OPERATION BLACK ARROW

How To Use The Philosophies of Republicanism (Sensu Stricto) and Distributism, in Combination with an Overnight “Type 2” Euro Money Creation Event, to Help Solve Both The EU’s Debt and Pensions-Crises, Help Save High Social Utility Capitalism and Help Re-establish and Widen Trust-Horizons, Both Amongst the EU’s Populations and Towards Their Political and Financial Institutions.

Contents

Introduction

A Glimpse of Nothingness

Of Symbols, Valour and Theft

A Fissile Priestcraft

NOOBA – A Night to Remember

Describing the Arrow

Perverse Incentives

Public Visibility

A Ceremony of Youth

The Serendipity of Synergistic Benefits

Our Neighbours

Trust-Horizons

Ease of Implementation

A Secret Solution

Fraud and Honesty

Opportunity and Opposition

People, Profit and Property

Philosophy and Power in Practice

Cost

Notes on the Nature of the Universe

Footnote

Bibliography

Appendix 1

Appendix 2

Appendix 3

The After-Glow of Afterthought

Introduction

Like a lot of people I have been thinking about the economic problems that confront Ireland and Europe, especially the problem in Ireland of negative equity, a situation which I have been personally fortunate to avoid.

I would like to suggest a solution – albeit a partial solution – to these problems; a solution to which the word “republican” in its truest sense is an appropriate description.

By “republican”, I simply mean something involving the sort of peaceable state that scruples to treat all its law-abiding and sane citizens equally and which thus avoids state favouritism – that form of favouritism which is more usually called “aristocracy”.

Operation Black Arrow (OBA) is a solution which requires the offices of a central bank to effect, so the only “republic” that can carry it out is now the European Union itself. An even wider-scale OBA made by several central banks (which is also recommended) would need a very high level of international co-ordination. This briefing document is however written for the EU and Euro-zone areas.

As designed, OBA is a form of quantitative easing (QE) but in creating money and endeavouring to solve the credit/debt crisis it differs from “normal” QE in two new ways.

Firstly OBA involves creating money of a different “type”; a type under inherently greater governance (i.e. under greater moral and economic limitations) than ordinary money. In fact, economic limitation is so strict that these new monies cannot really be spent like ordianary money at all. Many of the moral and economic limitations pertaining to OBA and this new type of Euros are to be found described throughout the text below.

This money can be called “Type 2” Euros (acronymed “T2E”) and, as we shall see, one of its several specific functions is not to create further debt but to destroy a good deal of existing debt.

Secondly, the money is to be immediately distributed to almost all adult citizens. I call this Hyper-Egalitarian Quantative Easing (HEQE).

By scrupling to make only the real living citizenry their target, these new and rather inaccessible T2E QE monies are paradoxically predicted to also help with solving the economic problems of both the banks and of the sovereign exchequers.

A Glimpse of Nothingness

“The problem is the solution” – I quote Holmgren; and the problem behind the credit/debt crisis is that, during the economic boom, senior bankers have created (yes, literally created – “ex-nihilo”– out of nothing), vast amounts of certain symbols called “money”. The tremendous extent of the excess credit/debt money-creation was successfully disguised from almost everyone (including quite possibly the bankers themselves) by the creation of multiple claims upon the underlying wealth of Europe. This underlying wealth has likely not really changed that much during the credit/debt-fueled “boom” (or the subsequent “bust”) at all. Part of the nature of a recession is that many of these claims to wealth are rapidly extinguished, oftentimes in a savagely unfair manner. Furthermore, since one man’s dispossession often leads to another’s gain, incentives now unfortunately exist to sinfully exacerbate this process. These incentives are additional to the powerful fear-based positive feedback processes which are anyways operant in the recessionary parts of the “economic cycle”. Operation Black Arrow can be viewed as an attempt to short-circuit these fearful, destructive and dis-possessive dynamics and so shorten the lifespan of the recessionary part of the “cycle”.

Of Symbols, Valour and Theft

It is worth reminding ourselves at this juncture that money is a symbol used for the immediate exchange of goods and services, and also to facilitate the storage of wealth. So the current monetary crisis afflicting the EU (and indeed the world) is in essence “merely” a symbolic crisis. It follows that the solution to the problem is also to be found largely in the realm of the symbols.

Note that the word “merely” is in parentheses in the previous paragraph; Homo religioso, a.k.a. Homo sapiens, is the only species that is capable of both creating and then using symbols for large-scale matters such as scientific discovery or the control of its own societies. For humans there is nothing “mere” about symbols at all; whether those symbols are the words of a religious text, the symbols in a mathematical equation used to model aspects of the universe (such as E=mc2), or indeed the printed symbols on small pieces of paper that represent (to members of the human species’ minds alone) a million in money.

Humans are unique in their ability to imbue (and disembue) their symbols with meaning and value; although, outside of religious rituals, we are oftentimes unaware of such processes. So, for example, we often speak of needing to “go to work to make money”, when in fact all money is made by central banks and is essentially worthless (and may even become of negative worth, that is destructive in nature) unless and until it is valourized in its existence (i.e. imbued with meaning and value) by the co-action of moral enterprise and useful labour.

Excessive and immoral money-creation de-valourizes existing money and may be described as the esoteric theft of valour.

Just such excessive credit/debt creation has now resulted in several major socio-economic problems involving a huge collapse in fiscal and political trust-horizons in the aftermath of the type of property-ponzi economic “shell game” that we Irish have essentially inflicted upon ourselves and each other; albeit with the willing and reckless collusion of the realm of national and international finance (who supplied the necessary excess fiscal symbols).

The asset bubble Ireland has recently had to endure contained a dynamic which facilitated a huge and as yet largely undescribed wealth-transfer within the Irish economy. This dynamic has left many in the historically (and pre-historically) unprecedented condition of negative wealth, euphemised as “negative equity”; their wealth and future-wealth (especially their ability to valourously save in the future) having “already” been majickly transferred to others. The valourized life-savings of many other older citizens have likewise been entirely so transferred -if those savings were being held as bank shares.

Note: It certainly does not follow from the above that all money-creation is wrong but, during the boom, it was certainly conducted in a highly excessive, occult (hidden) and amoral manner. In fact, as well shall see, OBA attempts to use a moral unvalourized money-creation event to partially redistribute valour and thus ameliorate some of the many problems caused by the vast amoral unvalourized money-creation of the past, especially of the last decade or so. As such, it (OBA) may be said to be following in the tradition of forgiveness.

A Fissile Priestcraft

Ordinarily, when a senior banker creates the symbol we call “money”- as “credit”, he or she must also create the same amount of “debt”. The process can be usefully thought of as a type of magical, fissile, priest-craft. “Fissile” because the “nihilo” is being split into two: credit and debt. “Magical priestcraft” because the symbolic attachment of “debt” gives the banker-priests and their servants considerable disciplinary control over persons upon whom “debt” is so attached. Using the Law of Contract, the State enforces this attachment. Under normal economic conditions the rate of fission (i.e. credit/debt creation) is controlled by the relevant central bank, fission rates usually being an inverse function of real interest rates.

The metaphor of fission is appropriate; for if governance (i.e. moral and economic limitation) of the credit/debt creation process is inadequate then the possibility of positive-feedback loops developing can lead, as in a nuclear reactor, to a sort of run-away chain reaction resulting in melt-down. The situation inside an overheated ponzi-bank is in some sense the financial equivalent (and hence of course “merely” the symbolic equivalent) of a “Chernobyl”. Unlike a nuclear reactor the operators of a bank can actually, under certain circumstances of anti-governance, (e.g. circumstances permissive of crony and ponzi-capitalism), be incentivized to permit such a run-away situation. Quad erat in Hibernia demonstrandum.

