Transfinancial Economics

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Project by Robert Searle



Transfinancial Economics (TFE) is an evolving project nearing basic completion. It should be said that there has been a degree of interest in it from a number of people with economic backgrounds such as Warren Mosler, Andy Dennis, Stephen Monrad, David Axelrod, Trond Andresen (cybernetics expert), Prem Sikka, and the noted autodidact, and futurist Hazel Henderson. In April 2010, TFE was also a subject discussed at a major scientific conference (the ICEME, or International Conference of Engineering, and Meta-Engineering, Florida, USA).

It is important to add that TFE regards the financial system as a huge global IT system, and recognizes the reality that virtually all money exists as electronic,or digital data transmitted from one bank account to another. This means that the free flow of capital can be tracked, and controlled if necessary.

Essentially, TFE can be regarded as a form of Cybernetic Economics. Its scope, and scale is colossal....colossal enough to help deal with a whole range of multidimensional problems facing humanity, be it social, economic, or political.

It should be said too that TFE is ofcourse not a science in the strict sense of the word. Yet,it has aspects which may appear "scientific". Naturally enough, it also takes into account uncertainty in the economy, and indeed, the irrationality of the money markets. It has special super-flexible electronic controls that could help deal with serious economic problems.

It must be said that the serious, and full development of TFE will require the help of "open minded" experts notably in the fields of Economics, Computer Science, and Law.


Please note that the following has been going through a whole series of continuous drafts, and where, and when necessary may be subject to changes, additions, and possible corrections. It is still a "work in progress" project. Also, the Kheper version of TFE which appears at times on search engines is out-of-date, and is not as authorative as the presentation here.



IMPORTANT. It should be said too that references are made to supercomputers to possibly monitor, and control the economy within a capitalist system. However, quantum computers could do an infinitely better job than supercomputers if they are properly developed.






TFE, A Brief Introduction.



The following may be helpful for new readers.


Essentially, TFE claims that new largely monitored non-repayable debt-free 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 environmental, and socio-economic projects of high ethical value. This would help to speed things up unlike repayable loans....though possibly interest free ones could also be created electronically when necessary. Ofcourse, such funding could be used to deal with projects that have little, or indeed, no commercial viability...and yet, more importantly, they may have great social, and environmental value.

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 possible "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 very limited. It uses conventional Economic Indicators (eg.Consumer Price Index)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 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 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 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 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.


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 Advanced Stage TFE there would be super-flexible direct electronic controls (similiar to "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 more clearly explained later.


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 unnecessary. This could with the right education lead to the "natural" phasing out of the financial elites, and lead to a more advanced non-hierarchical society based on cooperation rather than competition.


During the above process, pressure groups, or NGOs would become increasingly more influential as they would gain 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.

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 TFE is concerned essentially with a systems change to achieve these lofty goals.




Present Day Economics.



Mainstream Neo-Classical Economics has developed a somewhat appalling reputation as the dismal "science". Most of its work appears to be largely theoretical, and based on highly questionable statistics, and mathematical modelling. Its economic forecasts often, or not turn out to be wrong. Moreover, there is still an obsession with the need for more, and more unsustainable growth even though the planet has finite resources. More startling though, is that there is little, or no real understanding of the importance of how money is created, and what it fully means in society, and the world.

Unfortunately, Neo-Classical Economics still has great influence over the economics profession. Essentially, it believes in the Free Market in which little, or virtually no regulation is needed. Thus, capitalism then appears to do well by being largely unimpeded by red tape. Yet, such ideology received a battering with the Great Financial Crisis, or GFC (2007-2008, and the following Global Recession) in which the entire world banking system practically collapsed, and was saved by massive bailouts. Many commentators claimed that this was in the main due to "too much" self-regulation given to banks. Hence, they could do "what they liked"......

Transfinancial Economics, or TFE itself is a form of Heterodox Economics which deals with mainly non-mainstream economic thinking.


The Creation Of Money.



In TFE ofcourse, money is recognized as being largely digital, or electronic data which can be transmitted from one bank account to another at the touch of a button. Governments create it as paper cash, and coins. This makes up a near non-existent portion of the entire money supply itself, and is spent into the economy as something non-repayable.

However, the rest of the money is created electronically out of thin air by mainly private banks via Credit Creation as repayable loans with interest charged on them. In other words, unlike what many people may think, they do not actually lend out existing money from their deposits. The amounts they can issue are supposed to be limited by a fraction of existing money held. Certain banking reformers believe that banks should not be allowed to create more money than they actually have.... But it is hard to see how this can ever be a reality in the foreseeable future. NGOs such as Positive Money, and the American Monetary Institute are concerned with such issues.


As can be seen the actual mechanics of money creation are subject to some controversy. But what does appear to be clear as day is the seeming fact that private banks can create money ex nihilo which gives them great power. But this money is something which is repayable(ie. a loan) as opposed to being non-repayable.

Anyhow, some radical monetary reformers believe (like the Muslims) that loans should be free of interest, and of "excessive" interest, or usury. Others though claim that interest should still exist, and could go to the government. A number of reformers like the idea of banks possibly being nationalized.

It is also claimed that new non-repayable debt free money could be created by governments, and this could help reduce taxation.As reasoning, and evidence seems to indicate if enough of it is produced it would not lead to serious inflation (ie Primary Stage TFE).


Certain radical monetary reformers believe in the development, and the usuage of free local currencies which strictly speaking are meant to be tax free, and interest free. These have obvious limitations, but they are easily set up, and are workable. However, new virtual crypto-currencies, notably Bitcoin have a far more global reach.

