Introduction to Transfinancial Economics
The following introduction originates from the main p2pfoundation entry on Transfinancial Economics http://www.p2pfoundation.net/Transfinancial_Economics
Essentially, TFE claims that new closely monitored non-repayable money, or Facilitation Finance could be created electronically by special transparent, and credible funding mechanisms, or Facilitation Banks (and/or by governments to some extent). This could notably fund in full, or in part high environmental, and high socio-economic projects of great ethical value. This would help to speed things up unlike repayable loans, but interest free ones could also be created electronically when necessary, and when a commercial operation becomes self-supporting. Incidently, funding using non-repayable could be used to deal with projects that have little, or indeed, no commercial viability.
The aim of all this is also to give powerful financial incentives to businesses. They could profit with genuine projects, and more importantly help save the planet, and its people notably in connection with Climate Change, and "irreversible" Global Warming.
Extra finance would not lead to serious inflation, or indeed, hyperinflation (eg. Zimbabwe) as the phasing in of newly created unearned money would be a gradual process, and the checks, and "controls" would be most effective in monitoring, and controlling inflation. This point is most notably true of Advanced Stage TFE explained a little later. Thus, there is no mad flooding of the real economy which ofcourse is absurd in extremis.
Strictly speaking, there are two forms of TFE, one of which has just been mentioned above. Firstly, Primary Stage TFE which is when the amount of new money created is limited to "sufficient" amounts. It notably uses Economic Indicators (eg. GDP, and Inflation Indexes)to help decide how much could be created, and used directly into the Real Economy. Also, the conventional method of raising taxation, and interest rates could be utilized to help decrease the money supply, and hence, reduce any inflationary pressures.
Also, it is important to note that Primary Stage TFE could be skipped altogether in favour of Advanced Stage TFE. This could be regarded as genuine Transfinancial Economics as the latter would involve highly credible programming using relevant algorithms, and supercomputers, and their ilke.
In contrast to Primary Stage TFE, Advanced Stage TFE itself can create and phase in far greater amounts of new financial capital for projects mentioned in the first paragraph of this section. This should become clear shortly.
Among other things, Advanced Stage TFE can gain a "near perfect" knowledge of the entire economy of the country. Such Big Data as it is called would come about via full Electronic Transaction Monitoring(or ETM)and could be collected 24/7 in Real-Time. This is done via the ID codes, and barcodes of most products, and services at the electronic Point of Sale (EPOS), or later transactions with banks.
Due to comprehensive algorithmic programming, the Free Market Price comparisons are made in Real-Time, and inflationary pressures can be detected (ie. data mining). This transaction data could be vital to bring about a genuine wholesale sea change towards an environmentally more comprehensive sustainable, and socially ethical economy, as more, and more new electronically monitored non-repayable money could be gradually phased in, and created with real confidence, and without any serious inflation in Advanced Stage TFE.
As we would have a highly accurate understanding of the real economy inflation risks could possibly be more accurately assessed continually via "instant" continuous computer simulations of the economy itself. This is revolutionary when fully understood. However, it is worth repeating here that TFE would have to take into account uncertainty, and indeed, the irrationality of the money markets. As such economic forecasts would still be very difficult to do accurately. However, such predictions may well be more accurate than conventional methods.
Another aspect of Advanced Stage TFE, and full ETM is taxation(and interest) itself could possibly be phased out. Moreover, fuller funding of many charitable NGOs would also become possible, and fundraising for them could ultimately be phased out altogether in many cases.
In Advanced Stage TFE there would be super-flexible direct electronic controls (similiar to temporary "price controls" but far more advanced)to ensure inflation, and currency devaluation can never get out of hand. This would involve an instantaneous intervention with little, or no time-lag. This is explained in more detail later on.
However, as far as the collection of income tax is concerned it would be allowed to continue for the time being via conventional means. It would not be undertaken by some form of "instant" electronic deduction(s)even though this is perfectly possible. Civil, and criminal fines (a kind of tax if such it could be called) would still exist ofcourse.
It is also important to point out that we are not discussing a full Soviet style top down command/control economy. The reason why is that the Free Market Price is largely determined by private businesses, and capitalism in an increasingly more ethical form (due to increasing powerful financial incentives notably created by non-repayable money, plus repayable money as loans if necessary)would still continue until there is "full" automation when money, and wage slavery would no longer exist, and hence, become largely, or wholly unnecessary. This could with the right education lead to the "natural" phasing out of the rich elites, and lead to a more advanced non-hierarchical society based on true cooperation rather than competition.
During the above process, pressure groups, or NGOs would become increasingly more influential as they would gain over time greater, and greater access to mainly newly created funds from independent grant making bodies, and possible other sources. Thus, the process of socio-economic, and political reform should grow apace as never before in human history.
Hopefully, a more advanced technological, and more moral human civilization will largely emerge based on improved Democracy, Universal Human Rights, and greater fairness. In other words, Global Justice. As can be seen that TFE is concerned essentially with a system's change to achieve these lofty goals.