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16/04/2011

A system designed to crash by David Korten

 

David Korten on why a money system dependent on constant growth can’t last.
 
by

This is the twelfth of a series of blogs based on excerpts adapted from the 2nd edition of Agenda for a New Economy: From Phantom Wealth to Real Wealth. I wrote Agenda to spur a national conversation on economic policy issues and options that are otherwise largely ignored. This blog series is intended to contribute to that conversation. —DK


Money Pile, photo by Nick Ares
 

Photo by Nick Ares.

The unrealistic expectation that money should grow effortlessly in perpetuity [see my last blog] is more than an issue of unrealizable expectations. It combines with a Wall Street controlled debt-based money system to create an imperative for the economy to grow the profits of bankers, and thereby the richest among us, to keep the financial system, and thereby the economy, from collapsing.

It is odd that we experienced a financial collapse in 2008 because of a credit crunch, a shutdown on lending, at a time when the world was already awash in money. BusinessWeek’s July 11, 2005, cover story shouted “Too Much Money” and spoke of a savings glut. Its June 11, 2008, European issue reiterated the theme: “Too Much Money, Inflation Goes Global.”

Most discussion of the financial crisis focuses on the details and misses the big picture. First, much of the money was tied up in the Wall Street casino rather than facilitating productive activity in the real economy and was simply pumping up a phantom wealth bubble. Second, virtually every dollar in the system was borrowed, because in our money system, banks create money by lending it into existence. When this debt is used to inflate financial bubbles and support Ponzi schemes, eventual default is inevitable. 

The problem appears to be a lack of money, even though the total money in circulation is far more than enough to cover real-wealth exchanges in a rational real-wealth economy.

Third, Wall Street and the Federal Reserve are joined in an alliance to keep “wage inflation” below the level of growth in the real cost of living. This assures that the benefits of productivity gains all go to owners rather than being shared with workers. It also keeps inflation confined to financial bubbles that inflate the phantom wealth financial assets of the rich.

Furthermore, it forces the bottom 90 percent of the population—the people who make their living by producing real goods and services—into debt at usurious interest rates to the top 10 percent to cover daily basic daily expenses. Inevitably, the amounts owed exceed the borrower’s ability to repay. The lenders then stop lending and foreclose on the assets of the desperate borrowers.

When a loan is repaid or goes into default, the debt is canceled and the money supply shrinks by that amount. Most loans continue to be repaid, but if new loans are not being issued, the demand for real goods and services falls because people don’t have the money to pay for them. As demand falls, businesses lay off workers, who then join those pushed into default.

The problem appears to be a lack of money, even though the total money in circulation is far more than enough to cover real-wealth exchanges in a rational real-wealth economy. The money, however, is locked up in the Wall Street casino economy rather than circulating in the real Main Street economy. Pouring public bailout money into Wall Street serves only to reflate the bubble. It does nothing to revive the real economy.

When the credit funds current consumption and phantom wealth speculation, the result is ever-increasing debt, inequality, destruction of the natural environment, erosion of the social fabric, and ultimate default.

The demand by Wall Street for the eventual repayment with interest of nearly every dollar in circulation means that to avoid collapse, the economy has to grow to generate demand for new borrowing to put new money into circulation to pay the interest due to bankers on already outstanding loans. This demand for perpetual growth simply to keep the bankers solvent results in a serious distortion of society’s economic priorities.

Rather than maximizing real well-being, policy makers are compelled to focus on avoiding economic collapse by growing the money economy. A debt-based money system can make sense when the credit funds real investment. When the credit funds current consumption and phantom wealth speculation, the result is ever-increasing debt, inequality, destruction of the natural environment, erosion of the social fabric, and ultimate default.

Ladakh Children, photo by Daniela Hartmann
7 Steps for Action Toward a New Economy

For too long, we have put up with a money system designed to grow the financial assets of rich people at the expense of assuring continuing cycles of economic boom and bust, confining billions to lives of desperation, and reducing Earth to a toxic waste dump. We can do better.

Growth in GDP creates the illusion that we are getting richer, even as we accelerate our material, social, and spiritual self-impoverishment as a species. Fortunately for our common future, people everywhere are waking up to the reality and challenging conventional economic wisdom. They are focusing their attention on rebuilding their communities and local economies to improve human security, health, and happiness without regard to how this impacts GDP, corporate share prices or other bogus indicators of economic well-being. It is an important beginning.

An obvious next step is to replace GDP and other financial indicators with indicators of the health of our children, families, communities, and natural systems as the basis for assessing the economy’s performance. We may then notice that destroying living wealth to create financial wealth is an act of collective suicidal insanity and begin treating money as a useful tool for managing our economic choices rather than as the end to be maximized.


David Korten (livingeconomiesforum.org) is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World. He is board chair of YES! Magazine and co-chair of the New Economy Working Group. This Agenda for a New Economy blog series is co-sponsored by CSRwire.com and YesMagazine.org based on excerpts from Agenda for a New Economy, 2nd edition.

The ideas presented here are developed in greater detail in Agenda for a New Economy available from the YES! Magazine web store — where there are 3 WAYS TO GET THE BOOK and a 22% discount!

Interested?

3 WAYS TO GET THE BOOK with a 22% discount


 

More by David Korten:

YES! Magazine encourages you to make free use of this article by taking these easy steps.Korten, D. (2011, March 21). A System Designed to Crash. Retrieved March 28, 2011, from YES! Magazine Web site: http://www.yesmagazine.org/blogs/david-korten/a-system-designed-to-crash. This work is licensed under a Creative Commons License Creative Commons License

10/04/2011

Instinct, control, illusion of freedom & Giving up dominion

 

 

 

 

Lire la suite

26/02/2011

Human Rights Watch 2011

 La difficile bataille de faire vivre les droits de l'homme.

Human Rights Watch

21/02/2011

The Fountainhead (Le Rebelle)

J'ai regardé hier ce film. Le film est basé sur un livre d'Ayn Rand qui a écrit aussi le scenario.

Franchement j'ai beaucoup aimé le film, le seule moment j'ai un peut des questionaires c'était pendant le discours Howard Roark (Gary Cooper) dans le tribinal. C'était en contrast avec le film pour moi! C'est un peut le moment d'Ayn Rand de ventiler son philosophie. Avec certain éléments je suis en accord mais il y a certains pensées si tu prends ceux là trop idéologique (noir/blanc) ça peut posé des très très grands problèmes. Mais la fidelité vers son propre conscience sans imposé aux autres, mérite être mis en grand à l'avant.