Another important initiative is the emergence of P2P lending companies that avoid mainstream banks. Zopa is one such example in which lenders, and borrowers are brought together. Crowdfunding is another, in which the internet notably is used to raise money directly from the people themselves for some business proposal, or charity.

Anyway, to return to TFE. It can be regarded by many as being very similiar to Social Credit(Socred), and Modern Monetary Reform, or MMT (formerly known as Chartalism). Both notably believe in the responsible creation of new non-repayable debt-free money.

Policy makers, and technocrats in Advanced Stage TFE are given full confidence that newly created money could be "safely" created.Instead of conventional "controls" of raising taxation, and interest rates to try, and control inflation the TFE ones would be electronic, and instantaneous. As a result, taxation, and interest rates could possibly be phased out altogether.

Some people would say that the notion of creating new non-repayable money is funny money. But as we have seen here in connection with banks they themselves create it ex nihilo as something repayable (ie as loans).

Moreover, in TFE itself we are not discussing easy money because controls on its electronic issuance would be legally credible, and transparent.

For some, the notion that new money could be created at the push of a button is socially unacceptable. Yet, social, economic, and political injustice is also unacceptable especially if there is a lack of conventional earned funding available to back up NGOs, (green) businesses, and governments to deal with it.This gives newly created money a new higher value, and ethical dimension as never before.



The Problem With Redistribution.



There is probably more than enough money to change the world. The problem is gaining legal access to it especially where there is a genuine social, economic, or environmental issue at stake. Apparently, most of the money of the world exists in financial trading, or "betting casinos" dealing with derivatives (eg. currency speculation). Indeed, the sum total of the capital involved may even be several times greater than the entire Gross Domestic Product(GDP)of the planet...

Some activist groups have suggested the implementation of the Financial Transaction Tax (FFT), or Robin Hood Tax to raise funds in the real productive economy. In TFE such an approach at "redistribution" in this context is ultimately seen as unnecessary, and frankly absurd when sufficient sums could be created at the press of a button. Incidently, it is interesting to point out that the Transaction Tax appears to be an instant electronic deduction in Real-Time.


However, redistribution of financial wealth using taxation is fine, and ethical as far as it goes. It is highly unlikely though that such capital will "ever" be fairly redistributed due to the present Capitalist System, and the Free Market Economy. Moreover, the problems facing humanity such as food security, climate change/global warming, population growth, and the like are colossal. To try, and solve this via earned money alone through taxation, and business investment will probably become increasingly difficult. Hence, the need for TFE to speed up, and facilitate change notably using in full, or in part newly created non-repayable money, or indeed, repayable finance as an add on where necessary to earned capital. In other words, direct financial easing by special Facilitation Banks, and/or by governments if absolutely necessary.



The Emergence Of Facilitation Banks



Before proceeding further, it should be stressed that Primary Stage TFE may be largely avoided in part, or altogether in favour of Advanced Stage TFE. The reason for this is because of possible fears of inflationary risk even though a limited amount of new non-repayable money could be created directly into the economy. This though ofcourse would be carefully monitored by conventional Economic Indicators, and inflation could be dealt with by conventional "controls" of interest rates, and taxation rises to help reduce money in circulation. Ofcourse, new repayable money could also be created as well.

If Primary Stage TFE is undertaken the introduction of Smart Banks, or rather Facilitation Banks, or FBs is a crucial start.They can be seen as "superbanks". They could become a part of the mainstream banking system but they would have a far tighter regulatory framework.

Anyhow, FBs would have powers to electronically create closely monitored new non-repayable debt-free money (ie. Facilitation Finance) as well as repayable interest free loans if necessary. The interest on loans does not have to come from the customer necessarily but could instead be electronically created by the Central Bank, or by some other independent authority. Something similiar could happen with the new non-repayable capital. In other words, an operating cost ideally, or more controversially, Grant Interest which could increase depending on the amount of new money created.

The basic aim, and purpose of such FBs is to create funds for projects which would be difficult if not "impossible" to finance by conventional means as indicated earlier on. Their remit though is largely targetted at investing in full, or in part in large, or small human-scale concerns to do with renewable energy alternatives, enviromental projects as well as social/ethical "entrepreneurial" businesses, or indeed, non-profit "enterprises".

The decision making process on all this must be largely, if not wholly be free from any undue influence from governments, and corporations.It must notably be transparent, holistic and "objective" as possible with all options for consideration for some specific project, or projects that could be vital for the social, and environmental "health" of the planet. In the main this would require bona fide experts in their respective fields. It could involve partnerships with governments, NGOs, and existing green businesses as well as Open Source interactions with the public.

Ofcourse, when ready, investors using their own earned money could put it in some commercial project in order to gain a return. Indeed, their assets could be financially protected by the FB should the economy of any country face any serious problems, and hence, could avoid capital flight where possible.

A interesting feature of FBs is that in theory at least, it could electronically create infinite sums of capital. As indicated earlier, mainstream banks are similiar in this respect except that they cannot legally create new money as something non-repayable.

However, quite unlike existing mainstream commercial banks, the financial dealings of FBs are continually, and fully tracked electronically to prevent fraud with specific algorithms for the job. Such a process could again be undertaken by a Central Bank, or by some other credible body which could also impose instant fines, and/or indeed, an instant freeze on targeted accounts as part of a legally binding contract.

Anyhow, the amount of money which FBs can create is dependent on the costing of relevant resources, or products from suppliers. Essentially, it means that the amount of goods needed to be manufactured for some project would need to be planned well in advance. Ideally, if possible, checks on the relevant suppliers in the supply chain as to whether they have sufficient capacity to produce such resources could be undertaken. Capacity though could be increased if necessary by the FB. Ofcourse, it would be possible to have the relevant products (and services) on order to be electronically monitored whenever money is transmitted. In effect, we could have to some extent a "protected" economy existing within the present Free Market system.

