fraud works we will need to step back in time and imagine ourselves next to the original goldsmith-banker.

Now our goldsmith-banker has a vault in his business premises and in this vault ten of his customers each deposits a bar of gold weighing 1 kilogram – for safekeeping and in the hope of a return for lending our banker their gold and thereby depriving themselves of the benefits they would enjoy had they elected to spend their wealth now.

Classical economic theory would have it that our banker fulfils a useful social function – namely bringing together those who have a surplus of money with those who have a deficit but who, despite this, nevertheless have the energy, work ethic and vision to make a profit for all concerned out of this union. In short, our banker lends the ten gold bars in his vault to certain of his other customers who in turn use this wealth to embark on profitable ventures, ventures that generate a surplus by the end of year one. Happily, the vault now contains eleven gold bars out of which our banker can pay his depositors and himself a reasonable return.

This process, which for obvious reasons depends first and foremost upon economic ‘growth’, continues apace and is refined, at least to begin with, in ways that appear eminently logical. In particular, our banker soon questions the wisdom of keeping all the gold bars in his vault where security is a concern. Likewise, the procedure of having to descend to the vault and withdraw the gold bars and transport them to different parts of the country and carve them up into smaller units becomes too burdensome. The picture is further complicated when one appreciates that by now thousands of banks have sprung up all over the place and have begun to lend to each other.

At this point therefore he comes up with an idea – to create a token, a token in itself valueless, such as a piece of paper, that will represent a given quantity of the gold either in his own vault or held to his account at some giant, more secure vault – a precursor to Fort Knox if you like. Such a token can then be circulated and exchanged within the economy in a manner that is relatively hassle-free. Historians credit one of the first examples of such an instrument – the cheque – to the Knights Templar. In this way, a pilgrim could encash a cheque drawn on a European preceptory at a Templar branch in the Holy Land.

So far so good. And good it remains just so long as for the face value of each of the pieces of paper in circulation there exists a corresponding amount of gold sitting in a vault somewhere that can be accessed in the real world.

At this juncture therefore the virtual and real economies are able to advance pretty much in lock-step.

However, it is at this precise point that something truly wondrous and truly diabolical occurs.

For our banker and his banker friends make an imaginative leap.

Experience has taught them that the bearers of the pieces of paper which they have created rarely attempt to claim the gold their paper – or their ‘money’ – represents en masse.

Our banker reasons thus: “just so long as the pieces of paper that my friends and I have put into circulation are not encashed simultaneously then it is largely academic how many such pieces we create. If, for example, we have 1 kilogram of gold in our vaults and we issue ten pieces of paper to ten different clients each with a face value equivalent to that 1 kilogram, then so long as two people do not come to the bank on the same day demanding their gold we will be able to keep out of trouble.

Clearly, the most crucial part of our scheme is to create a culture of confidence. The bearers of our pieces of paper must feel secure about our ability to convert their paper back into their gold, or real wealth. Best therefore to give names to our institutions such as ‘prudential’, ‘guarantee’, ‘trust’, ‘security’, ‘fidelity’ and so on.”

The reader will appreciate the beauty of the scheme: for now, instead of earning interest on a single piece of paper our banker can earn interest on ten such pieces of paper! Moreover, whilst charging interest on these ten pieces of paper, he has only to pay out a reduced rate of interest on the single gold bar that has been deposited with him!

And, incredibly, this is indeed exactly what happens.

Currently the average fractional reserve requirements for banks amount to under 10% which means that for every dollar (or equivalent) the banks have on deposit they can lend out at least ten such dollars – virtual dollars which they summon from nowhere – and on which they charge interest.

Just as incredibly, this fact – the key to understanding how the international financial system actually operates and why the world is in such a mess – is discussed virtually nowhere in mainstream circles: not in The Financial Times, not in The Economist, not in the broadsheets, not in Parliament, not in the City and not in the economics departments of most Universities.

Either the process is unknown in these circles therefore – a sign of mediocrity – or it is indeed understood but kept deliberately quiet – a sign of wickedness.

