Dr Drabik Janos

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Switching to the Natural Economic Order is theFuture of Mankind

Why is globalisation anti-human?

Ladies and Gentleman!

Let me mention the following at the outset: I am not value-free and whatI have to say is based on the value-basis acknowledging the universalethics. Under universal ethics I mean the recognition and protection of thefundamental needs, interests and values of all people based on the equalityof rights. Before we start to analyze the problems of globalization, we haveto touch upon the nature of the problems. In terms of their possiblesolutions, problems are either convergent or divergent. Methods suitableto solve convergent problems cannot be used to solve divergent problems.Abstract mathematical methods can be well used for the convergentproblems of the natural sciences and these problems in theory can besolved. On the other hand, for solving problems in connection with people,the human society and its activity (and so with economics), mathematicalmethods can be used only with limits, as subsidiary means.

In the case of divergent problems at least two valid answers can alwaysbe given. On the other hand, in the case of convergent problems it istheoretically possible to give one sole answer. The problems in connectionwith people are divergent because life and all human activities are complexand dynamic and so they can be described only by the double demand ofthe mutually complementary contrast pairs. All life phenomena in societyare a state of balance between the contrastive sides that perpetually getupset and are to be constantly restored if we want to avoid the developmentof an extreme situation. I would like to support these introductory remarksof mine only by a few examples. It is a good example of a convergentproblem when the task to create a two-wheel vehicle driven by humanpower gets solved. After several draft solutions, the circle of the answersgrows narrow and eventually only one answer turns out to be long-lasting:this vehicle is the bicycle, which of course can have several versions.

This version is long-lasting because it is suitable for the natural laws andthe human needs. The essence of convergent problems is that the more

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thorough we study them, the more the answers come near to each other. So,theoretically, these scientific, technological-technical problems can besolved permanently, because people are not present in these. Physics,chemistry, astronomy and theoretical sciences as mathematics andgeometry deal with convergent problems.

In case of problems valid for people, social life and economics weexperience that the more we study them, the more conflicting answers wearrive at. The more logical and clearer these answers are, the more theycontradict each other. This is why we can call these problems ramifying,divergent problems. In the human community we call society the tworequirements that conflict each other most frequently are freedom andequality. The former favours the strong, the latter favours the weaker.Equality sets limits to freedom, while the exaggerated freedom, the “over-equalization” liquidates it. While dealing with the questions of people andsociety, we find ourselves facing human life and the contrasting pairtypical of it, i.e. birth and growth, decline and death, and in connectionwith society: freedom and order.

Due to these inevitable contrasts, the balance of human life, and so thatof society and economic life cannot be created with abstract mathematicalformulas either. But even if they cannot be solved, they can be surpassedtemporarily with a human-centred, complex approach. For doing so, on thebasis of mutual dependence and responsibility, we have to keep thefundamental needs and interests of our fellow-beings in view, that is,according to the Christian ethics, we indeed have to love our fellow as wedo ourselves. The need for freedom and equality are opposite needs,however, they can form a mutually complementary and sustainable unitywith the help of brotherhood, solidarity and communal spirit. In this case itis the human-historical experiences and the higher, divine abilities of men(or those that can be traced back to natural laws) which are the standard,and not logic. In our approach God means the absolute fairness and theunconditional universal ethics obligatory to everyone to which each andevery people can join via its transcendental dimension. This means that werise above ourselves.

To understand divergent problems better, we have to say that in asubstantive-ethical democracy functioning on the basis of directparticipation, justice and mercy are simultaneously necessary. Seemingly,one contradicts the other, but in fact the mutual dependence between them

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makes the order of such substantial democracy lively and balanced, whichis fundamentally different from the present system of plutocraticdictatorship presented as an alibi-democracy. However, mercy withoutdisciplining force and order is chaos and anarchy. Society simultaneouslyneeds change and stability, the keeping of tradition and renewal, the jointprevalence of the public and individual interest through the consensusbetween them which has to be continuously renewed.

Demand pairs, double demands have to be met in the economic life too.The harmonious, stable and well-balanced economic life needs the strongframes of the market’s operation and the free movement of its participants,the prudent planning and the economic freedom of “do as you wish”, thehealthy growth and the natural decline simultaneously. The health ofsociety and the economic life within depends on the joint and continuousfulfilment of these conflicting requirements. If only one of therequirements is fulfilled, it makes the society merciless, it leads toimbalance and then disintegration. This is what happened to the Soviet-type socialist system whose ruling layer seized the achievements of thecitizens’ work and obtained the absolute command of them, including thecommand of their lives too.

Property is power, and those who have an absolute right over propertyhave an absolute power over people as well. This system, as we know, hasshamefully failed. The ultra-liberal plutocratic world order stands beforethis very same opportunity as well, where the owners of the global moneymonopoly monopolize the achievements of the work of the other peoplefor themselves by financial techniques, and with the help of the financialand real property, they obtain the domination of the world for themselves,too. This system is also unbalanced and we are witnesses of itsdisintegration.

The concept of globalisation began to be used at the end of the 1950s byAmerican strategic planners and the experts of the so-called “think tanks”.However, the concept of globalisation can thank its real career to thereports published by the Roman Club in the 1970s. Since globalisation istoo a divergent circle of problems to face, as far as its judgement isconsidered, there are people who accept the content of it and support it andthere are others who criticize and even attack it. Those who accept itdescribe the phenomena of globalisation as if they could be traced back tonatural laws. They regard globalisation as the organic part of the

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relationship between people and nature. Thus globalisation is not onlyinevitable but is equal to development and progress. Previously, theexpression “modernisation” was used for the phenomena of globalisationbut they took the interpretation of technical modernisation from“modernisation” and abandoned the requirements in connection with themodernisation of human society that had really been emphasized before.The modernisation of human society means that society is made to be afairer medium where the achievement of the work remains at where it wascreated. Technical modernisation meant the development of thetechnological revolution: the industry and transportation leaning on fossilenergy sources, the automobile, the aeroplane, and even the rocket, buttelecommunications, the telephone, the radio, the television, the internetand nanotechnology also have to be counted among these.

According to the interpretation of globalisation as such technicalmodernisation, these global processes, like natural laws, cannot beinfluenced. At the same time, their effect is positive and thereforeglobalisation has to be welcomed as the natural and inevitable accessory ofthe long-term development of humanity. Furthermore, they say thatglobalisation is in fact value-free and in terms of politics and power it is aneutral phenomenon. They think that globalisation as independent fromhuman choice of value. This view questions the raison d'ętre of thecriticism of globalisation as it is not possible to make natural laws such asgravitation a matter of criticism either.

Since, as I have already mentioned, we face a divergent problem, wethink it is natural that in the course of the last two decades a series ofapproaches has been developed criticizing globalisation. Strong anti-globalprotests and mass demonstrations have also blossomed out from these. Onepart of the anti-global criticisms focuses on the quantitative, while theother part on the qualitative criticism of globalisation. The criticismsabout the quantity or the extent of globalisation on the one hand regard theprocess as inevitable but on the other hand criticise the exaggerations andlimitless shamelessness of it. Therefore they want to bring the powers ofglobalisation under control in a certain form. We can mention among thesePope Benedict XVI’s now third encyclical which was timed for themeeting of the G8 leaders in Italy on 8 July, 2009. We will later return tothe critical analysis of the encyclical’s relevant part.

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According to the other big group of people opposing globalisation, theproblem with present globalisation is about its content and quality. Theproblem is not only that a fundamentally value-free or even easilymanageable process over-expands its possibilities and therefore becomesunmanageable. The main problem is that globalisation is originally adestructive, dangerous world-historical development which can be evenregarded as fatal from the point of view of humanity. They do not onlyclaim that globalisation is not a natural law and therefore it is avoidable,but they also emphasize that referring to political, power and ideologicalneutrality is an attempt of the now concretely describable plutocraticstructure to present itself non-existing by the false interpretation it supports.And there is no sense in criticising something which does not exist.

This question touches the inner problem of globalisation, because if thispower structure, which forces this system on the world and of which it isthe beneficiary, does not exist, than those controllers who keep this systemin balance do not exist either. The basic theorem of the system theory isthat all systems collapse in time if there are no balancing counter-forces. Adriving force that exists in itself is not capable of self-organization andinevitably becomes self-destructive. A part of the anti-global critics regardglobalisation as a form of existence which can turn out to be a fatal deadend for humanity.

The main problem with globalisation is that it is the private monopoly ofmoney that has become world-wide, functioned by the interest mechanism.This interest mechanism forces the world economy for a growth whichuses up the unrecoverable fossil energy sources and destroys the naturalenvironment which is no longer capable of regeneration. On our finiteEarth no subsystem can grow (develop) infinitely. What we need is not asustainable i.e. infinite growth, but sustainable energy sources, the survivalof humanity and its home, the planet called Earth.

