A Stairway to Heaven (Part Two of Two)

EnMo Economics

EnMo economics is an economic theory that suggests the proper role of the state in the economy is to ensure that all its people have Enough of everything they need to live secure, comfortable and happy lives, whilst also ensuring that the private sector is able to supply more in terms of non-essential products and services. This is a very important but quite simple distinction to make — although there would always be some unimportant blurring at the edge where essential meets non-essential.

This principle applies to money supply too. The proper role of the state is to take the view that money is a human right, and therefore that it would ensure that citizens have enough of it to keep themselves supplied with Enough essential goods and services. The private sector would be free to operate a private banking system, within the laws of the state, to provide alternative types of money for citizens to use to purchase More in the way of non-essentials. Different types of money circulating in the economy is not an original idea. It was quite normal for banks to produce and manage their own currencies in the early days of imperial expansion in the United States, and the principle is still used today in Britain where Bristol, for example, produces its own currency, as does Lewes.

The role of private sector banks in the economy is not of much importance to this essay. It would be a similar role to the one they have today but much smaller and much better policed by the state. This essay is mainly about the public banking system in an EnMo economy.

EnMo doesn’t exist anywhere. It could, but it doesn’t. Therefore in order to explain it further it’s necessary to imagine a very different world from the one we have. This serves two purposes. Firstly, it makes it easier to explain the system of EnMo, and, secondly, it provides an idea for a very different economic model to the one that currently controls our planet.

The State

The role of the state is central to EnMo, and the state is wholly managed by a well-informed citizenry through direct democracy. Although political parties are permitted there’s little need for them given that the state is operated by direct democracy rather than representational democracy. Private funding of election campaigns is forbidden, and the state pays for and manages all elections.

The Work Ethic

The state pays for all public services using an interest-free currency it creates and manages through a system of public banks. The currency is recognised as legal tender throughout the country, and is based on work.

Each year the state bank produces a volume of currency roughly equivalent to the amount needed to pay public servants to produce the essential goods and services the state needs for that year. There is no unemployment, except for those who choose not to work, or who cannot work for one reason or another, or who are in full time education or retired. The state always has good and useful work available for those who want it providing and maintaining public services.

The state’s role in the economy is confined to providing essential goods and services. To this end it has its own farms, factories, transport and storage systems, engineering facilities… etc. It owns and manages essential utilities such as water supply, communications and electricity; and it owns and maintains core public services such as schools, hospitals, justice, parks and recreation, public transport… etc. All of these public services need human beings to work in them, and the quantity of money produced each year by the state bank is always enough to ensure they are all adequately paid.

Every citizen is encouraged to work in public service at least some of the time. Every young person, on leaving full-time education, is required to register for work with the Public Works department, a government agency with responsibility for managing human resources across the public services, and for ensuring full employment. Once registered the young citizen must do at least twenty hours work a week, for two years, performing a variety of duties working in public service. All new immigrants are required to do the same. Although citizens are not compelled to work for the state, all are encouraged to continue doing so throughout their working lives.

In return the citizen wants for nothing. Every necessity of life is provided by the state, from food and water to comfortable clothing; from education to health care; from public transport to comfortable and secure housing…etc. The citizen can have all of these things because other citizens are doing the work that provides those services, and given that the state is highly mechanised and computerised, public servants seldom need to work more than twenty hours a week – but can do so if they choose.

The twenty hour rule means that citizens have plenty of free time to do whatever they like. They can do more than twenty hours a week in public service if they wish to, or they can work in the private sector, or they can continue their education, or they can just relax with family and friends.

Proper management of human labour, for the benefit of the whole society, is the key to the success of the EnMo model. No one is ever out of work unless they choose to be, or cannot work for some reason. There is always work to do maintaining public services, and the state can always pay for this work because it can always produce whatever money it needs to do so.

Inflation

Because the state is continually producing new money to maintain public services, a mechanism is needed to ensure that an excess of money in the economy is avoided. Excess money is undesirable as it reduces the nominal value of it.

