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Money is a means of payment for traded goods and services. It serves for the exchange of products of work in a market economy. Money is issued by the state. Each country tries to equalize the quantity of money in circulation and the value of totally produced commodities. It is not easy to achieve in a market economy because it is based on independent factors. Therefore, the monetary policy of a state adapts much more to anarchical market changes than a conscientious economic policy.  


The state apparatus is the largest possessor of accumulated funds and is the largest consumer. The bodies of state authorities maintain administration, defence of the state, the state reserves, non-profit activities, subsidies, insurances, etc. The state realizes the funds through the tax policy. If due to unstable economic trends the state cannot tax enough money, then the government realizes a budget deficit. The state cannot go bankrupt and therefore covers the lack of money for the budget by issuing money. In this way, states could solve economic problems very easily, but when the government begins issuing money they begin to adapt to the act and then it becomes hard to stop. The emission of money increases the mass of money in circulation without being covered by produced goods. Then, there is more money in circulation than the worth of economic production. The economy defends itself by increasing the price of goods until the balance between supply and demand is reached. The product of this is inflation in which money loses its value.

The state defends itself from inflation using a restrictive monetary policy. Such a policy reduces the amount of money in circulation. Then, a deflationary tension may appear that leads to the blockage of the circulation of goods, to recession, and to economic crisis. In the capitalist society, states try to remove the deflationary tension through credit policy. The central bank issues fresh money through commercial banks and then balances the supply and demand of money through the interest rate. Then the interest rate becomes an instrument of economic policy of the state, which gives stability to market economy.

An increase of the production of goods requires increased amounts of money in circulation in order for the manufactured goods to be bought. Capitalism has no mechanism to do that in a satisfactory manner. The credit policy of issuing new money solves that problem only temporarily because the money must later be returned. The problem is even greater because there is not enough money in circulation to allow the borrowed money to be returned with interest. Debtors find a temporary escape in re-borrowing money from banks that they cannot return. Thus, the capitalist method of production chokes itself and the result is often the bankruptcy of companies. Bankers take over such companies at a bargain price and this is one more way how they enormously enrich themselves. Bankers became so rich that in America they even established the Federal Reserve Bank with the help of cunning and corrupt politicians.

The Federal Reserve Bank is the U.S. central bank and since 1913 it has been placed in private ownership. The owners also have control over the issue of money. They lend money to the state and to other users, and require its return normally with interest. According to the law, the owners of the Federal Reserve are required to return issued money and profits to the treasury, but there is not enough of a powerful organization that has real power to control the operations within the Federal Reserve Bank. Even if their books are clean they can still produce a lot of money out of thin air by the help of innovative accounting practice and keep it for themselves. Thus, the owners of the U.S. Federal Reserve exploit the U.S. and the whole world. That is how they became the wealthiest and most powerful men in the world. I know this sounds unbelievable, so I suggest a little search over the internet (Google, Yahoo, etc.) where you can easily find man supporting articles that confirm it.

The Federal Reserve Banks were created as a solution that should provide a stable economic policy to the country but this did not happen because the interests of their owners were different. In 1929, the owners of the Federal Reserve created a very expansive monetary policy with affordable loans. When a huge number of Americans become indebted they suddenly made the monetary policy very restrictive. They withdrew money from circulation and thus, they reduced the trade of goods. The people who had taken out loans could not earn enough money to repay their debts to banks and what followed was a massive bankruptcy of companies in which the bankers took ownership. The escape from the crisis was found in public work, funded by the Federal Reserve. The fresh money pulled the U.S. out of the crisis. And so, America was brought out of the crisis by the same people who put them in it. The majority ownership of the bank is in the hands of the richest men in the world. On top of them is the Rothschild family.

The U.S. cannot repay their debt to the Federal Reserve Banks. They are paying it by re-borrowing from the Federal Reserve with new interest. Just for the purpose of returning U.S. debt and covering the budget deficit, the Federal Reserve Banks may issue about a trillion dollars yearly. If we add the money which was needed to rescue the U.S. private banks in 2008, the Federal Reserve Banks may have produced about two trillion dollars a year. Thus, the U.S. became the most indebted country in the world. The money produced to cover budget deficits in the US is made out of nothing and brings huge profits to the owners of the bank. Thus the owners of the Federal Reserve are the richest people in the world. U.S. inflation is not high because the U.S. dollar is the world’s currency and therefore the whole world supports the strength of the U.S. dollar. But it is nothing but another form of exploitation around the world.

The U.S. Federal Reserve is the main shareholder of the World Bank and the International Monetary Fund. The Rothschild family has a major impact on policy formation in Western European countries. That gives the Rothschild family a majority decision making power in the IMF and World Bank. In this way they are able to impose economic policy worldwide. The monetary policy the Rothschild family usually imposes to the world through the World Bank and IMF is generally restrictive. With such a policy, countries cannot earn enough money to pay back loans. These countries have to borrow more money in order to pay debt and must follow the policy imposed by the Rothschild family. So the whole world, with the exception of Russia and China, which still successfully resist, has become a colony of the Rothschild family.