OBA can be seen as the swift (overnight) lowering of millions of individual debt-absorbing “control rods” into the now critically debt-overheated reactor vessel that contains Europe’s fissile finances. In OBA it is the citizens themselves who are the many control rods. However, because we are dealing “merely” with symbols and not heavy metallic radio-isotopes, the process is in fact a lot safer than it sounds in simile.

NOOBA – A Night to Remember

Now to explain workings of the Operation Black Arrow proposal. It is simple.

What is suggested is that (almost) all adult citizens of the Eurozone would just wake up one fine morning to find that every one of them is “x” thousand Euros “better off” than when they went to bed the night before. In this respect everyone is treated perfectly equally, as befits a republic (sensu stricto).

Note: “x” is currently a variable whose value is yet to be decided upon; and then fixed upon, by a collaboration of the EU area governments and the EU parliament along with advice from the ECB and senior economists.

January 1^st 2012 is suggested as a suitable date to be the Night of Operation Black Arrow – acronymed as “NOOBA”.

Since the money is to be created “ex nihilo” by the ECB, during the night, this money is created at near zero cost to the ECB. For, unlike ordinary banks in the Eurozone, only the ECB can create money without creating debt at the same time; which process normally is called “quantitative easing”(QE).

OBA is a quite new sort of project centring on the novel power of “Hyper-Egalitarian Quantitative Easing” (acronymnable as “HEQE”).

But crucially these new HEQE monies are to be “Type 2” Euros (T2E) and, while they will have exactly the same value as ordinary Euros, they have higher levels of governance and cannot -and must not- be spent like ordinary Euros. In fact they can only be “spent” in two very particular ways.

Firstly, If a citizen of the EU has a domestic residential mortgage taken out before a certain date (on or before NOOBA) then the monies are “set against” -i.e. used to destroy- €x,000 of debt from the capital sum outstanding on the mortgage and that citizen effectively never sees “their” OBA money again: The money has been “given” to him or her and spent in that way without any choice on the citizen’s part. If two citizens are signatories to a mortgage then up to two times €x,000 could be written off a residential mortgage.

In an economic crisis caused by the creation of too much debt, the primary objective of OBA is naturally to effect debt-annihilation; quite literally to return some excess debt to the nihilo from whence it came. Importantly, as we shall see, OBA scruples to make this beneficial matter as egalitarian as possible; i.e. of benefit for almost every adult citizen of the EU, even those who are not holders of mortgage debt.

The debt-destruction must only apply to EU citizens’ home mortgages on their primary residences and may not be used to write off any other type of mortgage or debt whatsoever. The only possible exception to this rule is some pre-existing debt the citizen may have with their own EU state at NOOBA – such as long-standing tax arrears or social welfare “overpayments”.

The OBA mortgage debt write-off is to be a once-off event, occurring across the Euro-zone, or the whole EU area, on a given date and is made with the intention and understanding that it shall not be repeated for any future dates or debts.

Strict and punitive laws against the fraudulent conversion of Type 2 Euros to ordinary Type 1 Euros, and indeed any type of fraud involving the new T2 Euros, will need to be passed into existence by the EU parliament and national parliaments across the EU before this pamphlet’s suggestion could be safely implemented.

Quite seperately, laws to make a tort of negligent lending will also need to be enacted in order to prevent EU society, via the intermediating agency of its bankers, from yielding again in the future to the tremendous temptations to which we have succumbed in the past. The temptation to create too much money out of thin air is indeed a tremendous one, and because ordinary citizens (thanks to the intercession and intermediation of the banker-priests) are maintained in a condition of “indirect” temptation they are, even now, somewhat unaware of the origins of this systemic and moral problem, or indeed of the dynamics and nature of the strange form of occult theft it empowers.

Please note that I do not wish to demonise our banks or even senior bankers: From the text above I hope the reader will understand that bankers are ordinary persons subjected to extraordinary temptation. The need to “encourage” resistance to such temptation is of course the reason that laws such as ones to make a tort of negligent lending are sorely needed whether OBA ever proceeds or not.

Describing the Arrow

I propose that a maximum of 50% of a mortgage should be capable of being written off so that if, for example, if “x” was set at a high level of 50 (a level admittedly more relevant to the Irish negative-equity situation than other countries); then if a citizen has a mortgage with €80,000 capital outstanding, only €40,000 could be written off and €10,000 “Type 2” Euros would remain “unspent”. These unspent monies would be placed in a special type of “EU Citizens OBA Escrow Account”, the contents being owned by that individual citizen. More details about these new types of accounts in a while and below. The purpose of this 50% limitation is to limit the power of OBA itself, since its action results in a large scale reduction in the power-base of the EU’s banks. Such a dis-empowerment, whilst now necessary, also itself needs prudent limitation. Correctly run banks are socially useful economic institutions and their activities (tested for social utility and public morality) really do need to continue.

Of course it would be unfair to just give those citizens who happen to have mortgages at NOOBA the capital write-off, since a debt write-off is a form of wealth transfer. What about persons who do not have mortgages? For each of them I propose that exactly the same amount (x,000) “T2” Euros also be created “ex-nihilo” on NOOBA and then immediately placed in their “EU Citizens OBA Escrow Accounts”; such accounts to be created for (almost) all of those adult citizens of the EU who do not not get the benefit of the mortgage debt write-off .

When these citizens reach 70 years of age then – and only then – are their ECB escrow monies released to them and even then these monies must -and can only- be used to purchase an EU (strict investment area) pension. Type 2 Euros are converted to ordinary “Type 1” Euros at that point. In this way the T2E monies are used to help ameliorate the looming EU area pensions crisis and indeed they do so on an on-going basis into the future. Note that this EU investment area limitation overcomes what is perhaps the major current problem with “ordinary” QE -namely the fact that the monies created are entirely fungible and so immediatley transferrable throughout the global economy. Money being created by the ECB under current QE (to help offset the EU area debt crisis) in the morning is likely to have “leaked away” to be invested on the other side of the globe by lunchtime, and quite possibly “invested” for socially useless purposes such as in obscure derivatives too.

But I digress a little. To return to the second objective of OBA: the aim here is to assist EU citizens in retaining their economic independence in old age, rescue them from the possibility of poverty when elderly, and moreover, to rescue them from poverty-anxiety concerning their old age throughout their adult lives. Such an aim is worthy and should be properly effected without half-measures.

Type 2 money does not, and must not ever, earn any interest but its value (while held in escrow by the ECB) would be adjusted over the years for inflation (or deflation) in order to maintain the value that €x,000 had at NOOBA.

The ordinary retirement age would still be set at 65, or ideally even lower – to facilitate job vacancy creation for the younger generation. Ordinary pension funds would be prohibited from considering the prospect of receiving Type 2 Euros at age 70 in their actuarial calculations, OBA monies are to be entirely additional to the ordinary monies of ordinary pensions, whether those pensions are private or state funded or indeed provided by the welfare state.

A good many EU citizens will be over the age of 70 on NOOBA. Their case is a bit special. They could receive some fraction of x,000 Euros actuarially calculated according to their age, this they would be compelled to add to their authorized pension funds or buy a pension fund with. Alternatively, if fear of inflation from the release of so much monies to pension funds on NOOBA was a factor (and it is) then it would perhaps be better for persons over 70 on NOOBA to receive a monthly pension from the ECB directly as if they a pension fund of €x,000 had been given them back on the date of their 70^th birthday.

The €x,000 “en-block” escrow pension funds would then only be released to the pension fund market in the future, only for those citizens younger than 70 at NOOBA, and only of course upon their 70^th birthdays. Then the individual citizen’s ECB escrow monies are converted to type 1 Euros, released to the citizen, who is immediately compelled to use them to purchase an approved (i.e. morally pre-tested) pension fund in the EU area markets, and so they become the source of a modest annual pension income. This income itself would of course be added to other income whose total would then be subject to normal annual income tax in the EU citizen’s state of residence.