Interest and the money system controlled by it are of course capable ofinfinite growth, but the real economy forced by the money system is notcapable of such growth. The plutocratic civilisation which now has beencontrolling our world for 250 years is an order of unsustainability and eventill now it could only be operated by a certain form of force. This is whywe regard globalisation as the power system of force (the permanent word-wide civil war). Globalisation can be regarded as a new lifestyle whose aimis to create and operate an artificial reality that serves the strategic aims of

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the plutocratic interest groups. This system which serves the plutocraticelite expands through liberalisation, deregulation and privatisation. Theplutocratic world order has built a network which is capable of using force,disciplining and interpreting in a way which is influencing andsupervising human consciousness. The first element of the plutocraticworld order is the forcing power, that is, the network of the multinationalcompanies. The other institutional system of the plutocratic world orderconsists of the trans-national financial structures. Here belong the BrettonWoods-twins, the World Bank and the IMF, the WTO (the World TradeOrganization), the investment funds, the institutions of credit analysis andthe central banks.

The third institution of the plutocratic world order is the consciousnessindustry. It is the telecommunicational, scientific and educationalinstitutions of this industry that formulate and spread the frame ofinterpretation which presents the world-dominating order of globalisationas a natural law.

The competition between the producer economy and money economy

The above makes it evident that the plutocratic system that is nowcontrolling the world is not the same as entrepreneurial freedom based onequal chances and the market economy built upon it. This plutocraticsystem, the chrematistics differs significantly from the economy, namelythe real economic life that serves the satisfaction of human needs. Aristotlealready sharply distinguished the economy that serves to satisfy humanneeds from the money economy that creates more money out of money, inwhich the emphasis is not on the traffic of goods and on value-creatingproduction. Economy deals with producing goods that are necessary forlife and are useful for the state. It produces use values. On the other hand,money economy wants to make more money from money. In a productioneconomy the main aspect is to satisfy the needs. The creation of moneyhappens through economic activity. Money, which is the mediatory agentof the value-creating producer economy, is an agreed sign which holds thetrust of the economic actors. However, money in itself is valueless. Whatdo has a value is the thing that it represents. Therefore, in fact producingthe sign should be due to those who produce the value which this signrepresents.

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In this present plutocratic world order the creation of money has beencompletely separated from producing the goods and services that holdvalue. Therefore, producing money has become an industry itself where anenormous amount of money was attempted to be produced by evading thereal economy. The recent financial world crisis was also induced by thefact that the money industry which had got separated from the producereconomy was producing uncovered money of the order of hundreds oftrillions and was creating money market products to them offering virtualsecurities, the so-called “toxic assets”, that is, toxic financial means. Themoney bubble that came into existence this way from the uncoveredtrillions of dollars was bound to burst.

In this crisis it became clear that money is only secondary and the realvalue is produced by the producer economy. The bank system producingand moving the mediatory signs in fact is only dividing the results of otherpeople’s work. One of the alternatives of today’s global chrematistic is thesocial market economy and the welfare state. Another way out can be theprotectionism that defends local economic interests and autonomy. Thebeneficiaries of the plutocratic system have made a swear-word out ofprotectionism, although it does not mean anything else only protecting theweaker economic actors from the economic predators with superior force.

There have been some attempts to combine globality and localityharmoniously, mainly in Japan, Taiwan, South-Korea, Hong Kong,Singapore and Malaysia. The present plutocratic system is talking about amarket economy based on free enterprise, but in reality the economicmanagement that has become ultra-liberal is operating a monopoly system,an economy of power. This economy of power is against the productivecombination of protectionism and welfare state. In the ultra-liberalplutocratic order the financial structures dominating the world economyand the corporate empires do everything to annihilate local ability toenforce interests i.e. protectionism and the welfare state. In this globalplutocratic system the economy becomes a production line whose functionis to make the money capital flow from bottom to top, to the owners of thefinancial sphere. The rearrangement of income is taking place fromproduction work to the direction of money capital, by monetizing,privatising and creating trans-national markets across borders.

From the above mentioned the most important is monetizing, in otherwords, that some kind of price expressed in money is attached to allexisting things and human activities. The trick here is that those who do

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not have such mediatory agent do not have any chance to survive in theplutocratic order. They do not have any other choice but to join those whoare sentenced to liquidation and annihilation.

If we are looking for the future ways of surpassing the present situation,then we have to resort to scientific foresight. This among others mean thatwe attempt to take stock of the possibilities, needs and probabilities andthus to find the way out. The alternative of the plutocratic globalisation canbe the global order based on the priority of producer property, in which theinstitutionalized form of economic-social irresponsibility and limitlessselfishness, the corporation bearing a legal personality gets to be liquidated.In a natural economic order the property can exist only attached to aconcrete, natural person and the amount of property depends on theperformance of its operator. The natural person-owner has a share in itsprofit in proportion to his performance and he can freely possess thissurplus.

This is not the failed system of extreme equality, the “over-equalization”.But it is not equal to the system of the plutocratic world order that is basedon financial diversification either, to which a preference is shown to becalled democratic capitalism. In the new property structure only a naturalperson can be an owner and the extent of his property goes by theperformance of this natural person. The order of just inequality wouldreplace today’s order of extremely unjust inequality.

In the system called socialism the interest groups that exercised powertook away the properties and work achievements from those creating valueby the help of the means of police force practiced by the party-state. Themembers of the nomenclature that directed the party-state were inpossession of the material conditions of freedom without personalachievements. In the present plutocratic dictatorship the interest groupsthat monopolize the monetary privileges for themselves monopolize theachievements of the work of others by the help of the private monopoly ofmoney. They take the task of producing the mediatory agent of theeconomic life away from the states exercising public authority and forwardit to the bank system which is in their possession. The private monopoly ofmoney makes it possible to draw away the work of those creating value inthe form of interest, which is the general theorem of getting someone intodept, and to drive the states, the economic actors and the individuals intodebt traps.

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The dept spiral started out this way is constantly moving the createdvalues to those who possess the monopoly of creating the signs, namely themoney. In both systems, in state monopoly and money monopoly, unjustinequality prevails because in an unnatural way the one who possesses theachievements of work is not the same person who created it with hisperformance. It is this unnatural system that has to be replaced by thesystem of just inequality suitable for the human nature. This is the naturaleconomic order, in which two people are different mainly on the basis oftheir performance.

In the natural economic order based on the priority of production the roleof money decreases and the primary function of money will be to act as ago-between in economic processes. In this new system the possibility tomake more money directly out of money (by omitting the productioneconomy and personal performance) will be put an end to. The moneysystem operated by the private money monopoly and the mechanism ofcharging interest will be replaced by the public money system. The creditmoney charging interest will be replaced by the neutral global currencystanding above all the national currencies, which can lead to world traderelations really working based on free and equal chances.

The term natural economic order was first used by Silvio Gesell, aGerman-Argentine businessman. Gesell was known to be a sociallycommitted thinker, and in 1919 he was invited to be the finance minister ofthe Bavarian government of that time. Silvio Gesell already died in 1930and opposed both Marxism and national socialism. The American world-famous economist-mathematician Irving Fisher called himself the modestfollower of the Argentine businessman Silvio Gesell. And John MaynardKeynes said that the world will learn more from him than from Marx andthat the 21st century will be his.

Gesell deduces the concept of natural economic order from the naturalstate of men. If we do not originate money from a somewhat irrationalsuperhuman power dominating human society, than the harmony ofeconomy and society comes into existence from the free game of powersand reason. Gesell emphasized that an economic order can only bequalified natural if there are no privileges, that is, monopolies in it, and thelayer of money capital that possesses the mediatory agent of economy doesnot dominate it. Such natural economic order does not come into existence

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by itself. It can be created by ceasing all privileges, the private moneymonopoly in the first place, because this is the only way real equality ofchance belonging to everyone can be provided.

Gesell is being silenced and disliked by the ruling layer of the presentplutocratic world order although Gesell has sharply distanced himself fromracist and anti-Semite ideology. Darwin’s theory based on the fight forexistence had a great effect on him, but Gesell refused to use thisautomatically for the society and the economy. He regarded the communalspirit of a nation as natural and healthy, and therefore he acceptedmoderate nationalism as a healthy attribute. However, he opposed extremenationalism, chauvinism. He thought that the expansion of the nation statesshould be replaced by the cooperation of the European states based onequality. He was convinced that the condition for peace is the success ofjustice, both in financial-economic and social-political affairs, includinginternational relations as well. Therefore, it is justice based on theuniversal ethics that has to be realized in the first place, and it is only afterthis that we can talk about long-lasting peace.

My personal opinion is that there is no good capitalism, there is no goodplutocratic system, but it is possible to create a more or less just marketeconomy free of monopolies, operating on the basis of equal chances.Capitalism is not the same as market economy, not to mention socialmarket economy. Real market economy is a system related to naturalpersons and their performance, and it provides the freedom of equalchances for all economic actors. The operation of the present plutocraticworld order is facilitated by the fact that it has the most important universalmonopoly, the private money system operated by the interest mechanism.Gesell did not formulate it this way, but he multiply came out in support ofthe open world market free of any kind of monopoly.

