SIMULTANEOUSPOLICY

BySilvanoBorruso
Considerations
Whileagreeingthatcompetitionistheprincipalbarriertosocialimprovement,competition,
farfrombeingacause,isitselftheeffectofpoliciesthatforalongtimehavecausedanartificial
scarcityofmuchneededresources,naturalaswellasartificial.
Therealcauseofthepresentmalaiseishoarding:ofland,ofrawmaterialsandofmoney.
Causesandeffects
Thehoardingoflandisanancientphenomenoninallcontinents.Tacitusremarkedthat
thelatifundia(largeestatesworkedbyslaves)weretheunderlyingcauseoftheruinofRometwo
thousandyearsago.ThefeudallordsandtheChurchinheritedthesystem,butforsevencenturiesor
sotheytookuponthemselvesthesocialchargesofadministration,defenceandsocialservices.With
theendoffeudalismthesechargeswereincreasinglytransferredonthepeople,whileancient
privilegesincreasinglyfailedtocorrespondtoduty.ThelandlessofEuropeeitherstarvedormigrated,
exportingthephenomenonabroad.Landlessnessisatthebottomofphenomenalikecolonialism,
slavery,revolutionandviolenceuptoandincludingwar.Itisalsotherealcauseofoverpopulation,
whichperverselyisstilltoutedatthecauseofpovertywhereasitisitsmostglaringeffect.
Thatthelandhoardersbecomerichonthesweatofthelandlesscanbegaugedfromanews
itemofJanuary30th2002:inKenya,aparagonofThirdWorldpovertystrickencountry,thesalesof
MercedesBenzcarsincreasedby285%between2000and2001.238unitsweresoldinthepastyear,
at4.1millionshillingseach,inacountrywheretheminimummonthlywageis3500shillings.
Thehoardingofnaturalresourcesisbehindtheirartificialscarcityandhighprices.No
naturalresourceisnaturallyscarce.Ifthepriceofgoldhoversaround$300anounce,itisbecauseits
bulkisburiedinbankvaultsgatheringdust.Ifthepriceofdiamondsisastronomical,itisbecause
theirbulkisburiedintheDeBeersbasementat2CharterhouseStreetinLondon.Ifthepriceofwool
tothemanufacturersofclothesforcesthemtochargeoutrageouspricestobuyers,itisbecausethe
hoardersofwoolsellittospeculators,eachofwhomaddshisowncuttothebalesofthestuff.The
sameprocesstakesplacewithallcommodities.Theirmarketisnotfreeatall,butcontrolledby
hoarders,allwithacommoninterestinartificialscarcityfortheirownexclusivebenefit.
Thehoardingofmoneyisthemaincauseofthelossofsovereigntybythenationalstatesto
theglobalfinancialmarketsasdepictedinthesecondparagraphoftheISPOdocument.Theissueand
controlofmoneypassedfromgovernmentstotheinternationalusurersinabouttwocenturies,1609
1815.FromWaterlooonwards,sovereigntyhasincreasinglybeentransferredfromcrownedto
uncrowneddynasties,themoretyrannicalforbeingthemoresurreptitious.Thesituationtodayisthat
theStatecontrolsapaltry510%ofthemoneycirculation,whichitissuesfreeofdebtasnotesand
coins.Thebankscontrolthebulk:9095%,whichtheyissueascreditloadedwithdebt.Thebanks
issuemoneycorrespondingtotheprincipalbutnottotheinterest,therebycausingintensecompetition
andcompulsorygrowth.Further,interestratesmustbehigherthanthereturnofinvestmentonland,
otherwisetheywouldnotattractclients.Theresultisthatcreditisshutofffromthebulkofthe
population.Thusthedoublehoardingoflandandofmoneyworkstothebenefitofthesuperrich.The
restmustnecessarilybecomepoorerandpoorer.
Atinternationallevel,theworldisvictimofthe1944BrettonWoodsagreement,which
replacedthegoldstandardwiththedollarstandard.Theresultisthatcountriesareforcedtoemitno
moremoneyfordomesticusethandollarstheyhappentohave,therebystranglingtheireconomies.
TheexceptionsarethepowerfulGroupof8countries,exemptedsomehowfromthestranglehold.