I repeat that OBA is a republican (sensu-stricto, non sensu Hiberniae) suggestion. All adult persons other than imprisoned criminals and those certified insane (neither of which groups are “in” normal society) are, I am suggesting, to get x,000 Type 2 Euros at NOOBA, irrespective of any notions or realities of relative wealth or poverty, or indeed of ideas of “deservedness”.

Type 2 Euros are to be non-transferable, non-inheritable and cease to exist upon the citizen’s death.

Type 2 Euro funds may not be considered by any EU or national state agencies in making calculations of a citizen’s wealth for purposes such as assessment for taxation or welfare.

Type 2 Euro funds may not ever be prematurely accessed by the citizen or their state.

Type 2 Euros may not be traded. It is to be made illegal to use T2 Euros, or the promise of them being converted to Type 1 Euros in the future, to underwrite or secure any trade, transaction or loan…this is important. Remember, we are trying to “fix” a credit/debt-creation problem here, not exacerbate it.

Type 2 Euros may only be held in the accounts of real, living, human EU citizens. They may not be held in the account of any fictitious person, irrespective of the legality of that fictitious person. By which I mean that Type 2 Euros may not ever be placed in the account of, or in any way fiscally referred to by, any company, trust or corporation; they may only ever be held in the many citizens’ escrow accounts at the ECB.

Note that ordinary “Type 1” Euros give their owners a very high level of choice, but because type 2 Euros are under a stricter, higher level of governance they are characterized by high levels of moral orthodoxy and, correspondingly, lower levels of choice.

At the higher end of possible “x” values, say where x is fixed at ’50’; Well, 50,000 Type 2 Euros may seem like an awful lot to create for each EU citizen. It is…and it isn’t. Given the gravity of the negative equity situation in Ireland, and the scale of the EU area debt crisis, it is probably the amount needed to just really ameliorate – much less actually fix – the dreadful circumstance for those trapped therein. We are trying to head off a monster of an economic recession at a mountain pass and, I suggest, it is better to arrive there swiftly and with too much fire-power than too late and with too little. Also as a pension fund €50,000 is a reasonable and generous sum. Lesser sums would also work, but possibly rather less well – there really is a case for bravery to be made here, and a swift bravery at that.

That much said, I do realize that, being Irish, I of course tend to write from an Irish perspective and, since OBA must be done across the whole EU, the value of ‘x’ needs to be set by very well informed professional economists determinedly acting in favour of European  socio-genesis.

Perverse Incentives

So OBA is designed as a very focused and egalitarian form of quantitative easing, a form that carefully produces the most “bang” for the bucks being created. Current quantitative easing monies are “Type 1” low-governance monies, which are just being given to – and being used by – the bankers and financiers; used at their discretion, often as a way to create even more credit/debt, the monies adventured upon markets such as derivatives. All of this is very likely actually exacerbating the problem. Also the high-level financially savant in society are better placed and much more effective at “mopping up” the current type of QE monies than ordinary folk. Thus current forms of QE are aristocratic (i.e. anti-egalitarian) in their functioning.

Furthermore, since the banks – I’m thinking of the Irish banks here especially – are at present effectively in receipt of billions in Type 1 Euro QE “welfare” they now have a perverse incentive to maintain the situation where they continue to receive that welfare. The OBA project avoids the further creation of such perverse incentives. OBA partially disempowers Europe’s banks and, since debts are banks primarey assets, is appropriately punitive towards them.

Public Visibility

The OBA initiative being suggested here is not just public (rather than corporate) in its targets; it is not just strictly egalitarian in its treatment of the public; it is also to be entirely publicly visible.

A big problem with the manner in which the economic problems (again e.g. of Ireland’s banks) are being presently handled is that vast sums of public monies are being ceded to the banks and – apart from being occasionally told how many “billions” are being put in – the public have hardly a single clue as to where and to whom those monies are being used and transferred (remember a debt write-off is a wealth-transfer). “Cui bono?” as the lawyers say. This situation is most corrosive of public trust.

Should OBA ever be implemented, its workings would be transparent, i.e. highly “visible” to the public. For everyone would, so to speak, “see” that they, and almost everyone else, were the recipients of €x,000 of public QE monies. This should have the effect of enhancing the public’s trust in the EU project and its institutions. A public record of all the mortgage write-offs with the names of beneficiaries and amounts written off under the scheme would be available, as would a register of those other citizens who shall receive “their” escrow funds at 70. This is necessary because the expenditure and transfer of public monies should -with very few permitted exceptions- always be publicly visible.

The public visibility inherent to the OBA project should assist with fraud deterrence and detection and also with some projects quite unrelated to OBA such as preparation of population statistics etc.

I should just say that each EU citizen would of course have the right to “opt out” of OBA and so choose not to be a recipient of his/her OBA monies and this right would be clearly and publicly communicated to the citizenry immediately after NOOBA along with the necessary information as to how to exercise that right in practice…this is an important point. Such a right (the right of refusal) is primordial and primary. Regrettably, positive action to opt out on the part of a citizen would probably be required both in the case of the mortgage write-off scenario and/or the release of Type 2 escrow pension funds at age 70. The most likely reason for a citizen to exercise such an opt-out would be preservation of privacy for I am recommending that (almost) all transfers of public monies should be publicly visible.

A Ceremony of Youth

Of course since the mortgage debt write-off is to be a once-off matter all of the younger generation (i.e. those un-mortgaged on 1^st January 2012) will have to live to age 70 to get the benefit of their monies.

I suggest this pensions part of the OBA proposal should continue into the foreseeable future: Younger citizens would be given their ECB escrow account books (with €x,000 “in” them) on reaching their majority. The citizens of the EU would thus be firmly amongst the bondholders of the EU. A small public ceremony with a European flavour could accompany this event. (Actually, the monies would exist “only” on a Type 2 ledger at the ECB and psychologically in the mind of the citizen; they would be translated from Type 2 monies to trade-able Type 1 monies by effectively being created- by micro-quantitative easing- on the eve of their 70^th birthdays, but the individual citizens do not really need to know all this.)

The Serendipity of Synergistic Benefits

Meanwhile, and even while the citizens are living their lives, and long before ever reaching age 70, there are several unexpected secondary benefits that accrue to the individual, to society and to the EU project itself from this “ECB escrow pensions fund” part of the OBA initiative:

Firstly, in the event that a citizen commits a serious crime (the type that one goes to jail for) then the -now criminal- citizen’s €x,000 escrow fund balance is simply “returned to zero” by the ECB. So the possession of the Type 2 capital and the risk of its loss – a risk inherent to and essential to all practices of good capitalism- by each citizen acts in a way to incentivize peaceable and lawful civil behaviour across the EU. Likewise, mortgage debts that have been written off at NOOBA would be re-attached to the individual citizen, and also liened against his/her property, if that citizen was ever convicted of a serious crime in their own lifetime.

Secondly, the “existence” for each individual citizen of “their” escrow funds will very likely incentivize behaviour conducive to enhancing health and safety during their own lifetime, as citizens more actively seek to live well in order to enjoy the pension funds waiting for them at age 70. Real and significant savings on national health bills may thus be reasonably expected to occur. EU citizens, in expectation of their pension “carrot”, are likely to exercise well, look after themselves and, indeed, perhaps even to eat more carrots.

Thirdly, by ameliorating the fear and anxiety many citizens feel regarding making adequate provision for their old age, it is likely that many people will be reassured enough to recommence spending and hence shorten the current economic recession. The phenomenon of saving hard in a recession is now especially evident in Ireland where, following on the enormous destruction of life-savings (total destruction if held as bank shares) and the big decline in value of their (once grossly overvalued) primary assets (their homes), a great many Irish are now suddenly truly (and quite rationally) fearful of being pauperized in their old age. Their response has been, where possible, to save and to save hard: one in every seven Euros earned in Ireland today is now put away for a rainy day. The irony is of course that the rainy day has truly already arrived; and in a country where it really does rain a great deal (so much so that the Romans named Ireland “Hibernia, …“Winterland” in Latin).