Let me repeat: supposedly ‘sovereign’ Governments – representative of their people, at least in theory – do not control the single most important mechanism when it comes to their economies: namely the production and distribution of money. That role has been diverted in large measure to the banks which manufacture money out of nothing and charge interest on that conjured-up money. In fact, beyond a pathetic interest rate cut here and a token cut in VAT rates there our politicians have zero real power when it comes to directing their country’s economy.

Only in a world of lies and illusions, a world in which actors become our leaders and our heroes, could such sorcery be possible.

The picture has of course become a great deal more complicated. Soon pieces of paper are no longer required and instead entries on a bank’s ledger will suffice. Eventually, a further layer of virtuality is added when computers emerge and with them credits in cyberspace. Likewise all sorts of financial instruments and ‘products’ are devised by the experts – Collateralised Mortgage Obligations, Put and Call Options, Floating Rate Notes, Preference Shares, Convertible Bonds, Semi-Convertible Bonds and endless other ‘derivatives’ – but in essence these additions constitute mere variations of the same basic Three Card Trick.

Moreover, the illusion becomes self-reinforcing. Those involved in the process, sitting behind their computer screens, shuttled from one air-conditioned capsule to another, stressed by the pressure and the volatility of the hallucinogenic nightmare they inhabit, yet sheltered from the tactile realities of the outside world, no longer control the beast they have created. How far removed from the days when wheat landed on the docks and merchants met in coffee houses and bazaars to haggle over things they could feel.

Now it may be argued that while it is true that money is manufactured in the manner I have just described – in other words by creating loans to the banks’ clients – surely just as much money is destroyed every time a loan is repaid? This is true to an extent. However, the point to be grasped is that while money is indeed created and destroyed in vast amounts every second of the day, the interest on that money remains un-destroyed and accumulates within the system – and at a compounded rate, moreover.

The reader will appreciate the problem and how it is that the process described is far more inflationary and far more parasitical than the activities of all the Tommys in the world put together. For while that money, which by now has mutated into a vast mutual-indebtedness monster, grows exponentially, the wealth it is supposed to represent cannot grow at the same pace for very long. In short, while there is no limit to the number of zeros we can create on a computer – zeros which represent claims on us and on what we own – there is a very real limit to the amount of oil in the ground, the amount of wheat in the fields and the amount of livestock in our farms.

Granted, the discovery of a continent here, a technological invention there and an increase in efficiency somewhere else can accommodate the growth in the real economy that is required to keep pace with the growth in the virtual one, but only to a point – which is of course precisely why the economic explosion begins with the discovery and opening up of just such continents from the early 16th Century on and is reinforced with the advent of the industrial revolution. Capitalism, banking and growth become inseparable, but in a world bounded by the real, logic dictates that the virtual economy must eventually peel away from the real one and sooner or later the day of reckoning arrives – when the gulf that separates these two economies is too large to be sustained – for no power on earth can match the power of compound interest in the ether.

Consider the well-known tale of the Chinese Emperor and his opponent at a game of chess to whom the Emperor asks what reward would satisfy him in the event his victory. The opponent, his subject, replies that a single grain of wheat, doubled for each of the 64 squares on the chess board, would suffice. The Emperor, imagining that he has a good deal, plays on and loses, only to learn that he now owes his adversary the equivalent of 2000 times the current annual worldwide production of wheat.

Such are the miracles of compound growth. Such too is the reason why financiers have been able to award themselves increasingly astronomical sums. For their virtual printing presses are calibrated to an exponential production while no such calibration applies to Mother Earth.

It was the 1921 winner of a Nobel Prize for Chemistry and not for Economics, Frederick Soddy, who was among the first to articulate the mechanism by which money is created by the banks and how it mutates into debt in the ways I have described and his arguments have been developed over the years by thinkers such as Herman Daly and Richard Douthwaite.

In fact, the reasoning can be extended to cover not only bankers but the financial sector as a whole. A company makes a certain profit; a multiple of many times can be applied to that figure to arrive at a ‘value’ for that company (the price-earnings ratio) – based, as ever, on the assumption of future growth. That value can then be leveraged yet further for it to raise debt against its share price and so on and so forth. Taken to ever more ethereal extremes, such super-ovulation can mean that a single company with nothing more than an idea to be applied to the internet and a turnover less than your average Fish ‘n Chips can create yet more tokens – share certificates – worth several times the entire annual production of diamonds for the continent of Africa, a process known, retrospectively, as the dotcom bubble.