With the aid of experts it is hoped that Facilitation Banks, and indeed, Facilitation Finance in the context of TFE will become a serious proposition. This innovative financial model would certainly be more advanced than anything created by such controversial global institutions as the World Bank, and the International Monetary Fund.

Indeed, FBs would not lead to"competition" with "normal" mainstream banks as the latter could possibly have equal shares in the FBs, or some other legal arrangement(s). Understandably, some NGOs may regard them with suspicion but hopefully this will be dispelled if everything goes to plan "successfully".

Critics will probably point out that elected governments alone should have the power via an independent body to have Facilitation Finance created rather than mainly by companies such as the FBs (existing as private companies, or be owned by the state in full, or in part). The reason for emphasis on the latter approach is that it is hard to see that a country notably like the US would frown on the idea of greater government interventionism in the so-called Free Market Economy...

Thus, something like FBs could be more acceptable, and their influence towards more environmentally, and ethically centred businesses would be more agreeable. Arguably, more regulations could do this to some extent, and this would be a more ethical approach rather than financial incentives. However, many companies including a number of Corporations are taking the initiative as they realize for example that recycling, and reusing resources makes good business sense as the planet has finite resources. A good example, of this is the Circular Economy.

As well as this, there is a slow, but growing realization of the importance of creating products and services concerned with energy efficiency. For a business this can cut costs such as heating, and lighting bills. From an ethical environmental point of view it ofcourse helps to reduce energy usage.

One more example of the Free Market at work is ethical investment could be seen as an example of the Free Market at work. People can decide for themselves in which shares, or securities they could invest in, and these investments could be in companies with either a good, or bad environmental, or ethical track record.

All this, is all very well, and good, but sufficient amounts of new non-repayable money (plus loans interest free ideally)could also be created to speed things up in a Free Market Economy. Ofcourse, to a very limited extent, governments notably in the developed world have been doing just that using earned money from taxation. A hell of a lot more needs to be done though. Hence, the need for TFE which may one day receive serious attention, and recognition.




Democratic Governments, And Taxation.



In TFE, taxation could be phased out overtime. In other words, earned money from the people would be gradually reduced in terms of tax liability as new non-repayable money is slowly phased in. In other words, Facilitation Finance by democratic governments.

At the present time, democratic governments could arguably create money electronically directly. This could come about with the relevant legal changes as indicated earlier. However, an independent public body could also be created to ensure that such funding was spent properly.

At present though, if there are shortfalls in tax revenues, governments can issue bonds. These are IOUs mainly sold to the rich, and super rich companies, and corporations in which money is lent to governments. When paid back the bonds also carry interest which act as profit for lenders in the private sector. In other words, a good example of debt-based economics.

In Quantitative Easing, or QE governments again create bonds, and these though are bought up by the Central Bank electronically creating new unearned money. But it may seem a little absurd for legal reasons that publicly elected governments cannot directly create sufficient amounts of new debt-free money into the real economy..via an independent public authority(ie direct QE). Instead though new money has notably been created for banks (ie indirect QE) to back up their reserves (during the Great Financial Crisis, and beyond)so that they have a new "basis" on which to create new repayable money for businesses...

Another area of finance is bond trading which is a huge global market. With TFE it could continue if necessary, or be gradually phased out (if desired). If the latter happened, investors could receive compensation, or alternatively other kinds of financial instruments, or investments could be found. These could be far more lucrative. In other words, vested interests would not find TFE a threat, thus making global change quicker, and easier to achieve. This seems to be the most sensible, and practical way forward. Trying to do otherwise would probably be too slow, and "virtually impossible" to do.



The Electronic Profile of the Economy, And Big Data In Real-Time/Advanced Stage TFE.



Most products, and services in the business world have codes for ease of accounting. Small shops, and supermarkets often, or not have barcodes which are used at checkouts to electronically account for sales transactions of customers. This is known as the Electronic Point of Sales, or EPOS. This notably gives retailers an accurate understanding of the demand of barcoded products along with their identifications, or IDs.

Such a method known as Electronic Transaction Monitoring, or ETM could also be used to create an electronic profile of the entire economy in Real-Time. What we are also ofcourse talking about here is Big Data,and instant Data Mining. Morever, even so-called Deep Learning, and Artificial Intelligence could also possibly play a part.

Anyway, under new regulations, retailers would not only account for their sales, but would also at the same time transmit their information to a public, or semi-public, or private inflation authority (which could be a part of the banking system, or independent of it). With modifications in barcodes,such transaction data (largely identified but not always..plus some legalized commercial confidentiality which could still have where necessary a high degree of commercial confidentiality, or possibly exempted altogether from ETM) would be able to build up a highly accurate electronic Global Domestic Product, or GDP of the entire economy on a daily basis (ie.24/7). Ofcourse, as indicated earlier most products, and services should be identified. However, where this is not so they could still be subject to "blanket" inflation checks but the origins of such transactions could be anonymous, and if necessary be untraceable in certain circumstances.

The question now is this. Why is it vital to know the Economy as far as possible in Real-Time? The answer is basically three-fold.


i) To electronically monitor, and track, and compare price changes of specific groupings of most products, and services.

If serious rises in prices occur they could be targetted by direct electronic controls rather than always using indirect controls of taxation, and interest on loans which could be phased out overtime. This process would involve advanced, and highly credible algorithmic programming, and the possible use of supercomputers of the inflation authority. A more "decentralized" version of this could also exist.


ii) To create a highly accurate electronic "inventory" of resources used to make up products, or goods.

