3.1.2.4.                      The Money  

The money is a means of payment for traded goods and services, serving for the exchange of the products of work in a market economy. A stable quantity of money in circulation creates a stable economic policy in the country. The money is issued by the state. Each country tries to equalize the quantity of money in circulation and the value of totally produced commodities. Countries achieve a satisfactory quantity of money in circulation by the controlled credit money emission. They have power to create the interest rate level that balances the money supply and demand. The interest rate then becomes an instrument of the country's economic policy that gives stability to the market-based form of doing business. However, such a measure adapts much more to anarchical market changes than it conducts a conscientious economic policy.  

A quantity of money in circulation smaller than needed suffocates the trading in goods. A deflationary tension appears, which leads to recession in the production and to the crisis of the economic system. The society tries to remove the deflationary tension by a fast turnover of cash assets, which is achieved by credits and by lowering the prices of commodities. In the case of failure, consumers do not have enough money to buy the products, and producers are not able to repay the loans. An economic crisis emerges that leads the unprepared society to a collapse, as it happened in the American great depression of 1929. The escape from it was found in the money emission that financed the public works. The fresh money pulled out the country from crisis. 

As the state apparatus is the biggest holder of accumulated cash assets, it is at the same time the biggest consumer. State authorities maintain the administration, defence of the country, state reserves, and non-economic activities, subsidies, insurance. They allocate large amounts of money for investments and for lending to banks and, through them, to the entire society and economy.  

The state generates cash assets by its fiscal policy. If due to unstable economic flows it is not able to have the sufficient quantity of money generated, then the state budget runs a deficit. The state cannot get bankrupt and, therefore, by a credit money issue it covers its own losses, as well as the money deficiency for the budget needs. Such credits augment the quantity of money in circulation without a cover in produced commodities. In such circumstances, there is more money in circulation than the economic production is worth.  

The economy defends itself by increasing the prices of products until the point when the supply and demand will be in equilibrium, which creates inflation. Inflation further requires a devaluation of the national currency against the world's currencies until the point when the value of the commodities produced on the market will be adjusted, or until the point when the trading in goods across the state border will be balanced. The devaluation easily results in a new price rise, and the process repeats.  

Inflation prevents bankruptcy of enterprises. In this way, the resumption of the production is ensured; however, the system of values becomes distorted. The galloping inflation was for the first time registered in Germany in early thirties, and in 1993 it also hit Yugoslavia, which by printing the money was providing the subsistence of the population. The inflation was saving the production in the circumstances of imposed economic sanctions by the international community. The states develop the defence mechanisms against deflation and inflation; however, it is questionable how much such mechanisms are efficient in preventing more serious crises caused by stagnating production and demand that is sooner or later indispensable.  

The quantity of money in circulation in the capitalist society is a big problem. Beside other things, the economic production growth requires a larger amount of money in circulation so that the produced commodities might be purchased. Beside market that is sometimes very unpredictable and painful, capitalism does not have a mechanism that might regulate quantity of money in circulation. The issued money has to be returned with an interest. In case of an expansion of production and consumption that is possible to achieve because the same money circulates faster and produces larger values. In case of a market slow down, the money circulation slows down as well and the society does not have enough money to buy produced commodities and specially because it has to return the borrowed money together with an interest. Thus the capitalist form of production easily suffocates itself and result is most often bankruptcy. Capitalism does not have a satisfactory monetary policy. The new money loans issues could only postpone the problem. That is exactly how most of the countries around the world have become debtors and the most powerful one among them, the USA, has become the largest debtor in the world. Its debt rapidly grows and forms a very uncertain economic future. 

Countries often solve the problem of insufficient amount of money in circulation by controlled money grants. If democracy in that country is strong enough the money is used for common needs of society. Such a measure brings fresh money into circulation that helps the economy.  

In the USA such measure cannot be realized because the quantity of money in circulation is not regulated by democratic process but by private capital. The USA is the only country in the world where the Federal Reserves are privately owned. The owners also have control over the primary money emission. They land the issued money to the state and to other users normally with an interest. According to the law they should return most of the profits back to the Treasury Department but there is no organization that have power to audit the Federal Reserve. Even the formal request for control cannot be accepted because this is the most corruptible place in the world. Even if their books are clean they are able, with the help of creative accounting, producing money practically from nothing and keeping it for them. That is how the owners of the Federal reserves exploit the USA and the whole world. That is how they have become the richest and most powerful people of the world. I know that this sounds unbelievable and therefore I propose you dear reader a small searching over the Internet (google, yahoo, etc.) and you may easily find numerous articles with strong arguments that confirm what I wrote here. I have randomly chosen three. Here they are:   

http://prophecy-center.com/Psycho6.shtml, http://www.totse.com/en/politics/international_banking_money_laundering/fedpwer.html, http://iresist.com/cbg/battle.html. 