Fourthly, the creation of Type 2 Euros will likely cause some inflation in the Eurozone and a decline in Euro exchange rates. Both these things are essentially desirable from the overall point of view of Europe at this point in a recession. Note that, because Type 2 Euros cannot themselves be traded and are “hard” to transfer into Type 1 Euros, the inflationary effect of this very large financial initiative is intrinsically minimized.

Also on the macro-economic scale, the democratic destruction of debt would allow the ECB to eventually gently increase interest rates with less pain to the public once the recession ends. One of the many causative factors of the credit/debt crisis was of course the fact that interest rates were held far too low for far too long, thereby facilitating excessive credit/debt creation.

Fifthly, the ongoing creation of Type 2 monies and their investment into the stock markets of Europe confers upon EU citizens (via their democratic institutions) the power of moral investment. By carefully choosing to invest the pensions-escrow monies only into well-run European industries that are of high social utility, OBA pensions monies can incentivize European industry to maintain that high social utility and incentivize them against economic activities that could (and should) disqualify them from receiving any OBA investments. (e.g. unwarranted use of offshore finance, market speculation, improper derivatives trading, being party to environmental and human rights abuses etc., etc.).

I believe that Gresham’s law concerning counterfeit currency can in fact be restated for all of capitalism: “Bad capitalism has the power to drive out good capitalism but good capitalism does not have the power to drive out bad capitalism.” Hence the State is needed to maintain and man the barricades of coercion…against, amongst many other evils, bad capitalism.

Note that at NOOBA the entire adult population of the EU immediately become incentivized to consider such matters…i.e. They have a vested interest in holding EU-area capitalism “up to the mark” and to do so throughout their working lives since the fact that the proceeds of this  systemic effort are delayed in arrival until age 70 should powerfully dis-incentivize most of  the whole population from partaking in, or using their political influence to pursue, the sort of “fast buck” type bubble capitalism that has almost demoniacally possessed the globe of late. So, in its escrow pensions fund  initiative, OBA can also serve to stabilize both society and the capitalist system itself.

Our Neighbours

OBA type initiatives would also likely work in other debt-troubled economic regions such as the U.S.A., Japan and the U.K.. Indeed it could be useful, and fairer, to have “synchronized NOOBAs” on January 1^st 2012. I say “fairer” because it would reduce the phenomenon of “beggar my neighbour” associated with a unilateral inflationary or stabiliszation event. “Competitive” currency devaluation relative to the other economic areas should then be minimized. Synchronised NOOBAs would be a more neighbourly way of conducting matters of debt-destruction and it is right that the egalitarianism inherent in OBA be extended, where possible, beyond the borders of the EU.

Just as much as lawful competition, lawful collaboration also has its place in the complex economic systems of the world.

Trust-Horizons

Importantly, OBA should restore (and perhaps even extend and enhance) the EU citizen’s trust-horizons as regards the EU and its institutions such as the ECB and the EU parliament.

The EU’s populations’ faith in the positive project that is the European Union has been damaged by the collapse of trust-horizons associated with the debt-crisis in the Eurozone; by the destruction of honestly acquired wealth and also by the selective and preferential wealth-transfers, from public purses to certain institutions (usually banks), to unknown bondholders of banks, and from some EU nations to others. Ostensibly made to prevent further system-collapse, however needed some of these transfers probably were, they typically involved a departure by government from the law of contract (rather a stupendous departure in the case of Ireland) and they are at least perceived as most unfair and, with apologies to Mr. Chesterton, the possibility of Europe’s descent into a sort of “EUtopia of EUsurers” at times appears to loom.

An Easy Solution

But, let us proceed: From a logistical perspective, OBA should be relatively easy to implement and the whole thing can be done swiftly, which is important now.

Ease of implementation should be further facilitated by its likely popularity, both at national and EU level, since nearly all persons are not adverse to receiving monies “ex gratia”– even if they are of a novel, inaccessible type, and a type with highly limited applications. OBA acts for the public and against the oftentimes socially destructive short-term interests of the international financial systems.

If OBA is implemented the real and wider public should correctly perceive that the political class of Europe are practising leadership on behalf of the wider EU “republic”.

Of more importance than any improved perception of contemporary politicians however is the reduction of debt burdens on households and the restoration of real public trust.

A Secret Solution

It is desirable that this plan be prepared in secrecy and that the international markets should be unaware of its existence before the date of implementation. This will prevent markets, individuals and corporations, from pre-adapting or otherwise speculating upon -and against- the likely economic, bond and share-price effects etc. of such an initiative.

There is nothing wrong or unfair about such secrecy: If it is implemented Operation Black Arrow will be just another happen-stance which the markets will have to adapt to just like any other large unexpected natural phenomenon, such as an earthquake or a flood. OBA would also be a large, unexpected and yet entirely natural event. (2/11/2011: Postscript Note: I am having to compromise on this strategic ideal since I have not had any reply from the several persons in the appropriate institutions to whom I sent this document, or rather earlier versions of it, in recent months).

Fraud and Honesty

OBA should enhance the EU Parliament and the ECB’s ability to influence the member-nations of the EU to maintain high vigilance against fraud. It would do this by providing the ECB with a new form of “soft power”. It would quietly become clear that the continued granting (i.e. creation by QE) of the €x,000 escrow pension funds to each years new “crop” of 70 year-olds is to be contingent on high levels of trust, honesty, fraud-prevention, fraud-detection and fraud-prosecution being maintained within and by each member nation. If necessary the escrow monies “tap” could be turned off for a particular nation and the ECB could basically wait until the elderly of that nation (who will have built a deal of contacts and influence in the course of their long lives) agitate to get the situation “fixed”. In reality the widely understood prospect of this fraud-consequence happening should be enough to make the necessity of such an action by the ECB most improbable.

The on-going, publicly-funded, generosity inherent in the individual escrow pension fund monies part of OBA incentivizes the populations of the EU to resist those policy errors and unconscious forces and tendencies which tend towards the break-up to the EU project. Populations should also be incentivized to resist any conscious designs to such an end. As such, OBA assists the manifestation and maintenance of trust-horizons at the high and extended level which are both utterly inherent to, very necessary to, and in some good part also emanate from, the European Union project.

Note also, since “their” Type 2 monies are to be invested into the stock, bond and money markets upon their 70 th birthday, all EU citizens will be incentivized to keep a close eye out for, and likely insist their parliaments enact laws against, the type of financial shenanigans that have so recently allowed the “Pirates of Ponzi-Finance” to get clear away over the horizon with so very much wealth.

Opportunity and Opposition

While the opportunity does exist for the EU and the ECB to make the transfer of OBA monies to a given country conditional upon certain criteria being met, most likely criteria to do with “enhanced” austerity; I feel this temptation should be resisted and that OBA should be kept strictly in the realm of generosity -a synchronized, sudden, trust-restoring -and hopefully pleasant- surprise for the many people who are fortunate to live within the EU.

The new legal limitations on negligent lending that should come with OBA are, of course, to be EU-wide.

Nevertheless, such widespread and sudden debt-destruction does make it possible -and great a deal easier- for “peripheral” countries such as Ireland to implement economic policies aimed at “resetting” their economies at a more realistic and sustainable level. There is a need to reduce and close the tremendous current account deficits being run by such governments and to fix other urgent matters and the opportunity presented by Black Arrow in such respects would need to be seized in both hands. Appendix 1 will, I hope, soon contain several other “operations”, largely pertinent to the Irish economic situation, designed to further restore trust, sustainability and economic reality during the post-OBA lacuna of opportunity. These other operations (which I am as yet only imagining) are mostly based upon using state coercion to “mimic” some of the effects of an inflation. The likely mild unpopularity of such “re-settings” is one of the reasons why “x” needs to be a suitably large number and for these re-settings to occur quickly post NOOBA.

