ON THIS PAGE: Key Books • Developments • Main Differences between American and UK Binary Economics • The Most Universal Economics with the Most Efficiency and Justice • Existing Social Security Systems to Remain in Place • Iraq Plan, Palestine Plan, Kashmir Plan and Alaska Permanent Fund • International Money Supply and Real Economy Conferences • Visual Summary of Binary Economics • Footnotes
Key Books: Over the last few years binary economics has been developing and, in particular, making universal its appeal so that its essence is more easily understood around the world. The key books in this development are:-
* Robert Ashford & Rodney Shakespeare (1999) Binary Economics – the new paradigm
* Rodney Shakespeare & Peter Challen (2002) Seven Steps to Justice
* Norman Kurland, Dawn Brohawn & Michael Greaney (2004) Capital Homesteading for Every Citizen: A Just Free Market Solution for Saving Social Security
* Rodney Shakespeare (2007) The Modern Universal Paradigm
Furthermore, acknowledgement is made of the individual contributions coming via internet discussion between binary economists. Harold Channer, America’s longest serving television interviewer, is particularly thanked for many relevant television programs.
American and UK binary economics have developed differently. In summary, the main differences now are:-
* Whereas the proposed uses of national bank-issued interest-free loans had been limited or under-developed, in the UK they now cover all the economy as long as the spreading of productive capacity is involved.
* Whereas public capital (e.g., low-cost public housing, bridges, hospitals, sewage works) was neglected, in the UK it is now a principal subject.
This is a matter of huge significance because it means that public capital projects can be built for half, even a quarter, of the present cost. Therefore many more public projects are affordable (or the existing number can be built at half the cost). A major consequence is a diminution of the National Debt.
Trisakti University, Jakarta, Indonesia
* Whereas it was recommended binary policy that children should have sufficient income to pay for their own education, in the UK account is now taken of more immediate reality in that education for children should be free while older students should have interest-free loans.
There are two co-operating factors in production — productive capital and human labour. Both factors must be properly developed and thus the importance of education. Moreover, education also has great intrinsic value.
* Whereas interest-free loans for homes were relatively neglected (but are dealt with in the Kelso book Democracy and Economic Power, 1986 and 1991), in the UK such loans are now major binary policy.
N.B. There should not be 125% loans for homes as happens at present (maybe 80% is more appropriate and only two to three times earnings). Deliberate false valuations, like false declarations of income, should be subject to criminal penalty.
Women at a village pond in Matlab, Bangladesh, washing utensils and vegetables. The woman on the right is putting a sari filter onto a water-collecting pot (or kalash) to filter water for drinking.
* Whereas micro-credit was not part of binary economics, in the UK it now is — the poorest people of the world must be given a chance to stand on their own two feet and not have money-lenders battening onto them. Micro-credit ensures that, through training, mutual support and financial help, poor people who previously had nothing become independent producers who really have something.
La Rance, France, tidal barrage power plant
* Whereas environmental capital projects and clean electricity generation were neglected, in the UK they are now major subjects.
There is no hope for achieving the large-scale projects the world immediately needs (e.g., tidal lagoons/barrages, solar electricity generation, clean water projects) without the use of national bank-issued interest-free loans. At present, the technology exists, but the funding does not.
* Whereas the ability of the banking system to create money was noted but not substantially opposed, in the UK it is now proposed to gradually raise banking reserves to 100% so that the banking system will not be able to continually create new money. It will of course, be able to use its own capital and, with permission, the deposits of customers.
* And whereas the first emphasis was on capital ownership, in the UK it is now on the supply of national bank-issued interest-free loans for the spreading of productive capacity which can take many different forms.
N.B. The emphasis on the interest-free loan supply is especially important for Islam — see interview with Sofyan Harahap (Professor of Economics, Trisakti University, Jakarta, Indonesia) www.youtube.com. See also The American Muslim at The American Muslim particularly articles by Dr. Robert D. Crane.
Rodney Shakespeare says that, most important of all, binary economics is now seen to be by far the most universal economics with the most efficiency and the most justice so that it falls naturally within the global justice movement — see www.globaljusticemovement.net and www.globaljusticemovement.org — and, at the same time, it is an economics which corresponds deeply with core aspects of religious belief. It can thus be taken up by any society and by any faith and, in so doing, they may call it their own.
One World …… For example, binary economics has a concept of unicity embracing all aspects of life. This resonates with Muslims (Tawhid); Christians (Kingdom (or Kin-dom) of God); Hindus, Buddhists, Jains and Sikhs (Dharma); and Jews (Shalom). Bodies like the Christian Council for Monetary Justice (www.ccmj.org) and the Washington D.C. Center for Economic and Social Justice (www.cesj.org) maintain the inter-faith aspects. ……Many Faiths
Furthermore, binary economics now confidently embraces major elements from the present and the past.
Past…… From the past come:-
* a prohibition of riba (interest)
* a strong ethical sense
* a sense of stewardship
* a demand for structural social and economic justice (as opposed to mere palliative charity).
