Pim Fortuyn on 4 May 2002, two days before his assassination

Troubles in the Multicultural Society

nivtricLeave a comment

Balls on the ground

The Netherlands has been one of the most liberal countries in the world. The country has a long tradition of tolerance dating back to the Dutch Republic. It was also a fairy-tale society, with Van Kooten and De Bie seeking the nuance. Their characters represented the so-called conservative, ignorant and xenophobic undercurrent in Dutch society, and also hustlers, such as Jacobse and Van Es, infiltrating politics with their corrupt schemes and dubious deals. That undercurrent didn’t go away. Instead, it grew stronger as immigrants continued to arrive, causing increasing unease. The progressive values many Dutch cherished didn’t agree with the conservative worldviews of many immigrants, most notably Muslims. And then there were the crimes and misconduct of particular groups. These feelings needed a catalyst to give the discontent a voice. The existing political parties had become complacent and didn’t see what was coming. Nor had I.

After the terrorist attacks of 11 September 2001, a maverick politician, Pim Fortuyn, rose to prominence with his strong views on immigration and Islam. Fortuyn claimed that leftists were to blame for immigration. He called them the Leftist Church for their moral superiority claims, who would call you a racist if you opposed immigration. There is a lot of racism, but it was not the reason why the movement gained strength. Many Dutch people desired to limit immigration, most notably of people who had trouble adapting. Only, no politician raised the issue the way Fortuyn did. The others were careful not to promote division. Most immigrants did okay, so inciting hatred would destroy society, they reasoned. Keeping a good society is not a simple affair. It is like juggling several balls in the air. Fortuyn didn’t seem to care and sought personal fame. And he believed that allowing immigration to continue would make it harder to maintain a good society.

Fortuyn attacked the fairy tale of the multicultural society and called it a failure. I had believed in it or wanted to believe in it. If there is ever to be world peace, the world must unite and become one multicultural society. Living with people from different cultures isn’t easy and can go wrong easily, and I knew that from what had happened to me as a student. Culture can be an unbridgeable gap. Yet, you could live separate lives as long as you don’t cause trouble. Some Fortuyn supporters seemed to anticipate civil war and hoped that it would start sooner rather than later, when the authentic white Dutch were still a majority. The atmosphere quickly turned grim. Under the guise of free speech, the sewers opened, and the rivers of hatred flooded freely into the open. Fortuyn’s rise made headlines in the international press as it represented a clear break with the past, occurring in what many believed was the world’s most liberal country.

Having lived in neighbourhoods with ethnic minorities myself, the picture the fascists presented differed from my personal experiences. Add to that that I had been the subject of bullying and random violence, so that harassment complaints didn’t particularly impress me at first. Your life is normal for you, and if others make a fuss about what you think is normal, you might see them as a bunch of whiners. So, my initial belief was that it was mostly bigotry, racism and hatred, making me think that people would calm down over time, and that reason would prevail. A leftist poster with the avatar Kingie launched a new website, BeursKings (MarketKings), with help from Danger Money, who programmed it. A small group left IEX and joined the new message board, including me. BeursKings remained in operation for several years. Kingie once posted photographs of himself. That was a shock. He looked like my double. In hindsight, that is remarkable because of his avatar name. Others who remained on IEX also joined the BeursKings message board. I was part of the so-called Leftist Church and had tried to rein in the bigotry. One of the IEX posters once called me ‘vicar’ for my moralising.

Somehow, I had come into his crosshairs. He had a high regard for himself. A spectacular profit he had made on a semiconductor stock might have made him think he was a genius. The Dot-Com bubble led some people to believe, for a while, that they were stock-market legends, beating investment gurus like Warren Buffett, until the bubble imploded. My investment returns have never justified those kinds of ideas, but I could write stories people liked to read. This guy was a physicist working in a laboratory, or so he once wrote, and a Czech, a relative of Franz Kafka, he further confided on the message board. He thought that his excellent investment results came from ‘observing the herd and anticipating where it would go next’ rather than from luck in picking a winning stock. He was eager to pick on me, but when I returned years later to IEX, he praised me for identifying interest charges on money and debts as a root cause of financial collapse.

Shortly before the 2002 elections, a left-wing loner assassinated Fortuyn. Fortuyn had hinted at that possibility. If something were to happen to him, he claimed, it would be because establishment politicians had demonised him. The socialist-in-name-only Marcel van Dam, who lived in a luxurious mansion far away from multicultural neighbourhoods, and who had always been eager to take the moral high ground, once called Fortuyn an ‘exceptionally inferior human.’ And so, you may ask yourself, which of the two was the most superb Nazi? Fortuyn gave a presentable at-your-service salute that might go well in some fascist circles, but his ‘inferior human’ remark gave Van Dam an edge.

The Dutch secret service AIVD found that Fortuyn likely had sex with underage boys, including Moroccans. Others called Fortuyn ‘extreme’ or ‘demolishing society’ because he was stirring up public sentiment, which might lead to violence against minorities. Fortuyn was a man of theatre, hyping the wrongs that others did to him while being a jerk himself. The Netherlands is not a violent country. It was the first political assassination in 400 years, so no one saw it coming. The civil war didn’t arrive, but death threats to politicians have become common. The attitudes toward immigrants and Islam have also changed. Fifteen years later, the United States saw the rise of a similar leader, and they are more alike than most people think.

Fortuyn’s assassin, Volkert van der Graaf, was diagnosed with Asperger’s syndrome. He was someone like me. To him, Fortuyn may have been a new Hitler on the rise. He feared Fortuyn would tear down Dutch society so that the weak, such as the poor and refugees, would suffer, and also animals, as he had been an animal rights activist. Van der Graaf drew a logical conclusion from the facts, or so he believed. The problem with this kind of thinking is that we don’t know the future. Van der Graaf had good intentions, but Fortuyn also believed he was serving the Netherlands. Yet, there was something sinister about Fortuyn. I am not a trained psychologist, but Fortuyn was someone who wanted to be the centre of attention and wield power, and didn’t care about the consequences of his actions, much like Donald Trump.