 

 

I foresee that three groups of persons would likely be opposed to Operation Black Arrow as a proposal and possibly might attempt to frustrate its implementation:

Firstly, the banks and bankers would likely oppose the debt write-off and oppose it strongly since, in the somewhat inverted accountancy of banks, debts are actually counted as assets. So, the OBA debt write-off would make a major reduction in the asset and power base of Europe’s banks. I do not myself see this as a negative thing. In fact the banks, though somewhat smaller after OBA would also be more stable for having some of the excess debt in the banking system written off (i.e. their capital adequacy ratios would automatically improve). Their share prices would be unlikely to actually tumble.

Obviously, if provided with public Type 1 monies and left to their own devices in a crisis , bankers will preferentially write-off the loans which are “unsustainable” or “under-performing”; situations likely as a result of their own negligent lending. Thus public monies are currently being used to prefer both the negligent lender and his borrower over the prudent borrower and lender. This preference is shown largely automatically as a result of normal accountancy procedures at the banks and is a normal consequence of their continuing control of their businesses.

Importantly, the OBA debt-write off would not be under the control of the bankers themselves at all but would be done on the instruction of the EU parliament, the parliaments of the EU countries and the ECB. So OBA is quite unlike the current situation of Type 1 Euro publicly invisible debt-write offs. During OBA the democratic institutions of Europe would be asserting their command and control upon the situation…and the banks and bankers would be “requested and required” to take – and comply with- parliamentary instruction. Thus OBA imposes damage-limitation, effecting solution to the crisis by the morally appropriate and combined use of the EU27 member states’ lawful monopolies of coercion.

Secondly, many among the rich would be opposed to this suggestion since it does have the effect of diluting their wealth by both printing a considerable amount of money (quantitative easing) and then what’s “even worse!”, subsequently distributing those funds in a scrupulously egalitarian manner. For the owners of capital I do accept that this is a genuinely bitter pill -especially in the case of those individuals and families where such capital has been accumulated in legal, honest, decent and fair enterprise- but I would point out that the pill does come with a sugar-coating (of €x,000) and does so for everyone, whether they are themselves among the deserving or undeserving poor, or among the deserving or undeserving wealthy.

I believe that the importance of resolving the debt-crisis before us, and the many benefits which accrue from effecting a gentle (and essentially non-confiscatory) re-distribution of wealth, must now override even the rather valid objections of the deservedly prosperous.

I am unconcerned at the modest dilution of wealth this proposal would have upon the fortunes of those who have accumulated capital in circumstances less than legal, decent, fair and honest and I am sure my unconcern in this regard will be shared by many. Nevertheless, unless time-serving convicted criminals, the undeserving rich are also to get the x,000 Euro individual benefit of OBA.

Of course, one of the tragedies of modern capitalism (especially the sort that has flourished in the era of Bush and Bertie) is that honest citizens who work to valourize (via lawful enterprise) what truly thus becomes “their” money, and then prudently save some of their earnings as honest capital; when these persons then lodge their savings into the money system via their local financial institution they are, in part, unwittingly provisioning a fleet of financial ponzi-pirates to set sail in raids against the commonwealth.

Thirdly, persons of a socialist bent will, I suspect, be opposed to the suggestion, partly on the grounds that actually giving the wealthy money is too galling for words. Severe socialists tend to presume that all persons possessed of capital are, ipso facto, undeserving of it. Indeed, in their more extreme manifestation, socialists would appear to believe that only the state is “deserving” of owning wealth, ordinary humankind being unworthy of that privilege and responsibility. There is certainly a deep pessimism underlying such thinking, which Operation Black Arrow stands firmly in contradiction to.

OBA optimistically proposes that every sane and law-abiding adult citizen in the EU may be safely presumed as deserving of the custody of €x,000 of capital more or less immediately (albeit as Type 2 Euros -OBA is not an imprudent suggestion) and likely remains safely so deserving unless proved otherwise in a court of criminal law or, in the case of insanity, by several of their doctors.

OBA is not a socialist or crypto-socialist tactic, rather it is a capitalist intervention designed to help save and enhance the prospects of socially useful, creative, productive and distributive capitalism. As such OBA is in accord with Chesterton’s observation: “”Too much capitalism does not mean too many capitalists, but too few capitalists.”

People, Profit and Property

There is yet another benefit of OBA, a positive psychological one: The fact that persons who do not currently possess capital shall, after the implementation of OBA, effectively be “in possession” of €x,000 Type 2 Euros.

It is a tired cliché to speak of “a crisis being an opportunity” but this crisis does provide the opportunity to begin -in quite a safe way- the long-delayed work of “repossessing” (via a modest distributive re-capitalization) the dispossessed in our society. In fact of course the “opportunity” is always there but the crisis somehow makes it easier to “grab the chance”, so to speak. I consider this a really important benefit of OBA and, by way of further explanation, I have appended Hilaire Belloc’s essay “The Proletarian Mind” (now out of copyright) below as Appendix #2. Note that Belloc understands that the casino, ponzi and disaster-capitalist’s “mind” is the other side of the coin of the “proletarian mind”; since dispossession has two faces, that of the dispossessor and that of the dispossessed. Both such types’ minds are divorced from the profitable, socially useful, family and community-based paleoconservative capitalism – that ability to create and store wealth – which humans were fortunate to discover at the start of the Neolithic Revolution.

I hold that, along with the advent of authentic religion, good, high trust-horizon capitalism is a large part of why humans are now able to form much larger group sizes than they could back in the Paleolithic or Mesolithic. This enhanced group size is usually called “society”.

Without profit and the ability to store some wealth (i.e. without property) there cannot be a people and so this is the essential format of capitalism, albeit greatly modernized, which needs to be defended, preserved, promoted and distinguished from (i.e. understood to be quite distinct from) the several parasitic forms of capitalism now extant and presently particularly flourishing; which latter forms are characteristically innovative, dis-possessive, hyper-wealth concentrating  and trust-destroying. Parasitic forms such as ponzi, casino, crony, disaster, offshore and much of derivative capitalism European society now needs to carefully rid itself of. I say “carefully rid”, for care must be taken that the riddance itself be good; that is made without resorting to presumptuous, excessive, or cruel measures.

Note that OBA’s monies can help maintain citizens’ trust levels during the necessary surgery to de-parasitize and de-ponzify European financial systems. These surgeries may be long and difficult.

Philosophy and Power in Practice

The great policy temptation during a period of crisis is to believe that “the solution” requires the application of even more concentrated power – extra powers usually to be grasped and applied by the state. The Black Arrow initiative however is a solution based on quite the contrary premise and should have the effect of somewhat re-empowering (by debt-destruction and/or individual re-capitalization) the many citizenry of Europe. Its tendency is towards the desirable re-privatization of  both the individaul EU citizen and, importantly, of the family. OBA’s action is to be that of slightly diluting and distributing wealth and power from both the state (and super-state institutions such as the EU and the ECB) and from the rich; the rich both in their human form, and from the corporations who, being fictitious persons, do not get, and indeed are not intended to get, the primary benefit from OBA. Socially useful corporations will however naturally really benefit from the restoration of economic confidence within society.

As such OBA is in accord with one of the EU parliament’s own excellent guiding principles: that of “subsidiarity”. Subsidiarity is of course the name of the principle that seeks to solve any given political problem as far down the power ladder and as close to the “grass-roots”, who are the citizens themselves, as is humanly and practically possible.

I do not think that OBA raises the power levels of the ECB improperly, since all Euro monies are anyways created by it at source. Besides, immediately upon creation, the monies are intended to be distributed…given away to the citizenry and scrupulously invested in the EU area economy.