He supported the ceasing of custom borders and narrow-minded nationaltrade protectionism too. He did not live through World War II, therefore hedid not have to face that the monetary system that came to existence afterthe war and its organizations of universal authority, the World Bank andthe International Monetary Fund have been all enforcing the interests of thetrans-national money cartel. Gesell wanted an international currencyfederation which would circulate a neutral global currency that wouldstand above all the national currencies. Neutral money is “tame” moneynot suitable for exercising power. Such a neutral global currency would be

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able to operate the world trade in a way that could lead to just exchangeratios.

The plutocratic power-economy is unfit for operating an economysuitable for the needs and interests of each and every people. The moneysystem pressed to expand by the interest mechanism forces an economicgrowth that destroys the natural environment and energy sources necessaryfor maintaining life. Socialism and capitalism which work as the systemsof unjust inequality are not the alternatives of each other, they are both theopposites of the just inequality dependent on personal achievement.

There are several reasons for the failure of the market economy’sopposites, namely the state-monopoly and money-monopoly economicsystem. The most important reason can be found in the errors of the moneysystem. The first such error is that the interest mechanism operating in themoney system can only secure the circulation of money in the middle term,but never in the long-term. The long-lasting charging of interest is amathematical-logical impossibility, and therefore it is only suitable formaintaining the circulation of money for a limited time.

Many of our contemporaries still believe that we only pay interest if weraise a loan. This is a mistake, because every price contains an interestwhich the producer and the servicer raising the loan pay to the bank systemin order to obtain means of production. Thanks to the brainwashing activityof the mass media we also believe that paying the interests is a just service.The interest system only redistributes the produced income, and it does itso by constantly pumping the money from those that live from their workto those who can accumulate and lend their money. It is also amisconception about the interest mechanism that we have to pay interestbecause of inflation. Inflation is the concomitant of the loan system, andthe interest is needed to secure the circulation of money. Interest makes itpossible to have income without achievement, and, as we have mentionedbefore, it presses the economy to a forced, unnatural growth and increasesthe inequality between incomes.

Gesell would restore the public money system in the natural economicsuggested by him This would mean that instead of charging interest, themediatory means of economic life i.e. the money would get under thecontrol of the society. And the circulation of money would not be securedby the interest mechanism but by the duty of money usage and money

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retaining. This would not favour those who have a large amount of moneysurplus but the whole society and the state or region representing it, thoseissuing and using the money. This way, the role of money would be limitedto its original function, that is, it would be a mediatory means of exchangeagain.

The financial world system and the economic world crisis put the leadinggroups of the present plutocratic world order at a crossroads. They areaware of the fact that it is not only the financial and economic system thathas got into a crisis, but the ecologic balance of our planet has also gotupset. Therefore it is no longer possible to keep postponing thereplacement of the present system which is based on the private moneymonopoly and is operated by the interest mechanism. We have mentionedalready that the present plutocratic world order is an empire with a privatenature which does not set out from the fundamental interests of the wholehumanity but of the selfish interests of the privileged interest groups of thisworld order.

As the institutional establishment of the New World Order has got on theagenda, it has become necessary to remove the trillions of dollars that hadbeen produced by the methods of big industries and to convert the existingmoney into covered money, above all by making the states run into debt ona scale which had no precedent in world history before. The elite of theworld is also considering escaping to an armed conflict. Plans have beenmade to issue a kind of Global Single Currency, a world currencycovered by precious metal, and to establish a Central Bank of globalauthority which is necessary for operating this system. But even thatquestion has not been decided yet whether it should be the Bank ofInternational Settlement in Basel, the International Monetary Fund whichis also invested with the authority of a central bank, or some thirdorganization.

The global elite of the plutocratic world order does not want to hearabout the free economic model of Silvio Gesell. In spite of this, the ideasof Gesell about free money have been spreading. Irving Fisher, theadvisor of president Roosevelt said about the free money suggested byGesell that it would be able to properly control the circulation of money. Inthe present monetary system operated by interest mechanism it is theinterest mechanism that most upsets the stability of the price level. Fisher

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was of the opinion that using free money would in a few weeks helpAmerica come out of the crisis it got into between 1929 and 1930.

Let us summarize: why has the plutocratic world order got into a crisis?First of all, because the money economy has not only separated from theproducer economy but it has also suppressed it. This monetary system is aparasite construction operated by the bubble money issued by the banksand the speculations with capital transfer made by the investors. By theseparation of the money economy from the producer economy, anunbalanced system has come to existence. The public welfare serving theneeds of all people has become subordinated to the one-dimensional selfishprofit interests of the wealthy interest groups. The sign mediating theprocesses of real economy, namely the money has also been transformed.Debt has replaced the role of money. Debt money differs from normalmoney in that it comes to existence debited with interest from the first.This necessarily leads to the economic actors running into debt andbecoming dependent.

The biggest error of the present plutocratic economy is that it necessarilycreates indebtedness. This plutocratic economy, when it had became global,did not allow the states to use their individually issued national currenciesany more. It forbade the states to issue money individually and to controltheir credit system with issuing real money covered by the work of thatcertain national economy and the economic actors functioning in it.

About the strategy of the leading groups of the plutocratic world order, it isworth quoting the concise definition of university professor CarrollQuigley, mentor of Bill Clinton, from his book Tragedy and Hope, page324. According to this, the aim of the international network of the moneyasset owners is nothing less than “to create a world system of financialcontrol in private hands able to dominate the political system of eachcountry and the economy of the world as a whole. This system was tobe controlled in a feudalist fashion by the central banks of the worldacting in concert, by secret agreements arrived at in frequent meetingsand conferences.”

The central bank of the United States, the FED was established in 1913and is a private financial institution in the hands of private banks. Since itis one of the important institutions of the plutocratic world order, itsactivity has an effect on the whole world. Due to the activity of the FED

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there is never enough money to satisfy the needs of the producer realeconomy. This makes it possible for the private banks owned by theinternational money cartel to offer to help the actors of the real economyand to supply the missing amount of money in return for a proper interest.They have become the institutionalized means of the central banks and theproducer economy to make the actors of the economic life indebted. Theyforce them to raise loans from them in exchange for a high interest definedby them by artificially decreasing the amount of money in circulation.

Those disposing over the monopoly of the credit system are interested inmaking this system general and to help it obtain a leading role in the wholeworld. In order to make more people raise loans and run into debts theysupported unlimited consuming, lavish spending, the desire for obtaining,all of which destroys saving and consumption that adjusts to income. Dueto the vacillation of the present plutocratic world order and its centralcurrency, the FED-dollar, the problem of money and interest has become astressed matter in international politics again today. The financial crisiscaused not only an economic, but also a social, societal and even a politicalcrisis, too.

It is worth referring to how the international money cartel has beenlooting Hungary in the last one and a half year. Hungary’s running intodebt began when it raised a credit of one billion dollars between 1973 and1989, this was the amount that actually flowed into the country. During thesame period it paid 11 billion dollars worth of interest and a 22 billiondollars worth of unpaid debt still remained. In 1990 the nowdemocratically elected government decided that it would privatize one partof the national wealth in operation and from the incoming money it wouldpay the debt of the country. The working national wealth was estimated bythe International Monetary Fund to be 130-140 billion dollars.

90 % of this was sold, but altogether a value of 20 billion dollars flowedinto the country during the last 19 years. The central bank, which isexclusively under the control of the foreign financial structures, kept these20 billion dollars on its own foreign exchange account and it gave theHungarian state forint issued on its own. This forint, after circulating in thenational economy, became a profit in forint for the companies owned byforeigners, an interest in forint in the banks and a capital endowment inforint for the capital investors. These foreign asset owners changed theforint for foreign exchange in the foreign exchange account set up in the

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National Bank and brought it out from the country. This way, the forint gotback to its issuer, and the National Bank annulled it with different methodsand withdrew it from circulation. It inflated most of it or it withdrew itfrom money circulation with other, so-called “sterilising techniques” andsent it back to where it produced it, that is, into the air. The Hungarianpeople therefore basically got inflation in exchange for its national wealth.

In the last one and a half year, the trans-national financial structurescarried out the drain of the income of the Hungarian national economy bybasically flooding the country with speculative hot capital. While thefivefold of the gross domestic product (25 thousand billion forints)appeared on our bank accounts in 1995, in 2008 it is 43 times bigger thanthe now 28 thousand billion forint worth GDP. This huge amount offoreign exchange (mainly euro and dollar) arrived in the country to makean interest of 12-14% instead of the 2-3%, denominated to forint. When itsucked itself with the huge margin of real interest, it wanted to leave freely.In order to do that, it was and is necessary to have a large sum of reserveson the foreign exchange account of the Central Bank. The 18.5 billion euroin 2008 were not enough, this is why the international money cartel forceda further 25 billion dollar and 20 billion euro on Hungary via theInternational Monetary Fund and the EU, so that it can completely bringout the huge interest difference drained from the Hungarian nationaleconomy without being disturbed. The residents were told that the statebudget has got into a situation “near bankruptcy” and that it is for avoidingstate bankruptcy and preserving workplaces in the real economy why it’snecessary to accept the 25 billion dollar stand-by credit, to which a 5%interest have to be paid in advance even if this interest is not called.