Harry Mens, a Dutch real estate tycoon whom you might call the Dutch Donald Trump, had promoted Fortuyn on his television show, Business Class. So, like Trump, Mens had a television show. Fortuyn’s appearance on his show foreshadowed a new type of politics, common in the United States but not in the Netherlands, in which wealthy moneymen fund the politicians. I found Mr Mens to be a questionable character, who boasted and flaunted his wealth. At the time, I didn’t think of Trump, but there are parallels. His programme was about investments with people in suits and dresses promoting their investment services. A few advertisers on his show turned out to be frauds, such as Palm Invest.

I see Pim Fortuyn and Donald Trump as narcissistic psychopaths. These are not official diagnoses, but personal impressions. However, I am not alone. Some psychoanalysts concluded that Fortuyn was a narcissist, possibly because of feelings of inferiority that he needed to compensate for with praise. It was all about him, and other people were just utensils. His neurotic disturbances and unresolved personality flaws made Pim Fortuyn such a powerful force. One psychoanalyst said, ‘Imagine if he had to go on a state visit to US President Bush. He would exhibit Sun King-like behaviour.’1 To Fortuyn, the US President would have been a mere extra in the Pim Fortuyn show. Even though the psychoanalysts didn’t raise that particular issue, Pim Fortuyn seemed to enjoy hurting other people’s feelings, making me think he was a psychopath as well.

If you consider the characteristics of narcissistic psychopaths, you might discover they are the opposite of Asperger’s syndrome. I name a few: (1) thriving on chaos versus thriving in order, (2) desiring to be the centre of attention versus not wanting attention or praise, (3) manipulative and lying versus honest and forthright and (4) charming versus impolite. At first glance, Fortuyn and Trump seemed impolite rather than charming. That needs further explanation. First, you don’t have to check all the boxes to be autistic or a psychopath. And second, the impoliteness of the autistic person comes from being honest. By being rude, Fortuyn and Trump catered to their supporters’ fear and anger. They told them what they wanted to hear. Still, I think that Fortuyn and Trump both believed that what they were doing was necessary. What can make psychopaths successful as leaders is that they are willing to hurt people, which may be required to do what is necessary. With these words, I conclude my psychoanalysis session.

Life went on

Beurkings also attracted a few posters who remained on IEX. They were the most colourful ones. One of them, Xzorro, didn’t believe the 9/11 conspiracy theories and thought that the success of the attacks was due to the incompetence of the American authorities. His conspiracy thinking took another direction. He believed the allegations that a high-ranking Dutch Prosecution official, Joris Demmink, had had sex with underage male prostitutes and that there was a conspiracy within the Dutch government to cover it up. An investigative journalist and conspiracy theorist, Micha Kat, had pursued the matter relentlessly for years. In the 1990s, there had been a police investigation into possible child abuse by four high-ranking government officials.

The investigation had collapsed after someone had leaked information. During raids, the police found no incriminating evidence on the suspects. Fred Teeven, who had led the investigation, later stated that Demmink had not been a person of interest in that investigation. The Dutch newspaper AD later claimed that Demmink had contact in the 1980s with a pimp of underage boys. Kat was onto something, but he may not have been right. He was also a nutcase. Kat later claimed that children buried in a Bodegraven cemetery were victims of Satanic child abusers, which was nonsense and easy to disprove. And Kat had a conviction for making death threats to a fellow journalist.

Another noteworthy poster on BeursKings, Gung Ho, who lived in the Dutch countryside, favoured traditional US conservatism and posted lengthy pieces copied from American conservative websites, including some claiming that US Neoconservatives were Leninist agitators. He enthusiastically promoted a penny stock, Clifton Mining, and believed that colloidal silver was a cure against many diseases. That made him the subject of mockery, most notably by Amoricano, an American of Dutch origin who had long been on IEX. Amoricano was a Democrat who ridiculed conspiracy thinking, quackery and pushing penny stocks. Gung Ho might have been in the military and had friends in the American military, or so his sparse remarks about his personal life suggested.

Gung Ho posted comments about the Neoconservatives in the Bush Administration being chicken hawks, so cowards who send others to war while having done no military service themselves. His use of language was odd, which made his lengthy texts amusing. The connection he made between Neoconservatism and Leninism seemed obscure to me at the time. Still, like the Leninists, the Neoconservatives use Hegel’s dialectic to promote social progress via revolutions and wars. The conflict between the West and Islam was their latest project, founded on the clash-of-civilisations ideology, and the Iraq War was one of its consequences. Traditional conservatives like Gung Ho opposed these methods.

There was also a psychiatrist on BeursKings. He had quit his job and tried to make a living by day trading. He posted under the name Kindval, a football player from the 1970s. He didn’t seem to like me. When someone attacked me personally or for my political views, he consistently upvoted these comments. He was usually a bit edgy and irritable, making me think that his life as a parasite didn’t work out so well for him, and he would have to work for a living again. I didn’t make those kinds of comments, so that was not why he disliked me. Once, Gung Ho went loose on him by suggesting he had psychological issues.

I upvoted that comment. It was a rare occasion for me to upvote a negative comment. Kindval became agitated about Gung Ho’s comment, but even more so about my upvote, which was particularly odd, as he had done the same to me several times before, never missing a single opportunity. That made me think that he was, as Gung Ho implied, on his way to a nervous breakdown, thereby confirming the prejudice of psychiatrists choosing their profession because of having mental issues themselves.