This pamphlet advises that one of the best attempts to solve our current debt-crisis problems is to employ the philosophies of republicanism and distributism in creatively designing and ruthfully implementing a publicly visible high-subsidiarity debt-destruction event, the fruits of which should be spread, not just amongst the property-price distressed Irish or just the citizens of the other so-called “marginal” economies being named as Greece, Portugal, Italy and Spain, but bravely amongst all the EU’s citizenry as befits the action of the great egalitarian and optimistic project that is the European Union.

Thus under Operation Black Arrow, the prudent German mortgage-holder’s prudence is rewarded by a write-off of €x,000, just as her cousin, the less prudent Irish mortgage-holder (likely now “underwater” in negative equity) is thrown a life-belt worth €x,000 and their non-mortgage holding French cousin is also beneficed to the same amount. So OBA gets around both the problems of moral hazard and that of state-sponsored favouritism by scrupling (as far as is possible in practice) to be truly egalitarian.

Cost

There is the matter of the “cost” of this OBA proposal. Well, as the money is to be created out of nothing, in what I am suggesting is really a strange sort of spiritual “ritual”, the cost is simply stated: It is nil.

I am not an economist, nor even a statistician, and I would welcome those professionals’ accurate estimates of the large amounts of money needing to be created. My own very “back of the envelope” estimates are contained in Appendix #3 and based on a high “x” -Ireland relevant- value of 50.

Europe is a commonwealth, that is to say we are all of us -together- wealthy indeed. The “cost” of OBA is the partial dilution – by the mechanism of quantitative easing – of the wealth held by the many wealthy , and the re-distribution of that part of the wealth amongst all of the citizens of the European Union, including the wealthy.

OBA does not impose a “cost” upon the wealth that we have accumulated in, and inherited from, the past; that commonwealth stays the same. The actual operational cost of OBA is utterly tiny but, for the wealthy, it does effect them with the cost of a modest loss, not of capital but of wealth. I suggest that this (somewhat disguised) loss by dilution is likely to be more than compensated for everyone (even for, or perhaps even especially for, the very wealthy) by the ensuing gain in EU-wide trust-horizon expansions.

Most importantly OBA does not impose any cost upon the future, even though I suggest that the pension’s part of the OBA initiative continue into the future, OBA’s action shall always be the (slight) dilution and (scrupulous) distribution of wealth in present time.

In OBA the inherent problem at the heart of our money system (the fact that, since monies are initially just symbols created by an elite priesthood, there is a temptation to create too much unvalourized money as credit/debt); this very problem is used to form and become the solution.

Knowing this, instead of pursing financial “solutions” which involve loading future generations with debt, OBA can be a gift –a “present”- made to the future from we who are in the present and shall (soon enough) be in the past.

Notes on the Nature of the Universe

If we believe a priori that we live in a universe (rather than “a” multiverse) then modern physics (specifically relativity theory…when integrated with quantum theory) informs us that, in the universe of space-time which we inhabit, only the present and the past really exist. Like far distant galaxies, the past exists but is very, very inaccessible.

At the other end of the scale, in the realm of the very very tiny, quantum mechanics demonstrates that the universe of the present moment is collapsing “ex-nihilo” out of quantum uncertainty. Even though the present moment has been moving towards the future at the rate of sixty seconds per minute for nearly 14 billion years now, and can indeed be very reliably expected to continue doing so, crucially the future itself does not exist – except in the mental models we humans construct of it, which are all, at bottom, fantasies.

Quite unlike the publicly visible, retrospective and retro-connective priestcrafted ritual at the heart of Christianity, which, in its astonishing materiality, respectfully remains within the limits of space-time reality, the spiritually audacious and future-directed priestcraft involving credit/debt creation at the occult centre of the modern financial system has succeeded in attaching huge and extractive fantasies concerning the future upon the many people. Representatives of the financial system are now insistent these fantasies must be – and be made become – true, irrespective of present reality as people are living it and, indeed, of what science informs us about the nature of the reality that is the space-time universe itself.

At NOOBA the opportunity exists to at least partially dis-empower and falsify the extractive future-directed techno-fantasies of our excessively monetized modern world. In doing so, OBA can perhaps even help a little to re-orient the citizenry away from fantasy and towards the lived reality of the shared heritage that is Europe and the wondrous reality of living in present creation.

In conclusion, may I thank you for taking the time to read this long document, and to recommend the implementation of Operation Black Arrow.

© Stanislaus Reynolds, Cork, Ireland, originally posted 2^nd November 2011

E: battyoldseadog”#”gmail***com

Note: my e-mail is disguised for anti-spam purposes. Just replace the“#” symbol with “@” and put a dot where the three stars indicate.

Footnote:

I wrote up Operation Black Arrow in September of last year (2011) while holidaying at the Cove, in Baltimore, West Cork (thanks to the generosity of the owners of a holiday home there). Writing was “helped” by the fact it rained a lot that fortnight. I posted it online last November with 1^st January 2012 as the original suggested “NOOBA”. Later, a few months ago now, I learnt that the Cove was the very site of the raid by Algerian pirates in the 18thC. That I found a little ironic as Operation Black Arrow is intended to strike against against some of the economic consequences of those whom I call “The Pirates of Ponzi-Finance” (with apologies to Messrs Gilbert and Sullivan of course). For a time I considered re-naming the project “Operation Baltimore”, not least because I have learnt that in the history of the Israeli Army there also is an Operation Black Arrow; but also, after a year of it languishing unread on the internet, to help it “come ashore” so to speak..

BIBLIOGRAPHY

Capitalist Realism: Is there no alternative? By Mark Fisher (Zero Books 2009) Useful for helping the reader understand the tremendous grip contemporary capitalism has upon our abilities to “imagine reality” so to speak.

Ecology of Money, The, By Richard Douthwaite (Green Books 2000) A useful and unusual book about money and money-creation.

Growth Illusion, The, By Richard Douthwaite (Lilliput Press 1999) I was fortunate to buy the first edition of this book the week it was published back in 1992. It served to alert me to some of the dangers of a credit boom and emboldened me to resist same during the long -and to my mind quite dreadful- “party” .

Orthodoxy, by G.K. Chesterton, (Dover Publ.) Since I am advocating type 2 Euros in the text above with a higher level of moral governance, this  is the relevant text for establishing why we need orthodoxy. Everything that Chesterton wrote is uncannily superb and this text is particularly relevant.

Parasite Rex: Inside the Bizarre World of Nature’s Most Dangerous Creatures by Carl Zimmer (Simon & Schuster Ltd; New edition edition 14 Jan 2002) Biological systems are very prone to parasitism and so it seems are other systems – such as religious and financial systems. This book provides a very good introduction to the topic at the biological level where it -and we- all started. The importance of the matter can be gauged from the likelihood that sex itself evolved primordially and primarily as an anti-parasitic response to this systemic problem back in the Precambrian (c. 1,400 million years ago). Sexual reproduction itself and all it has wrought upon the Earth since the Precambrian is “merely” a system-artefact of the immensely ancient need for anti-parasitic response! Albeit a response that has proved to be highly consequential; including as it does now amongst its many, many earthly consequences both the author and the reader.

Servile State, The, by Hilaire Belloc, Published back at the very start of the 20th Century, this remarkable book foresees pretty much exactly the sort of capture of modern states by the financial sector that we have in fact just recently seen for real. Ironically, Belloc thought such an event unlikely in Ireland, on account of the land redistribution that had just then been achieved under Gladstone. Given that the bankers are now ultra-reliant on state capitalism, I sometimes quip that Ireland is now a “Marxist-Lenihanist Servile State”. The text of Belloc’s book can be downloaded for free from Project Gutenberg on the www.

Shock Doctrine, The: The Rise of Disaster Capitalism, by Naomi Klein (Penguin 2008) A very complete examination of one form of dis-possessive capitalism, the philosophy behind it and the tactics employed by its proponents.