 

 

 

 

 

19/02/2011

Imagine a world without money............ ;-)

 

The Venus project, based on the ideas of Joe Fresco, the man in the film.

 

Le prix de la gratuité Kairos 6 février 2010  Emission très intéressant!!!

 

 

ps l"argent reste un des plus grand inventions de l'homme!!!

 

But en soi ou moyenne de communication pour vivre?

 

A lire aussi: Les bonnes idées ne donnent pas automatiquement une bonne société.

25/11/2010

Appeal to Supreme Court II (english)

Supreme Court of the Netherlands
Postbus 20303
2500 EH The Hague                                                            
The Netherlands                                                                   30 March 2010

Case number: F 09/3608
Re.: conclusion/reply in appeal in cassation                               Your document number: 4803761

Subject: Is there life after death?

                                               The resurrection of the spirit of thelaw or declared dead

 

Dear representatives of the Supreme Court of the Netherlands,

On Friday 12 March I received your letter dated 10 March and, enclosed, the statement of defence from the Minister of Finance and, speaking on his behalf, the Director General of the Tax and Customs Administration.

In this letter, the Director General writes the following:

“The court has ruled that interest is charged in business transactions relating to capital provisions and that that does not conflict with any national or international rule of law. This conclusion attests to a correct interpretation of the law.

On the basis of the above, I am of the opinion that the appeal filed will not lead to a review of the contested ruling”.

Self-assured and without any question marks, the Director General writes his defence concisely and apparently without a shadow of a doubt. A privileged and comfortable position. The letter from the Supreme Court itself states that I could clarify the issue in person, but that in practice this is rarely done. However, should I want to clarify the issue, I could only do so via a lawyer.

Perhaps you will understand that finding the right lawyer1 in this case is not an easy task. When they can fathom the issue and have the courage to accept the consequences – largely, deep down – it is highly likely that a lawyer will abandon the case. I shall try to explain to you why. The legal proceedings that I have initiated aim to legally question the most important politico-economic assumption, not only in the Netherlands, but globally, because, according to the plaintiff2, this assumption has become a breeding ground for chronic injustice. When a lawyer intrinsically understands this and is in a position to expound on this in an appeal, they will almost certainly end up dealing with an inner conflict.

Because this lawyer will simultaneously be questioning his current means for bringing home the bacon. When you question something as fundamental as interest – whether we want it or not, our financial and economic world is built on little more – you call the world to account and this world is one that pays a lawyer3 to an important degree. Questioning that world means hazarding your own current security. Such a strong sense of justice is probably still felt when you start to study (law), but in most cases quickly ebbs away after the first few years of practical experience when we adapt to the predominating mores, because that’s the way it goes, I can’t help it. You adapt or you go and live somewhere where autocracy is still possible. This is the reality, also in other parts of society. The question of whether something is just or not and testing it against our conscience loses strength and substance because reality is simply so recalcitrant. If you want to take care of yourself and your family in a world based on competition, you are forced to back down idealistically and morally. It is this game of blackmail that we play in ourselves and against others that is being judged in this appeal. It is perhaps bitter to say, but the legal profession and the legal sector flourishes better financially in an unjust society than in a just one and even more so in a competitive society! A question of (unintentionally/unwittingly?) creating supply and demand.4

So, in this appeal we need to ask ourselves whether we are all busy together endlessly compromising justice at the expense of democracy and the constitutional state because of the insecurity about our own existence in the short term.

In reply to the Director General’s brief statement of defence and as part of this appeal, I find it necessary to attempt to outline the basis for the following:

An isolated hierarchy of power resulting from mutual competition will:

1. create chronic ambiguity and confusion

2. avoid individual and collective responsibility

3. concentrate on maintaining and strengthening power structures (centralisation), rarely question itself and thus create very little restorative/corrective capability within the system

4. thwart integration, participation, democratisation and direct communication

5.favour winners at the expense of the public interest

6. discourage identity, autonomy, authenticity and independence

7. lead to uncontrollable politics hiding behind a mountain of impotent legislation and regulations and an increasingly stifling bureaucratisation

8. lead to an institutionalisation/centralisation of established interests, both public and private, thereby blurring and denying inner conscience

9. discourage diversity, creativity and individuality

10. create little room for reason, justice and objectification of reality

11. be a continuation of the misshapen compromise between securing profit, on the one hand and taking responsibility, on the other, in which the compromise winner is already known in advance

 

I am talking about an isolated hierarchy of power. Although the hierarchies of power in the Netherlands and the West are based on mutual competition, they are thankfully not completely isolated. Technically speaking, there is a reasonably well functioning legal system and, likewise, a reasonably well functioning democracy. These are achievements that we should nurture, and for which many have fought and are still fighting. During the sessions at the tribunal and the Supreme Court, I was given the space to say what I wanted to say and in some instances I even felt a certain involvement. It facilitated a discussion between people from different backgrounds and with different responsibilities, but there was, nevertheless, a sense of exchange. That can only happen when there is mutual respect and that affected me, because I had prepared myself for cool technocrats who would only be doing their job because they get paid for it. The following quote illustrates the fact that the topic is, however, considered a burning question: You do not think that we will be questioning the financial system here, do you? And again in the ruling on 28 July 2009: The court expressly sets aside the question of whether a ban on charging interest is advisable as the stakeholder suggests. The content of the issue I raised was not discussed, under the guise that even the European court imposes the obligation on parties to pay interest on payments imposed by the European Court in case these are made after the expiry of the term of payment set by the Court …. This only pushes the apparently overheated issue even further away or simply ignores it. The fact that we have already appointed one part of society as the winner – the financial world with as its current partner in crime the government which, in relation to this fundamental point, unintentionally and unobtainably5 ensconces itself above the law – apparently cannot or will not register with representatives of the Dutch constitutional state. The least the Supreme Court could establish is that this question places us in a legal no man’s land, although personally I do not think that that is the case when you consider constitutional and human rights. The legal system has agreed to the difficult task of being the guardian of social equilibrium. I have tried to show that the assumption that money is worth money has, over the course of time, resulted in a centralised hierarchy of power at the expense of humanity and society, which is comparable to the rise and institutionalisation of the Catholic faith. Funnily enough, the word credit is related to the Latin word credo, which means faith. Of course we need faith (hope) and trust in society, but only when we restore our own faith in humanity can we go ahead and build a more just society. Until that time, we will be left at the mercy of arbitrariness.