Fortuyn’s rise had made me curious about the troubles in the multicultural society. The fallout of my student years of not fitting in had made me interested in cultural issues. The multicultural society has to work because nation-states and tribes fight wars. So, what stands in the way of success? Is the gap between Islamic and Western culture unbridgeable? It kindled my interest in Muslims and their beliefs. And why is there trouble?

That led me to join the Maroc.nl message board for people with a Moroccan background in 2004. They are a disregarded minority. Most notably, young Moroccan men cause trouble. Some other minority groups have similar issues, but Moroccans receive the most negative attention. When the nationalist politician Geert Wilders singled out one minority for deportation, he chose the Moroccans in his infamous ‘fewer Moroccans’ quote, ‘Fewer Moroccans. Let us take care of that.’ Indeed, they have a serious likeability problem. The reason is conduct. When people complain about youths causing trouble, it is most often about Moroccans.

There is also a historical background. The Netherlands had invited poorly educated country dwellers to work in factories. They were Berbers who call themselves Imazighen, meaning ‘free people.’ They have a distrust of government. Among them were the pirates who made the Mediterranean and the Atlantic unsafe between 1500 and 1800 AD. Like the Dutch, they were engaged in the slave trade. As faithful Muslims, they only took Christian slaves, raiding European ships and coasts. The Dutch were sought after by these pirates because they were rich and could be sold for ransom. Over the centuries, their franchise processed over 1,000,000 slaves. As entrepreneurs, they were a liberty-loving people with hardly any government. Insofar as history says something about culture, here is a possible reason why men from North Africa often cause trouble. In Morocco, the Berbers have long been secondary citizens in a country dominated by Arab culture. That came with brutal repression. Today, the Moroccan government recognises their culture and language.

The Dutch expected that these ‘guest labourers’ would return home and initially didn’t invest in their integration. Yet, most didn’t return because they had stayed for decades and had raised families in the Netherlands. They were denied opportunities, for example, by receiving advice to pursue lower levels of education than native Dutch with similar intelligence scores. Nordin Ghouddani, a man of Moroccan descent, and his Dutch friend Thomas Rijsman have been friends since primary school and are now both sports journalists. After primary school, Rijsman went to the highest level of secondary school, VWO. In contrast, Ghouddani went to a much lower level, LTS, despite having the same score on the test used to determine the school level. And Ghouddani had Dutch friends and had integrated. He explains,

Yes, you get torn away. I could become a car mechanic, the teacher said, and my father, for whom I had to translate that, thought that was a great job. But I was butterfingers. And that teacher knew. I wanted to go to the school where Thomas and all our friends went, but I was the only one who wasn’t allowed to do so.2

No surprise, then, that many Moroccans felt like outsiders and disrespected by the Dutch. They were contemned. I remember an aunt once telling me, in the 1970s or 1980s, that she had invited Moroccan children into their home to play, perhaps as friends of one of her children, and that it was the first time ever the Dutch had invited them into their home. The precise reason remains unclear, as integration means adapting to the surrounding culture to become accepted. In any case, many youngsters found their way into gang culture, where they felt respected. Their culture of distrust of authorities adds to the problems. It is mostly youths who misbehave. Most change their ways as adults, while the remainder end up in organised crime. But by then, a new generation of troublemakers has arrived.

No gain without pain

The issues Moroccans in the Netherlands face, and how they relate to society, compare to those of blacks in the United States, even though blacks in the United States do identify as Americans. The message board was open. Everyone could join. It featured discussions about religion and social issues. Various people shared their opinions and discussed them with one another. People came and went on the message board over the years. I have been on it for two decades, not every day, but regularly. Occasionally, there were heated exchanges, with Moroccans complaining about the racism of the Dutch and Dutch complaining about the misconduct of the Moroccans.

As far as the size of the problem goes, in most groups, 80% to 90% of the people check out okay. Of the remainder, a smaller group are criminals. Some newcomers have trouble adapting, so many of the first generation may end up unemployed. The next generation usually does better, but still lags behind. And people who come from warzones or unruly areas dominated by warlords and gangs can bring with them psychological issues or a culture that is problematic in a civilised society. Most people are okay, but culture strongly influences how the remaining behave, and in that sense, Moroccan troublemakers stand out negatively.

What Moroccans call racism is often discrimination or cultural criticism. Criminals complain about the police and may use racism as an excuse. Yet, research has shown that discrimination is widespread. People with foreign names get fewer job interviews than those with Dutch names who have similar qualifications. Cultural groups favour each other. You have to fit in with the team. And hiring people from particular groups comes with a risk. Yet, that risk-avoidance also contributes to the problem. The issue is hard to solve, except by reducing differences, so that people mix more easily. And Muslims generally do not mix well with non-Muslims. Muslims are the least likely to mix with others.

Most people on the message board seemed okay. I never met them in person, but that was my impression. There were a few agitators from both sides, so Moroccans and Dutch, but overall, the discussions were insightful, thanks to the diversity of posters expressing their opinions. On the board, the moderators sometimes discriminated against the Dutch, who were banned for lighter offences than Moroccans. As far as discrimination goes, Moroccans are no better than the Dutch. Still, it was an open message board nonetheless, and in most cases, misconduct preceded a ban. Likely, the message board had received a grant and was obliged to keep it a safe space for a variety of opinions. There were Christians, Jews, Muslims, former Fortuyn supporters, and leftists. There were also gays seeking to counter the hatred of LGBTQ people because of street violence against them.