People do not have an influence on the formation of economic policy anywhere and it is probably the biggest problem of today's economic policy in the world.


Finally let’s conclude that the market regulation of the quantity of money in circulation does not create a sufficiently stable economic policy. Cyclical oscillations in market trends emerge with unstable prices, productivity and earnings, which is unfavourable both for the economy and society. A stable economic policy requires a balanced distribution of work and work products, a known purchasing power of the population and known needs of the society, as well as an efficient economy to meet such needs. A free market economy is not able to achieve such conditions. A fully balanced economic policy could only be conducted by a developed planned economy and this is the reason why it will have to be in place in the future. The future will unavoidably require the creation of an adequate amount of money in circulation and its democratic distribution. The monetary policy in such a system will be based on social ownership of money and on a direct democratic direction of joined money assets. 


Money in the Commune  

The most suitable situation for any economy would be to have in circulation the quantity of money precisely identical to the value of produced commodities. In an ideal case in which the economy produces precisely what the society needs, such a quantity of money in circulation enables purchasing of all produced commodities and economic stability.  

Consumers hold a large amount of money. It is significantly larger than the value of the whole current production, and significantly smaller than the total value of everything the society possesses, because such values were generated by the turnover of the same money. A part of money is turned over for current production related payment transactions purposes, and a large amount of money is accumulated in citizens' holdings as a reserve fund. This money is invested in new businesses or preserves and thus provides economic security to individuals and society as a whole. The big problem for the economy lies in the fact that privately accumulated money is placed in a hardly predictable direction and that creates problems of production planning. It is necessary to bring more order to the economic policies of the commune by the process of planning production.

The commune does not issue money, but it can acquire it by redeeming accumulated money held by the population. It does so by means of past labour points. A larger quantity of past labour points of workers results in greater income, and in this way money holders may find it in their interest to sell money for points. By selling money, the population of the commune loses the possibility to lend with interest, but realizes a rise of income proportionate to the increase in the quantity of past labour points.  

In the new system, the society as a whole materially secures each individual. Therefore, individual money accumulation as a form of security is no longer necessary, and a significant voluntary sale of money for past labour points may be expected for this reason. The individual will no longer have to work and save in order to ensure their future, as is the case today. A smaller volume of individual savings of money will contribute to a greater stability of the economic system.  

Each community should establish its own public bank. Redeemed money is pooled in a public bank commune. The commune will also pool the entire cash fund of the merged company of the commune, owned by the commune inhabitants. Money that belongs to people and private enterprises is not pooled in the public bank commune but the money collected from taxes of individuals and private enterprises is. 

The commune will accumulate a large amount of money. This amount is significantly greater than the total value produced in the merged public company of the commune in the accounting period. A new form of economic policy will put into circulation of the commune an equivalent amount of money to the totally produced value of goods in the merged public company of the commune and collected taxes from private enterprises.

Now, I will simplify the analysis in order to be better understood. If there are no private companies in the commune, then the total amount of money put into circulation will be identical to the total value of produced goods in the merged public company commune. That would give people exactly the same purchasing power as the value of produced goods. By use of computer technology it is possible to calculate the full value of production and allocate the same amount of money into circulation. The increase in production will require a greater amount of money in circulation, which will increase purchasing power. Conversely, a reduction in productivity will reduce the quantity of money put in circulation in order to reduce the purchasing power of society.

However, if the amount of money is tied only to the produced value of goods then there would be the danger that the produced value is not sold on the market and workers realize incomes as the profit is made. Such production would create overstock in warehouses and spend money from the commune’s reserves, while the commune would not go bankrupt. Because of it, the quantity of money in circulation should be created also on the basis of profit realized on the market. Therefore the commune will form the quantity of money in circulation also based on the selling of the produced value. With this regard, the quantity of money put into circulation should be formed between the total value produced in the merged public company of the commune and the profit realized on the market in the accounting period. The quantity of money put into circulation should be determined by the public bank of the commune. It should realize the optimal economic monetary policy and economic stability of the commune.

Such an amount of money we may call the revenue of the commune. The commune's revenue is less than the quantity of money that the commune possesses. A surplus of money will be used as working capital and reserve funds for the commune. The economy has to return working capital in the accounting period in order to be able to renew the production process.

When the amount of money required for the revenue of the commune is determined, the commune will then enable society to decide, through the democratic process, on the division of this money for individual consumption and money intended for collective consumption. The fund for individual consumption defines the total amount of money for incomes for all residents of the commune excluding workers in private enterprises because private enterprises keep their profits. The fund for the collective consumption defines the total amount of money intended for common spending of all people of the commune.

The commune's revenue will be distributed to the needs of individual and collective consumption through direct voting by all residents of the commune. In fact, the inhabitants of the commune will distribute the value of their past labour points for the needs of individual and collective consumption. In this way, each resident will have decision-making power in society in proportion to the possession of their past labour points. People with more valuable past work will have more power in the process of decision making.