When we collectively give away power to an assumption, ultimately a hierarchy of power will be created on the basis of the laws relating to that assumption. Whether we want it or not, this will result in a monopoly of power if we or the legal system do not remedy this. Irrespective of the form of the original assumption, the danger is that power will be centralised at the expense of diversity and independence (self-reliance, autonomy) of individuals within the larger whole.

Power should, therefore, be experienced in a decentralised manner by everyone, and carried by society as broadly as possible. This can only happen when people can agree to collective foundations. These foundations will never come about from mutual competition which, in an ever more densely populated world, demands that we live our lives at the expense of others. Afterwards, profit is pruned away supposedly to restore equilibrium. This will never create a communal bond between people and we will ultimately become a plaything of power structures and conditioning. As such, the institutionalised power of the financial world and the resulting servility of the government and society are part of this appeal and should be discussed.

Why is it so difficult for our democracy to work? If it is really that economical6 to compete, the stupidest thing a person can probably do is delegate power to something that says it represents them. You just know that you are going to be disappointed. I am not against delegated democracy, but it has to be able to operate on behalf of society. Delegated democracy is also trapped by having to win elections or debates, for example. Dressing a message up differently in the hope that the voter will like it better or consider it more sympathetic or improved. However, by doing so we continually deny the basis, which, in legal terms, is the constitution that regards everyone as equals with equal responsibility. Within the current set-up, ‘having to score’ is and remains a lot of hot air. The sale and upkeep of a bureaucratic illusion resulting in a social-liberal delusion, in which the socialists want the bureaucratic illusion tobenefit everyone and the liberals want it to benefit the individual that has created it. Endlessly pussyfooting around, sabotaging the other’s opinion instead of searching for consensus, putting into practice this collective basis, which, in legal terms, comprises the constitution and the European Convention on Human Rights. If we do not put this into practice, we will continually need new legislation and regulations to compensate, but, on balance, nothing will change.4

It is the duty of politicians to formulate clear frameworks, laws and regulations of which, in my view, the constitution is the most important. However, these should be put into practice by people, wherever they are in society. Connecting people and experiencing that individual and collective responsibility is the key task for governments. This can only happen when the power citizens have delegated to governments to create the prerequisites for society is returned to society for people (including governments!) to fully put into practice. Only in this way can the gap between politics and citizens be closed.

Institutionalised power is the biggest danger to compliance with the constitution. In his book The Wisdom of Crowds, James Surowiecki writes in an original way about the conditions for a democracy to be able to come to life:

Elements required to form a wise crowd are: diversity, independence, decentralisation and aggregation (coordination, a system in which private judgements are turned into collective decisions).

As an autonomous phenomenon, power will have none of this. From the point of view of power, democratisation and constitutional state are nothing more than forms of anarchy that should immediately be crushed. The challenge of this appeal is to get hierarchy (something that is normal within society) and therefore also power to join forces with justice and democratisation. This will allow the natural authority of governments to be restored.

It is not always easy to stand in my shoes in these proceedings, but I certainly would not have found it any easier if I had served on the Supreme Court and had to come to a just ruling on the issue I have raised. Looking the other way would not have been an option for me; I would want to formulate a ruling in which justice prevails and which simultaneously creates the space for people to feel that they are a part of something and that they can take control again by working together locally and internationally and getting a grip on their lives with others again. I do not know if a ruling that does right by every citizen in Dutch society is possible without hope losing out to fear, without realism and creativity losing out to frustration and hatred. And yet that is what I asked the court to do, to provide such a ruling. In an already orphaned society such as ours, many people may experience this as a double betrayal or feel even more left in the lurch than is already the case. That is the difficult hurdle and apparent paradox that we are obliged to overcome, should we still believe in democratisation and the constitutional state.

The difficult message that we need to convey is that the apple we took to market is not an apple plus ten per cent, but just an apple – no more, no less. This means that from the top to the bottom of the hierarchy we should get rid of the bureaucratic reward, the mathematical leverage and the accounting corruption on which we have become so dependent and that has completely corrupted our communication and, even worse, made it impossible in many cases. It has significantly conditioned our thinking and trading and turned them into a technocracy, causing us to live in two different worlds; one in which we know full well that an apple is an apple and the other in which an apple is an apple plus or minus 10 percent, thanks to what we call the free-market system. No matter how long or short we discuss or analyse this, we have pulled the bureaucratic wool over our own and others’ eyes and, when all is said and done, neither we nor the economists nor the politicians can see the wood for the trees. As a result, everyone is defending and trying to convince others of a different experience with all the expected consequences; from the top to the very bottom fear reigns, divides and conquers a fragmented society without providing any mutual connection.

Will we continue to look the other way when we give the system its power and greedily accept its bureaucratic charity as thanks? Is that the essence of the awakening individual within the whole? To a great extent, mankind has put its conscience up for sale because the mechanics of power demand this. And yes, you have to be sure of yourself to be able to resist this. And that is not something the government encourages; ultimately, we want to be rewarded for it (read: remain dependent!). The bureaucratic reward that we postpone as debt.

I can only hope that the Supreme Court finds the legal courage to interpret the letter of the law7 by intrinsically and justly bringing the sprit of the law8 into play for the benefit of society.

In a mutually competitive society/economy, the spirit of the law can only be implemented with great difficultly and this demands an unbelievable commitment from those involved to be able to develop at all in the direction of a just, dynamic equilibrium. Intentional or not, ‘winners’ appropriate more rights for themselves than ‘losers’; they are not winners for nothing. Subsequently, the winners will protect their achievements (political, economic, bureaucratic and/or legal), thereby chronically bungling and effectively preventing the intentions of the principle of equality.

Competition ultimately leads to economic apartheid, the Berlin Wall that primarily exists in our psyche, that creates mostly top-down communication within a hierarchy that is often unilaterally directed at exercising power (dominating and aiming at profit etc). Because of this, bottom-up communication is seen as a nuisance and a hindrance to exercising power and potential profit. Competition prevents the true integration and participation of individuals, it ultimately creates a servile, indifferent and closed hierarchy instead of a dynamic, open one in which individuals can blossom.