The USA does not have a large inflation because the owners of Federal Reserve successfully control the amount of money into circulation. Beside that the USA dollar is the world’s currency so that the whole world support the strength of it. However, this is nothing else but one more form of exploitation of the world.

Finally let’s conclude that the market regulation of the quantity of money in circulation does not create a sufficiently stable economic policy. Cyclical oscillations in market trends emerge with unstable prices, productivity and earnings, which is unfavourable both for the economy and society. A stable economic policy requires a balanced distribution of work and work products, a known purchasing power of the population and known needs of the society, as well as an efficient economy meeting such needs. A free market economy is not able to achieve such conditions. A fully balanced economic policy could only be conducted by a developed planned economy and this is the reason why it will have to be in place in a future. The future will unavoidable require a creation of adequate amount of money in circulation distributed in a fair manner. That is one of the main reasons capitalism will have to be replaced with a more appropriate system. The monetary policy in such a system will be based on a social ownership of the money and on a direct democratic direction of joined money assets. 

The Commune  

The most suitable situation for any economy would be to have in circulation the quantity of money precisely identical to the value of produced commodities. In an ideal case in which the economy produces precisely what the society needs, such a quantity of money in circulation enables purchasing of all produced commodities and the economic stability of the society.  

Consumers hold a large amount of money. It is significantly larger than the value of the whole current production is, and significantly smaller than the total value of everything the society possesses, because such values were generated by the turnover of the same money. A part of money is turned over for the current production related payment transactions purposes, and a large amount of money is accumulated in citizens' and the society's holdings as a reserve fund. The accumulated money ensures the economic safety of individuals and of the society as a whole.  

It is hard to establish control of the money in circulation when private money accumulation is large, because each holder disposes with his money according to his own wish. Privately accumulated money is placed uncontrollably, in directions that are difficult to predict, which creates difficulties to the economy in planning the production.  

The commune does not issue the money, but it can acquire it by redeeming the accumulated money held by the population. It does so by means of past labour income-based points. A larger quantity of past labour income-based points of workers results in greater income, and in this way the money holders may find their interest in selling the money for income-based points. By selling the money, the population of commune loses the renting possibility with a bank interest, but realizes a rise of income proportionately to the increase in the quantity of past labour income-related points.  

In the new system, the society as a whole materially secures each individual. Therefore, individual money accumulation as a form of security is no longer necessary, and a significant voluntary sale of money for past labour income-based points may be expected for this reason. The man will no longer have to work and save in order to ensure his future, as the case is today. A smaller volume of individual savings of money will contribute to a greater stability of the economic system.  

The money redeemed is pooled in a company of the commune. The commune would also pool the entire money funds of the enterprises that are collectively owned by the commune's inhabitants, as well as the money collected by taxes of private enterprises. Thus, the commune will accumulate a large quantity of cash assets. That quantity exceeds significantly the value of totally produced commodities in the accounting period of commune.  

The new form of economic policy will put into circulation the quantity of cash assets identical to the value of produced commodities, while the rest of the money would make up the reserve fund of the commune. It is easy to rapidly calculate with the computer technology the value of complete current production and expenses of the associated corporation of commune and of private enterprises. Even though the private enterprises will spend their money independently after they pay taxes, the new system of monetary policy of commune may put the most optimal amount of money into circulation in order to ensure the purchasing power of inhabitants for the demand for produced commodities. The rise in productivity or, more precisely, a production of a larger quantity of goods with stable prices will require a larger amount of money in circulation. In this way, income will increase and thereby the purchasing power of the society. And vice-versa, a drop in productivity will reduce the quantity of money for the purchase of the same goods.  