This will become increasingly vital as scarcity increases. Such data would be good for democratic government planners, and more importantly for private business planners who have a profit motive as their incentive.


iii) To bring about a greater understanding of the dynamics of the economy itself.

This may be very useful for future economists. With computer simulations, and projections garnered directly in Real-Time from ETM of the real economy itself it may be likely to possibly forecast the inflation risks involved in the creation of new unearned money for certain vital projects. It could also ultimately give us direct data of the capacity of various "small" companies, and corporations.

Indeed, the origins of potential business cycles of boom, and bust could be tracked, and resolved. This is a very important point. In other words, recessions, and depressions could become things of the past.


It is clear that existing Economic Indicators would be largely, if not wholly superseded by the new "electronic economy" proposed. This is revolutionary. In other words, a cybernetic economy within a capitalist framework rather than a genuine communist, or socialist one.


It is important to understand that ideally only those businesses which make serious, and genuine efforts to be environmentally friendly, and ethical could ultimately receive a Zero Tax, and Zero Interest Status. There would be no real excuse not to do this because money from FBs, and/or democratic governments would always be there.

On the other hand, those enterprises which continue to use environmentally unsustainable technologies, and markets for the products, and services would continue to pay tax, and interest. But the door would always be open for them to radically change. Infact, the financial incentives would be such that they would willingly restructure themselves.

Unfortunately, IT Megaprojects such as the above often, or not fail. But there is no reason in the world why they cannot be achieved with total persistence in the future with greater, and greater insight garnered from the analysis of past experience. Thus, ETM on a national scale represents a real techncial challenge, but it is one well worth undertaking as the social, economic, environmental, and political implications of it would be colossal.

Incidently, cash transactions, or something similiar could still exist, and be adapted to Advanced TFE in some manner, or other.

It should be added too that such an "electronic economy" would be "fully" protected against cyber attacks. Indeed, there would always be the funds to ensure that security is continually reviewed to the highest possible standards imaginable.



Super Flexible Instantaneous Electronic Controls.



It must be made very clear that direct electronic controls, or specific interventions in the economy are used only if necessary. With the continous electronic monitoring of the Free Market Prices of the transaction of most goods, and services the data which results is transmitted to the inflation authority where supercomputers are programmed to check any inflationary problems, and related matters.

However, economists would recognize the direct electronic controls mentioned above as being like "price controls," but a far more advanced version of them. The key feature of them is that in Advanced TFE they are super-flexible, and instantaneous. They are also notably super-sensitive to the changes in Real-Time to inflationary pressures in ways unimaginable to the old clumsy, and "rigid" price controls of the past.


Ofcourse, their correct programming using algorithms is absolutely vital, and this could be based with likely modifications on existing formulas, and equations known in Econometrics. Naturally, such an arrangement could take into account many variables in Free Marketing Pricing such as the value added to a product, or service. It should also be said that a producer of goods, or services would have to register online by law to ensure that their offerings can be correctly identified at the point of transactions by special barcodes, or like means.

Such electronic, or digital transactions would occur in the main with special smartphones, or indeed, by debit, or credit cards, or something similiar. These can transmit, and receive money electronically. To a limited extent, this happens.


Anyhow, there are a number of things which the electronic controls (open to further modification, and development) could do, and they would naturally enough require specific algorithms to be programmed carefully, and properly :-


i) Above Inflation Adjustment.


A Free Market price of a product being bought at a checkout is found to be above the inflation rate. An example, should make it clear as to what happens. Lets say that the price of product X is instantly checked by the inflation authority using supercomputers at the point of sale. It is found that X is 2p about inflation. As a result, the 2p is instantly added to the customer's bank account electronically. However, the retailer still retains the 2p on product X. The extra 2p for the customer is an adjustment, or instant subsidy created electronically with new money.

Ofcourse, an instant electronic inflation tax could be created to deduct money in real terms. This though is avoided unless it is absolutely necessary. TFE aims to be as business friendly as possible.


ii) Below Inflation Adjustment.


This is when a price of a product may be below the inflation rate, and an instant subsidy, or adjustment is created electronically. Again, to take a simple example. A customer wishes to buy product Z at the point of sale. The price is checked instantly by the inflation authority. It is found that Product Z is being sold below inflation by 2p. As such, the retailer, and not ofcourse, the customer gets 2p straight into their account.

What is described above is deliberately "simplistic" as there may well be many aspects to all this that are beyond the scope of our presentation.


iii) Instant Price Drop Subsidy.


This may be necessary if the Free Market Price is rising too quickly. If so, a price drop may be undertaken instantaneously. At the same time, a subsidy, or adjustment is created with new money which creates a "progressive" profit to a certain level for the retailer instead of a profit "loss". In effect, it creates an incentive to drop prices if, and when necessary.


iv) Electronic Price Capping.


Here, a maximun price may be set by a government, or by an FB in certain circumstances. If the price of production starts to exceed the maximun price, the producers would recieve instant financial help, or compensation where necessary as long they stick to the temporary "controlled" price. Ofcourse, electronic price capping should be avoided at all cost as it could in certain instances lead to serious shortages, and price distortions.The aim in TFE is to allow as far as possible for the laws of supply, and demand to be maintained naturally.

It should be added here that similar methods to the above could be used to help control "bubbles" in the economy (eg."runaway" rising prices in the housing market being the classic example).'



The Question Of Economic Growth.