There are a couple of features which should be immediately apparent.

First, such a system constitutes in effect a redistribution mechanism from the poor to the rich which is of course precisely why the banks and Western Governments are so desperate to ensure its survival and the hegemony which results from it.

Money breeds more money and develops a quality akin to matter – the larger the agglomerations, the greater their gravitational pull or, as the Bible puts it: “unto he that hath shall be rendered and from he that hath not shall be taken away, even that which he hath.”

Indeed, contrary to what they may tell you, the banks never really want their loans to be repaid at all. Just so long as the interest is funded it is in fact to their benefit for the capital to remain outstanding on their books as ‘assets’ and for the debts to be rolled over. Every time the IMF or World Bank extends a line of credit to some impoverished nation, are they being ‘charitable’ therefore or are they simply perpetuating the enslavement?

Second, such a system relies entirely, as do all Ponzi schemes, on the assumption of continued growth, hence its inherent instability. Once that growth is threatened the edifice collapses. Householders in Britain today will appreciate such a phenomenon – the result of ‘leverage’ – only too well: put up 10 per cent for a property and borrow the rest from the bank. That property’s value need rise by only 10 per cent and you have doubled your equity. But on the flip side that value need fall by only 10 percent and you are wiped out.

Which in turn explains precisely why a contraction of a mere 2 or 3 percent in the global economy leads not to a correspondingly minute fall on international stock markets, but to financial Armageddon.

Likewise with the banks – lend ten times more money than you possess and when the economy grows – or at least pretends to grow – Porsches galore, but when the lack of growth is exposed it requires only 11% of the loans on your books (in value terms) to be bad and you are bust. The truth is not that these institutions have suddenly become insolvent therefore, but that they were never really solvent in the first place since the assumptions on which they were founded could not apply in the real world. Simple false-accounting has meant that by rolling over their debts they have been able to keep them on their books as ‘assets’ rather than losses and forestall the evil hour.

There is an overarching name for the process I have outlined – ‘usury’ – and our predecessors from the Ancient and Medieval worlds appear to have appreciated much better than us its ultimate destination: ruin.

In sum, I have argued that both the analyses of the current economic crisis and the sticky-plaster remedies advanced by politicians, financial journalists and the financial industry itself to counter that crisis are woefully inadequate because they fail to grasp what is in fact a simple and devastatingly effective swindle, a swindle largely invisible because it has become so deeply embedded in our culture.

The consequences of that swindle, in particular the desperate need for economic growth, the consumption, wastage, and the environmental and cultural despoliation which it engenders, together with some possible antidotes worthy of consideration, must be dealt with separately.

In the interim, suffice to say that some original and radical thinking, the type of thinking one encounters nowhere in any of the political parties, will be required.

Readers of the Telegraph in particular should take note – a degree in PPE or History and a few A-Levels in the Bleedin’ Obvious will not make the problems go away.

The principles of tax policyWritten evidence submitted by the Systemic Fiscal Reform Group

Parliament home page > Parliamentary business > Publications and Records > Committee Publications > All Select Committee Publications > Commons Select Committees > Treasury > Treasury
Session 2010-11
The principles of tax policy
Written evidence submitted by the Systemic Fiscal Reform Group

  1. The Systemic Fiscal Reform Group was formed in Cambridge in 2008 by a small group of individuals led by Dr. Adrian Wrigley. Operating as a “think tank”, we study the systems of taxation, money, subsidy and welfare as they operate in practice as well as the political economy behind them. We develop and advocate reforms we believe can be implemented by governments around the globe to improve living standards while reducing environmental damage.

  2. Dr. Adrian Wrigley is an entrepreneur trained in natural, engineering and computer sciences. Now working as a financial trader, he promotes a scientific understanding of the fiscal system as a whole with a view to establishing a new reform agenda. He is the principal author of this evidence.