A Dutchman sometimes asked why Moroccans don’t openly distance themselves from fellow Moroccans who misbehave. A Moroccan would argue that he is not responsible for the conduct of others, and there is no reason to make excuses for what others do. He also doesn’t ask the Dutch to excuse themselves for the misconduct of fellow Dutch. So, here is a rant on Reddit on 1 July 2026 of a Moroccan fed up with the criticism of the Dutch,

It is driving me absolutely crazy. Yeah, congratulations on the win [of the football game], but it’s a shame you have to cause trouble again. Why do you think that is? Yeah, how should I know? I was in bed, and I don’t know those guys. I’m not going to ask you for an explanation just because your compatriots are blocking highways, rioting at the Malieveld, vandalising the town hall in Loosdrecht, and all the other things. Just leave me alone. I’m not doing anything wrong.

It is a fair point. The poster is part of the majority who do nothing wrong and have to put up with comments from the Dutch about their compatriots’ misconduct. A Jew also joined in, saying that he was fed up with having to account for the misconduct of the Israeli government, which he had nothing to do with and didn’t support.

I have read complaints about annoying individuals who demand respect up front before they accept you. One poster acted like a jerk to me for a considerable time, and for no obvious reason, so the only reason could have been that I was Dutch. That was until I upvoted one of his comments. From then on, he saw me as his best friend. To be fair, I have had a fair share of people acting like jerks to me for no reason, and they were nearly all native Dutch, so that doesn’t say much, but it fits a pattern others notice. A pattern means it is more prevalent in a group, so many Dutch people behave similarly, but on average, less often. Again, a psychologist might attribute it to an inferiority complex. He may have presupposed that I didn’t respect him based on the assumption that the Dutch hate him, which becomes a self-fulfilling prophecy if that belief leads him to act like a jerk.

Pride and honour mean less to the Dutch than to Moroccans. On a Dutch message board, I found the following observation: ‘Moroccan troublemakers have a macho attitude and a short fuse. They see criticism as a personal attack, and if they don’t aggressively go against it, their friends will see them as sissies.’ Young men can be easily provoked, but culture can rein them in. That may go a long way in explaining the issue. That conduct may come from an inferiority complex. They may feel disrespected. Like Pim Fortuyn, they act out hysterically. That attitude can make you hate them instantly. Yet, if you are a bit self-critical and less impolite, others will like you much better already.

Violence against LGBTQ people is one of the issues at play, as was violence against Jews. Some posters on the message board argued that native Dutch commit more hate crimes against LGBTQ people, which is correct because there are far more native Dutch. Likewise, you can point at football hooligans or drunk Dutch causing trouble abroad at holiday destinations. It is how you can twist the numbers, as the sophists did in ancient Greece. For problem-solving, this tactic isn’t helpful. If you do that, you make people angry. The sophists were unpopular, and it wouldn’t surprise me if angry peasants had hanged a few. Statisticians look at percentages of the population, which makes more sense.

Traditional Muslims are strict on religion, much like conservative Christians. They have more in common with each other than with liberals. So, why many liberals like Muslims, and conservative Christians dislike them, is quite an enigma if you reason from their beliefs alone. Terrorists usually are young men who seek meaning in life and find it in Islam, and then fall prey to extremist preachers. There aren’t that many, but a few hundred can already be a serious threat. During the first year, there was uproar over the Dutch publicist Theo van Gogh, who was indeed kin to the famous Dutch painter. Under the guise of freedom of speech, he called Muslims ‘goat fuckers’ and Muhammad ‘a pimp’. The people on the message board didn’t care much about being called ‘goat fuckers,’ but insulting Muhammad was a red line that genuinely upset them.

Several posters also expressed fury about the Somali lady Ayaan Hirsi Ali, who had left Islam for a liberal lifestyle, and had, together with Van Gogh, made the short film Submission about the suppression and mistreatment of women by Muslims. To Muslims, the film was blasphemous as it showed the bodies of abused women with Quran verses on them that the filmmakers claimed Muslims use to justify mistreating women. Hirsi Ali also had called Muhammad a ‘pervert.’ She faced death threats. The anti-immigration and anti-Islam politician Geert Wilders also faced death threats and requires security to this day.

Hirsi Ali had escaped an arranged marriage. The Dutch police prevented her family from abducting her from an asylum seeker centre in Almelo. She later moved to the United States to work for the neoconservative think tank. Van Gogh paid for his Islam-insulting binge with his life. A youngster of Moroccan descent slit his throat, precisely 911 days after the Fortuyn assassination. That was on 2 November, which refers to the European emergency services telephone number 112, the European equivalent of 911. So, in the first year, the atmosphere on the message board was tense.

Western interventions in the Middle East and Western support for Israel also angered quite a few people, and that goes a long way in explaining violent incidents against Jews. Islam itself, like Christianity, is not hostile to Jews, but Muslims and Christians can be, and Jews can be hostile to Muslims and Christians where they are the majority, like in Israel. Israel illegally occupied Palestinian land, and Palestinians kept on committing acts of terrorism. It has proven to be an irresolvable conflict. Several posters on the message board viewed the West, including the Netherlands, as anti-Islamic.

Some Dutch have argued that they are ungrateful, as the Netherlands provided them with a good life and freedom of religion. If it was so bad over here, why don’t they move to an Islamic country where life is better? I tried not to offend people with my opinions. At first, I was making up my mind anyhow. It is a conflict between two worldviews, each with its own logic and merit. And there were issues the mainstream media hardly reported on, so for me, as an outsider, it was hard to tell what was true and how serious it was. And the West was not morally superior. There is an underlying truth, whatever that may be, so I was not inclined to judge before having a clear picture of all the issues at play.

In the first years, the American gangster heist called the Iraq War was still in progress. For me, the Iraq War became an unexpected mental dip. The Americans had tricked me into believing that Saddam Hussein had a stash of WMDs, making me think that this war was necessary. Once I saw live on CNN how the bombs fell on Baghdad and how gung-ho Americans ran over the country’s defences, and murdered the defenceless Iraqis, with the Iraqi Information Minister vehemently claiming until the very end that there were no Americans in Baghdad, and that all American forces had been obliterated, my mood suddenly swung to dim. And then there were no WMDs. That was the year before I joined the message board. They had attacked a country and killed for no reason. Estimates of the total number of people killed range from 150,000 to over 1,000,000.