As many realize the planet has finite resources. Thus, continous exponential growth cannot go on indefinitely. In Advanced Stage TFE there is a long temporary period of rapid economic growth but it is heavily influenced notably by the power of FBs, and Facilitation Financing making the present capitalist system far more environmentally sustainable, more ethical, and energy efficient as never before in human history.

Yet, how finite is our planet really? This is arguably at present an "impossible" question to fully, or accurately answer. But, it has also been pointed out that most of the resources of our planet lie under the sea. To actually "mine them"(with robots) is prohibitively expensive but there appear to be small initial attempts to do so. With Facilitation Finance this process could be speeded up, but it must be undertaken in a responsible manner.

Apart from mining sea beds, there are other ways to deal with the potential resource scarcity question. They could include the following:-

i) The development of safe nanotechnology which could create new resources out of thin air via the manipulation of atoms.

ii) Space exploration with the aid of Facilitation Finance could find resources from other planets. These could be brought to our terrestrial world.

iii) Again, with Facilitation Finance it would be possible to create colonies on other planets, and hopefully, use their resources responsibly.

iv) Inventions could be developed to create more out of less, and less.

Ideally, people (especially the young) must become more, and more educated in that we must live simpler, less materialistic lives. This does not mean going back to the "stone age" but instead to an advanced technological world in which higher values, or ideals should take their place of unnecessary overconsumption, or "affluenza". This is not a question of ideology. It is a question of practical necessity.



Some Other Key Benefits Of Transfinancial Economics.



Apart from the above section there are many other benefits with TFE. They would include the following list.


a) Poverty.

With TFE, NGOs concerned with this issue would become increasingly empowered financially by Facilitation Finance which could be had directly from a FB, or possibly a government agency. It could also come from one, or more "independent" grant-making body (ie. a foundation, or trust). It could also help to reduce inequality in the world.

Moreover, it could modify microfinance in the developing world to include an UBI, or Universal Basic Income, or subsidy of sorts without having to borrow money all the time (except possibly for the development of some form of self-employment/business ofcourse). It would be electronically created by FBs, or by genuine governments, or by both of them in partnership.

Also, it should be stressed that every effort would be made to ensure that new money does not go into the wrong hands especially in the developing world. What is required here is a very credible "full-proof" system for the electronic tracking of funds which could lead to instant fines, and/or freeze of relevant targeted accounts. This was mentioned earlier on in the text in connection with FBs, but is worth repeating.


b) Health Care.

Irrespective of whether health care is largely in private hands, or not,Facilitation Financing could help enhance the existing system in which everyone in spite of their economic status has access to high quality medical intervention.This process could happen in both the developed world, and the developing world.


c) Food Security.

Here, innovative but safe production of more food could be funded in full, or in part by Facilitation Finance. Moreover,like their developed world couterparts, farmers in the developing world could receive in full, or in part subsidies notably via closely monitored new non-repayable money created electronically.


d) Population.


NGOs with ideas, and projects concerned with this matter could be funded in full, or in part by Facilitation Finance.


e) Climate Change, and Potential Global Warming.


This is probably the most important challenge facing the human race,(apart from potential resource scarcity) and could infact, threaten its very existence. A huge amount needs to be done in the quickest space of time. "Science Fiction" type projects should be considered seriously such as geoengineering, and various adaption, and mitigation projects such as special dams, underground cities, artificial underwater dwellings, underground agriculture(even), and the like could become serious possibilities with the aid of Facilitation Finance. Governments need to take climate change seriously, along with global warming irrespective of whether such "scenarios" prove ultimately true, or not. It is also should be stated that most scientists believe that climate change is largely man-made, and could lead to serious global warming.


Possible National, and International Compensation


One aspect of TFE notably in its Advanced Stage is that any "unethical", or environmental activity undertaken by some company, or transnational corporation could be paid a one off payment, or a phasing in of compensation (depending on the situation) to stop, correct, and/or possibly take up some other more "ethical" "environmental" business. Such an approach has already been undertaken by governments on certain issues, but ofcourse using earned money (ie.via taxation) on a very limited scale. With TFE though such compensation can be undertaken on a massive scale by FBs, and possibly governments via an independent public authority.

More controversially, it may be possible to "progressively" "re-price" the value of genuine products, and services of a high ethical, and high environmental value to a level that would be more acceptable to businesses. Thus, there would be a much greater profit incentive (as never before) for real ethical change to occur. Incidently, this could possibly involve a mass restructuring of companies, including corporations to something akin to genuine "green" sustainability, and "ethical" business activity. This is revolutionary, and seems to be the only real way forward for true comprehensive reform.

In an ideal world there should be a credible global environmental agency which could ensure that corporations, and smaller business organizations are regulated in ways which are legally binding, and truly enforceable on an international scale. This is the high ethical approach. Unfortunately, whether we like it, or not, the lower ethical approach of legally "bribing" them to move in the right directions would probably be necessary in a large number of cases.

Also, It should be said that TFE is not the panacea of all the problems of the world. But it can certainly help many of them...when, and where necessary.


"Full" Automation, The Future, and Global Citizenship.


During the transition from a debt based economic system to a non-debt based one in which taxation, and interest could ultimately be phased out, many momentous socio-economic, and political changes would probably occur. But the rates at which this evolutionary process would happen will vary from one country to another.

One of the future momentous events is the phasing in of "full" automation on a huge scale. This could lead to growing "unemployment". However, something like an UBI, or Universal Basic Income could be introduced irrespective of whether one is employed, or not. This would not require means testing. Moreover, it could be financed in full, or in part by new non-repayable funds without fear of serious inflation.

