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 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, the law, and Computer Science.


Please note that the following may be subject to changes, 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 Also, the Kheper version of TFE which appears at times on search engines is out-of-date, and is not as authorative as the presentation here.






TFE, A Brief Introduction.



The following may be helpful for new readers.


Essentially, TFE claims that new largely monitored non-repayable debt-free money 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.The aim of all this is also to give powerful financial incentives to businesses that could profit with genuine projects, and more importantly help save the planet, and its people as far as possible from the likely extreme weather events which could occur via climate change, and 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 (notably the 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 termed Real Transfinancial Economics as it would involve highly credible programming, and supercomputers.


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 data would come 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 point of sale (EPOS), or later transactions with banks.


Due to comprehensive programming, Free Market Price comparisons are made in Real-Time, and inflationary pressures can be detected. This transaction data would be vital to bring about wholesale sea change towards an environmentally 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 be more accurately assessed continually via computer simulations of the economy itself. This is revolutionary when fully understood.However, it cannot ofcourse fully rule out uncertainty.


Anyway, another aspect of Advanced Stage TFE, and full ETM is taxation 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...Ofcourse, interest rates, and taxation could if necessary be phased out in time.

Anyhow, the direct controls concerned would in the main probably involve the electronic creation of "subsides".. (ie. new money not earned from taxes at all), or inflation "adjustments" in real terms at the point of sale, and the cashier may inform the customer of it. In other cases, an instant inflation "tax" might be necessary in which the deducted amount could be taken off. In most, if not all cases probably, it could be recreated electronically in the bank account of the customer.

However, as far as income tax is concerned it is allowed to continue via conventional means. Its collection would not be undertaken by some form of "instant" electronic deduction(s).Ofcourse, civil, and criminal fines (a kind of tax if such it could be called) would still exist.


It is also important to point out that we are not discussing a full Soviet style top down command economy. The reason being 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.

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.


PS. Facilitation Finance can arguably be seen as a more advanced form of Quantitative Easing, or QE. However,it could also be understood as the result of QE. In other words, Facilitation Finance equals the manifestation of newly created money in the economy.



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 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, 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, as capitalism appears at large to do well by being largely unimpeded. 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 nearly collapsed and was notably saved by massive bailouts. Many commentators pointed out that this was largely due to a lack of real, or good quality regulation of banks though ofcourse other factors were implicated.

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. Moreover, 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 it. In other words, unlike what many people may think they do not actually lend out existing money from their reserves. The amounts they can issue are meant(!) to be limited by a fraction of the reserves held. This has been aptly called on occasion "Fractional Reserve" Banking. NGOs, such as Positive Money, and the American Monetary Institute are concerned with this, and other related matters. Many such groups usually believe that banks should not be able to create new money which they do not have, and be fully constrained by their reserves. This is often called Full-Reserve Banking.

A small minority claim that banks as soon as they create new money try to back it up with borrowed money from elsewhere. This seems more credible, but official documents appear to suggest that some form of "fractional reserve" banking persists...though the reserve "limits" are probably ignored altogether by banks to leverage their "assets" (translated here as the amount of new money created ex nihilo). As can be seen it is clear that the topic of how banks "create" money as credit, or loans is subject to controversy.

Some radical monetary reformers also 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 the 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 currencies notably Bitcoin have a more global reach.

TFE is also regarded by many as being very similiar to Social Credit(Socred), and Modern Monetary Reform, or MMT (notably based on Chartalism, or Neo-Chartalism). Both notably believe in the responsible creation of new debt-free money.

However, Advanced Stage TFE gives policy makers, and technocrats full confidence that newly created money could be "safely" created in contrast arguably to "conventional" methods notably suggested in MMT, and Social Credit. Moreover, in TFE they would be electronic, and instantaneous unlike raising (inflation)taxation, and interest rates. The two latter methods could 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. Moreover, we are not discussing easy money because controls on its electronic issuance would be legally credible, and transparent.