For example, when it really comes down to it, are we capable of questioning our own performance in a hierarchy based on mutual competition? That is the confronting question and challenge for everyone in society, irrespective of their position. A question and challenge of which the Director General of the Tax and Customs Administration does not appear to be aware when relying on the court’s observation that “interest is charged in business transactions relating to capital provisions and that that does not conflict with any national or international rule of law”, without any exception or nuance. Afraid of being sanctioned by superiors locked away in their ivory towers of power? A career-stifled conscience under the guise of that is just how it is; an order is an order and we are not going to question it? Presumably, he never thought of it like that, unaware and ignorant of the position and independence in relation to the system that people are able and allowed to assume. Obedience to the system and the prevailing mores is, after all, more comfortable and less confronting.

In a competing bureaucracy and economy it is about power (having an edge), not about responsibility, which we shift towards the abstract whole. To be clear here, the government has manoeuvred itself into an impossible situation that has cost it most of its natural authority over the course of time. What needs to be central to the judgment/analysis of this appeal is the equilibrium and synthesis between power and responsibility within a society. Nowadays, this balance has almost completely shifted to the blind ambition for power. This is logical in the context of mutual competition, in which, as an individual, you need to survive. Taking responsibility for your own actions towards the masses is often an awkward cost item/confrontation that we try to avoid or sweep under the carpet to secure the revenue stream or protect our own career.

This causes the social challenges to pile up, resulting in an astronomically increasing collective debt9, because nobody bears or shares responsibility for society as a whole. Governments are caught between a rock and a hard place here. It goes without saying that people want to intervene, but in nine out of the ten cases intrinsic regulations will be at the expense of someone’s or something’s influence or revenue stream. So, we will squabble for as long as possible before we intervene. The buzzwords sustainable growth9 will not be able to change this logic when mutual competition and growth remain the most important economic starting points: living at the expense of others. Within such a context, governments have no option but to try and keep all the holes plugged because we cannot question revenue streams in a context where pursuing profit is the key economic activity. In reality, however, we are primarily playing hide-and-seek, constantly putting off the real social challenges. Simply establishing a company with limited liability illustrates the hideous compromise that solves nothing and tries to advance profit, on the one hand, while shirking responsibility, on the other.10

Levying bureaucratic taxes will not change anything structurally, no matter how high or low we make them, because it leaves our basic conditioning, the avoidance of social responsibility by politics and citizens, unaffected: the pursuit of profit and power, reaping more than we have sown, especially at the expense of others. We are piling crisis on top of crisis without having the courage to ask ourselves what the reasons for these crises could be, because then we would be forced to scrutinise our own role within society. While this usually does not have any beneficial effect on our social position as seen from a power or careerist perspective, it is the only way to break through ingrained conditioning to become aware of our own actions (or lack thereof) in society.

We are currently playing an endless game of bureaucratic hide-and-seek in our two-dimensional world of numbers and figures. And when you go looking for it, nobody is ultimately responsible. We are responsible for paper profit or another form of power that someone contributes to an organisation. That is where we derive our social status. As a result, our crisis management pretty much only focuses on saving what is essentially a bureaucratic illusion of power. By doing so, we are chronically shifting our debt (moral and financial) to future generations, because we have no time for these social priorities today. We defer to others for responsibility, to the system or the system’s logic. This only underlines our own incompetences because questioning your own role is deadly within an economy that is based on a power struggle. In fact it is only our belief in bureaucracy’s added value that finds itself in a crisis, and billions in paper debt are pumped into the system to save this bureaucratic illusion/belief from going under. Economic and just?

This is our joint flight from reality, or should I say farce within reality: a paper make-believe world in pursuit of profit. We think we can resolve the social challenges by producing more of that illusory paper to pull ourselves out of the mire.9 The reason for this circular logic lies in the assumption that money in itself is worth money in the form of interest and the meanwhile hundreds of financial derivatives that lead a breakaway bureaucratic life at the expense (read: denial) of society. Politics and humanity have become so dependent on this that we are no longer aware that we have created this ourselves and that we can therefore also change it again. This latter point is the spirit of the law being applied. However, if we no longer believe that we are capable of changing course, the spirit of the law slowly dies in us, at the mercy of a jungle of laws and regulations that genuinely try to save whatever can be saved, but which have no hope of succeeding because we are not questioning our fundamental ‘economic’ conditioning: the pursuit of profit and power, our fearful and instinctive form of (false) security.

It is an illusion to think that this is only happening within the private sector, as our pubic sector is fully dependent on it as well. Someone on social security is in the same boat as a CEO, as is everyone in between: getting more out of it than you have put in without busying yourself with the confronting question of where does this more come from? Just like debt, we shift that question to the future, to our ignorant children. Will they have more courage and a sense of justice than we have now to take up this challenge?

If we do not bite the bullet today, the situation will only become more difficult, bitter and embarrassing considering the self-denying vicious circle in which we currently find ourselves.

 

It is my opinion that the Supreme Court should review the ruling on the appeal by the Court. The assumption that money is worth money in the form of interest has resulted in a world in which people have become subservient to bureaucratic laws. As a result, humanity has alienated itself from human rights and the possibilities for humankind, life itself, reality, its inner freedom due to servile conditioning, a righteous, dynamic equilibrium, its inner conscience, thus denying freedom of speech, its human equality as a result of a hierarchy based on power, as a result of which it is impossible for a legal system to evolve into a constitutional state, so that society cannot develop towards becoming an open democracy on the basis of individuals evolving towards independence in relation to the larger whole.
(Quite a mouthful, taken from articles from the European Convention on Human Rights)

 

The Supreme Court has a simple, but difficult choice to make between power and the system and conditioning related to it, on the one hand, and a humanity that, in fits and starts, is becoming conscious of the world it is living in, on the other. Not at the expense of life, but as an integral part of life. By – on a legal level – carefully, but resolutely setting out on a path to resurrect the spirit of the law within the letter of the law. If we convince ourselves of this, it is almost unavoidable that we will experience some sort of anarchy and rebellion, which is necessary to make change possible, to contribute from within society, the origins of democracy, and humankind itself. But anarchy should also be reined in, especially considering the enormous frustration (energy) hidden in society and looking for a way out. This reservoir of frustration should be constructively transformed for (re)structuring society, not for destroying it. This is why it is so important that we should try to change the system from within and not from being forced by the outside with all the attendant bigger social chaos and misery. Separate from this appeal, the old system based on blind and fearful power is dying; you only need to keep your eyes and ears open to witness the bitterness and frustration in our society. A society based on its own initiatives, collaboration, creativity and solidarity is of course already present in society, but also vulnerable and fragile. Creating space little by little with individual freedom and responsibility going hand in hand; this is the new basis and framework on which we need to establish a society over the next 5 to 15 years and provide a context for the future of the Netherlands, Europe and the world and to reassure mankind we need each other for this. In all our diversity, creativity, capacity and courage.