In the light of the above paragraph, other kinds of "leisure-like" forms of work, or employment could come into being. Alternatively, for some, a green business could be created but with a high degree of automation included. The finance for such things would not be a problem. Ultimately, the only problem with developing such "enterprises" would no longer be financial capital but rather good efficient small-scale, or large-scale planning, plus relevant resources. Ideally, such "businesses" should also be genuine cooperatives.

Interestingly, TFE has great implications for NGOs. These Civil Societies could expand, and be able to bring aboard new recruits as money would become easier to find, and fundraising itself could also be ultimately phased out altogether in many cases. Hence, progress of socio-economic, and political issues (eg. Fair Trade, Human Rights, Poverty Reduction, Globalization, Racial Discrimination, Campaign Finance, et al) will gain far greater momentum, influence, and power as never before. Thus, Advanced Stage TFE can lead to greater, and greater Democracy.

Certain better financed NGOs would find it easier to challenge elitist plutocratic power structures if they feel that their activities to a certain extent are unethical in some manner, or other...

....Yet, TFE may make the wealthy richer notably with green, and socially ethical type investments. It could also ironically lead to their own demise when automation begins to take over most work activities. This could be accelerated with new non-repayable money. When near "full" automation is achieved on a largely global scale money itself could become unnecessary...This is very important to try, and understand.It is revolutionary. Essentially, TFE can be seen as a transitional stage from a money based system to a non-money based one.

With the growing financial empowerment of NGOs for a new, and hopefully a better, and fairer world the following values could be included notably.


i) The continuance of Open Democracy, and respect for Universal Human Rights.


ii) Growing altruism, and more humanitarian action in society should act as the key incentive rather than the profit motive. This is very important. Indeed, so-called Hedonic, or Happiness Economics seems to indicate that money is not everything. As long as people have enough, they are found to be reasonably happy.


iii) Possible evolution towards direct/digital democracy in which a Universal Debating Project could be part of a "Global Brain", or "forum" could be credibly created on the internet on a P2P Open Source basis to show clearly "all-known" arguments notably for, and against social, economic, and political issues (presented without too much verbal padding). In other words, an objective, and holistic approach to information. This could be updated continually in Real-Time.


iv) The need to move towards a society in which cooperation, and high ideals rather than competition, and greed should be the incentive to drive the world forwards. At the same time, there should be greater growth in the development of the Sharing Economy in which products, and services could be shared for financial, or non-financial gain.


v) There should be a greater emphasis for "smaller" human-scale communities which could be highly self-sufficient. This is important, but huge "smart" eco-cities could also possibly be developed, and expanded simultaneously. Also, there should be a drive towards more, and more decentralised energy systems.

vi) As already indicated, NGOs notably concerned with inequality would become increasingly empowered by Facilitation Finance in the form of grants, and interest free loans to improve the lot of the poor. One aspect of this is the creation of more social housing which could be funded in full, or in part with new non-repayable money.


vii) Greater decentralisation of power especially at the top.


viii) Society should become less, and less hierarchical.


It is ultimately envisaged that something like an advanced technological world will emerge. The Venus Project inspired by Jacque Fresco, a noted populariser of Technocracy is an example of what could be done in the future but arguably has no real, or credible transition plan unlike Transfinancial Economics.

The ideas above could help form the basis of a new global order of existence. They are progressive, and humane. They also indicate the need for the entire world to move towards Global Cooperation, and Global Citizenship.

Indeed, there should over time be the creation of Global Education Movements (or GEMs)which could inspire the young especially, to bring about change in the world. Ofcourse, there are many groups already which are similar to GEMs. They could join in, and work together more, and more to bring about a "saner" reality in the spirit of genuine cooperation. This could notably occur with P2P-like computer networks.

Naturally enough, GEMs could be funded in full, or in part with new money electronically created.


Campaign Activism For Transfinancial Economics.


In order to bring about the serious possibility of change from our present debt based economy of taxation, and interest to one which is largely non-debt based, a campaign would be necessary. Unfortunately, a grassroots organization(s) at the present time to challenge banks, and their kind is unlikely to work....though we may be wrong.

To promote this campaign it is suggested here that a professional website would be set up to spread the word of Transfinancial Economics as a serious, and credible proposal if the world is to successfully "survive" the global problems of the future (especially climate change, and possible global warming). It could be sent to people, and organizations that have real power, and influence such as government policy makers, financial companies, progressive think tanks, et cetera. This is probably the way forward.

I. The TFE website itself could include the following features.


II. News update about the campaign progress, notably the lobbying of certain governments.


III. Commissioned papers (initially) by willing forward thinking economists (and others, notably computer scientists) possibly using econometric models to show the efficacy of TFE in technical terms, including detailed studies on various facets of the subject.


IV. A scholarly online Journal of Transfinancial Economics.


V. A powerpoint presentation of TFE for downloading.


VI. Monitoring advances in technology, notably in connection to dynamic algorithmic pricing, and developments in Big Data would help to give TFE greater, and greater credibility. Indeed, it aught to be added that there are now initiatives to electronically track to a limited degree, the Free Market Price of products, and services in Real-Time.


VII. Possible field trials of the electronic technologies involved in TFE. This could be partly, or fully funded by governments, and/or by corporations, or by some other source such as an NGO(s).


At some point, the concept of TFE would probably have to go before the US authorities,the European Parliament, the UK Parliament, and other democratic governments. Ideally, most countries especially in the developed world should work in consort to introduce something like TFE.

More controversially, a "good" idea may be to try, and market the new global paradigm to certain corporations(and ofcourse, other smaller businesses) as a huge global "business opportunity" of colossal importance. Such powerful businesses though should have some serious, and genuine interest in sustainability. They could form a special alliance to put pressure on governments notably in Washington to at least phase in Primary Stage TFE to some extent.