This problem has been averted in the past by using taxation. But taxation is complicated and difficult to administer fairly. EnMo uses a different and much simpler mechanism – demurrage.

The main use of money in an EnMo economy is to help facilitate continual trade in goods and services. In other words, it isn’t meant to be saved, it’s meant to be spent. Given that the state produces brand new money every year, money produced in previous years is simply withdrawn from circulation and slowly destroyed at a steady fixed rate. Money produced this year, for example, would lose twenty per cent of its face value, say, each year for the next five years until it no longer exists, and is no longer recognised as legal tender.

Taxation is currently used, not so much to pay for public services, but to withdraw money from circulation so that money inflation is controlled. However, taxation is difficult to manage and administer, and it has never successfully prevented hoarding of currency by the super-rich – which prevents money from serving its primary function: facilitating trade. Demurrage removes these problems. The fact that money would decay in value to zero, at a known fixed rate, and that brand new money is continually being produced, makes it pointless to hoard. Small quantities of it could be saved for short periods of time, but it would be utterly useless as a long-term investment. Given that the state produces brand new currency every year, to provide whatever public services are needed, the fact that old money is continually expiring is largely irrelevant: there is still plenty of money circulating in the economy, doing what it’s supposed to do. It therefore goes without saying that taxation, of EnMo currency – would be completely unnecessary.

EnMo currency would be useless as a long-term investment, because savings are not the point it’s intended to serve. EnMo currency is for facilitating trade, not for long-term saving. Those who wish to acquire long-term savings would need to use other instruments to do so – which is pretty much what a lot of people do now: buy things which are hoped will increase in value, such as property, precious metals, classic cars, art works, stocks and shares… etc. Whilst money in the form of long-term savings is pleasant and useful, the vast majority of people today have too little of it to save for any length of time and must continually spend the little they get in order to survive. Consistent with the core principle of EnMo – that the state provides Enough of everything people need to have secure, comfortable and happy lives – the state would ensure people have enough money too; if they want More they will need to turn to the private sector to supply it.

Paper money and metal coins would still be used for small cash transactions. Each year a new print for the paper money would be designed, and it too would lose its face-value at twenty per cent a year until it is worthless, except for trade between money collectors – pretty much as numismatologists have always done. Coins, being of very small monetary worth, permanently maintain their face-value, and are recycled only when damaged.

The Private Sector

Although the EnMo system is essentially a socialist economic model, it strongly encourages the existence of a free market economy too, for the purposes of supplying and trading in non-essential goods and services, the More part of the EnMo system. The need for More, and different, although unnecessary is a natural human desire, therefore it should be provided for (within the law), and not suppressed.

The state is primarily concerned with only providing essentials, and does so without any frills. It provides abundant secure and comfortable accommodation, for example, but it does not build luxurious housing with more and larger rooms than one person or small families ever need; it provides comfortable and practical clothing and footwear, it does not provide customised designer products; it supplies plentiful and nutritious vegan food, and potable drinking water through a national waterworks, it does not supply animal products or bottled water; it provides free expert legal services, it does not supply overpaid lawyers; it provides environmentally-friendly vehicles, it does not supply gas-guzzling automobiles; it provides good and free healthcare and schools, it does not provide “alternative” healthcare and education services… and so on.

In other words there’s plenty of scope for providing the goods and services the state does not consider to be essential, and those who wish to labour at supplying such non-essentials are free to do so – within the law of the land.

The private sector is also free to operate private banks, and trade in different currencies – within the law of the land.

No private sector operation, including banks, is guaranteed or underwritten by the state: it succeeds or fails by itself.

The Bigger Picture

The long-term success of an EnMo economy is dependent on its adoption by a reformed United Nations. At the moment the UN is considerably hampered in all of its operations and undertakings by being financially dependent on the United States. If the UN created a new bank to serve a similar function as a public bank serves in a country, but on a global scale, it would free itself of its existing financial dependence and therefore be able to serve a more effective role on the global stage, and the long term success of EnMo would be more likely.