However, if the quantity of money were only tied to the value of produced commodities, there will be then a danger that the goods on the market will not be sold and that workers realize income as if the profit was realized. Such production would create stocks of inventories and would be spending the money of the reserve money fund of commune until the bankruptcy of the commune. This is the reason why the amount of money into circulation needs to be also created according to the realized profit on the market. In that case, the commune's population forms its purchasing power on the basis of the sales of produced goods. On the other hand, if the money supply were formed only according to the realized profit on the market there will not be enough money for the purchase of a larger quantity of newly produced commodities. In such a case, the system would not allow its own development. In this regard, the amount of money intended for trading of goods needs to be created between the values of totally produced goods and the profit realized on the market in the accounting period of commune. The money intended for the trading in commodities needs to be determined by the commune's leaders in the manner that will allow it to realize an optimal economic policy, productivity and stability of the commune.  

We can call such an amount of money as the revenue of commune. The commune's revenue is always smaller than the amount of money the commune owns. The surplus of cash assets will be used as working money assets and as reserve cash assets of the commune. The commune may use a larger part of these assets for the needs of working capital of the economy because the merged companies of commune would easier insure themselves so that they will need smaller amount of money assets in reserve. The economy has to repay the working cash assets in the accounting period so that the process of production could renew.  

Once the amount of money needed for payment transactions, or the commune's income is determined, then the commune will allow the society to decide democratically on the key issues of collective economic policy by distributing the collective money to the consumption groups. In this way, the collective money accumulation will allow the forming and development of a democratic planned economy that will create a full stability of production.  

In the monthly accounting period the commune's revenue may be distributed to the following funds:   

1. Money asset for individual consumption  

2. Money asset for collective consumption 

3. Money asset for federal consumption 

4. Money asset for economic development  

5. Money asset for depreciation of the manufacturing capacities.  

Money asset intended for federal consumption are determined by the commune's delegates at the level of the association of communes. The price of a product includes as an input a percentage of commune’s revenue intended for federal consumption, and upon the realized profit it is set aside for the federal consumption needs.  

All other money assets of the commune's collective fund are distributed by direct voting of all commune's inhabitants within the range of possible value ranges determined by the commune's leadership. Within these ranges each inhabitant participates, according to his own will, in the distribution of collective money.  

It was already noted that each inhabitant of the commune has a voting power proportionate to the number of past labour-based voting points he holds. Each inhabitant will actually distribute the quantity of past income-based voting points he holds among the quoted forms of consumption. If an individual thinks that he will need a larger amount of money for individual consumption, a medium amount of money for the economic development and maintenance of the means of production, and the smallest quantity of money for collective consumption, he will in such proportion distribute his voting points. He will enter such statement into the computer card and file it with the computer centre of the commune's administration or he will enter his statement directly into the computer application that will be connected via Internet to the communal information-processing centre. The summed values of all commune's population by each group will determine the proportion of cash assets distribution in the commune.  

As cash assets are limited, a larger quantity of money earmarked for a certain fund will diminish the quantity of money intended for other funds. This means that if the population wishes to develop its economy more intensively, then a larger quantity of money will be earmarked for the development of the economy; however, a consequence will be a reduced consumption of the population, and vice versa. If the population wishes a more extensive consumption, the quantity of money intended for the development of economy will be reduced. 

The new voting system will be based on unlimited validity of the voters’ votes until each voter himself changes his vote. Also the new system will for the first time enable the people to vote when ever they want. They will be able to change their voting statements many times per day if they want it and the system will not have any problem to process such changes. 

The population will on the basis of its own experience see the advantages and disadvantages of a certain form of money distribution and will make corrections according to its own will whenever it will wish to do so. In this way, all individuals and the society in general will realize greater conveniences, and the society will accept the economic policy as its own, which is one of the most important elements of disalienation of the economic activity system, and of the society as well.  

The proposed system will allow the population of the commune to determine to a significant extent the collective economic needs. Identified collective economic needs define the macro consumption and thereby determine the production as well. In this manner the commune's population will in a direct and democratic way create the macro-economic policy of the commune. This will be an introduction to creation of a markedly stable democratic planned economy.  

The commune's inhabitants may agree to withdraw the money from circulation in order to more easily monitor the social needs and prevent the illegal use and earning of money. Payments may be made with credit cards and checks. Non-cash payments allow monitoring of the consumption to a larger extent, which facilitates a more efficient planning of the economy and creation of a more stable economy. The withdrawing of money from circulation would disallow a non-controlled earning, illegal use and alienation of the money. 

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