To 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 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) 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. Indeed, it is interesting to point out that the Transaction Tax may well be an instant electronic deduction.


Redistribution of financial wealth using taxation is fine, and ethical as far as it goes. It is highly unlikely that such capital will be fairly, or rather fully 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/Primary Stage TFE



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", or as possible prototypes of future banks, and banking. They could become a part of the mainstream banking system but they have a far tighter regulatory framework to operate in. However, as indicated earlier governments could also directly create their own money electronically with the right legal framework. Alternatively, they could possibly use FBs instead.

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 but could instead be electronically created by the Central Bank, or by some independent authority. Something similiar could happen with the new non-repayable capital. In other words, an operating cost ideally, or alternatively 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.

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, 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 mainstream commercial banks, the financial dealings of FBs are continually, and fully tracked electronically to prevent fraud. Such a process could again be undertaken by a Central Bank, or by some other credible body which could also impose instant fines electronically 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 to create Facilitation Finance rather than mainly private companies such as the FBs (though FBs could be in part 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 may be more acceptable, and their influence towards more environmentally, and ethically centred businesses would be more agreeable. Arguably, rather than more regulation (which ofcourse can be long, and "difficult" to pass into law in certain countries) they would be able to "nudge" certain commercial enterprises as never before to reform themselves using financial incentives (ie. notably commercial grants, or non-repayable money, and where necessary loans ideally free of interest), and to possibly win further relevant contracts.

Some business leaders would claim that using "normal" market strategies rather than resorting to "subsidy" like incentives should be possible. Ethical investment could be seen possibly an example of this in which shares, or securities are bought up in companies with a "good" environmental, and ethical record. However, TFE is a far more powerful, and comprehensive approach, and could ideally compliment where necessary existing "green" schemes.




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 unearned (or debt-free) 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.

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 creating new unearned money. But it seems a little absurd for legal reasons that publicly elected governments cannot directly create new money into the real economy itself rather than trying to notably back up banks(via QE notably)during the Great Financial Crisis, and the following Global Recession...

Bond trading is a huge global market. With TFE it could be gradually phased out if desired. 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 slow, and "virtually impossible".

Lastly, the so-called sovereign wealth funds of governments investing in the markets to raise money could continue if desired. Strictly speaking, they would not be absolutely necessary as the electronic creation of new unearned money could be created in sufficient amounts. However, such a practice could continue.



Electronic Profile Of The Economy 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 be used to create an electronic profile of the entire economy in "Real-Time". Under new regulations, retailers would not only account for their sales, but would also at the sametime 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, and business codes in general such transaction data (largely identified but not always..plus some legalized commercial confidentiality which could still have a high degree of non-disclosure of data, or possibly exempted altogether) would be able to build up a highly accurate electronic GDP of the economy on a daily basis (ie.24/7). But why is this neccessary, and important? The answer is 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 would be phased out overtime. This process would involve advanced, and highly credible computer programming, and the possible use of supercomputers by banks connected with the inflation authority. A more decentralised 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 mechanics 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 would be likely to possibly forecast the inflation risks involved in the creation of new unearned money for certain vital projects. It would also give us direct data of the capacity of various "small" companies, and corporations which would be essential for correct funding by FBs,and democratic governments.

Indeed, the origins of potential business cycles of boom, and bust could be tracked, and resolved. This is a very important point.

However, all this cannot fully rule out uncertainty, and the irrational behaviour of the money markets. But everthing could still work well in spite of this as TFE is a robust system.

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.

However, 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, and political implications of it would probably 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.



Direct Super Flexible 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. In other words, we are ofcourse talking here about Big Data, Meta-Analysis,and Data Mining. Morever,Deep Learning, and Artificial Intelligence could also probably play a part.

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 is absolutely vital, and this could be based with likely modifications on existing formulas, and equations known in Econometrics used by certain economists, and then be adapted into a computer program as algorithms. Naturally, such an arrangement would have to 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. Certain products, and services ofcourse may not be easily "quantifiable", and may be exempt, or rather subjected to an instant "estimated" inflation tax "deduction", at a checkout, or the bank.