Executive Summary

  1. Historically, tax policy appears to have been based on the principle of serving powerful interest groups at the expense of the public interest. The adverse consequences of this include damage to the economy, political integrity and public well-being. These worsen over time as the private interest embed themselves in the political system expanding their power until serious failures become apparent.

  2. Reform of the tax system has become imperative, moving from the present system of taxation for private interests to one where the public interest is served instead. Achieving this is only possible if the fundamental principles of tax policy and its path to reform are based both on economic and political realities. Most existing components of the tax system are neither necessary, nor fit for serving the public. They should be considered obsolescent and rapidly phased out.

  3. The modern tax system is based around the repayment of privately created debt money. This is transferred through the banking system mainly from economic producers according to the market value of their production or labour. The direct effect of this choice is twofold. Firstly, the suppression of productive economic activity. Secondly, the promotion of the banking interests which operate a cartel setting the terms and conditions for issuing fresh debt money needed for public spending and payment of taxes. Unemployment, poverty, debt bubbles, poor public services and inflation are the follow-on consequences.

  4. Legitimate government spending generally provides infrastructure, services and welfare payments to resident people and businesses. To benefit from this government spending, a person must own or rent a home or operate a business in the area. The monthly amount people pay to occupy their homes is set in the marketplace, based upon location and the value of natural, commercial and government amenities provided. Landlords charge monthly for these location amenities while home sellers charge a lump sum.

  5. Public interest is harmed greatly by two aspects of the tax system. Firstly the granting the power to issue the the money to pay taxes (the medium of taxation) to a private banking cartel. Secondly the collection of the tax according to production contributed rather then benefit conferred to the ultimate beneficiaries, the land/homeowners.

  6. Reform of the tax system will be unsuccessful unless based on sound economics and sound politics. Economics dictates the abandonment of the ill-defined “Ability to Pay” principle in favour of the “Benefit Principle”, recognising that the benefits of legitimate government accrue to land/home owners and those controlling natural resources. Politics dictates that proposals creating many obvious losers cannot be implemented

  7. The Systemic Fiscal Reform Group recommends a fundamentally new approach to reforming the tax system – elective reform. Taxpayers should have the right to opt out of the current system into a new system designed around sound principles.

  8. Allowing people to switch out of the harmful tax system for a much sounder, simpler system would allow the economy to recover rapidly solving the toughest financial, human, environmental and economic challenges.

Principles of tax policy are economic and political

  1. National success can only be sustained with a sound system of taxation. Sound taxation must be based on policy principles thoroughly understood by those empowered to maintain it. These must be based on an understanding of the economic principles underlying taxation. Equally important is an understanding of the political principles behind taxation.

Understanding taxation

  1. Taxation is central to the interests of every citizen, business and special group. Each group has its own economic interests and perspective foremost when it analyses the economy and promotes a particular viewpoint. Politicians, economists and business people rarely promote analysis which conflicts with their group interests. Clarity and analytical integrity generally work against private interests and are usually absent.

  2. In this response, it is assumed The Committee is seeking to further the public interest, even where this may conflict with the private interests which usually dominate the analysis and debate. This will pose a major challenge to those who have learned their analysis exclusively through channels devoted to promoting private interests, and must “unlearn” erroneous but pervasive assumptions and principles.

What are the economic principles of taxation?

  1. Taxation is at the economic core wherever government supplies significant services such as civil and military protection of property rights, infrastructure, education or healthcare. The UK is no exception.

  2. Taxation comprises three fundamental economic parts:

l Creation of the medium of taxation and issue into the economy

l Distribution of the medium of taxation through the economy

l Collection of the medium of taxation

The medium of taxation

  1. Over the course of history, the medium of taxation has changed several times. Under the earliest systems, taxation was paid in cattle, later moving to grain – generally rice or wheat (tithe systems) or labour (corvée systems). Whenever payments moved to metal tokens issued by the rulers, a money system was born. These tokens were usually made out of scarce and distinctive metals to prevent counterfeiting – silver, sometimes gold. The tokens would move through the economy through economic exchange, but would be demanded back by the rulers as the means of collecting taxes. Wooden tally sticks were the most successful English tax medium. The public demand of tokens to pay taxation ensures a sustained demand and maintains their exchange value across the economy.