It is not my intention to win or lose this appeal, because that is exactly what I am trying to question and analyse. Competition is at the expense of reason, common sense, an objectification of reality and the perception of truth. No, as far as I am concerned, it is about creating space and putting the issues raised in a legal perspective. We need to summon up the courage to look at it and learn to observe the mechanics and social conditioning resulting from it and find out how this influences our own role in society. We need to become aware that we have difficulty experiencing the spirit of the law within ourselves, which makes us feel cut off, unable to make a constructive contribution to change. The constitution and the European convention seek to provide a framework for this, so that people can feel safer. However, this can only be realised when people give it practical substance. Institutions can guard this, to some degree, but without the practical and contextual input from people, the European Convention on Human Rights is just a piece of paper. To take the first step, the Supreme Court as well as legislators should examine within a legal context the assumption that money is worth money in the form of interest. From my point of view, this assumption has never been formally framed within a legal context, let alone tested. In his Ethics, Aristotle appears to have written that (depending on the translation) ….. money exists not by nature, but by law. Does this (unwritten) rule serve power or mankind, striving for a righteous, dynamic equilibrium, i.e. the spirit of the law?

We have this choice today and it will not come knocking every day, but the strength of the spirit of the law is present in everyone. It is not written in any statute book and can only be realised by people who respect the rules of the law and try to give them content. Handle with care because the spirit of the law is incredibly vulnerable, but must be empowered by gradually creating space by means of a sustainable union of freedom and responsibility, which is and will be the nucleus of consciousness-raising and civilisation.11

The recognition of the Supreme Court that we are dealing with a fundamentally legal and social issue is the first step on the journey towards an essential recovery of trust in the constitutional state, governments, democracy and, therefore, our own role within society.
 
Should the Supreme Court of the Netherlands still have questions in this difficult, but challenging case, I am certainly at your service, although I may not have a sensible answer to every question.

Yours sincerely,

Peter Hoopman
De Hutte Holding BV
c/o Château de Roquetaillade
 

1 Before the first case began, I used a lawyer as a sounding board. After he had read it, he called to say, “Very interesting, Mr Hoopman, but you have a less than minus 30 percent chance of this going your way. You will be hidden away in a file and, when it comes down to it, you will simply be ignored”.
2 Funny, in this case I do feel like the plaintiff. So you see, intrinsic contexts can change again.
3 But also journalists, civil servants, scientists, businessmen, educators, everyone including myself lives at the expense of democracy and the constitutional state.
4 I read in the local paper Journal de Millau that 37,000 new laws, decrees and rules appear in France every year. The article added: “to be of service to you as a business owner, Aveyron chamber of commerce has put together a platform of 50 legal experts to support you". Self-fulfilling prophecy? I imagine that it is not quite the same in the more pragmatic Netherlands, but that a similar situation exists.
5 See also appendices I & II: A few questions ….. & The closed door of power…..
6 In the context of power, it is economical, but in the context of public interest it is uneconomical.
7The legal home of society/the constitutional state.
8 The self-developing person inside this home.
9 How many billions are needed to pay off our debts or to make a sustainable economy possible? What we are probably forgetting here is that only man can decide to do business in a more sustainable way, but because we want to be rewarded for this, we will continue to blackmail ourselves and others. The ‘reward’ (read: reality) is the act we will perform or not, which cannot be paid for again, because that would only mean fooling ourselves, dependent and trapped within a bureaucratic matrix that will sort everything out for us. A matrix that, when it comes down to it, can resolve nothing intrinsic, and I really mean nothing. As a result we are denying ourselves the strength (you can also read power for this word) to be able to be fully co-responsible for the world we will live in.
10 The idea of the year by Juriaan Kamp: http://nl.odemagazine.com/doc/0073/Het-idee-van-het-jaar/
11 Recently deceased Dutch politician Hans van Mierlo aptly defines a civilisation as follows: Solicitude for the fate of others.


Appendix I: A few questions make the spirit of the law, the legal economic-democratic debate more profound
Appendix II: The closed door of power…
Appendix III: What will change in a world without interest?
Appendix IV: En route to a free market of, for and by the people
Appendix V: Copy of statement of defence from the Director General of the Tax and Customs Administration dated 4 March 2010

03/11/2010

Lost in the machine?

11/10/2010

Appeal to Supreme Court (english)

Supreme Court of the Netherlands (tax division)
PO Box 20303
2500 EH The Hague
The Netherlands

5 September 2009

Appeal to the Supreme Court in case number: BK/M3-08/00242

Legal action by: De Hutte Holding BV c/o Montjaux France / Dutch Tax and Customs Administration Office, division East, Doetinchem office in Almelo.

assessment/decision no.: 64.57.502.V.70.0112

 

Dear Sir/Madam,

On 28 July of this year the Court of Appeal in Arnhem gave its decision on appeal in case BK/M3-08/00242

The Court of Appeal expressed the following:

4. Assessment of the dispute

 

  1. The stakeholder declared in court that their point of view can be presented as follows. The current practice of paying remuneration (in the form of interest) when capital is provided has no actual economic basis, given that money in itself has no value. This leads to a disruption of the balance of power or trade in favour of those who have capital at their disposal. The demand for or payment of remuneration (interest) for the provision of capital should, for this reason, not be permitted and, according to the stakeholder, it is not permitted. In this case, they refer to international treaties, particularly the Convention for the Protection of Human Rights and Fundamental Freedoms (hereafter referred to as ECHR). Now that it is not permitted to remunerate the provision of capital, the stakeholder holds the view that, it is a fortiori prohibited to consider interest a taxable profit and to tax it as such. What is not being disputed is that, if charging interest is not prohibited, the inspector has rightfully considered the interest by the stakeholder to be part of such profit
  2. The court expressly sets aside the question of whether a ban on charging interest is advisable, as the stakeholder suggests. The court only finds that interest is charged in business transactions relating to capital provisions and that this does not conflict with any national or international legal rule. In relation to ECHR, the court infers this from the fact that the European Court of Human Rights also imposes the obligation on parties to pay interest on payments imposed by the European Court in case these are made after the expiry of the term of payment set by the Court (see for example, ECHR 16 April 2002, S.A. Dangeville v. France, Application no. 36677/97, in which the following was decided. “(b) that from expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate of 4.26% per annum.”