If one wishes to allocate a larger amount of money for individual consumption (income) and a smaller amount of money for collective consumption (tax), they will divide their value of past labour points proportionally as they wish. The leadership of the commune, of course, should first define the minimum ratio of tax money so that the commune can meet its basic common consumption needs. 

Each person will write a statement of their decision directly to the web application associated with the data processing center of the commune administration. The summarized statements
of all the inhabitants of the commune for the purposes of individual and collective consumption will determine the ratio in which the revenue of the commune will be spent. Thus, society will directly create the income and tax policies of the commune.

The total amount of money for individual incomes (workers in private companies excluded) will be distributed to the population of the commune according to their merits. These merits will be primarily based on the realized productivity and the prices of work. This will be addressed in more detail in section: “the Distribution of Income”.

Through the distribution of income, society needs to determine the minimum income of individuals which will regulate the range of incomes among the people. This will regulate the relationship among work merits, solidarity and income based interest of work. If workers were unwilling to perform undesirable work and thus reduce the productivity of the commune, the people can reduce the minimum income of workers through direct voting. The result would stimulate workers to work more and thus achieve a higher productivity and greater share in the distribution of incomes. On the other hand, if the commune achieves a higher productivity than is required, then the society will increase the minimum income and thus reduce the income stimulation of work.

The system provides a single tax rate because it is simpler to calculate and in this way the people can simply determine it through direct democratic voting. Today's regulation of progressive taxation, which has the task of establishing social balance, will be replaced with the income policy of the commune which will later be explained more. Harmful forms of spending for health such as alcohol and tobacco may be more effectively reduced through the disalienation of society rather than through tax policy.

From the total amount of money earmarked by people for collective expenses which is in fact the tax of all people, the commune leadership is first required to set aside money for federal spending. This money is used for the consumption of the state. The amount of money for federal spending is determined by the Federal Assembly through the delegates or representatives of all communes. The leadership of the commune also sets aside money from the common fund spending budget for the special needs of the merged public company of the commune. The allocation of funds for these purposes is generally performed identically as it is implemented in large corporations today.

From the rest of the money for the collective consumption, inhabitants of the commune will by their immediate will allocate funds for the economic development of the merged public commune company. The funds earmarked for economic development serve the expansion of the economy, for the purchase of new means of production or whole plants that enhance production.

I repeat this because it is very important: The amount of money intended for economic development is determined by the direct voting of the people within the possible values
​​that determine the leadership of the commune. Every inhabitant of the commune will have voting rights in proportion to the amount of past labour points. Every inhabitant of the commune would by their sole discretion allocate a certain percentage of their own voting points towards economic development. The sum of the voting values ​​of all the people of the commune will determine the amount of money intended for the development of the economy of the commune. Taking into account that the amount of money is limited, the greater the amount of money allocated towards the development of production, the less is intended for collective consumption, and vice versa.

A larger amount of money intended for economic development will increasingly engage social work in economic development which would increase the quality of means of production and thus productivity. Greater investments in economic development will provide greater social benefits in the future, but this would reduce the funds for current consumption and therefore reduce current individual and social standards. Such a system would allow any commune to be developed by relying on its own power.

The remaining money from the funds intended for collective consumption will be used for the common satisfaction of all material needs of society. Funds for collective commodity consumption are used for all that the society, as a community, need for their own living standards. It is used to maintain existing facilities of social standards and for new construction. That spending covers all the needs of society from collective meals up to the construction of roads, houses, sports and cultural facilities. It involves the financing of commodity consumption in public health, education, security, construction and maintenance of infrastructure, etc.

The funds for collective consumption can be allocated to a certain extent directly by the decisions of the people, and subsequent partial distribution may be made directly by interested members of the affiliated societies, while the final distribution of the smallest segments of the consumer needs the leadership would exercise and for that it shall be directly responsible to society. Increased funding for joint consumption would allow a higher common standard at the expense of other forms of consumption.

It is important to note that the democratic distribution of joint money will direct the macro economy and that means that the macroeconomic policy will for the first time be directly in the hands of society. In this way, a collective accumulation of money allows for the formation of a democratic economic policy of the commune. It will include income, tax, developmental, and other economic policies. In this way the policy will most effectively follow the needs of society.


The new voting system will be based on unlimited validity of the voters’ votes until each voter themselves changes their vote. Also the new system will for the first time enable the people to vote whenever they want. They will be able to change their voting statements many times per day to they want it and the system will not have any problem processing such changes. 

The population will on the basis of its own experience see the advantages and disadvantages of a certain form of monetary distribution and will make corrections according to its own will whenever it wishes to do so. In this way, all individuals and the society in general will realize greater conveniences, and the society will accept the economic policy as its own, which is one of the most important elements of disalienation of the economic activity system, and of the society as well.  

The proposed system will allow the population of the commune to determine to a significant extent the collective economic needs. Identified collective economic needs define the macro consumption and thereby determine the production as well. In this manner the commune's population will in a direct and democratic way create the macro-economic policy of the commune. This will be an introduction to the creation of a markedly stable democratic planned economy.  



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