This new global bank would, like any state-owned public bank using the EnMo model, be empowered to produce and manage its own currency. But this currency would be a new reserve currency – a currency which every country that adopts EnMo would have an automatic supply of, and which could be used for trading with other countries.

The power of a global reserve currency is very considerable, and it’s no coincidence that controllers of the global currency also control the most powerful military machines. But times change. For the first time in history a concept of international law is slowly developing. Although it’s still in its infancy, the notion that powerful nations cannot be allowed to continue ruling by force alone is slowly gaining traction. There’s still a long way to go, but brute force is slowly but surely being more widely rejected as acceptable or allowable behaviour, no matter how powerful a nation may be. The day that rule of law assumes more authority than force of arms is creeping slowly nearer; and when it does arrive human beings everywhere, and the planet in general, will be able to breathe a huge sigh of relief. If the United Nations created its own bank, to operate a global EnMo model, a great leap forward towards that day of final liberation would be taken.

The UN is effectively powerless because it largely depends on the US for its financing. Therefore it’s effectively just another agency serving the interests of the US Empire. If it was able to finance itself, through its own bank, the huge potential of the UN as a force for global freedom, peace and prosperity, and protector of the long-term interests of our planet could finally be unlocked and realised.

Transition

Moving from where we are today to where we need to be, in an EnMo world, would not be easy – not through any intrinsic difficulties with the EnMo model, but because of the powerful vested interests of those who profit very handsomely from the globalised chaos which has always been the modus operandi of empires, vested interests who will fight tooth and claw to keep what they have. It’s not enough to know that we have to rid ourselves of these people and the global power system they control; we also need to know what will replace them. The solution has two different but related components – a political element and an economic one. I’ve dealt in detail elsewhere with the political component, in the People’s Constitution, which provides for a largely decentralised system of government, controlled by direct democracy where a WELL-INFORMED citizenry makes all the decisions of government. This essay has focussed on the economic element. The gulf between where we are today and where we need to be is massive, and those who would stop at nothing to prevent us reaching our destination are incredibly powerful, but as Shelley said: We are many, they are few1, and having a clear idea of what our destination is is a fine place to start.

Every new development has to start somewhere, and few new developments are perfectly formed from the very beginning. EnMo is not a wholly new idea. It’s a variation of socialism. Its essential difference lies in a fairly well-defined separation of the economic roles of the state and private sector: the state provides essentials (Enough), the private sector provides non-essentials (More). The state has no interest in controlling all goods and services, and the private sector is not permitted to control any essential goods and services. There is, of course, some overlap at the margins, but conflicting interests could easily be resolved by citizen tribunals.

Moving from where we are to where we need to be – transition – needs widespread re-education as its starting point. A sizeable number of people already know that what we have must go, but there is less certainty about what will replace it. The People’s Constitution and EnMo economics are not perfect, but they’re much better than what we have, and they contain the all-important requirement of flexibility – mechanisms whereby they could be continually adjusted to suit the changing needs of society and our planet. It’s not enough to rail against the system, we also need a clear idea of the changes we’ll make. This was a weakness of the otherwise wonderful Occupy Movement. Occupy perfectly identified the problem, but had no commonly agreed solution. Re-education could put that right. We have already started the journey. Masses of people are wandering vaguely in the right direction. A new star in the sky is ready and waiting to help guide their footsteps. It has no human form, it’s a young binary star full of energy and long-term promise: the People’s Constitution and EnMo Economics.

  1. “Mask of Anarchy” by Percy Shelley, 1819 []
John Andrews is a writer and political activist based in England. His latest booklet is entitled EnMo Economics. Other Non-Fiction books by John are: The People's Constitution (2018 Edition); and The School of Kindness (2018 Edition); and his historical novel The Road to Emily Bay Read other articles by John.