Remedies
TheSimultaneousPolicywillremainadreamforaslongasthemodernState,itssovereignty
weakenedanditsinstitutionsincreasinglyparalysed,isnotinapositiontoregainthecontrollostto
themoneypower.Historically,Napoleon,Lincoln,NicholasII,Hitler,TrujilloandKennedyalltried
andfailed.ToaskforaSimultaneousPolicyfrompoliticiansandpolitics,especiallyafterthe
dramaticlossofsovereigntyrepresentedbytheintroductionoftheEuro,isfutile.
Remedies,however,exist,buttheymustbepeopledrivenbeforetheStatecanintervenewith
subsidiaryandnottotalitarianfunctions.
CommunityCurrencies
Thisprovidentialinstitution,begunaround1980andnowactivebymeansof2500plus
communitiesthroughouttheworld,hasthepotentialforcurbingtheusurerspower.Theworking
principleisthateverysaleofgoodsorserviceswithinalocalcommunityneednotbepaidinnational
currency,butinacurrencyemittedandcontrolledbythecommunityitself.Thecommunitycurrency
isnotalternative,butcomplementarytothenationalcurrency,therebyrelievingpressureonitand
concomitantlycompetition.Detailscanbehadatthewebsiteccdev.letsontheInternet.
CCsintrinsicallysupportcooperationinsteadofcompetition,localeconomiesinsteadof
globalisationandhardworkinsteadofparasitism.Theyarealsoimmunefromtheft,bothprivateand
public.TheyhavethepotentialforrestoringsovereigntytotheState,whichcanthenflexitsmuscleto
bringspeculatorsandtransnationalstoheel.
LandValueTaxation
Thisremedyhasbeenproposedsince1879byHenryGeorge(183997)asameansfor
controllingthehoardingandspeculationofland.Whereverapplied(Denmarkinthe1950s,Taiwan
after1949)ithasbeenverysuccessful,butelsewhereithasbeenresistedforthesimplereasonthat
thelandlordsaregenerallyalsoinpower.Itisnotdifficulttosee,forinstance,thatthesolereasonfor
theexistenceoftheHouseofLordsistopreventtheCommonsfrompassinglawsdetrimentalto
landedinterests.
Buttheideaisgatheringmomentum.SupportisgrowingforastrongStateinapositionto
abolishalltaxesonvalueaddedandreplacethemwithtaxesonvaluesubtractedfromnatural
resources,mainlylandandenergy.
Oncethisisdone,theStatewillalsobeinapositiontoimpose100%reserverequirementon
thebanks,whichcouldonlylendwhatalreadyexists,namelydebtfreemoneyissuedbytheState.To
discouragehoarding,andthereforefavouringcooperationinsteadofcompetition,moneyshouldbe
consideredasapublicservicesubjectedtoademurragechargeassuggestedbytheeconomistSilvio
Gesell(18621930).
SpeculationandHoarding
Oncetheincentivetospeculationisremovedfromlandandmoney,theraisondtrefor
speculationinothercommoditieswilldisappear.Theirmarketswouldbecometrulyfree,andfree
tradewouldbegintomakesense.
Withthepresentconstraintsandartificialscarcities,neitherfreetradenorprotectionare
solutions.Thefirstendsupbenefitingthehoarders.Freetradebetweennonfreepeopleisthe
situationthatexistedintheU.S.beforetheCivilWar.TheSouthhad3/4millionlandhoardersand
theirentourages,twomillionblackslavesandsixmillionpoorwhites.Thefirstgrouppassionately
supportedfreetradewithEngland,whoprovidedcheaptrinketsagainstbalesofcheapcotton.

ButLincolnsAmericanSystem(protectionism),wasnobetter:itendedupbenefiting
manufacturersattheexpenseofconsumers,whohadtopayoutrageouspricesforexpensivetrinkets
withnoguaranteeofquality.Theproblemwasthatlandandmoneyspeculatorswerebusyhoarding
withoutanyonestoppingthem.
Conclusion
Wheneveraneconomicpoliticalsystemcreatesandmaintainsimbalancesagainsttheinterests
ofthecommongood,thecausehastobesoughtiningrainedinjustice:forwhateverreasons,
someoneisnotgivenhis/herdue,andasaresultthoseenjoyingprivilegeliveofftheworkofothers.
Wearewitnessingtheendoftheline.Ifdemocracymeansanything,thepeopleandcommon
sensemusttaketheinitiative,withouthavingtoberepresentedbyopportunistswhoforgetalltheir
promisesthemomenttheyreachpositionsofpower.Thepoliticalpartyisaparasiticinstitutionthat
hasseenitsday.Itisalsotimethatintermediateassociations,fromthefamilytotheprofessionsand
tradestothemunicipalitiesactaseffectivechecksandbalancesonthepowersoftheStateandon
thoseofMammon.
SilvanoBorruso
February2002
silbor@strathmore.ac.ke