Advanced Stage TFE (ie. full, or limited Electronic Transaction Monitoring, or ETM)though would ofcourse be more difficult, and controversial to become law on a national, or international scale...

.....However, it should be noted that the huge global benefits for humanity far outweigh its risks for phasing it into society, and the world. This must be emphasised as it is vital for people to appreciate TFE in its advanced stage of development.


Basic Glossary


What is presented here are the basic definition of key terms in TFE. New terms may be added in the future, but most of the terminology would ultimately come from mainstream economics.



  • Transfinancial = The latin word trans implies something above, or beyond. In this case, it can be interpreted as being beyond conventional finance, and indeed, economics itself (ie Transfinancial Economics). In another context, transfinancial can imply money being transferred across borders to other countries.


  • Facilitation Banks = These are quite unlike their mainstream "counterparts" in that they have a licence to create new non-repayable money directly into the economy. Moreover, their regulatory framework is far more tighter than an ordinary bank. They can among other things closely track, and monitor electronically where newly created money goes, and can instantly override, and fine an account holder if it is deemed that certain funds have gone to a "wrong" account (ie. fraud prevention). The aim of FBs would be notably concerned with creating finance for environmental projects, and high ethical concerns.


  • Primary Stage TFE = Here, very limited amounts of mainly new debt-free non-repayable money could be gradually created electronically into the economy directly. Repayable money, or loans could be created as well if necessary. Economic Indicators (notably the Consumer Price Index) could be used to decide whether more new money could be created, or not. If inflationary pressures grow the conventional methods of raising taxation, and interest on loans could be undertaken. This is intended to help reduce the money supply, and hence, inflation.

One vital potential application of Primary Stage TFE is that it could fund in full, or in part new antibiotic drugs to help save the lives of huge numbers of people in the present, and in the future. Such medicines make little, or indeed, no real profit for the big corporations, and their ilke, and hence, an "unconventional" approach to funding may be required. However, the focus is now on the creation of an accurate diagnostic which could help "seriously" reduce the demand for antibiotics for patients. This is a good ethical idea as it would also reduce the demand for the resources necessary to make antibiotics. But it would still require conventional, or indeed, "unconventional" funding arguably.


  • Advanced Stage TFE = This is when most goods, and services would be tracked electronically, and have instantaneous checks undertaken at the point of transaction. This is done to find out their inflation status, and also to ideally discover the IDs of most goods, and services. The latter aspect is used to build up a profile, or electronic GDP of the economy in Real-Time. At the point of transaction electronic checks are undertaken by supercomputers when the relevant pricing data is sent to an inflation authority. It is then that the inflation status, and IDs of most goods, and services can be ascertained. The resulting data is transmitted to the cashier, and certain "unconventional" electronic controls may be used to adjust the Free Market Price.


  • Electronic Transaction Monitoring (ETM) = This is explained above. It is simply the monitoring of most goods, and services of products, and services.


  • Facilitation Finance = The circulation of mainly new debt-free non-repayble electronic money by special Smart Banks, or Facilitation Banks(FBs), and/or possibly by governments. This Facilitation Finance can be seen as the result of a money creation process known in economics as Quantitative Easing, or QE. Ofcourse, repayable money could be created electronically sans interest.


  • Grant Interest = A highly controversial concept in which an independent authority (eg. the Central Bank) could pay on behalf of the customer, or company the interest on the amounts of electronic creation of new non-repayable money (ie.a commercial grant) by Facilitation Banks. A more ethical approach to Grant Interest is a one off payment for the electronic production of new money. Another controversial aspect of all this is that repayable loans could also have their interest paid by an independent authority (eg. the Central Bank). In other words, they would be interest free.


It is also important to realize that traditional mainstream banks would still exist to lend money. Unlike the FBs, they are not as well regulated, and furthermore, they are unable to create new non-repayable finance legally.





Some Key References



The following is not exhaustive ofcourse. The literature on finance, monetary reform, economics,and sustainability, is vast with an array of well-known, and little-known authors.


Steve Keen, Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned? Zed Books, 2011


David Colander (Author), Paul Ormerod (Author), Dave Ramsden (Author), Paul Seabright (Author), John Sloman (Author), Edward Glaeser (Author), Andrew Haldane (Author), John Kay (Author), Andrew Lo (Author), Diane Coyle (Editor), What's the Use of Economics? Teaching the Dismal Science after the Crisis, published 2012.


L. Randall Wray, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems, Palgrave Macmillan, 2012


Stephen Zarlenga,The Lost Science of Money: The Mythology of Money, The Story of Power, AMI, Dec 2002


J.W. Hughes,Major Douglas: The Policy of a Philosophy, Wedderspoon Associates,2002


Ellen Hodgson Brown and Reed Simpson, Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free, 2012 edition (among many other interesting things, it includes some rare info on "experiments" used by early American Colonists to create "enough" new money to fund various projects)


Josh Ryan-Collins (Author), Tony Greenham (Author), Richard Werner (Author), Andrew Jackson (Author) Where Does Money Come From?: A Guide to the UK Monetary and Banking System, New Economics Foundation, 2012


Jeffrey D. Sachs,Common Wealth: Economics for a Crowded Planet,Penguin Books, 2009


Jeffrey D. Sachs, The Price of Civilization: Reawakening American Virtue and Prosperity, Random House Trade Paperbacks, 2012


Joseph Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy, W. W. Norton & Company, 2010


Noreena Hertz, IOU: The Debt Threat and Why We Must Defuse It, Fourth Estate, 2010


Mckenzie Funk, Windfall, The Booming Business of Climate Change, Penguin, 2014


Jeremy Rifkin, The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism, Palgrave Macmillan, 2014


Naomi Klein, This Changes Everything: Capitalism vs. the Climate Simon & Schuster, 2014



Some Links Of Possible Interest.