  2. Modern taxation systems are still based around the creation, distribution and collection of tokens, but the tokens now take electronic rather than physical form. These tokens are bookkeeping entries in the banking system. The structure of the taxation system and the economy it controls is determined by the rules under which these electronic bookkeeping tokens are created, distributed and collected. Coins and notes are still issued in small quantity, but are subsidiary to to the banking system’s bookkeeping entries.

  3. The economic power of the tax system is determined both by how and where in the economy the medium of taxation is created and where and how the medium is collected.

  4. Contemporary governments grant the exclusive power to issue the medium of taxation to a state sanctioned banking cartel. The banking cartel comprises a central bank and private member banks. The central bank is responsible for price fixing, information sharing, promoting member interests and preventing member defaults. Serving the public interest is not a primary goal of a central bank. The cartel holds the exclusive power to set the price of and issue the medium of taxation. Governments generally prohibit the issue of alternative media for exchange and mandate payments of taxes only in the cartel-issued medium.

  5. The collection of the medium of taxation is under direct government control. Most tax is collected whenever economic production takes place. This places a burden on producers, who must acquire the medium of taxation directly or indirectly from the private banking cartel. The economic effect of taxation is dependent on the rules for calculating the amount of tax which is paid, regardless of who the tax is collected from. Usually, the person from whom the tax is collected can pass the burden of acquiring the medium on to others, generally by paying less for economic inputs, but sometimes by charging more for economic outputs.

  6. The spending power derived from taxation is shared between the government and the private banking cartel. This spending power is transmitted through the economy by banking cartel to their favoured associates, and by the government and their favoured associates. The system is effectively one of dual sovereignty since the sovereign powers of tax collecting and the corresponding issue of money is shared between the government and the banking cartel. This is the most distorting aspect of tax policy.

Change the medium of taxation

  1. The spending power derived from taxation should accrue wholly to the government, and not be shared with the private banking cartel. The only satisfactory ways of achieving the involve abandoning the collection of taxes through the medium of money created by fractional reserve lending. Taxation defines and underpins the money system.

  2. Principle : Taxes should only be payable in government issued money

l Money should be issued into circulation exclusively by the government when it pays wages, suppliers, pensions and welfare.

l Money should be withdrawn from circulation by the government when taxpayers pay taxes

l Money created by private businesses should no longer be accepted in payment of taxes

Introduce free markets, abandon production penalties

  1. Principle : Taxation should not interfere with free markets in labour, goods and services

  2. The following taxes depend on economic production and therefore act as production penalties: Income Tax, National Insurance, VAT, Corporation Tax, CGT, Stamp Duties

  3. By design, they impair the free exchange of labour, goods and/or services. They conflict with the above principle. They have no role in any sound tax system, and constitute major distortions in the economy. Harmful and unnecessary, they should be phased out.

Charging the beneficiary

  1. Businesses generally charge each customer a market price for the supply of goods or services which benefit that customer. The market price balances the overall forces of supply and demand. The government should use the same principle for taxation. Understanding the nature of “the customer” is a central issue.

  2. The legitimate “customers” of government activity are the owners of houses and land in the area governed. The owners of houses benefit from nearby roads, schools, hospitals, parks, police, flood defences. The owners are the ultimate beneficiary whether or not the house is owner-occupied or let to tenants. People renting property may receive these amenities, but pay for their value in their rent. Renters should not pay tax towards these amenities in addition to paying rent for them as at present.

  3. Principle : Taxation should only be levied on the ultimate beneficiaries of government, in particular, owners of land and houses.

  4. An alternative principle is sometimes advocated, that of “ability to pay”. Superficially attractive, this concept is entirely without merit. The ultimate burden of tax is transmitted through the economy so the suppliers of economic inputs whereupon the ability to pay cannot be measured for taxation. Whenever tax exceeds the ability to pay production is lost or transfers to the black market.

  5. Where the government confers a benefit exceeding the tax paid for the benefit, an implicit subsidy exists. Implicit and explicit private subsidies tend to undermine the public interest goals of tax policy and should to be avoided.