In the future such electronic, or digital transactions will probably 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 already, and all this could herald a big step forwards in the development of economics.


Anyhow, there are a number of things which the electronic controls (open to further modification, and development) could do:-


i) Automatic Inflation Deduction.

When a price of a product being bought at a checkout is found to be above the inflation rate new unearned money could be used to instantly adjust it to the "right" Free Market Price. This would ofcourse appear on a display screen after having been instantly checked by the inflation authority using supercomputers. The customer is thus informed about it.

The Automatic Inflation Deduction is like a tax but the money taken at the point of sale is re-created electronically in the account of the customer. In other words, it is "temporarily" taken out of general circulation where the inflationary pressures are being "felt." Such a method is known as a False Tax, or False Inflation Taxation in Advanced Stage TFE. However, if necessary, the money could be legally retained electronically, and re-created into the relevant bank accounts at some later time.


Ofcourse, the Automatic Inflation Deduction could also deduct money in real terms (without electronic re-creation at all for the "tax-payer")but this is avoided unless it is absolutely necessary. Automatic Inflation Deduction is arguably the most important basic "instrument" in TFE. It also helps to retain the value of money in Real Terms, and in Real-Time.


ii) Instant Electronic Price Subsidization.


This is when a price of a product may be below the inflation rate, and an instant subsidy, or adjustment is created electronically if necessary for retailers. This adjustment instantly occurs at the point of sale, and is again checked by the inflation authority using supercomputers.


iii) 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 if possible 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).



A Form of Limited Electronic Transaction Monitoring.


A form of limited ETM could be introduced on a "local" scale if at all necessary. However, a national version could be "quickly" set up without the need to know the ID details of most, if not all products, and services via special barcodes. Money on Debit, and credit cards, or indeed, a smartphone (mentioned earlier)could be subjected to an instant inflation "tax" when a purchase is made. Again, the amount deducted from some purchased product(s), or service(s) could be taken off, and then notably re-created electronically (ie a False Tax).

Ofcourse, it should be clearly stated that in Advanced Stage TFE certain transactions do not have to be identified by special codes, or barcodes. But,ideally, most products, and services should be identified if full ETM, as opposed to limited ETM were to exist.


The Question Of Economic Growth.



As many realize the planet has finite resources. Thus,continous exponential growth cannot go on indefinitely. In Advancd 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.

There are those who believe in No-Growth Economics, or Steady-State Economics. Such notions are fine as far as they go, but they are very limited compared with the vision of Advanced Stage TFE.

Moreover, how finite is our planet really? This is arguably at present an "impossible" question to fully, or accurately answer. Yet, it has also been pointed out that most of the resources of our planet lie under the sea. To actually "mine them" is prohibitively expensive but their appear to be small initial attempts to do so. With Facilitation Finance it would be possible but it must be done in a highly responsible manner.

Apart from this there are all sorts of 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).

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 governments, or by both of them in partnership. Controversial Grant Interest could accrue too..as explained earlier.


b) Health Care.

Irrespective of whether health care is largely in private hands, or not,Factilitation Financing could 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 (ie.d)could be funded in full, or in part by Facilitation Finance.



e) Industrial Emissions.


One way, other than conventional methods to try, and reduce industrial emissions is to have governments use Facilitation Finance for companies to reduce excessive emissions from entering the atmosphere. Ofcourse, this contradicts the "polluter pays" policy but it is not totally unethical. Moreover, this could prove a simpler method than carbon trading in the Eurozone which appears to be failing.


f) Climate Change, and 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 continous long-term compensation (depending on the situation) to stop, correct, and/or possibly take up some other more "ethical" "environmental" business. Similiar ideas have been undertaken by governments on certain issues, but ofcourse using earned money in the main from taxation usually on a very limited scale. With TFE though such compensation can be undertaken on a massive scale by FBs, and governments.

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, And The Future.


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.