Sins of the Father: Tracing the Decisions That Shaped the Irish Economy by Conor McCabe (The History Press Ltd; 1st edition Jun 2011) I have read several books purporting to be popular histories of the Irish economy in the wake of “The Last September” (with apologies to Elizabeth Bowen). Most all of the books suffer from the tendency to personalize and/or nationalize almost everything and the authors spend a lot of time describing who went to school where and in what restaurant so-and-so was inclined to dine -and with whom. Or else how “we” are all in a debt-crisis etc. I.e the authors are unable to escape he Irish/RTE/Dublin 4 dialectic (which is really no more or less than the dialectics of interested gossip alternating with those of a ‘useful’ nationalism). No serious historical or system-analysis occurs at all in such books. This book is the one that is not like the others I have read in these regards. Do you know that not a single golf club or posh Dublin restaurant is so much as mentioned between its covers! Instead of treating us to extensive descriptions of important individuals and their large personalities adn how they interact with similar others, this evidently hard-working author restricts himself to describing Ireland’s economic and political history as unembellished system-reality.

Treasure Island, R.L. Stevenson This utterly marvellous book warrants recommendation for all students of that treacherous part of human nature which may be described as “piratical”. For boys this is the best sort of boyish book; for adults it is -or should be- a frighteningly adult book. It is also useful here for providing possibly the best, most palpable, example of a trust-horizon collapse (the one that happens aboard ship as Jim Hawkins listens in the apple barrel). Direct metaphorical comparisons with events in Ireland in 2008 of course need to be taken with a grain of salt – For example, on-board the Hispaniola the pirates lodged forward of the mast. Ah yes, how it resonates, here for example is Ben Gunn speaking: “Flint. Ah, he was the man to have a headpiece, was Flint! Barring rum, his match were never seen. He were afraid of none, not he; only Silver—Silver was that genteel.”

Treasure Islands: Tax Havens and the Men who Stole the World, by Nicholas Shaxson (Vintage, Jan 2012) A useful book for alerting one to the vastness of the realm of offshore finance and the particular -and particularly ancient- power of the Corporation of the City of London (e.g. the Queen literally has to wait for them!). Shaxson’s thesis that the British Empire has “faked its own death” is surprisingly convincing.

APPENDIX #1

Below are some other “operations”, specifically to help the economic and political situation in Ireland. Ideally, they would be implemented soon after Operation Black Arrow. However, unlike OBA they can all be done by the Irish Government and people without recourse, or further recourse to, the ECB’s magical ability to create money. Rather than waiting for others to fly in by rescue helicopter, if our government is willing to utilize the coercive apparatus of state to that end, Ireland can do a lot to effect self-rescue.

For Ireland in fact still has a tremendous lot of sovereignty…if we choose to use it. The “operations” below largely achieve amelioration of Ireland’s economic difficulties by mimicking several of the beneficial effects of an inflation, such mimicking being needed now since we do not have sovereign recourse to the normal means of creating inflation – an Irish central bank’s money-printing press. Like inflation such operations are unfortunately likely to be unpopular, with both the wealthy and the worker.

This Appendix is A Work in Progress….More Details To Follow
Headings:
Operation Wyckham-Gladstone – ..
Operation Plata

Operation Carbon Sabbath

Operation Onshore
Operation De-peak
Operation Decimation

APPENDIX #2:

THE PROLETARIAN MIND – AN ESSAY BY HILAIRE BELLOC

The small owner of old days—farmer, craftsman, boat-owner, storekeeper—was a truly free man. He possessed the instruments of his livelihood, no one could take them away and so take away his livelihood with them. He thought as a free man. He estimated his well-being in terms of property. He did not think of property as the privileges of a few, or as an unfair advantage: he thought of it as a natural condition of life, enjoyed by most citizens. He inherited property—especially his house and land. He left it to his children. When he made a contract freely with another free man, he felt bound to observe that contract and felt it no grievance that the other party should require him to do so. He took his share of the public burden, paying, out of his own money, certain sums for public purposes; in those days sums small compared with his total earnings. It was natural that he should help to decide with his fellows how public funds thus formed should be spent. So the whole democratic system could work easily and well. His labour enriched him. It paid him to be a hard worker. If he was slack in his work he was blameworthy, not only in the eyes of his neighbours, but in his own eyes. Such men forming the most part of the commonwealth gave society its tone and spirit. Those who were not owners could become so by saving and, after serving other men, could become independent in their turn. Society was inspired politically by the Free Mind, which is in harmony with man’s nature: for all men have Free Will. But when this free man sank to be a proletarian, deprived of property, wholly dependent upon a wage, his mind gradually changed. At last he became a man with a proletarian mind. To the proletarian mind work is an evil, a burden wrongfully imposed by another. The proletarian knows that his work enriches not himself but somebody else. He cannot, by saving, in a proletarian society, acquire independence as a small owner: for in a proletarian society the small owner is ruined. An exceptional man can rise out of the proletariat into the privileged owning class, but he does so at the expense of his fellows. The mass of him can never be other than proletarian, or at least the proletarian mind gets into that mood and is fixed in it. The proletarian mind feels every incentive to spending what it earns and no incentive to saving, just as it has no direct incentive to work save for the necessity of keeping alive; and livelihood which is, in social justice, no more than his due, is not the product of his own choice and effort, but is doled out to him by another. His ideal can only be to get as much as possible for as little effort as possible. In pursuing that ideal his capitalist master sets him the example; for the owners who in a capitalist state (that is, a proletarian society) are a privileged minority.

They live by profit and by obtaining as much as possible for as little effort as possible—often with no effort beyond the gambler’s effort. The proletarian mind is not conscious of duties to the commonwealth, save, still, in one particular, that of patriotism; and even this is growing weaker with the proletariat as proletarian conditions grow more hopelessly permanent. Far worse spiritual consequences follow. The proletarian mind loses the sense of home for a proletariat has no roots. It drifts from place to place. Its habitation is “the labour market.” It inherits nothing and has no hope of handing on anything to posterity. To tell the plain truth, the proletarian mind despairs. So do the minds of its masters, for the evil we do to others bears fruit in ourselves. The proletarian mind cannot but fall into hatred of its oppressor and that hatred is enhanced by the contempt of which it feels itself to be unjustly the victim. In such a mood how it is possible for men to enjoy leisure, to keep their sense of beauty and to exercise the Arts? The whole thing is inhuman. Meanwhile, the privileged owners live in dread of falling into the proletarian condition. That catastrophe lies before them on every occasion and this dread affects especially those who think wrongfully to benefit by the sufferings of their fellow men. The proletarian mind easily adheres to the profession of democracy. It will acclaim leaders who talk of democracy. But it is incapable of democratic action. It has forgotten what it was to be free. That is why modern industrial capitalism, as it is called (but we know that its true name is “proletarianism”) more and more in one country after another accepts a despot and under whatever name the despotism is labelled looks to it for its salvation from its misery. There as never been such a mood before in the history of the world and of its nature it cannot endure, but in passing it may breed something worse still. Never before has there been a social system based upon destitution combined with political freedom: upon free citizens, lacking economic freedom. Note particularly that the worst feature in the whole affair is the lack of human bonds. To a man who has not experience of anything but the modern social injustice and who is filled with its bitterness, the strength and value of a human bond, of loyalty, affection, neighbourly custom between the poorer and the wealthier man can mean nothing. But to those who have experience of such human bonds, they mean everything. It is not too late now to attempt a restoration of the old loyalties and personal contracts and long domestic familiarity which humanized and modified and made tolerable the older inequalities among men. When we come to speak of restoring better things we shall not begin by taking the proletarian mind for granted, we shall rather begin by aiming at destroying that mind and substituting for it conditions of economic freedom and the free mind of the free man.

APPENDIX #3:

THE “COST” OF OPERATION BLACK ARROW – Where “x” is assumed to be “50”.