4.3       The appeal miscarries.

I1cannot argue that it is currently prohibited for a tax inspector to collect taxes deriving from interest. This type of income has become so normal and self-evident in our society that it cannot be argued that collecting taxes on interest income conflicts with tax laws. I have stated that requesting and paying interest and, consequently, tax legislation conflict with the spirit of the fundamental rights in the Dutch constitution and the European Convention on Human Rights. That the court’s ruling made use of the fact that the European Court of Human Rights also demands payment of interest only illustrates the conditioned and self-evident nature of our society in relation to the assumption that money is worth money in the form of interest. However, the assumption presented for legal consideration that money is worth money is yet to be carefully weighed up in a legal context.

The assumption that money is worth money has led to such things as:

  1. A great deal of legislation conflicting with international treaties and fundamental rights in the Dutch constitution.
  2. A politico-economic and seemingly also legal lexical confusion because our economic communication has been split into a real and a virtual economy. This could be called economic schizophrenia.
  3. A centralised concentration of power referred to as ‘the financial world’ at the expense of the real economy, democracy and constitutional state.
  4. A bureaucratic delusion as a result of which we are not in a position to deal with the social challenges of the here and now.

 

In a letter to Prime Minister Balkenende2 dated 9 June 2006, I made the following appeal:

Is there a place in our State of Law, where where the chronical social injustice can appear for trial, withour being hanged on forehand by the jurdical and bureaucratic machinery?

It is not about the money,neither an ordinary battle between a company and the Tax and Customs administration, instead it is about the fundamental functioning of our economic communication and the foundations of our State of Law and democracy, wich today we can consider as maffian, kafkian, chronical injust and anti democratic. M. Balkenende, your government has without a doubt a number of arguments to let aside this problem. Pschycholoical I can fully understand that, but it will stay a painfull question we have to treat soner or later individual and as a whole. Today we all are cowards, believing in a juridical and bureaucratic lever, a political-economic bubble without roots in society at the cost of our environment, democracy, state of law and the weak in our society.

Legally speaking, it is not the workings of the Tax and Customs Administration office and the Tax inspector that are under discussion; they simply do what they have been instructed to do within the politico-economic context that we can nowadays regard as normal in Dutch society. No, what I have contended from the beginning in my correspondence with the Prime Minister, the Supreme Court, the Dutch House of Commons, the Tax inspector and in the legal action at the District Court and Court of Appeal is that the 5,000-year-old assumption that money is worth money in the form of interest be weighed up in a legal context. This issue came nowhere near to being evaluated at either the District Court or the Court of Appeal. The following observation by the President of the Court of Appeal illustrates this: “You do not think that we will be questioning the financial system here, do you?” This is a door that remained closed during the legal action, but deserves to be opened to be able to evaluate the issues raised in a truly legal manner.

However, are we not going to end up in a legal no man’s land by evaluating an assumption that is more than five thousand years old? Five thousand years ago the situation on earth was incomparable to today’s. With a world population approximating seven billion people, the challenges are incomparable to those of five thousand years ago. Do we really think that we can provide them with food, clothing, clean drinking water, housing, education and health care3 from the increasing economic growth/profit?
We do not need to be clairvoyant to see that sooner or later this growth will kill us or choke us to death. An individual’s progress towards adult life is based on growth, after which it is primarily a search for the right balance. A politico-economic system that is primarily based on growth and taking more than we invest indicates in fact that it is not willing to grow up. Do we have the individual, political, legal and commercial courage to question our own performance as part of the whole, in this case Dutch society, in order to try to redress the balance? Is the Netherlands much too small to do something like this? Should this be organised internationally and from above? Then we might as well wait until we are blue in the face, as absolutely nothing will change to create a healthy and just equilibrium. The only change we can make is within ourselves. Only then will the world around us start to move because we have become aware that we form an essential part of Dutch society. This is nothing more than the aims laid out in the fundamental rights in the Dutch constitution and those stated in the European Convention on Human Rights. What we appear to have forgotten along the way is that this is our duty and not the exclusive task of an institute or a far-removed system at work.

I have attempted to highlight the discrepancies between the aims of international human rights, Dutch fundamental rights and the very inconsiderate and blind execution of tax legislation, which is based on the assumption that money is worth money. This is not about finger-pointing, but about raising awareness of the challenges we are facing together

I hope that the Supreme Court will use its legal powers to ensure that the unjust imbalance surrounding the assumption that money is worth money in the form of interest is clear to Dutch legislators and deserves to be redressed.

Yours sincerely,

Peter Hoopman
De Hutte Holding BV
C/o Château de Roquetaillade
12490 MONTJAUX
France

1 I do not consider myself a plaintiff or stakeholder in the personal sense of the world, but in the sense that I am a member of society.

2 A copy of this letter was sent to the Dutch Supreme Court at that time.

3 Article 25 of the universal declaration of human rights (UN)

  1.  
    • Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

19/06/2010

Plato's bureaucracy cave (english)

 La version Française va paraître en septembre 2010

An integral overview of the consultation with the dutch State of Law

_______________________________________________________________

Doetinchem Tax and Customs Administration De Hutte Holding

Attn. Mr X.X Xxxxxxxxxx c/o Roquetaillade
Postbus 9024 12490 MONTJAUX
7000 HE DOETINCHEM France

The Netherlands

6 April 2007

Your reference: 64.57.602 (should this not be 64.57.502?)
Your letter dated: 26 March 2007

Re.: Notice of objection to assessment 64.57.502.V.70.0112

Dear Sir,

I would like to thank you for your letter dated 26 March, which I received this week on 3 April. The issue raised in the notice of objection should not be underestimated, or as you put it, “The issue that you bring up is an issue that goes beyond this notice of objection”. To a certain degree you are completely right and it should not be lying on your desk. It is more a matter for a constitutional court or other legal body that checks and reviews constitutional matters.