One of them is the introduction of automation on a huge scale.This would lead to growing unemployment. However, something like an UBI, or Universal Basic Income(mentioned earlier) could be introduced irrespective of whether one is employed, or not. This would not require means testing.

In the light of the above, 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.

Interestingly, all this has great implications for NGOs, or Non-Government Organizations. They 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, Banking Regulation, et al) will gain far greater momentum, influence, and power as never before. Thus, Advanced Stage TFE can lead to greater, and greater open 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 with green, and socially ethical type investments but with the aid of FBs it could all ironically lead to their own demise when automation begins to take over most work activities. It is then that money itself could become ultimately unnecessary...This is very important to try, and understand.It is revolutionary.

Also, 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 democracy in which a Universal Debating Project, or "forum" could be credibly created on the internet on a p2p Open Source basis to show "all-known" arguments notably for, and against social, economic, and political issues (without verbal padding). In other words, an objective, and holistic approach to information. This could be updated continually in Real-Time ofcourse.


iv) The need to move towards a society in which cooperation rather than competition should be the incentive to drive the world forwards. At the sametime, 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" cities would also probably be developed, and expanded at the sametime. 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 loans to improve the lot of the poor.


vii) Greater decentralilsation of power.


viii) Society should become less, and less hierachical


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, or TFE.



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) for 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, think tanks, et cetera. This is probably the way forward.

The TFE website itself could include the following features.


A news update about the campaign progress, notably the lobbying of certain governments.


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.


An online Journal of Transfinancial Economics.


A powerpoint presentation of TFE for downloading.


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).


The concept of TFE would probably have to go before the US authorities,the European Parliament, the UK Parliament, and other democratic governments. Ideally, all countries should work in consort to introduce something like TFE, though this may not be absolutely necessary. But it could mean for those who actually develop TFE successfully that a "unfair" competative advantage could be had over other countries.

More controversially, a "good" idea may be to try, and market the new global paradigm to certain corporations(and ofcourse, other much smaller businesses) as a huge "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, the huge global benefits for humanity far outweigh its risks for introducing it into society, and to 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 ones 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.


  • 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 interests on loans could be undertaken, are intended to help reduce the money supply.


  • 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.


  • Limited Transaction Monitoring (LETM) = Here, the IDs of products, and services are unknown. Yet, they are recorded, and may be subject to a False "Blanket" Tax, or False Inflation Taxation. Ofcourse, there can be a mixture of ETM, and Limited ETM in an economy. In other words, in Advanced Stage TFE not all transactions need to be identified, but most of them should be, and there aught to be a record of "all" anonyimised transactions.


  • False Taxation = At the point of sale, a False Inflation Tax may be undertaken on most products, and services. Essentially, this means that the Free Market Price is instantly adjusted to take into account present inflationary pressures, and a deduction is instantly undertaken, and recreated electronically in the account of the customer(ie. Automatic Inflation Deduction). Moreover, the value of currency can be increased instantly, and electronically (ie. Instant Electronic Price Subsidization).


  • Retainment = The concept in which there is no instant re-creation of new money (ie. False Taxation) but is instead in full, or in part retained temporarily by the inflation authority.


  • 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. The same notion can apply to repayable loans in some, or in all circumstances possibly. In effect, 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


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



Some Links Of Possible Interest.


The following links may be of interest.


1) The following is an old series of published articles. Most of the information on it is correct but for any recents developments the present p2pfoundation entry on this specific page offers the most accurate, and authorative presentation. http://blog.p2pfoundation.net/introduction-to-transfinancial-economics-part-one-the-core-concepts/2011/07/11 http://www.p2pfoundation.net/Introduction_to_Transfinancial_Economics


2) 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


3) 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. 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


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 in the financial sector. Something similar to it with different programming could be used in the economy as understood in Transfinancial Economics in its Advanced Stage. 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" society similiar to one envisaged by Technocracy 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


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 http://spectrum.ieee.org/podcast/telecom/internet/dynamic-pricing-how-much-is-not-a-simple-question


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






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