About 5,250,000 persons celebrate their 70^th birthday in the EU each year; so the simplest way of describing the on-going cost for OBA each year is just to look at the escrow pensions initiative where 70 year olds are granted €50,000 on their birthday. For simplicity we can assume all 70-year olds get these monies (i.e. that the mortgage write off at NOOBA does not occur) and the figure needed is about €265 billion per annum. This is about 2.2% of the GDP of the EU27 area and would need to be created by means of quantitative easing by the ECB every year into the future. Thee “true” long term cost of OBA is a modest inflation caused by this process, which can itself be beneficial to the wider economy since inflation tends to assist the retirement of debt and hence to gradually “forgive” persons who have made the error if overly indebting themselves. The main social danger of inflation is that it tends to erode the prudent citizens’ life savings. However once again here OBA is taking this problem and making it the solution. The monies that are created for OBA, being inflationary, are a type of tiny wealth tax that is very hard to avoid “paying”, yet the “tax” monies (which are created rather than collected) are specifically targeted precisely at those most at risk from inflation – the elderly.

Costings are not quite as simple as implied above because of two effects: At NOOBA, a lot of these future costs are front-loaded by the mortgage debt-destruction event and also by the pensions suddenly needing to be paid out for those already over 70 at that date. The figure of 265 billion is thus added to by the need to provide pensions for those already over 70, but conversely is also actually reduced -by about 18%- for years subsequent to NOOB by the front loading of the mortgage destruction effect.

There are 503 million persons in the EU of whom about 420 million are adults. Of these about 65 millions are over the age of 70.

For the 355 million adult citizens, who are under 70 years old at NOOB, about €18 trillion “Type 2” Euro will need to be created ex-nihilo on that night. This is 165% of the EU’s entire GDP for 2010! The majority of these vast OBA monies are however held long-term in escrow by the ECB. Such monies are psychologically “present” for the citizens reassurance (in their ECB escrow bank accounts) but not actually trade-ably present in the real economy at all. In fact, as “Type 2” Euros it is to be made illegal to financially refer to these vast monies at all, their existence is purely psychological…until a citizen’s 70^th birthday.

The portion of these Type 2 monies actually needing conversion to Type 1 Euros at NOOBA for the purposes of the mortgage debt write off appear to be between 2 or 3 trillion Euro. This is a once-off input of Type 1 QE monies which the banks are to be compelled to accept and put against citizens’ residential mortgages. The other 15 or 16 trillions remain as “Type 2” in the virtual reality of the citizens ECB escrow bank accounts and are “only” in existence as a trust restoring promise to be paid at each citizen’s 70^th birthday, when they will be actually “really” created into pension tradeable-able Type 1 financial reality…at the rate described above of about €265 billion per annum in the long term.

Since approximately 65 million persons will be already over age 70 at NOOBA, additional monthly sums will also have to be paid to them, “as if” they had been given €50,000 historically on their 70^th birthdays. This is a start-up cost and compensates the elderly for being born too early to have their 70^th birthday post NOOBA. Actuarial calculations are called for here and I am not an actuary. I reckon that they should receive about €400 per month or a little more, which is an additional cost of €312 billion per annum. This cost “lasts” for the next 9 years. I say “9 years” since the average lifespan in the EU27 area is 79 years. As explained above, OBA thus provides almost every elderly citizen with a financial buffer against the oftentimes difficult contingencies that may well be encountered in the last decade or so of life.

All these monies are to be created each year by quantitative easing performed by the ECB.

These OBA monies are quite enormous but, for purposes of comparison, at the end of 2010 the world’s derivatives market (most of which market is of very dubious social utility indeed) was “worth” €424 trillion – that’s 10 times the world’s GDP (Source: International Bank of Settlements 18^th May 2011). This is where the occult (i.e. hidden) priest-craft of credit/debt creation has surely been practised at its most utterly reckless. Even the “expensive” mortgage debt-annihilation part of Operation Black Arrow is most unlikely to involve the creation of more than “just”1% of the enormous monies that have already been created by the international banking system to fund that most peculiar and fabulously esoteric entity, the “international derivatives market”.

Query: Which money-creation operation has the higher social utility: the derivatives “market”? (evidently a sort of inscrutable global casino involving the less understandable quadratic equations) or Operation Black Arrow?

I suggest the answer is Operation Black Arrow, which can fix at least some part of the problems caused by excessive credit/debt-creation and, as described above, is also likely to have numerous other protective and emergent benefits to human society in Europe and beyond.

The After-Glow of After-thought…A.K.A. The Sentance-dump:

The future is frugality and this is a good thing – a true republic is a frugal institution where a wonderful freemasonry of association becomes (again?) possible.

Unaffordable Shelter: The Pill-House and the Affections

As well as tackling the debt-crisis, anti negligent lending laws could also be employed to intentionally and durably “reset” house prices to rational and affordable levels across the EU. Lower more rational shelter costs would greatly enhance working EU citizens ability to work-share, take sabbaticals or extended leave for the purposes of raising young children etc. Unemployed persons would then be taken on to “fill the gap” caused by their absence so that, paradoxically, by deliberately “resetting” credit/debt at a permanently lower level, and thus lowering shelter costs, an ameliorated economic and social climate can be anticipated post-NOOBA .

A “radical” ideal here would be to use the coercion of the EU states apres NOOBA to return average house prices to rational affordability based on one average

worker’s wage; that is to say to the condition that pertained prior to the invention of female-controlled contraception, the arrival of which technology permitted the financial industry (for the first time ever) to reliably capitalize-up (or “mortgageize”) the future-earnings of sexually active human females. This novel mortgage-burden was then added to that based upon the earnings of their mates and husbands.

So I am suggesting here that one of the many profound social changes that followed quite swiftly in the wake of the new and unexpected technology of female-controlled contraception (more usually known as -and somewhat verbally trivialized as- “the pill” ) was that it gave the financial credit/debt-creating system the ability to approximately double the real cost of shelter for “first world” human populations.

The other remarkable emergent technology which has also facilitated the craft behind excessive credit/debt creation is computerization, together with the ability to globally interconnect such automatic counting machines into huge data-filled networks. This provided financiers with a powerful model of the future, a techno-fantasy whose core parameters have been falsified.

We are, for sure, now enthrall to a new set of priests and their fiscal priest-craft. Yet remarkably the deep irony of the statement made by Professor Dawkins to a meeting  (recently held in the very shadow of the Irish Financial Shenanigans Centre) in Dublin: “The number of priests is declining beautifully!”, was I fear as entirely lost upon his cheering audience as it was likely to have been lost to the professor himself and many in the population at large. For, in truth, in all our history we Irish may never have been so very subject to priestcraft as we are right now.

But, I digress. This proposed resetting to single-earner mortgages is a worthy ideal, likely to enhance human life-experience by the reduction of fiscal stress and the provision of options for leisure, particularly the necessary leisure for the mothers of young children in the first and most formative years; that fleeting and irreplaceable period when a mother may choose to either be “something to everyone or everything to someone” (G.K. Chesteron).

That modern feminism, while speaking of the importance of “empowerment” and choice has permitted circumstances to arise (and arise on their watch) which now damage (i.e.”disempower”) so very many women’s ability to make this ancient choice is yet an irony of our age. Because Ireland has had such a huge property “bubble” this matter is, to my mind, particularly evident here.

Despite widespread beliefs to the contrary, the ideal of re-normalizing housing markets to single-earner mortgages is in fact achievable and the debt-crisis provides an unexpected opportunity. To start getting towards there will however require that the variable “x” described above be set suitably high and that correctly set laws of tort against negligent lending precede (or immediately follow upon) NOOBA with the intention of permanently lowering shelter costs for home-owning (and thus by economic contagion also home-renting) families.

© Stanislaus Reynolds 2012, CORK, IRELAND

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