At the same time, the issue raised goes beyond a Dutch or even a European context. Thus, sooner or later the question will arise whether there is an independent body at all that can objectively look at the issue of the justification for requesting and paying interest, let alone administer justice on it, because:

  1. How can you question something when you are simultaneously dependent on and subject to it? How do you file a complaint against something, when the body that has to judge it is dependent on it for its own financial survival?

  2. How do you lodge a complaint against something that feeds millions of families, on the one hand, but excludes billions of people and/or makes them dependent, on the other?

  3. Can we raise our own consciousness and call ourselves to account or can we only condemn others? Incidentally, the latter is logical in a world that believes in competition between people and paper profit.

  4. How can we communicate openly and fairly about justice when the belief in competition, growth and profit has become more important than respect for humanity, society and the planet we live on?

  5. How do you question something when in politics, commerce, justice and religion we have unintentionally made it common practice to make and keep people dependent?

  6. Is there anything or anyone responsible at all in Dutch or European society, where we now consider it economic to be competitors? Who is responsible for the public and social interests and individual independence?

In your letter dated 26 March you say, “If you want to change the law, or, more generally, if you want to influence developments within society, you will have to convince a parliamentary majority within the current establishment of your point of view”.

There is no point in trying “to change the law”; rather, the challenge is "being able and permitted to live in the spirit of the law" and creating the practical conditions required for it. We are currently formulating hundreds of rules and laws to “keep everyone satisfied” and try to fix something that was broken from the start.

Because what is the origin of our mountain of laws and regulations? Party A (EURL Petit Château de Roquetaillade Aveyron), the one paying interest is not as well protected as Party B (de Hutte Holding BV), the one demanding the interest. As a result, we have unintentionally managed to make the bureaucratisation of society the most important priority for the economy. We have, therefore, imprisoned the economy (and politics) in a two-dimensional world of growth and paper profit that is not capable of differentiating between social priorities. After all, profit is profit no matter where it comes from.

For example, as a football lover I occasionally watch a game; the competition is exciting, the spectators come flocking in, the stadium is full, which is good for the (current approach of the) economy. Economically speaking, though, nothing has happened; we were entertained and
that’s it. Reducing the economy to a two-dimensional priority conceals the danger of humanity alienating itself from reality. And that is what we experience in today’s world: having our lives lived for us, powerless to change something for the better.

You write that I should address parliament, but they will say, “We are a small country and at this point we do not have much to say on the matter”. If we were to go to Europe, we would hear the same, “This goes beyond our responsibility and should only be examined at a global level”. The UN? Solution in sight? No, because we are (potential) competitors, so we will continue to fight for our own individual survival. So we allow fear to reign! Can a constructive breakthrough be made in such a situation?

No, because as long as we are competitors, an open and balanced dialogue will never come about and mutual trust will slowly but surely disappear completely. The mechanism at the basis for all of this is our belief in profit. This means that we automatically also create losers. Humanly efficient and economical?

Plato’s bureaucracy cave

 caverne platon.jpg

 

 

 

 

Party A works, does business and borrows money. Party B receives money under the protection of the law (In practice, this means that the law itself produces money – a miracle?). That way A and B keep themselves and each other captive, leaving them unable to find C, the exit, even if we would like to.

Equal opportunities, just and economic, or simply a mundane institutionalised bureaucratic abuse of power?

Instead of being the guardian of public interest, the government has unintentionally become the “mafia boss”, chronically hazarding safety and mutual trust in society and protecting the out-of-control bureaucratisation against an everyday, independently functioning democracy, a responsible constitutional state and a healthier living environment.

!!!!!!!!!

The assessment is based on profit that is too high, as it consists of a bureaucratic illusion, an arithmetical leverage at interest, profit, dividend, etc. The illusion that has alienated us from reality. In this situation we cannot hide behind a parliamentary majority or hundreds of laws and regulations for subsequent compensation, given that the law and article 1 in particular are not currently being complied with.

Article 1
All persons in the Netherlands shall be treated equally in equal circumstances. Discrimination on the grounds of religion, belief, political opinion, race or sex or on any other grounds whatsoever shall not be permitted.
 
Economic apartheid and discrimination are the drivers of the current politico-economic system with the government as the so-called impartial policymaker and the legal system as independent referee. But, by opting for mutual competition, the government unintentionally opts for the winners. Gone are impartiality, independence, individual and collective responsibility. Are we simply system guards or are we, from the office we hold, trying to independently make a contribution to healing a society striving for justice? Because it is there, no matter how modest, as a gopher or gasbag, as a civil servant or prime minister, that democracy begins and nowhere else, no matter what the ladies and gentlemen in politics try to tell us and them.

Your intention to dismiss the notice of objection is humanly understandable, but it illustrates the social prison that we have created, in which the system decides for the people, who are only capable of guarding the system, thereby denying their own possible contribution and leaving democracy and the constitution irretrievably behind. Of course, the issues raised in this notice of objection should ultimately be discussed in parliament, but when ordinary people saddle institutional democracy with their responsibilities, the very basis of everyday democracy of, for and by the people is on its deathbed.

This notice of objection seeks to democratise the economy, to free it from its two-dimensional bureaucratic prison. This notice of objection, then, does not intend to change the law, but to take it seriously. For the sake of clarity, I do not agree with your intention to dismiss this notice of objection, protecting bureaucracy at the expense of free and integrated entrepreneurship that benefits society. We can certainly laugh at that, especially at ourselves and our game of bureaucratic hide-and seek.

Kind regards,


Peter Hoopman

De Hutte Holding BV

 

 

17/06/2010

Are we still living in a state of law?

 Version française déjà paru.

The richest 2% of adults in the world now own more than half of all household wealth according to a recently published pioneering study by the World Institute of Development and Economics Research of the United Nations University in Helsinki. (Autumn 2006)

__________________________________________________________________________________________________

Doetinchem Tax and Customs Administration De Hutte Holding BV
Attn. Tax Inspector c/o Château de Roquetaillade
PO Box 9024 12490 MONTJAUX
7000 HE  DOETINCHEM France

The Netherlands

 

 

11 February 2007

Cc: Dutch House of Commons



Re.: Notice of objection                             
Re. (assessment) number: 64.57.502.V.70.0112 dated 31 January 2007

Dear Tax Inspector,

I am writing to you to formally object to the 2007 provisional corporation tax assessment, number 64.57.502.V.70.0112.