From the present come key insights including:-
* money today is created out of nothing as debt on which riba/interest is imposed
* riba/interest — as distinct from administrative and any other essential cost — is not merely wrong and debilitative of the economy and society but is not necessary
* the technological capacity exists to eliminate poverty. Therefore continuing poverty is the fault of human institutions and practices rather than of any inadequacy of equipment or expertise.
Binary economics says that past and present then come together to create a new economics, a new politics, a new social morality, a solution to the major problems of the environment and a deepening of democracy. On the latter point, the political vote is far from enough. In a world where 25,000 people die each day from the effects of unclean water, a deepening of democracy requires not only the vote but also the proper provision of clean water, health services, housing, education and also some form of income for all individuals, including babies.
Other consequences of binary economics include an end to economic colonialism, a diminution of the national debt, an improvement in the position of women, and policy to unite differing groups. Both national and individual sovereignty are upheld.
Binary incomes and prosperity develop over time but, before they do so, existing social security and health systems will remain in place.
Binary technique is fertile with possibility and an example is the Iraq Plan proposal of the Washington D.C. Center for Economic and Social Justice which would use a combination of interest-free loans and future earnings to transfer ownership and control of Iraq’s oil resources to all individual Iraqi citizens. Each citizen, as a right of citizenship, would receive a personal lifetime non-transferable dividend-generating equity share in the national oil company.
By giving each individual a big economic stake in the future of a country, stability and unity can be encouraged.(www.cesj.org)
Other binary Plans exist for Palestine and Kashmir.
The Alaska Permanent Fund takes the annual income from the Alaskan oil pipe line and distributes it directly as income to each individual Alaskan citizen – somewhere between $900 and $1800 per year (in 2005 dollars). In the 2009 campaign for the Presidency of Iran candidate Mehdi Karroubi proposed an income (equal shares of stock) for everybody from Iran’s oil fields.
NB. Binary economics opposed the 2003 invasion of Iraq before the invasion took place on the ground that a rip-off of Iraqi assets to foreign ownership was intended. The USA’s Bremer Orders and endeavour to control Iraqi oil subsequently vindicated the binary position.
The Conferences are:-
* International Islamic University, Kuala Lumpur, Malaysia, August, 2002
* The Trisakti University, Jakarta, Indonesia, January, 2004
* International Islamic University, Chittagong, Bangladesh, December, 2004
* McGill University, Montreal, Canada, September, 2005
* Asian University of Bangladesh, Dhaka, Bangladesh, December, 2005
* Harvard University, USA, April, 2006
* The Trisakti University, Jakarta, Indonesia, December, 2006
* International Islamic University, Kuala Lumpur, Malaysia, November, 2010
* The Trisakti University, Jakarta, Indonesia, January, 2011
Below is a visual summary of the main aspects of binary economics which can be used to provide a gentle but powerful solution to the global financial and environmental crisis. It will prove helpful to study the diagram for a few minutes.
NB. The banking system is gradually stopped (by a gradual rise to 100% banking reserves) from continually creating money out of nothing. Instead it lends its own capital and (with permission) the deposits of customer, and such lending may be at interest. As the banking system’s money creation is stopped, a supply of national bank-issued interest-free loans (administered by the banking system) is opened up with the supply being directed at the development and spreading of productive (and the associated consuming) capacity. In effect, there will be two interest rates – a zero rate for binary purposes (plus administration cost) and the other for the rest of the economy.
Please also notice that, by using the banking reserves mechanism, the national bank has a macro tool in addition to that of interest rates to control the total volume of money in the economy.
37. Robert Ashford & Rodney Shakespeare (1999) op. cit.
Norman Kurland (2001) Saving Social Security at www.cesj.org.
Rodney Shakespeare & Peter Challen (2002) op. cit.
Norman Kurland, Dawn Brohawn & Michael Greaney (2004) op. cit.
Rodney Shakespeare (2007) op. cit.
38. Rodney Shakespeare & Peter Challen (2002) op. cit.
Rodney Shakespeare (2007) op. cit.
39. Rodney Shakespeare (2007) op. cit.
40. Rodney Shakespeare (2007) op. cit
41. Shann Turnbull (1975/2000) Democratising the Wealth of Nations.
Shann Turnbull (2001) The Use of Central Banks to Spread Ownership.
Jeff Gates (1999) The Ownership Solution.
Jeff Gates (2000) Democracy At Risk.
42. Rodney Shakespeare Integrating Islamic Finance into the Mainstream paper presented at Harvard University conference on Islamic Finance, April, 2006.
Rodney Shakespeare (2007) op. cit.
43. Rodney Shakespeare (2007) op. cit.
44. Rodney Shakespeare (2007) op. cit.
46. Rodney Shakespeare & Peter Challen (2002) op. cit.
47. Rodney Shakespeare (2007) op. cit.
48. Rodney Shakespeare & Peter Challen (2002) op. cit.
49. Rodney Shakespeare (2007) op. cit.
50. Rodney Shakespeare (2007) op. cit.
Next page: Rodney Shakespeare