The Netherlands has been a major contributor to the American war effort in Iraq as well as Afghanistan. It doesn’t seem a coincidence that the Dutch Prime Minister Balkenende had praised the Dutch VOC mentality of the former Dutch colonial enterprise that had invaded and exploited the Indies under the guise of trade. The VOC was a bunch of gangsters. The United States had copied that proud Dutch tradition of the oligarchic merchant republic.

The oil revenue was supposed to pay for the invasion that the Neoconservative planners envisioned. So today, the United States has the VOC mentality. Shell was a Dutch company, so the Dutch had to be in on the action, or so Mr Balkenende may have reasoned, so the Dutch sent troops to Iraq and Afghanistan. That, and Dutch liberal values, explain, to some extent, the negative views about the West and the Netherlands among the Moroccans on the message board. Some may have used these issues as an excuse for their misconduct and crimes that they would have committed anyway. Some could get angry at you simply for being Dutch because they think they know what you think. Some came to the message board only to lecture the Moroccans about the backwardness of Islam or the misconduct of Moroccans.

That didn’t work out so well. You also wouldn’t change your mind when someone you have never met before came out of the blue to tell you how stupid your religion is and that your community is a bunch of criminals. The Israelis were also stealing land from the Palestinians with American support. As for the Israeli-Palestinian conflict, some Dutch would say that Palestinians keep on committing acts of terrorism, thereby challenging a much stronger adversary, and then whine about losing the fight and their land.

Three posters once wrote that they had been in prison. One of them posted from jail, so he had access to the Internet or a smartphone. They discussed the Dutch police. Some were racist, they claimed, but others were professional. There had been hundreds of contributors on that message board, so that says little, but not everyone would openly write about having been in prison, and it is illustrative of the prejudices many Dutch have. If, as the statistics suggest, crime levels in their community are three times those of the native Dutch. Some have argued that you bear no blame for other people’s faults. Still, if group culture contributes to these issues, the group itself has a problem. One of these problems is that the Dutch dislike Moroccans more than any other ethnic minority. It is not because the Dutch singled them out for no reason.

As the most hated child in the entire school, I have been there. My predicament was not entirely my fault, but I was part of the problem, and the only one I could fix was myself, not the others. And if you want to solve the problem, you’re better off fixing yourself instead of waiting for others to fix themselves. So, once the opportunity arose, I went for it. Some other minorities face similar issues, but Moroccans, more than other minorities, seem to have an attitude problem of not acknowledging their own faults and blaming Dutch society. There is a lot of negative sentiment festering among the population that the mainstream media hardly reports on. Negativity makes matters worse for those who do well, but it is harder to change opinions among the Dutch as long as there is a problem.

The Moroccans on the message board hardly expressed pride about fellow Moroccans who did well in the Netherlands, such as Ahmed Aboutaleb, the mayor of Rotterdam, who was popular among the Dutch and would have had a good chance of becoming Prime Minister if he had demonstrated that ambition, or Khadijah Arib, who became Speaker of the House. Some called them bounty, so brown on the outside, but white on the inside, hence traitors of their Moroccan identity by siding with the Dutch or accepting their values. The Dutch national football team features players from ethnic minorities, but not Moroccans, who prefer to play for Morocco, despite being born in the Netherlands and having grown up there. Hakim Ziyech is an example. Among the reasons he cited was his feeling more Moroccan than Dutch. That is an integration failure.

Bounty politics means that the Dutch accept diversity as long as the migrants accept Dutch values. The Dutch question the allegiance of someone with a Moroccan or Turkish background more than that of someone from Sweden or France, due to the greater cultural distance, so they would ask Moroccans questions they wouldn’t ask someone from Sweden or France. And whites in New Zealand wouldn’t ask such questions of the Maori. That is because the Maori were there before the whites came.

Most Moroccans do all right, but the minority that causes trouble is large and problematic enough to drag down the group’s image. That well-known guy with a tainted skin on a scooter, who regularly features as a suspect in crime reports, ranging from street intimidation, robbery, and harassing women, often comes from that particular ethnic group. One of the top three most notorious Dutch criminals, Ridouan T, is of Moroccan descent. And the pimps luring or forcing vulnerable girls into prostitution are regularly of Moroccan or Turkish descent. Behind that seems a lack of respect for non-Muslim women, whom they see as sluts, so fair game. That it relates to Islam rather than Moroccan culture is illustrated by evidence that Turks are also involved, and in Great Britain, Pakistanis, who are involved in rape gangs. Similar problems exist in other countries. Most Muslims don’t do these things, and it is a small part of the total amount of sexual abuse, but it is a significant issue nonetheless.

Another issue causing upheaval in the Dutch multicultural society was the tradition of Saint Nicholas, in which a long-bearded, centuries-old white man from Spain arrived with a group of black servants to deliver presents to children. For a long time, that was fine as it was an old tradition and there had not been slavery of blacks in the Low Countries itself, so the Dutch didn’t associate the helpers with enslavement of blacks. As a child, I believed their faces were black because they went down chimneys to deliver the presents. Americans who saw it were appalled, as the tradition involved blackface. A black American woman working at the United Nations raised the issue, and black activists in the Netherlands began protesting. The issue remained contentious for over a decade.