De Hutte Holding BV refuses to pay tax on its interest income, given that the current monetary and financial system is based on the assumption that money is worth money. Bureaucratic profit from nothing. The assumption that money is worth money has led to today's bureaucracy being better protected by the legal system than democracy, the environment, human rights and the constitutional state itself.

It has reduced the economy to a two-dimensional world that is no longer capable of discerning social priorities. Money, profit, interest, tax and donations are money irrespective of where they come from. It has held politics, democracy, the business community and the individual captive/hostage and alienated from reality. Intentionally or unintentionally, it has seen unchecked bureaucracy become the key priority for government, justice and society, slowly but surely choking creativity, authenticity, sincerity, natural freedom and solidarity. It has turned citizens into worshippers and serfs of bureaucracy as a result of which security, sustainability, trust, well-being and an integrated economy have become empty concepts, trapped in a two-dimensional world of profit, growth, inflation, interest rates, debt, etc. This bureaucratisation represents humanity's flight from reality into a paper make-believe world, entangling us in a two-dimensional bureaucratic web, creating an ocean of powerlessness and indifference and a fertile breeding ground for crime, terrorism and war.

We have created a world in which neither the government nor the people are in control, but the unchecked bureaucratic corruption, without us wondering where this has come from: the assumption that money is worth money, interest. The question now is whether this is in the spirit of the law. Where does competition end and do crime, terrorism and war begin and what role do politics, the legal system and the individual play in this? Do we have any sense of responsibility for the world we live in or would we rather play hide-and-seek in a flat, two-dimensional world that is both soulless and lifeless?

Yours sincerely,

Peter Hoopman

De Hutte Holding BV

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PS Appendix I consists of copies and hard copies of earlier correspondence with Prime Minister J.P. Balkenende, the Supreme Court, the Dutch House of Commons and the Tax and Customs Administration
Appendix II contains a hypothetical alternative to the current politico-economic system called Back to reality



APPENDIX  I

(Relating to de Hutte Holding BV’s notice of objection, number 64.57.502.V.70.0112, to the Dutch Tax and Customs Administration, 11-2-2007)

  1. Letter to the Ministry of General Affairs dated 2 May 2006, Ending economic apartheid

  2. Reply from Prime Minister J.P. Balkenende dated 22 May 2006

  3. Letter to the Ministry of General Affairs dated 9 June 2006 Refusal to collaborate further on the fundamental injustice within the (current) Dutch and European constitutional state, the chronic bureaucratic corruption

  4. Reply from Prime Minister J.P. Balkenende dated 5 July 2006

  1. Letter to the Dutch House of Commons dated 9 June 2006, Injustice of the current politico-economic system

  2. Reply from the Dutch House of Commons’ standing committee for Economic Affairs dated 6 September 2006.

  1. Letter to Tax and Customs Administration dated 11 June 2006, refusal to pay tax on interest income of de Hutte Holding BV, originating from EURL Petit Château Roquetaillade – Aveyron.

  2. No reply from Tax and Customs Administration

  1. Letter to the Supreme Court dated 11 June 2006 Injustice of the current politico-economic system

  2. Reply from the Supreme Court dated 12 July 2006

  3. Letter to the Supreme Court dated 18 July 2006, Who controls compliance with the constitution?

  4. Reply from the Supreme Court dated 17 August 2006

  5. Letter to the Supreme Court dated 13 September 2006, The difference between a legal system and a concrete question to you

  6. Reply from the Supreme Court dated 2 November 2006

 

  1. Letter to Prime Minister J.P. Balkenende dated 6 November 2006

  2. Letter to Tax and Customs Administration dated 6 November 2006, Writ of execution

  3. Reply from Prime Minister J.P. Balkenende dated 23 November 2006

  4. No reply from Tax and Customs Administration

 

The richest 2% of adults in the world now own more than half of all household wealth according to a recently published pioneering study by the World Institute of Development and Economics Research of the United Nations University in Helsinki. (Autumn 2006)

 

 

 

 

APPENDIX II

(Relating to de Hutte Holding BV’s notice of objection, number 64.57.502.V.70.0112, to the Dutch Tax and Customs Administration, 11-2-2007)

Back to reality

and the search for a politico-economic simplicity based on democratic principles

This notice of objection serves little purpose, however true or untrue it may be, if it does not propose some kind of alternative. Questioning interest in the Netherlands and Europe is comparable to a non-believer in the Middle Ages telling the Pope that God has been dead for years. It is, therefore, important for this notice of objection to offer insight into a possible alternative.

What is (will be) the new political and economic priority? What priorities does everyone share?

  1. Clean air

  2. Clean drinking water

  3. Healthy and, if possible, tasty food

  4. Shelter inner ring, seven basic priorities

  5. Education (that underpin safety, freedom and solidarity)

  6. Health care

  7. Nature and infrastructure

       and a functional bureaucracy that serves these seven basic priorities

These seven priorities must form the basis for our political, economic and legal thinking and actions. They apply to individuals, families, municipalities, regions, countries, continents and the planet we live on. Medium- and small-sized businesses must fulfil key responsibilities. When these have been practically implemented, there is additional room for:

  1. The art of self-realisation through honesty of mind and integrity of sprit

  2. Science

  3. Art of living the outer ring, the self-realisation process

  4. Research and development

  5. Renunciation and tolerance

 

When we replace the current economic priority of (bureaucratic) profit that facilitates the payment of interest and taxes with the above-mentioned seven practical basic priorities, which can repair trust, integration and participation, we will have formed a healthy basis for the self-realisation process, which is the most essential expression of individuality as part of life. Not egocentric, but living completely as part of the world and not at its expense. The above-mentioned idea is an attempt to improve the harmonisation of individual interests and public interests, as a result of which individual interests will gradually merge into the so-called public interests. That can only happen when we become conscious of the place we have in this world. This is different for everyone, which is what makes everyone’s life unique and meaningful.

From this perspective, the economy is nothing more than consciousness-raising, fleshing out our inner well-being for the benefit of society. This will take us from an economic science based on "scarcity" to one based on individual and societal well-being.