Up to this day, about 80% of this enormous sum have been called, butnor the Monetary Fund, nor the Central Bank, nor the state is willing to tellthat exactly how much credit was obtained by whom and when from thisstand-by credit. The deficit of the Hungarian budget is today in the middleof the average of the European Union countries. This is what we can sayabout the foreign debts of the Hungarian state too. The Hungarian budgetand the foreign debts of the Hungarian state therefore did not make itnecessary to raise this enormous credit. Since the actors of the producereconomy – the small and medium businesses in the first place – did notobtain credits later either, the money was not spent on what it wasdrummed into the residents by the mass media, that is, to save theworkplaces. It is still unknown today exactly who got the money, since on

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27th July, 2009, no one else than Péter Felcsuti, the managing director ofthe Raiffeisen Bank and the president of the Hungarian Bank Associationtold that the banks got nothing from this money. So if the state did not getany, the producer economy did not get any and the financial institutionsbelonging to the bank association did not get any, then where did the 80%of this enormous sum get to?

The answer can only be the following: they filled the foreign exchangeaccount of the Central Bank with this, so that the stunningly highspeculative hot capital arriving in Hungary could undisturbedly take outthe interest difference it made from to the fact that the foreign financialstructures could achieve that the Hungarian National Bank raise thenormative interest rate high. While in the other countries of Europe and theworld the interest rates began to be decreased due to the effect of thefinancial crisis, in Hungary in the course of a few months it was raised bymore than its half, to 11.5%. Even at present - after several decreases – theinterest rate in Hungary is quite high: 8.5%.

It is not only the emerging countries like Hungary that got into a difficultsituation due to the still ongoing financial world crisis, but the most well-developed industrial countries are also being choked by the debt-serviceburdens. The monetary conflicts (for example that the countries of theEuropean Union had to take a debt of 3000 billion euro upon themselvesfrom public money to help out the banks that ravaged irresponsibly in themonetary system they transformed into a global financial casino) affectsthe present plutocratic world order and the stability of the world economyfundamentally. This ultra-liberal plutocratic order turned out to beunnatural and therefore it does not have reason for existence in the long run.In this system the freedom of the wealthy elite was deformed into thelimitless freedom of abusing the freedom of others.

Therefore the system is fundamentally unnatural. Something can becalled natural if it adjusts to the basic outer and inner living conditions ofpeople. The most suitable order for the human nature is the one in whicheach and every man can expand the most and where its optimaldevelopment is secured. This can be measured as well. If we look at howmuch energy and human energy source is needed for one square kilometreto produce a product of a bigger quantity and better quality, then theeconomic and social order where people can expand the most can beregarded the most natural one. It has to be kept in view that the output of

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the economy and the economic performance is for the people and it is notthe people who are for the profit and the interest.

Gesell considered healthy competition to be very important, because thisis the only thing that can make it possible for the one performing the bestto develop and the unsuitable one to be eliminated. However, thecompetition equal to the natural laws can be possible only if the privilegesare completely ignored. Equality of chance can only be secured if it is thepersonal attributes and performance of each and every person that decidethe outcome of the competition. This is how the best features can beselected and be passed on to the next generations.

For the competition going on based on the equality of chance it isnecessary to freely say the truth and the justice that respects the dignity ofall people. This openness is also a fundamental factor of competition. In anera when secrets are predominating, let us think of state secrets, officialsecrets, business secrets, bank secrets, national security secrets, these manysecrets all advance that the dishonest and deceitful people can also besuccessful and obtain bigger profit by keeping their fraudulent methodssecret. A man can suit his own nature if he can follow his rightful and justself-interest, the self-supporting instinct that is in his genes as a natural law.It has been proven that among the circumstances of the equality of chancethat is due to everyone, people can perform optimally both individually andtogether with others. And if this is the case, then the tree which bears goodfruit cannot be bad. We have to strive for a social freedom which includesthe entrepreneurial freedom based on the economic equality of chance aswell.

Following the self-interest is not the same as selfishness. In order tomake a just system work, it has to be made possible that everyone enforcestheir self-interest in the right proportion. And this is only possible if eachand every person himself has disposal over the result of his work. This isthe material basis for enforcing his self-interest, for his self-determinationand personal freedom. The result of work therefore can only belong to theone who did that work. If we do not build economy upon this self-interest,if not everyone can have fair profit and the result of his work based on hisfree decision, then the natural economic order is unable to function.

Therefore the natural economic order replacing the plutocratic system ofglobalisation can be based only on a private property that is linked to a

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person, reflects its performance and is burdened with responsibilitytowards the other people. However, private property can, as the associationof free individuals, function in communal versions of different stages andco-operative forms as well. Neither the state-monopoly power nor theprivate-monopoly plutocracy can take away from a value-creating personthe individual freedom, independence, personal responsibility and the rightto dispose over the result of his work. The basis of the individual andsocial freedom is the private property linked to the achievements of theindividual and the self-determination based on this.

Pope Benedict XVI’s encyclical about globalism

Pope Benedict XVI published his now third encyclical, papal pastoralletter, circular, with the title Caritas in Veritate (Love in the Truth) at thetime of the summit meeting beginning on 8th July, 2009 in the earthquake-stricken L’Aquila in Italy. In this pastoral letter which consists of 54 pagesin German, Benedict XVI deals with the world-wide financial andeconomic crisis, globalisation, development, solidarity and the fightagainst poverty. The encyclical aspires to make the world more just and toenforce Christian solidarity. He draws the conclusion from the developedfinancial and economic crisis that the entire world system needs afundamental structural change.

Benedict XVI warns that if the profit interest suppresses the ambition forthe common good and the pursuit of profit becomes an aim itself, then itbrings the danger that the economy is destroyed and poverty becomesworld-wide. The pope expresses his doubts about the functioning of thecompletely uncontrolled free market. The encyclical draws attention to thefact that the actors of the financial system and economic life of the worldhave been abusing their uncontrolled financial and economic power moreand more, and they have pulled out the financial and economic processesfrom the authority of the morals. The encyclical says the following aboutthis: “In the long term, these convictions have led to economic, social andpolitical systems that trample upon personal and social freedom, and aretherefore unable to deliver the justice that they promise.”

According to the pope, the profit is only useful if it serves the interest ofthe whole humanity. In economy moral norms and business ethics are alsonecessary to make it function properly in the interest of the public welfare.Ethics itself has to be human-centred and not profit-oriented. Point n. 67 of

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the encyclical makes suggestions about the structural reform of thefinancial, economic and political system that has got into a crisis.

(„67. Gegenüber der unaufhaltsamen Zunahme weltweiter gegenseitigerAbhängigkeit wird gerade auch bei einer ebenso weltweit anzutreffendenRezession stark die Dringlichkeit einer Reform sowohl der Organisationder Vereinten Nationen als auch der internationalen Wirtschafts- undFinanzgestaltung empfunden, damit dem Konzept einer Familie derNationen reale und konkrete Form gegeben werden kann. Desgleichenwird als dinglich gesehen, innovative Formen zu finden, um das Prinzipder Schutzverantwortung[146] anzuwenden und um auch den ärmerenNationen eine wirksame Stimme in den gemeinschaftlichenEntscheidungen zuzuerkennen. Dies scheint gerade im Hinblick auf einepolitische, rechtliche und wirtschaftliche Ordnung notwendig, die dieinternationale Zusammenarbeit auf die solidarische Entwicklung allerVölker hin fördert und ausrichtet. Um die Weltwirtschaft zu steuern, dievon der Krise betroffenen Wirtschaften zu sanieren, einerVerschlimmerung der Krise und sich daraus ergebendenUngleichgewichten vorzubeugen, um eine geeignete vollständigeAbrüstung zu verwirklichen, die Sicherheit und den Frieden zu nähren, denUmweltschutz zu gewährleisten und die Migrationsströme zu regulieren,ist das Vorhandensein einer echten politischen Weltautorität, wie sie schonvon meinem Vorgänger, dem seligen PapstJohannes XXIII., angesprochenwurde, dringend nötig. Eine solche Autorität muß sich dem Rechtunterordnen, sich auf konsequente Weise an die Prinzipien derSubsidiarität und Solidarität halten, auf die Verwirklichung desGemeinwohls hingeordnet sein,[147] sich für die Verwirklichung einerechten ganzheitlichen menschlichen Entwicklung einsetzen, die sich vonden Werten der Liebe in der Wahrheit inspirieren läßt. Darüber hinaus mußdiese Autorität von allen anerkannt sein, über wirksame Macht verfügen,um für jeden Sicherheit, Wahrung der Gerechtigkeit und Achtung derRechte zu gewährleisten.[148] Offensichtlich muß sie die Befugnisbesitzen, gegenüber den Parteien den eigenen Entscheidungen wie auchden in den verschiedenen internationalen Foren getroffenen abgestimmtenMaßnahmen Beachtung zu verschaffen. In Ermangelung dessen würdenämlich das internationale Recht trotz der großen Fortschritte, die auf denverschiedenen Gebieten erzielt worden sind, Gefahr laufen, vomKräftegleichgewicht der Stärkeren bestimmt zu werden. Die ganzheitlicheEntwicklung der Völker und die internationale Zusammenarbeit erfordern,daß eine übergeordnete Stufe internationaler Ordnung von subsidiärer Art