  6. Principle : Taxation should be levied for the full market value of the benefit conferred by government, so avoid implicit subsidies

Welfare payments must be considered with tax

  1. Principle : The welfare system should be fully integrated with tax

  2. The welfare system functions in ways similar to the tax system, but with the financial flows reversed. While taxes like Income Tax act as production penalties, welfare payments such as Jobseeker’s Allowance function as idleness rewards. Means tested welfare payments reward profligacy, penalise saving. There is no role for rewarding idleness in a sound tax and welfare system. Means tests induce fraud and bureaucracy while disempowering citizens.

  3. Principle : Means-tests and employment tests should not be part of policy

  4. The consequence of excluding means tests and employment tests is that any welfare payments should be made equally to all persons. This concept has been developed by welfare reform advocates who call it a “Citizens’ Income”, or a “Citizens’ Dividend”. It is a universal welfare comparable to universal healthcare or universal school education.

  5. Principle : A universal “Citizens’ Dividend” should be paid equally to all

  6. Such a Citizens’ Dividend does not distort economic incentives because it is independent of any changes to economic behaviour. It neither rewards nor penalises economic activity, nor does it reward any particular family structure. It empowers ordinary people facilitating their investment in study, business or family life. It improves negotiating power with employers, and eliminates the need for a statutory minimum wage.

  7. A Citizens’ Dividend is exactly analogous to the dividends paid to shareholders of a business. In this case, it is the return to citizens as shareholders in society. It is paid for entirely from payments made by the beneficiaries of government amenities and services.

Political reality must be fundamental to tax policy

  1. Countless efforts at tax reform have been attempted across the globe. Each has been guided by principles and political pragmatics. The result has been a dramatic increase in the complexity of tax and welfare systems to the point where ordinary people cannot understand it. Even top experts consistently fail to predict how tax revenues, welfare payments will develop over time. Individuals generally have mistaken concepts about how much they pay, how much they are entitled to and how proposals would affect them.

  2. Because people are generally mistaken about the impacts of policy changes, any reforms proposals quickly produce anxiety and opposition, while vested interests stoke deliberately confusion and misdirect political opinion.

  3. Proposals like Land Value Taxation (LVT) have been discussed for many decades, but failed to overcome the political difficulties and obstacles presented by the vested interests.

  4. Tax complexity has become a major problem to deal with, but attempts to simplify the system have consistently failed. A new approach to tax and welfare reform is essential.

  5. A tax and welfare system based around the fundamental principles here is very simple. Money is spent into circulation by government for the supply of services to property owners. Money is collected from property owners according to the full monthly amenity value of the site locations. The surplus is distributed as a dividend to citizens on an equal per-capita basis.

  6. Principle : Changes to existing tax policy create instability, confusion, political uncertainty, financial risk and must be minimised

  7. The transition of the tax system to one based on these fundamental principles must avoid creating economic and financial turbulence. It must avoid giving out big windfalls at public expense. And it must avoid creating losers and people who believe they are losers.

  8. The new principle of tax reform is the creation of a right to opt in to a new system of taxation and welfare. People should not receive a big windfall from the public when they choose to join the new system and leave the old. As people leave the old system, it will become clear to all that the new system is superior, and in consequence the transition can be rapid. This principle overcomes political barriers

  9. It will not be usually be possible for a person to leave the entirety of the old system in a single step. The transition involves contracting with government not to pay particular types of tax in exchange for accepting an equivalent burden.

  10. Payments from property owners should be regular, index linked to market values and based upon contract law, not on politically determined tax laws. Payments are independent of legal residence or personality. Citizens, corporations, non-domiciles are treated equally, removing a major cause of distortion and complexity. Establishing such payment contracts should be voluntary act which releases the person from defined obligations under the old system.

  11. The Systemic Fiscal Reform Group calls these payment obligations on property “Location Value Covenants” (LVCs), which are legal covenants running with the land. They obligate the owner to pay government a defined perpetual revenue stream.