The following links may be of interest.


1) TFE is notably similiar to Social Credit. The following link may be of interest, and a French version also exists. http://www.michaeljournal.org/plenty42.htm


2) An introduction to MMT, or Modern Monetary Theory which is also very similiar to TFE. http://ralphanomics.blogspot.com/2011/02/introduction-to-modern-monetary-theory.html


4) Trond Andresen connects electronic money to MMT in his working paper. He seems to have drawn something of his inspiration from TFE. http://www.itk.ntnu.no/ansatte/Andresen_Trond/econ/mmt-electronic.pdf


5) The following link to a NGO is concerned with how money is created, and used. http://www.positivemoney.org.uk/


6) The idea of businesses working in a real-time economy is nothing new. Ofcourse, TFE ultimately goes beyond this to include a deeper, and far more accurate understanding of the actual workings of the economy itself. This is revolutionary, and turns economics on its head. Indeed, it could be argued that TFE is the most important breakthrough in the history of economics, and this may one day be recognized. http://en.wikipedia.org/wiki/Real-time_economy Certain initiatives are being undertaken to a limited degree to track the Free Market Prices of goods in Real-Time. Some examples are as follows http://theeconomicrealms.blogspot.co.uk/2014/11/real-time-economic-data-tracking.html http://theeconomicrealms.blogspot.co.uk/2014/11/mit-launches-real-time-inflation-indices.html http://theeconomicrealms.blogspot.co.uk/2014/11/raging-inflation-narendra-modi.html

7) In the future smartphones could be used on a common daily basis by most of society, to transfer, or transmit money. This has great relevance to TFE as one can imagine. Barclays came out with their model phone called Pingit http://www.guardian.co.uk/money/2012/feb/16/barclays-pingit-money-sending-smartphone


8) In contrast to the Developed World, Kenya, of all places have been using the mobile phone as the main means to transmit, and indeed, recieve funds electronically. http://www.bbc.co.uk/news/business-11793290


9) A growing, and comprehensive blog on economics in general. http://theeconomicrealms.blogspot.co.uk/2012/12/how-can-anything-rival-threat-of.html http://theeconomicrealms.blogspot.co.uk/2012/11/paradise-or-oblivion.html


10) High Frequency Trading is an example of the power of advanced automated computer technology. http://www.en.wikipedia.org/wiki/High_frequency_trading


11) The idea of something like a cybernetic economy has been around for sometime. The following links may be of interest, and appear to offer "techno-economic" ideas within an "extreme" socialist, or communist type system. With TFE though we are discussing an economy that exists within the framework of a more "ethical" futuristic capitalist system which would ideally have genuine open democracy, and respect for universal human rights rather than some dystopia, or totalitarian system. This is always important to remember. Yet, if society decides it can evolve into a "higher," or more "advanced" social structure similiar to one envisaged by Technocracy. In this respect, TFE can seen as a "credible" transitional system to a "better" world. http://p2pfoundation.net/Towards_a_New_Cybernetic_Socialism http://blog.p2pfoundation.net/why-you-should-read-the-essay-red-plenty-platforms/2013/08/20 http://p2pfoundation.net/Cybernetic_Communism http://p2pfoundation.net/Cybernetic_Revolutionaries http://p2pfoundation.net/Cybernetic_Planning http://encyclopedia2.thefreedictionary.com/Economic+Cybernetics Reference is also made to Paul Cockshott, and his Cybersocialism https://www.youtube.com/watch?v=LtlZys7QOO4


12) Professor Richard Werner was the originator of the term Quantitative Easing, or QE. But it has been completely misinterpreted as the following link reveals http://www.bbc.co.uk/news/business-24614016#story_continues_3


13) The problems facing the management, and possible success of Megaprojects, notably IT ones.http://blog.budzier.com/me-research/ http://www.mckinsey.com/client_service/public_sector/latest_thinking/mckinsey_on_government/seven_imperatives_for_success_in_it_megaprojects


14) The use, and develeopment of Big Data appears to be growing apace in the world. It has huge significance for TFE http://en.wikipedia.org/wiki/Big_data


15) The use of dynamic pricing, and algorithms is becoming a serious reality. http://en.wikipedia.org/wiki/Dynamic_pricing


16) Serious problems may be faced with ageing bank computer systems. With TFE it may be possible to help in full, or in part the financing of new IT systems.http://theeconomicrealms.blogspot.co.uk/2013/12/banking-it-crisis.html


17) The Resource Based Economy may be of interest. http://www.theresourcebasedeconomy.com/


18) The Universal Debating Project http://www.p2pfoundation.net/Universal_Debating_Project


19) The idea of the Industrial Internet is similar to the concept of ETM in TFE. http://gelookahead.economist.com/industrial-internet/ http://en.wikipedia.org/wiki/Industrial_Internet


20) The Internet of Things has great relevance to TFE. http://en.wikipedia.org/w/index.php?title=Internet_of_Things&redirect=no




PS A paper on TFE was actually accepted by a peer reviewed journal. However, due to a dispute with the editor/publisher I withdrew it from publication, and at the time of writing a new version has been sent elsewhere.

Robert Searle is the originator of this "work in progress" project. His email address is dharao4@yahoo.co.uk, or robertsearle@live.co.uk. Admitedly, my bio below is unconventional by most peoples standards but it is hoped it will not detract from any interest in the above project.


http://www.p2pfoundation.net/Robert_Searle