The compromise gradually became the soot-stain helper, so a helper with soot-stain marks from going into chimneys. For the remainder, nothing changed. Yet a significant group of Dutch didn’t like black people telling them to change the tradition, which they claimed was part of Dutch cultural heritage. There had been some agitated encounters with the activists. The black activists had a point, but it was mainly a pissing contest between white egos and black egos. Whites could have accepted that the tradition had racist elements and that the soot-stain helper didn’t meaningfully change it, while the black activists could have understood that it was a quaint relic of the past and that altering it wouldn’t change the lives of blacks in the Netherlands. And there are far more serious issues, some apocalyptical even, making the conflict resemble a fight on the deck of the sinking Titanic.

Finally, there is the question of allegiance. Moroccans can’t renounce their nationality, and their children born in the Netherlands automatically become Moroccans. Morocco is firmly in the Western camp, so the consequences so far have been limited, with a few instances of Moroccans spying for their country. Yet, we don’t know what the future brings. The same goes for Turks, with many taking their orders from the Turkish president, who called the Netherlands a fascist country after the Dutch government had prevented a Turkish minister from politically campaigning in the Netherlands for a referendum in Turkey to give more power to him.

That these problems persist is not due to neglect by the Dutch government, which has programmes to address these issues. As a result of investments in opportunities for minorities, some of the best Dutch schools are Islamic schools. There is not much more that the Dutch government could have done. The underlying issue is cultural. And it works two ways. Western culture is even problematic because it promotes a suicidal way of life by valuing money above everything else. Nearly all existing cultures are problematic in some way. That is how I looked at it, which made me reluctant to judge.

I remained on the Maroc.nl message board for two decades. In 2024, shortly after the Gaza War had started, the message board went offline permanently after being filled with anti-Israel messages. That was suspicious indeed if you believe that the Jews are running this world. By then, I had arrived at some conclusions. We won’t make it if we aren’t willing to face these issues with brutal honesty. Few people are willing to change. They have their reasons. Moroccan malcontents may believe that they have it bad in the Netherlands and that they are not to blame for their misconduct. As for discrimination, it only stops once we identify as one people with a shared destiny. There will be no gain without pain, which I experienced firsthand as a student. For those who cause trouble, the consequences may soon be brutal, like they were for me. If you are one of them, you are on notice.

Latest revision: 30 June 2026

Featured image: Pim Fortuyn on 4 May 2002, two days before his assassination. Roy Beusker (2002). CC BY 3.0. Wikimedia Commons.

1. Een heel vervelend geval. Joris van Casteren (2002). Groene Amsterdammer.
2. Nordin Ghouddani, presentator van Mocro Inside: ‘De grootste vijand voor ons is toch echt wel links’. Margriet Oostveen (2026). NRC.

Cyclists. By FaceMePLS from The Hague, The Netherlands - Buitenleven / Country Life. Wikmedia Commons. CC BY 2.0.

Something Went Wrong Somewhere

nivtricLeave a comment

The bullshit economy

Today, few people produce all that we need. The remainder have found bullshit jobs in the bullshit economy. In several advanced economies, 1-3% of the population works in agriculture. In the past, that was over 90%. They produced barely enough for their own needs. Now these few per cent make the food for everyone, and more people suffer from obesity than famine, while the world’s population has increased from less than one billion to over eight billion. The efficiency increase is astounding. But if a few people do all that we need, then the rest are transforming energy and resources into waste and pollution by producing non-essential goods and services.

These activities make sense because they generate profits for investors or serve some common good. In the current political economy, some are essential, so you can’t simply terminate all these activities. The economic system is a system. Actions have consequences, many of which we can’t foresee. Still, we could manage without gadgets, social media, air travel, and many other things. It is hard to say precisely what the bullshit economy is, but most of it concentrates on the following areas:

  • law and consultancy;
  • communication, information and media;
  • policy making and bureaucracy;
  • management;
  • entertainment and tourism;
  • finance and trade;
  • technology, computers and software.

Usually, most of the attention goes to the government, so policy making, bureaucracy, and also welfare. That blinds us from what happens in the private sector. In ‘advanced’ economies, bullshit probably generates more than 50% of GDP, and it might be as much as 75%. And so a banker once noted,

A cyclist is a disaster for the country’s economy. He doesn’t buy cars and doesn’t borrow money to buy. He doesn’t pay for insurance policies. He doesn’t buy fuel or pay for maintenance and repairs. He doesn’t use paid parking. He doesn’t require multi-lane highways. He doesn’t get fat. Healthy people are neither needed nor beneficial for the economy. They don’t buy medicine. They don’t go to hospitals or doctors. Nothing gets added to the country’s gross domestic product. On the contrary, every new McDonald’s restaurant creates at least 30 jobs: 10 cardiologists, 10 dentists, 10 dietitians and nutritionists, and, obviously, people who work at the restaurant itself.

Now you get the picture. The bullshit economy is about making money, not providing needs. Returns in agriculture are meagre compared to those of tech giants. And we could survive without tech giants, but not without food. To illustrate the money-generating power of the bullshit economy, you can compare the returns on an investment in the Chinese stock markets versus the US stock markets. If you had invested $1,000 in the MSCI China in 2011, in a real economy that produces things, you would have had $1,670 by November 2025.

Had you instead put your money in the S&P 500, in a bullshit economy of social media, lawsuits, unaffordable healthcare, Hollywood, finance, vampire capital scams, marketing and sales, you would have had $6,700. And that was the timeframe during which China caught up to, or even overtook, the United States. At least, the rich are doing fine. The latest hype is artificial intelligence. Soon, capitalists may no longer need workers. That vision of a coming capitalist paradise may have kept the stock market going.

Social networks, retail and financial services depend on physical infrastructure, such as roads and electricity grids. Without concrete, copper and fibre optics, there would be no data centres, no electricity, no internet, and no parcel deliveries. The bullshit economy depends on physical labour and infrastructure. But the money is not in physical labour and infrastructure. A few mega corporations, such as NVIDIA, Microsoft, Apple, Google, and Amazon, reap the benefits, while nothing they do is something anyone needed fifty years ago. Bullshit is where the money is. In this sense, the US economy has become the most ‘advanced’. It helped that the US has always been a nation of salespeople.