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für die Steuerung der Globalisierung errichtet wird[149] und daß eine dermoralischen Ordnung entsprechende Sozialordnung sowie jeneVerbindung zwischen moralischem und sozialem Bereich, zwischen Politikund wirtschaftlichem und zivilem Bereich, die schon in den Statuten derVereinten Nationen dargelegt wurde, endlich verwirklicht werden. ”)

According to the German text we can see (in a non-word for wordtranslation) that Benedict XVI thinks that “In the face of the unrelentinggrowth of global interdependence, there is a strongly felt need, even in themidst of a global recession, for a reform of the United NationsOrganization, and likewise of economic institutions and internationalfinance, so that the concept of the family of nations can acquire real teeth.(…) One also senses the urgent need to find innovative ways ofimplementing the principle of the responsibility to protect and of givingpoorer nations an effective voice in shared decision-making. (…)”

“To manage the global economy; to revive economies hit by the crisis; toavoid any deterioration of the present crisis and the greater imbalances thatwould result; to bring about integral and timely disarmament, food securityand peace; to guarantee the protection of the environment and to regulatemigration: for all this, there is urgent need of a true world politicalauthority, as my predecessor Blessed John XXIII indicated some yearsago. (…)”

“Without this, despite the great progress accomplished in various sectors,international law would risk being conditioned by the balance of poweramong the strongest nations. The integral development of peoples andinternational cooperation require the establishment of a greater degree ofinternational ordering, marked by subsidiarity, for the management ofglobalization. (…)”

“They also require the construction of a social order that at last conformsto the moral order, to the interconnection between moral and social spheres,and to the link between politics and the economic and civil spheres, asenvisaged by the Charter of the United Nations.”

It turns out from the quoted text that Benedict XVI actually suggests aNew World Order, a kind of world government. These expressions soundfrightening to those who analyse the questions of the present plutocraticworld order more deeply. We have already quoted the university professor

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Caroll Quigley about what the global strategy of the super-wealthy investoris. A common religion that would be a syncretic religion mixing the worldreligions is necessary for the success of this strategy. (Syncretism as areligious term means the superficial coordination, mix of the differentreligious, philosophical trends and the hybrid spiritual system that iscreated this way.)

Further there is need for a common currency, the abolishment of thenation states and the national self-identity, the personal control includingeveryone, the state-control of the population growth, and in political lifefor the roughly controlled society, propagandistic literature, privilegedpolitical and economic leading layer, centrally supervised information,education and public health. We could continue the list further. If a systemlike this became global and humanity was controlled from one powercentre, it could be nothing else but dictatorship.

Due to the fact that the money monopoly has become global, in the 20th

century and in these days the political, economic and opinion power havealso become highly concentrated. It has become more and more evidentthat the plutocratic world-elite follows a strategy whose aim is to create aworld order controlled from one centre, to create a kind of central worldgoverning. The anti-globalist thinkers and movements that criticise thestrategy of the plutocratic world order oppose the creation of a world ordercontrolled from one centre and they wish to secure the free development ofhumanity by the help of the nations and religions preserved in their naturalstate. After this it is not easy to answer the question: What made popeBenedict XVI suggest the transferring of control of the whole mankindand the international life to a power centre having a global authority?

Up to now, the Vatican City has not signed the UN UniversalDeclaration of Human Rights and the European Convention of HumanRights. It was unwilling to do so because neither of them referred to Godas the source of human rights and political rights. Benedict XVI istherefore aware of the deficiencies of the UN, namely that this worldorganization is not inclined to acknowledge the creating God as theauthority that can act as the base of the individual and collective ethics. Itis also a well-known fact that the reference to Christianity as one of thefounders of the European culture did not get into the draft constitution ofthe European Union either. The Vatican City acknowledges the human and

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political rights, but it establishes them in a way fundamentally differentfrom the classical liberal view system.

Liberalism advocates that the human and political rights cannot becontrolled by the state in the name of any kind of sacral-ethical order. Theliberal belief does not acknowledge the existence of such order. On theother hand, the Catholic view recognizes the human and political rightsinside the frame of a Christian-ethical frame. The question arises: doesBenedict XVI give up the standpoint of the Vatican City in point n. 67 ofhis encyclical? When he writes about the reform of the UN, what kind ofchanges does he think about actually? The word “reformation” cannotmean to make this institution accept the sacralisation serving as the basisfor the individual and collective ethics, as the UN has been one of theimportant institutions of the liberal world domination efforts since itsexistence. The present liberalism, which has lead to the interest groupswith the money monopoly becoming extremely rich and thereforeobtaining too much power, deformed freedom into the freedom ofabsolutely abusing the freedom of others.

Property is power. Those who obtain an extremely big property obtainextremely much power. And the freedom of the extremely powerful manmeans the concentration of the freedom taken away from others. Thereforeliberalism that eliminated freedom in fact has never built anything, butdemolished the obstacles in the way of the absolute power of theplutocratic world-elite in the first place. It was demolishing anything thatstood in its way. Liberalism means the absolute power of the moneymonopoly that got out of all the control of the public, which at the sametime secures the absolute possibility of abusing this power too. The worlddomination of the private money monopoly makes it possible that theproducer property get centralized and concentrated under the hegemony ofa small interest group too. This neo-liberalism or ultra-liberalism haspushed out the social market economy from the economic life and replacedit with the plutocratic system that uses the alibi-democracy’s empty forms.

A social market economy can only come to existence if its mediatoryagent is the society and the interest-free public money that is under theexclusive control of the state. Moreover, the property system has to bereformed so that the property is linked to that natural person who canbehave ethically on his own. The legal abstraction that bears the name“legal person” is not capable of this. The economy which is based on the

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legal person is the preserver of the unethical business behaviour and it isnever capable of behaving in any other way than it was put by MiltonFriedman: “The business of the business is the business”, that is, thebusiness (activity) of those doing business (the businessmen) is to makebusiness, that is, to make profit for themselves. This means the disregard ofall ethical rules.

Benedict XVI should have returned to the re-regulation of the role ofmoney according to the Christian principles. Money is a valueless butnecessary mediatory sign, the mediatory agent of economic life, and assuch, the right to issue it is due to those who produce the product andservice, which is the real value represented with this sign. Money thereforeis due to everyone who creates value. The most important feature of moneyis that it carries trust. Its content is information based on trust. Without thepresent bank system the financial system and the economy could beoperated in a much fairer way by the commercial and clearing houses.These could give an account of the services of the actors participating inthe producer economy with signs carrying different trust.

The biggest problem with the institutional system of the present financialworld order is that there is no need for it. The Bible forbids charginginterest in many places. It is common knowledge that the Islam regardscharging interest unethical even today. If someone wants to invest hismoney, he can do it by giving it to a money institution which invests it inthe producer economy and if there is profit to it, it is divided by the twoinvestors, the owner of the money and the institution taking on themanaging of money, based on principles previously fixed. If the business isa loss-maker, they bear the loss together in the same proportion. However,the present money monopoly operated by the interest mechanism insists oncharging interests after the signs (that were by the way created from theair) even if the money given by it as a credit does not mean any kind ofeconomic profit for the borrower. In other words, the present wealthy layeris not wiling to bear a proportionate risk and responsibility with the raiserof the credit that works in the producer economy and creates value.

Therefore, the Vatican City first of all should examine whether it ispossible to return to the interest-free money system that the Bible and theCatholic Church had regarded as its own until Martin Luther. It is a well-known fact that Christianity gave up the prohibition of interest finally onlyfollowing the teachings of Calvin. John Calvin’s ascetic ethical view

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encouraged tireless work and cutting down on consumption. Overall, ithelped the expansion and accumulation of capital. In the question of capitalexpansion, Calvin set out from Martin Luther’s views and made adifference between legitimate profit and dishonest wealth. He regardedlegitimate profit as the necessary consequence of certain professions. Bydishonest wealth he meant the growth of wealth at the expense of others.

Calvin believed that God permits the legitimate profit if it is theconcomitant of certain professions. At the same time God, as the owner ofthe earthly goods, gives the goods only as a possession (as a loan) to thepeople on the condition that they manage it for the benefit of their fellow-creatures. Calvin did not consider wealth condemnable, in fact, he thoughtthat wealth can mean an opportunity to donate. He condemned wealth onlyif it violated the interests of others and turned man away from God. So inhis teaching the accumulation of capital in private hand and theredistribution of the capital for charitable aims can also be found.