  1. We recommend The Committee

l investigates the principles and implementation of Location Value Covenants

l investigates the impact of private money issue in the tax system

l investigates the Citizens’ Dividend as an alternative to welfare payments

l makes public interest the sole determinant of tax principles and rejects the advice of vested interests in the financial, real estate and accounting industries

l declares the present tax system to be not fit for purpose and beyond repair

l adopts the principles contained here for transitioning to a new system


  1. Development of the tax system has been constrained by political reality and driven by the demands of vested interests in finance and real estate. The fundamental principles of tax policy should explicitly incorporate the money system and the welfare system. The tax system is not fit for purpose and is beyond repair. It should be replaced by an efficient, neutral and distortion-free system based around clearly defined recurrent payments from owners of land, immovable property and natural resources based on contract law. Means-tested welfare should be replaced by a Citizens’ Dividend distributing the financial surpluses of government arising from such reforms.

  2. The transition to a new, principled tax system should be on an “opt-in” basis where people can choose to permanently leave the old system when they can benefit from so doing. The effect of such a transition would be an rapid and dramatic revival in economic performance without battling political headwinds.

  3. The principles outlined here fully meet all the objectives of the OECD tax report and the Mirrlees Review. They meet Smith’s canons of taxation and adhere to orthodox and common heterodox academic analysis. They are comprehensible and achievable.

January 2011
Dr. Adrian Wrigley… #CIL #PoplarandLimehouse #IODReferendumMay2021 #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @emptyhomes

Poplar and Limehouse – WikiTacticalVoting…
#FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @emptyhomes
Image… #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @paulcragg100
Image… #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @paulcragg100
Image… #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @paulcragg100
Image… #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @scientificecon @jbhearn @wesfree
Image… #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @scientificecon @jbhearn @wesfree
Generation Rent a Moduloft Reaction via @YouTube #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @scientificecon @jbhearn @wesfree… Generation Rent a Moduloft Reaction via @YouTube #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @scientificecon @jbhearn @wesfree

Generation Rent by Chloe Timperley
Generation Rent can study hard and win at work and still be locked out of Britain’s dysfunctional housing market. In this razor-sharp account, Chloe Timperley reveals the reality of Britain’s runaway …
Generation Rent by Chloe Timperley… #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @scientificecon @jbhearn @wesfree
Image… #FirstHomes #GenerationRent #Moduloft #Affordablebydesign @RobertJenrick @Lloyd__Evans @financialeyes @GenRentBook @EmptyHomesDoc @emptyhomes @scientificecon @jbhearn @wesfree
This paper is an empiricall…
Terms capturing assumptions…

On the Production function and other statistical opinionating.…

Response to Frank Slater, held in Moderation. February 2, 2019 at 1:23 pm Reply Your comment is awaiting moderation. “The upper output rate boundary occurs when all …

Response to Frank Slater, held in Moderation.

@Jan_Mallien , Jan Mallien Asks a Corking question of Madame La Gaffe. ECB Bailing out Europe’s Bank’s, ECB catches a cold and the rest of us die of Pneumonia. Socialism for the Rich and Capitalism for the Precariat. ECB announces measures to support bank liquidity conditions and money market activity. #Brexit #WTONow @davidgraeber @financialeyes @JoeBlob20 #DebtBomb @DominicFrisby
Jan Mallien is on Handelsblatt’s monetary policy team in Frankfurt. He studied political economics at universities in Halle, Saint-Denis and Mannheim, and has worked for, n-tv…

@Jan_Mallien , Jan Mallien Asks a Corking question of Madame La Gaffe. ECB Bailing out Europe’s Bank’s, ECB catches a cold and the rest of us die of Pneumonia. Socialism for the Rich and Capitalism for the Precariat. ECB announces measures to support bank liquidity conditions and money market activity. #Brexit #WTONow @davidgraeber @financialeyes @JoeBlob20 #DebtBomb @DominicFrisby

the PoSitive Money quiz developed by David Faraday – Take the Quiz #quiz #FirstHomes #GenerationRent #Moduloft #Affordablebydesign
@RobertJenrick @Lloyd__Evans
@financialeyes @GenRentBook @EmptyHomesDoc
@emptyhomes @scientificecon @jbhearn @wesfree

the PoSitive Money quiz Written and developed by David Faraday – Take the Quiz
Like the chicken and the egg, which came first banking or money?, Goldsmiths, or early bankers, started issuing promissory notes for the gold or silver they stored as early as 1633. But how many decad…
• • •

Trump Doles Out Another $4 Trillion To Wall Street
by Anthony Migchels on August 31, 2020
(Left: A good team, and everything is going according to plan. The Donald will get his landslide, Powell torches the Petrodollar while everybody will continue pretending it’s not happening.)