And so, yet another Wall Street wiz kid developed the Degenerate Economy Index, which tracks companies enabling gambling, day trading, and memecoin speculation. By October 2025, it had returned 130% since its inception in May 2023. The index includes 13 public companies providing computing power, mobile devices, cloud services, and social networks, as well as Bitcoin. The 130% return over 18 months occurred during a period of market uncertainty, rising interest rates, the collapse of regional banks, and the flailing commercial real estate market. The growth came from bullshit.1

In the Financial Times, a fellow named Tek Parikh claimed that fifty years ago, the assets held by the top 500 US companies were mainly tangible, such as factories, equipment, and inventory. Today, most of their assets are intangible, including intellectual property, brand value, and marketing networks. In the US, spending on intangible assets surpassed tangible investments as a share of GDP in the late 1990s. The gap has widened ever since. These intangibles drive US productivity growth. Parikh excitedly asserts that this transformation helps to explain the high concentration, exceptionalism and bubble-like valuations in the US stock market.

Information technology unlocks value, which is a marketing term for selling more bullshit or intensifying the competition. Buying a widget for €10 and selling it for €20 because you own a brand generates more wealth than labouring to make it for €8 and selling it for €10. A brand is capital that makes dirt look like gold to people willing to pay the price of gold for it, so it is something intangible, not a factory. Coca-Cola sells the same soda for five times the price to suckers who buy a ‘Coca-Cola feeling.’ The owners of the brands make producers compete, so producers have low margins, and their employees toil for low salaries in sweatshops. They hire a celebrity to tout the brand’s exclusiveness, and then they rake in the money. It costs a few euros to make a Gucci bag that sells for €2,500.

Social networks, retail and financial services depend on physical infrastructure, such as roads and electricity grids. Without concrete, copper and fibre optics, there would be no data centres, no electricity, no internet, and no parcel deliveries. The bullshit economy depends on physical labour and infrastructure. But the money is not in physical labour and infrastructure. A few mega corporations, such as NVIDIA, Microsoft, Apple, Google, and Amazon, reap the benefits, while nothing they do is something anyone needed fifty years ago. Bullshit is where the money is. In this sense, the US economy has become one of the most ‘advanced,’ leaving Europe to bite the dust.

Yet another Wall Street wiz kid developed the Degenerate Economy Index, which tracks companies enabling gambling, day trading, and memecoin speculation. By October 2025, it had returned 130% since its inception in May 2023. The index includes 13 public companies providing computing power, mobile devices, cloud services, and social networks, as well as Bitcoin. The 130% return over 18 months occurred during a period of market uncertainty, rising interest rates, the collapse of regional banks, and the flailing commercial real estate market.

The current economic organisation squeezes producers of necessities to employ more people in the bullshit economy to make money for investors from transforming natural resources and energy into waste and pollution. Economists call it efficient and wealth creation. Genetic engineering may increase crop yields. That may benefit farmers, but competition in farming keeps average returns low. Most profits go to the corporations that engineered the crops. In a typical bullshit economy, migrants do the hard labour at low wages, as the native population occupies itself with value-creating activities in the bullshit economy because that is where the money is.

No limits to our desires

As an ancient Persian story goes, the inventor of chess once presented the game to the country’s ruler. The king, much impressed by the game, offered the inventor any reward he desired. If there were ever to be a top three stupidest promises in the history of humankind, any reward someone wants will surely make it on that list. The inventor asked for a single grain of rice for the first square of the chessboard. Then, two grains for the second, four for the third, until the last square. The ruler, baffled by this seemingly small price, agreed. His treasurer later made the calculation and regretfully informed him that it was impossible to pay the inventor. There wasn’t enough rice in the world. The ruler then did the only sensible thing and ordered this man executed for his greed.

Humans don’t lack desires. The Bible tells that Eve and Adam wished to acquire the knowledge of the gods. And there are no limits. Otherwise, we wouldn’t live in someone’s personal fantasy world. When we have enough, we want more. It could be a larger home, a sports car, or an adventurous trip. Had that not been the case, we could have worked a few hours daily, had all we needed, and been content with what we had. Instead of living happily in a utopian society, we work hard to turn Earth into a wasteland by converting energy and raw materials into waste and pollution until we can’t keep up, and robots and artificial intelligence will replace us. On the bright side, that already happened, and artificial intelligence has generated this world, including us. That opens up new possibilities.

More material wealth and new inventions haven’t made us happier, yet we still hope they will. Between 1970 and 2024, income per person in the US rose a whopping 265%.2 Still, about 40% of Americans can’t make ends meet. Many feel more miserable than their grandparents did fifty years ago. It is also a lifestyle problem that economic growth can’t fix. What was once a luxury or didn’t even exist has now become a necessity. It is not only that. The gains mostly went into the pockets of the rich, and many poor people are hardly better off. It is not the first time that humans sacrificed quality of life for growth.

Our distant forbears switched from hunting and gathering to growing crops and herding cattle. That dramatically increased food production. Like us today, these poor suckers thought that if they worked harder, they would have more food and their lives would be better. Yet, more children survived, and they remained on the brink of famine. Even worse, their diets became less varied, leading to poorer health. They often ate tasteless porridge, while their forebears had nuts, berries, and fruits to chew on. They lived in unhygienic settlements where they contracted more infectious diseases. They suffered more from violence as farmers had to defend their crops and animals against thieves. And so, peasants were much more miserable than hunter-gatherers who lived before them.3

Since time immemorial, most people had barely enough, so frugality was a virtue and wastefulness a vice. Parents taught their children to be satisfied with what they had, which was not much. Few scraps remained unused. When my father wished for a toy, he would take a branch from a tree and turn it into a toy himself, at least when he had time to play and didn’t have to do chores at the farm. He didn’t know better and was quite satisfied with whatever toy he could create from a tree branch. His mother didn’t throw away food. And if his trousers had a hole, she would mend them. They were poor, but had enough. If they needed a costly item, they saved for it. Our virtues have evolved. In a time of excessive production and consumption, restraint and patience are not good for the economy.