Calvin had new thoughts about the functioning of money as capital, too.At the time of Calvin, according to the official standpoint of the CatholicChurch, charging interest was prohibited. The prohibition of charginginterests had been stated by the second council of Nicaea (787). Thisstandpoint of the Catholic Church indeed appears in its certain decisions.The third council of the Lateran brought in a law against usurers andpunished them with excommunication and denying them church funeral.Pope Gregory XX actually ordered the Christians to chase out themerchants and money loaners who broke the interest prohibition. PopeClement V condemned the principals who permitted the paying of loansgiven at interest. They explained the interest prohibition by referring partlyto the Bible and partly to Christian theologians and the teachings ofAristotle.

The great Greek philosopher, Aristotle also disclaimed the productivityof money. However, the regulations of the Church were evaded. Interestwas usually presented as default interest. The Church also raised a loan atinterest, so the Church itself also got into a contradictory situation.Calvin’s economic policy removed the conflict between theory andpractice that had been going on for hundreds of years. Calvin firstexplained his interest theory in his letter De usuris in 1545, then in hiscommentary written to the books of Moses published nine years later. In

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his writing De usuris Calvin lifts the interest prohibition. He writes thefollowing:

“Because if we completely forbid interest, we restrict the consciencemore than God does.”

He acknowledges the right for charging interest and he permits it withcertain conditions. Martin Luther strictly forbade charging interest intheory and he only permitted it with exceptions. On the other hand, Calvinpermits it in theory and forbids it only exceptionally. Calvin denies thatcharging interest is unknown to the spirit of the Bible. “There are no proofswhatsoever in the Bible saying that all interests should be completelycondemnable.”

Although he quotes and explains the same places in the Bible as hispredecessor, he arrives at a different result. Calvin identifies two interests.One of them is the consumer loan and the other one is the productiveloan. The consumer one does not represent a producing power for thedebtor and therefore no recognition or reward is due for it. This kind ofloan serves the living and helping, in other words it is an interest-free loanof a charitable nature.

In the case of the productive loan, which can create a new value togetherwith the work of the one raising the loan, the reward, namely the interestcan be justified. The productive loan is a loan given for a kind of businessby which the debtor is able to gain profit. So it can be regarded as a loanthat carries interest. Calvin believes that the Bible only talks about the firstkind of loan, since the second kind of interest only developed during thedecades that followed. The frequently quoted words of Jesus Christ in theGospel according to Luke are the following: “Lend, expecting nothing inreturn.”

Calvin interprets this as we have to help the poor sooner than the rich.Therefore, the sentence of Jesus Christ quoted most frequently by thoseopposing interests is not about the complete prohibition of interest but itrather encourages supporting the poor.

The Christian theologians’ other main argument against interest is basedon the Old Testament of the Bible. This strictly forbade the Jews to chargeinterest in trade among them. John Calvin believed that the Christian

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community of his age could not be considered the same as the Jewishcommunities of the biblical ancient times. This is because trade hadundergone serious changes until the 16th century and therefore rationallythinking, it is unconceivable to forbid interest among Christians. In thenext part of De usuris Calvin tries to prove the productivity of money andon the basis of this the legitimacy of charging interest. Calvin abandons theview concerning the nature of money. He tries to refute the idea whichrefers to Aristotle saying that money, as opposed to agricultural land, doesnot have a yield capability.

He refused the teaching of St Thomas Aquinas stating theunproductiveness of money. Calvin did not consider money from theconsumer’s point of view any more, but from the merchant’s and thebanker’s point of view. He pointed out that besides the value of the metalin it, money can have yield if it is invested, circulated, used. The profitdoes not come from the money itself, but from its income. Finally hesummarizes his basic theory in De usuris as follows: “We do not have togive our judgement of interest to God, on the basis of a certain decisionand his order, but only according to the rule of fairness.”

The protestant preacher of Geneva also compared the acceptedinstitution of mortgage with the prohibited interest-charging. He drew theconclusion that neither of them is fairer than the other. He thought thatthere is no significant difference between mortgage and interest, there isonly difference in name. It is not their name that decides whether a thing isfair or sinful. Therefore, similarly to the institution of mortgage, Calvinlifted the prohibition of interest, too. At the same time, however, Calvin setlimits to the freedom of charging interest. The first limit orders theinterest-freeness and priority of the loan given for consuming. The secondlimit: do not charge interest from the poor, and he who gives loans shallnot be so yearning for profit that he is negligent in fulfilling his obligationand shall not suppress the poor brothers. In the third exception heformulates the principle of equity: nothing shall occur not in line withnatural equity. Christ orders the following in verse 31 of chapter 6 of theGospel according to Luke: “And as ye would that men should do to you,do ye also to them likewise.”

The fourth exception defines a practical rule referring to equity: ifsomeone raises a loan, he shall win as much money or even more with it asthe sum of the borrowed money was. In case of the fifth exception the

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Geneva preacher draws attention to the responsibility towards God, whichhas to be kept in view in the economic life too: it is not the ordinary andgenerally accepted custom according to which we should decide what isallowed to us, but we shall rather adhere to the rule based on the speech ofGod.

Calvin did a lot in the interest of the general welfare by initiatingdifferent social measures. The priority of the public interest is reflected inthe sixth exception as well: we shall not consider only the private good ofthose with whom we do business but shall also consider what is good forthe public. Calvin finally mentions the measure of the interest too, and hesubordinates the measure of the interest to the laws of the country: Whencharging the interest, the measure which is permitted by the laws of thecountry or region in question shall not be exceeded.

During his analysis of the parts of the Old Testament in the Bible, Calvinemphasized that in the case of the earthly goods the idea of solidarity hasto prevail in connection with the interest, too. In Christian interpretation,social justice feeds from love, mercy and compassion. He considered theexemplary manifestation of Christian love when someone selflessly lends.He draws the conclusion that nowadays interest prohibition does notfunction as a cohesive power of community, as it did in the times of Moses.Calvin refrained from using the words usury and usurer. In his opinion it isthe Christian fairness that makes it possible to differentiate between theunacceptable form of interest and the accepted interest. He regardedinterest as justified in two cases: if the debtor does not pay off due to badintention and if the loan is productive, in other words, if it took part increating a certain value. Calvin at the same time knew that if we bearcertain forms of interest-charging, we can open a way to abuses too. Thecomplete prohibition of interest entails that the honest and the dishonestare given the same punishment.

He also writes down: it is indeed a rare thing to see someone who is anhonest man and at the same time is a usurer. Calvin’s instruction thatwork cannot suffer a loss because of the capital and money is very timely.According to Calvin the respect and wage of the creditor cannot be as highas that of the worker who created the value. Crediting does not involve anykind of effort and even the interest is created by the work of the personwho does the producing work. It is also an important instruction of Calvin

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that money cannot be the basis of profit if its yield, the interest entails thepoor getting in a more disadvantageous situation.

The great figure of the Reformation therefore lifted the interestprohibition and announced the freedom of interest-charging by taking thelaws of fairness and love into account. Instead of a word for word analysisof the Bible, he gave the theoretical-religious establishment of the answersthat had already developed in practice to the questions that emerged in theeconomic life. He advanced the development of market economy not onlytheoretically but also by his practical measures. Geneva, the ProtestantRome, became a flourishing city-state, to which the fact also contributedthat it made the operation of the banks and the various financial institutionspossible. He himself also established a Christian bank, but at the same timehe always kept social justice in view. As a Christian he tried to harmonizefraternal love, brotherly sympathy and economic growth. In this way hecould keep the frail balance between economic welfare and social justice.

Thus Calvin and Protestantism wanted to operate the financial systemcarrying interest based on a kind of “gentleman agreement”. However, thebanks and financial institutions are far from behaving like gentlemen,therefore they have to be persuaded to observe the financial and businessethics in another way. We can completely agree with the aim BenedictXVI suggests in “Caritas in Veritate” (Love in Justice, Die Liebe in derWahrheit), namely, that it is social justice which ought to be globalisedinstead of the world system of looting with interests and making peopleindebted. We can less agree with the fact that to a certain degree hedistances himself from the so-called “Dependency” theory and he warnsagainst the return of protectionism.

According to the representatives of the dependency theory, the so-called“Third world” countries could not modernize themselves and catch up withthe advanced industrial countries because by losing their independencethey got into a dependent situation on the developed world. According tothe representatives of the Dependence theory it is in the interest of theWest to maintain this financial, economic and technical dependency. Thedependency theory has several trends, but it is common in them that theyattribute the third world’s stagnancy and their falling behind indevelopment to the fact that the values created by them were taken awayfrom them by the advanced industrial countries with financial andeconomic methods, first of all by indebting and trans-national corporations.

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Benedict XVI wishes to form the extremely imbalanced system of thepresent plutocratic world order into a fairer world order following thenorms of the universal ethics by reforming the United NationsOrganization. Montesquieu already stepped up against the absolutist,extremely centralized power concentration. He wished to achieve themutual control and supervision of power by dividing the branches of statepower (separating the legislative, the executive and the judicial branch). Atpresent the world is centralized too much. If we set out from saying thatproperty is power and power is property, then we have to see that duringthe history of the world the property of humanity has never beencentralized before to such extent under the control of a relatively smallinterest group.