Missing s



Top of the Tower… Our Friends at Curzon with the Outlook from April 2020. Look out for James’s (Moss) next update and the Affordable Build Build Build #Moduloft revolution @DavidParsleyPW @financialeyes @tavistockbow @JoeBlob20 @Lloyd__EvansImage

via Leadership battle in the Green Party

I have not even got a whiff of a Green Party election? The green party has ceased to be even remotely relevant.
I made this FIlm in Support of Shahrar two years ago, I think its tongue in Cheek critique of Green Identity Politics portents to the irrelevance the Green party has now attained!

August 2, 2020

via Green Party Leadership: Shahrar Ali, or Rosi Sexton? (Making the Party relevant)

I have not even got a whiff of a Green Party election? The green party has ceased to be even remotely relevant.
I made this FIlm in Support of Shahrar two years ago, I think its tongue in Cheek critique of Green Identity Politics portents to the irrelevance the Green party has now attained!

August 2, 2020

via Leadership battle in the Green Party

I have not even got a whiff of a Green Party election? The green party has ceased to be even remotely relevant.
I made this FIlm in Support of Shahrar two years ago, I think its tongue in Cheek critique of Green Identity Politics portents to the irrelevance the Green party has now attained!

August 2, 2020

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Now Proudhon advocated a society without government, and used the word anarchy to describe it. Proudhon repudiated, as is known, all schemes of communism, according to which mankind would be driven into communistic monasteries or barracks, as also all the schemes of state or state-aided socialism which were advocated by Louis Blanc and the collectivists. When he proclaimed in his first memoir on property that ‘Property is theft’, he meant only property in its present, Roman-law, sense of ‘right of use and abuse’; in property-rights, on the other hand, understood in the limited sense of possession, he saw the best protection against the encroachments of the state. At the same time he did not want violently to dispossess the present owners of land, dwelling-houses, mines, factories and so on. He preferred to attain the same end by rendering capital incapable of earning interest; and this he proposed to obtain by means of a national bank, based on the mutual confidence of all those who are engaged in production, who would agree to exchange among themselves their produces at cost-value, by means of labour cheques representing the hours of labour required to produce every given commodity. Under such a system, which Proudhon described as ‘Mutuellisme’, all the exchanges of services would be strictly equivalent. Besides, such a bank would be enabled to lend money without interest, levying only something like I per cent, or even less, for covering the cost of administration. Everyone being thus enabled to borrow the money that would be required to buy a house, nobody would agree to pay any more a yearly rent for the use of it. A general ‘social liquidation’ would thus be rendered easy, without violent expropriation. The same applied to mines, railways, factories and so on.

In a society of this type the state would be useless. The chief relations between citizens would be based on free agreement and regulated by mere account keeping. The contests might be settled by arbitration. A penetrating criticism of the state and all possible forms of government, and a deep insight into all economic problems, were well-known characteristics of Proudhon’s work.


On Lady Luck and Investment Strategy.




Is it on the Trolley?

Damn right it is!


Free Yourself From Rental Slavery.

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Sam GIF-downsized_large


Reblogged this on Not The Grub Street Journal and commented:
Boris and the RedWall, Boris is at the  Last Chance Saloon, Put up or shut up. Conservatives that believe in Liberty and have a Burkean View of One Nation Toryism do not approve, including me.
Lets Let Boris Know, we will only award him the Laurels if he lives up to his Oath, to Protect and Preserve our Union and Our Liberty at present he is doing neither!





Covd19’s Second Wave: Boris Johnson descends into the Twilight Zone

me9719The bollocks about Covid19 continues unabated. Our blond Turk helmsman Bojo the Ethereal Ancient Greek Minotaurshitter discerns a new upcoming EU virus horror: Covid Tsuname2 – the Revenge of the Believers. But the data tell a different story.



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