According to the data of the UN Research Institute in Tokyo from2000, if we reduce the number of the people in the world to 10 and all ofthe financial and produced wealth of the world to 100 dollar, then oneperson owns 99 dollars and the other nine own 1. Such a big difference inwealth creates a huge inequality in power. If we do not resort to thedecentralization of the wealth circumstances and do not decentralize thefinancial, economic and political world power that has become too muchcentralized, then it is impossible to create a fairer world order that bettermeets the universal ethics and social justice. Extreme predomination inwealth leads to extreme predomination in power, and this makes possibleto abuse power on a global scale as well.

It is in fact necessary to decentralize this over-centralized and over-concentrated financial, economic and political power, and to create adivision of power where the functionally and regionally divided powerbranches and regional power centres mutually balance and control eachother. Namely, the “Checks and Balances” known form the Americanconstitution, i.e. the means and institutions securing the balance among thecertain power branches have to be made global by creating the system ofpower branches and regional power centres that are capable of mutualchecking and balancing.

In my opinion it is not further centralization, the establishment of a worldsystem and a kind of global union controlled from a single centre which isneeded, but the separation of the financial power from the producereconomy, and that of the financial power from the political and armed

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power. The financial power also has to be decentralized, namely in a waythat the owning of the property has to be linked to a natural person, and itsmeasure has to be linked to the performance of this natural person. Thisnew kind of property system would impede the excessive enrichment andthe entailing development of a power-predominance in the hands of a smallsuper-rich layer. At the same time it would prevent excessiveimpoverishment and the majority of people getting into a deprived anddependent situation because of not having the result of their own work.Those who do not possess the result of their work lose their self-determination and personal freedom and they are restrained from livingaccording to the norms of universal ethics.

If the Checks and Balances system, i.e. the system of mutual checkingand balancing was made to a global scale, it would make it possible thatthe owners of the private money monopoly could not abuse their financialoverpower, could not be the owners of a predominant part of the producerwealth of mankind and therefore could not control the political power andthe life of mankind necessarily. We cannot regard what Benedict XVIsuggests, namely the reformation and strengthening of the UN, as asolution.

We emphasize: The over-centralized and over-concentrated world powerhas to be decentralized to the highest degree both horizontally (accordingto geographical and geopolitical regions) and vertically (by separating thefinancial, producer-economical, political and armed power branches) andhas to be made capable of creating a balance of power by placing it underthe mutual control of each other. What is needed now is not that the littleefficient United Nations Organization gets transformed into a GlobalUnion with an effective government. It is a decentralized world ordercontrolled from below, organically built and capable of enforcing theuniversal ethics that has to be created by strengthening the natural humancommunities (the family, the nation, the primary religious-culturalcommunities) and strictly enforcing the principle of subsidiarity. A systemlike this could represent the culture of life and survival instead of thepresent system of looting by interests and indebting, which representsthe culture of shameless selfishness and death and which necessarilyleads to the destruction of humanity and its habitat, the Earth.

“Love your fellow as yourself!”

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Man is inclined to good and bad, selfishness and unselfishness at thesame time. Getting overly rich makes it possible for a small interest groupto unlimitedly enfroce its own selfishness. This selfishness can only belimited if the other group of people also has an amount of wealth andinterest-enforcement power based on the wealth that it can step up againstthe selfishness of the other group with its own selfishness. The selfishnessof equal financial, economic and political powers tightening against eachother can force the control of the opposing selfishnesses and the followingof an ethical behaviour respecting the needs, interests and values of theother. (Mathematics expresses this by saying that if we multiply a minuswith a minus, we get a plus, but it is more graphic if we think of thevectors of opposite directions, of which the resultant in case of equalpowers is a null vector. The latter expression here illustrates the ethical thatis unselfish behaviour.)

How can we protect ourselves from the global power predominance thathas grown into a limitless freedom of abuse? First of all we have to rethinkthe problem of interest, namely on the basis of the ideas of Silvio Gesellthat have proven to be durable. If someone states that the circulation ofmoney cannot be secured without the interest mechanism, he has to knowthat a negative interest also exists and the circulation of the signs playingthe mediatory agent of the economic life i.e. money can be secured by thisas well. The present system of positive interest rewards the one who holdsback this mediatory agent. Negative interest on the other hand punishes theone who holds it back from fulfilling its function in the operation of theproducer economy. Therefore the most important task is to liquidate theprivate money monopoly and to give back the signs of mediating in theeconomic life to the public authority supervised from below.

The present financial and credit system under private supervision has tobe transformed into a public money system and public credit. This wouldmake it possible to liquidate the power of the trans-national money cartelmade up of the superrich bankers (the present owners of the private moneymonopoly). If this extremely powerful group that forces everything underits hegemony and places its selfishness above all public interest isdisconnected, then the reform of the circumstances of producer economycan begin with the introduction of the new property system. The essence ofthis new property system is that it is actors of equal economic power thatstand in front of each other and the possibility of economic choice equalityis secured to everyone. In a system like this the interest enforcement of the

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economic actors of equal power is also equalized. This would make itpossible to enfroce the norms of the economic-business ethics. The legalpersons unable to behave ethically would not have a decisive role in asystem like this. The existence of the legal person is the denial of the ethicsin the economic-financial life. A legal person and ethics are incompatiblewith each other. Therefore, property has to be linked to a natural person,and the measure of the property, as we have already mentioned it severaltimes, has to be linked to the achievement of this natural person.

If all these are carried out in the financial and economic sector, then itcan make it possible to replace the present alibi-democracy with theactual-ethical democracy securing the direct participation of each andevery person. An ethical democracy like this is suitable for enforcing socialjustice. I am of the opinion that the Church, to whom it is an order tofollow the will of God, the absolute truth and the universal ethics that Jesusformulated as Ego sum via, veritas et vita (I am the road, the truth and thelife), should put forward completely different suggestions from what wecould read in the recently published encyclical of Benedict XVI.

Now what can be done?

Silvio Gesell expounded in his work “The Natural Economic OrderThrough Free Land and Free Money” published in 1913 how thefinancial system with a new principle suggested by him would work. Heleaned on the work of the English Henry George, according to whom theagricultural land belongs to God and the entire humanity, and each andevery person gets it only to use it when he is cultivating it. The privateproperty of land was unconceivable until capitalism. It is an indisputabletruth today as well: only that can be a commodity which one has createdwith his own achievement. The land, the water and the air cannot be acommodity, because these were given to the people by God and the nature,the universe. So Gesell also advocated that we have to return to the publicowning of the land. By this, one form of exploitation disappears: the landrent. This income comes from the fact that the productivity and usabilityof the lands are different, for example because they are a different distanceaway from the markets. The landowners usually monopolize the profit forthemselves. This land rent is an income without achievement and is theconsequence of the monopolized property. If we cease the private propertyof land, mankind get rid of an unethical and harmful financial burden.

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Silvio Gesell, such as the French Proudhon, found out that the goodsand money are different from each other in quality. The goods deteriorate,money doesn’t. Proudhon wanted to eliminate this difference by bringingthe goods to the level of money. He organized barter houses to do awaywith money, but his attempt failed. Proudhon was wrong when he thoughtthat the goods’ bent to deterioration is a natural feature and cannot bechanged. Whereas Silvio Gesell stated that goods don’t have to be lifted tothe same level as that of money, but money has to be made bent todeterioration like goods, and by the help of the laws made by the publicauthority. One of his suggestions was that for example at the end of everymonth the value of money should decrease by half per cent, which wouldbe indicated by putting a 5-pfenning stamp on the banknote. If the value ofthe retained money decreases, then it is not worth to accumulate it. Thisspeeds up the circulation of money. The loan supply increases. The fee ofmoney usage, the measure of interest decreases due to the increasingsupply. If the demand and the supply equalize, then theoretically theinterest can be reduced to zero.

During the great economic crisis the thoughts of Gesell were tried inpractice too. In the Tyrolean city of Wörgl local money was introduced ofthe order of several ten thousands of schilling. This money circulated 50times in a year. In Wörlg unemployment decreased to a quarter, bridges,channels and ski lifts were built. Even André Léon Blum, who had beenthe prime minister of France three times was to travel to Wörlg to study thesuccessful attempt. Due to the pressure of the central banks under itssupervision, the international financial cartel forced the Austrian, German,French and Swiss governments to ban the usage of means of exchange bylaw. In spite of this, the WIR-system in Switzerland has not only gotstabilized, but has been working successfully even until today with thecentre in Basel.

The interest-free financial system is operable and is one of the viablealternatives of the present financial world order. At present the issuing ofmoney is in private hands. On the other hand, in the Gesellian system theissuing of money is the exclusive right and obligation of the publicauthority. This public authority makes sure that the goods supply and theamount of money are balanced. It also pays attention to see to thedevelopment of the price level with consumer baskets. If the general pricelevel increases, then the public authority phases out money or simply limitsthe issuing of new money. In order to have public money in the circulation

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again, it is necessary that the financial sovereignty and its monetary andfiscal instruments be given into the exclusive authority of the publicauthority. At present, there are about 5000 local moneys functioning in theworld, and more than 3000 of them are doing it successfully. All of thesehowever can mean a partly and provisory solution.

It is noteworthy what is going on Venezuela. In this South-Americancountry the unprecedented and continuous economic upsurge has beenalready going on for five years. The domestic gross product of the South-American country doubled between 2003 and 2008 and the poverty wasreduced considerably. The Chavez government much attacked by therepresentatives of the plutocratic world order broke with the neo-liberalfinancial and economic policy. It made a sweeping turn into the directionof participative democracy and economic equality of chance. It adopted alaw about the development of the people’s economy, which helps to makethe relations between the towns, production and consumption moredemocratic. Due to this law ‘solidarity barter groups” were established inten towns, which have been proving to be more and more successful. Theeconomic strategy followed by the Venezuelan government is thealternative of the neo-liberal model also known as the WashingtonConsensus. They worked out the eight models of publicly operatedproperty and practically speaking they phased in the thoughts of SilvioGesell in certain areas.

Of course, the wide usage of interest-free money and other exchangemeans come up against a firm resistance of the owners of the privatemoney monopoly at present. The protectors of the plutocratic world orderstate that interest-free money or money made to circulate by negativeinterest does not stimulate to be sparing. This statement is a mistake or aconscious misleading. Due to the money kept in circulation, the producer-value creating real economy is continuously growing. It is the capacityexpansion happening here, the objects that get built, the surplus productsand services that mean the gain, the savings. So there indeed is (asignificantly increased) saving, but not in the financial sector, on the levelof signs, but in real economy, in the expansion of goods and services.

A global Lautenbach plan is needed

One of the respectable economic experts of Weimar Germany, DrWilhelm Lautenbach’s suggestions concerning the consequences and

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possibilities of economic interest expansion should be studied and usedagain. Lautenbach announced his memorandum on 16th September, 1931 inBerlin at the meeting of the Friedrich List Association, with the title “ThePossibilities of Boosting Economic Activity by Means of Investmentsand Expansion of Credit”. Lautenbach proved that the natural way ofovercoming the economic and financial emergency is not restriction andthe forcing of economic restraints, but the expansion of performance.Lautenbach made a distinction between emergencies. One of theemergencies derives from the warfare economy and the unusual producingtasks.

The other type of economic emergency is the economic decline, therecession and the depression. In these cases (because of the lack ofspending power), the demand lags behind the supply in spite of the sloweddown production. There are two reactions to this decrease in production.One of them is the deflationary monetary policy, when they want toeliminate the budget deficit with fiscal means, and at the same time theamount of money in circulation is decreased by high interest rates. Ananother answer to depression is that the monetary authority decreases thebasic interest rate, the fiscal authority decreases the taxes, and the leadersof the social politics and the economic life decrease the wages. These threecost factors of the economic performance affect the economic lifedifferently. The reduction of interest rate helps the foreign capital flow outof the country as it can get more favourable interest there. However, thisthreatens the foreign exchange rates and decreases the inland amount ofcapital. And the reduction of taxes is practically impossible at time ofrecession, since the income of the state decreases anyway and it is forcedto do a severe budget restriction.

Even in depressive circumstances there is product surplus, intactproduction capacity and unused labour force. Therefore it is practical ifthis unused economic capacity is somehow started up and utilized. For this,the state has to create new economic needs for the producer economy,namely by submitting cheap interests. However, the need financed this wayhas to be a productive need increasing the activity of the producereconomy and not one of consumptive nature. Thus, the public authority(based on its monetary prerogatives) can only grant public credit todevelop the infrastructure and bring the production capacities into motion.

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What is the essence of productive credit creation?

First of all Lautenbach suggested that the concrete plans of biginfrastructure programs be worked out and financing has to be secured fortheir realization only when these are done. The form of financing is thecommercial bills of exchange issued by the government. These bills areaccepted both by the central Bank and the other commercial banks sincethe government takes on guarantee for them. The banks have to secureshort-term and long-term credits for the companies that take part in theprograms developing the infrastructure and increasing production. Thesecompanies pay each other with these discountable and stately guaranteedcommercial bills and they use cash only for the wages. As their costs comein the form of cheques and bills, they hardly have to use financial credit.

So Lautenbach considered the conscious and well-thought outintervention of the state necessary to overcome the economic setback. Hereferred to the fact that in 1923 Japan could build up Tokyo that had beenpreviously destroyed in the earthquake this way. The Japanese governmentissued the credit, this increased the productivity and the standard of living,which exerted an unprecedentedly positive influence on the entire Japaneseeconomy.

The Germany of Lautenbach adopted the Japanese example. Accordingto this, the entrepreneur, who takes part in the programs initiated by thestate, can start investments that are brand new, or can correct apparatusesto which he does not have the appropriate liquid assets alone because ofthe economic setback. Since the commercial bills of exchange issued at thestart of the projects can be discounted, they can be converted after 12-15months to middle- or long-dated government securities. These are coveredby the growing domestic income. Therefore only those economic programscan receive credit, whose implementation satisfies an important need orincreases the volume, productivity and competitiveness of the economy.This way the value-creating real economy recovers, and the plus outputcovers the expansion of the issued credit and the money circulation. Andthis does not cause inflation, because the state and the bank system issuesonly as much credit as it is necessary to the extension of the real economy.In fact the capitalization of the national economy and the entire society isrealized.

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Lautenbach’s ideas were at first rejected, and they were implementedwith complete success only after 1933. The most important objectionagainst it was that the issuing of money by the state can cause an inflationwhich led to the complete depreciation of the Mark in 1923. It isunquestionable that at this time the Reichsbank issued as much money as itwas necessary to fulfil the obligations of reparation. The amount of moneyissued this way significantly exceeded the capabilities of the Germannational economy. This economy could not produce the goods and servicesthat could have covered the amount of money put in circulation.Hyperinflation was the consequence of this, due to which one trillionmarks had to be paid for half a kilo of bread. This absurdity forced theGermans not to use the mark in circulation any more, since they had tocarry a whole cart of money for a kilo of bread.

Does history repeat itself?

In 2009 we could already witness that due to the world crisis broken outin 2008 both in the US and in Great Britain money was issued to an extentas much as or even higher than in the German situation in 1923. Therefore,similar inflationary phenomena would have had to appear. But thesephenomena did not occur. This implies that the German inflationary wavein 1923 had other reason than that of the state putting too much money incirculation with the note press.

The order of magnitude of the money issuing is the same. The effecthowever is markedly different. We can find the explanation to this in thewritings of Hjalmar Schacht, the confidential man of the Wall Streetordered to Hitler (who was the president of the Reichsbank for a long timeand an economic top minister as well.) Schacht published his work “TheMagic of Money” in 1967. In this work he reveals such previouslyunknown facts which completely smash the interpretation forced to theworld by the international financial community. It was actually the trans-national money cartel speculating on the depreciation of the mark thatincreased the inflation to an unimaginable extent in Germany after theWorld War I. The foreign investing financers were speculating with a hugeamount of money to the value of the depreciating mark, using thespeculative techniques of the stock market what we briefly call [in English]as “short-selling”.

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The investors use the technique of short-selling when they count on theprice decrease of a certain money or money substitute. According to thismethod, the speculator borrows the monetary assets and sells them beingaware that later he has to buy these monetary assets back and has to givethem back to their original owner. The speculator therefore calculates thatthe price will decrease and therefore he can put away the difference. Themass selling of the German mark with shorting made it possible that theprivately owned banks submitted a huge amount of money to thespeculators.

When the need for credit occurred, the huge amount of marks was issuedby the banks from the air and then lent to the investor-speculators inexchange for the fact that they paid a real interest of a considerable extentto the banks for these credits. First the German central bank, theReichsbank satisfied this financial need of the speculators. However, whenthe Reichsbank was no longer capable of satisfying the unlimitedly surgingfinancial need with own issued mark, then the privately owned commercialbanks took over the lending. The commercial banks were allowed to issuemoney from the air unrestrictedly and to lend that at a significant interestto the financial speculators.

The future of mankind depends on the earliest possible switch to thenatural economic order.

I suggest neither optimism nor pessimism, because both of them make usbe prone to passivity. We have to be completely active, because mankindhas arrived at a crossroads. Those who see the situation hopeless shouldthink of the fact that only for the sake of the hopeless are we given hope.For the sake of those without hope that hope is given to us. Thank you forlistening.

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26. 08. 2009Europäische Metall-Union (EMU) in Hungary

German leng.:http://academia.edu/3742940/Die_Zukunft_der_Menschheit_und_die_Umstellung_auf_die_naturliche_Wirtschaftsordnung