The economy must grow. Otherwise, investors lose trust, the financial system collapses, and the economy will follow suit. And so, the excess production needs willing consumers to gobble it up. Otherwise, investors lose money. To prevent this catastrophe, consumerism became the new ethic. Businesses use psychology, advertisements, and the media to convince us to indulge ourselves. It is our moral duty to buy more stuff. That is what we want to hear, so the adherents of the religion of consumerism at least do as their preachers tell them. Today, many children have mountains of toys they never play with.

Growth, including economic growth, is exponential. Increases come on top of previous ones. It is unsustainable. Economists argue that efficiency improvements reduce resource and energy consumption, but the opposite happens due to the Jevons Paradox. Efficiency improvements make products more affordable, allowing more people to purchase them. To add insult to injury, innovation brings new products to the market. The combination of efficiency improvements, innovation, and our unlimited desires will ensure that we take as much as we can until there is nothing left.

An extreme case is information technology. Since the 1970s, computers have become over a million times as powerful. Their capacity and numbers grew far more, perhaps over a trillion times, so computers consume over a million times more energy and resources than they did in the 1970s. And what for? We don’t need computers. Otherwise, people in the 1960s would have died horrible deaths from a lack of information technology. Had you studied history, you could have known that countless generations have survived without it. Here is where economic growth comes from nowadays. Somehow, influencers selling us more stuff and replacing us with artificial intelligence creates a productivity miracle.

Our inner drives

Since the Industrial Revolution, schedules and appointments have determined people’s lives. We work at designated intervals. Trains must be on time. Roads must have more lanes to prevent congestion. We save time by travelling faster, eating ready-made meals, utilising cleaning services, and buying new items rather than mending them. And still we hurry because of schedules, appointments, and long working hours. As nations become ‘developed’, more people get sucked in, join the treadmill, and become cogs in a system over which we have no control but that determines our destiny.

A 2025 report from Microsoft claims that employees are experiencing an ‘infinite workday’ of constant emails, meetings and notifications. They check their emails as early as 6 AM, juggle meetings through the afternoon and stay online well into the night. According to Microsoft’s data, employees are interrupted every 2 minutes by meetings, emails, or messages, and receive an average of 117 emails and 153 Teams messages each workday. Many are feeling overwhelmed.4 Humans can’t keep up for much longer, and artificial intelligence and robots will take over, as they are more dependable and never complain. And that will turn humans into useless consumers of resources and energy.

Why can’t we work for three days or for twenty hours per week? It must be possible. What is the point of working hard to turn the planet into a wasteland and let artificial intelligence replace us? What is the point? And why the hurry? It is how the system works. Time is money, so we live by the clock. A high standard of living requires capital, thus profits for its owners. Everyone must be present during working hours. A business can only be profitable when operations run smoothly. Corporations incur losses if raw materials, workers, or repair crews arrive late. Competitors will put them out of business. That is because operations have become optimised, so a few people produce all we need, while we entertain the remainder in the bullshit economy to generate profits for investors.

Trade and finance drive the system. Economists argue that trade and finance bring prices down and offer us more choice. There are shampoos for every hair type, from several brands. Yet, there is a catch. We work harder or risk losing our jobs to provide better service at a lower cost. Traders buy where it is cheapest, and bankers move their money where it yields the highest returns, resulting in global competition where everyone competes against everyone. That is why several countries deindustrialised and became service economies. They moved from producing to adding value and became a bullshit economy.

We work so efficiently that a few people produce everything we need, leaving a surplus of labour needing employment. Many of us work in bullshit jobs. We may work hard, but in doing so, we waste resources and energy performing these jobs. Modern societies have become complex, so bullshit jobs make economic sense. You can become an influencer or trade crypto. Free-market proponents say that value is subjective and that the market is the ultimate judge of usefulness, which is also an opinion, and a fatal mistake, also. If it is profitable to terminate us, the markets will ensure it happens. Markets have no morals, and the ethic of the merchant is no ethic at all.

The system hooks into our inner drives, most notably our natural desires for security, comfort, and status. Squirrels gather and store nuts to get them through the winter. They pile up more nuts than needed. But they aren’t nuts. You can’t be sure what the winter will bring. A few more nuts can make a difference. Yet, as the total nut count increases, the likelihood of that decreases. We save for a rainy day, retirement, or to give our children a good start. Our desire to amass assets stems from our survival instinct. As you approach your destined appointment with that scythe-wielding fellow, that urge dissipates.

The system hooks into our inner drives, most notably our natural desires for security, comfort, and status. Squirrels gather and store nuts to get them through the winter. They pile up more nuts than needed. But they aren’t nuts. You can’t be sure what the winter will bring. A few more nuts can make the difference between perishing and survival. We save for a rainy day, retirement, or to give our children a good start in life. Our desire to pile up assets stems from our survival instinct. As you grow older and approach your destined appointment with that scythe-wielding fellow, that urge dissipates.

As a child, I had won over a thousand marbles. My gains came at the expense of other children at school. Yet, I sought to win more. What was the point? That I had never thought about. Having more marbles was pointless, except that I could marvel at them like Scrooge McDuck could spend time looking at his money in his warehouse. I was not that different from a greedy billionaire. And unlike most people, I still haven’t lost my marbles.

We are social animals, and we compare ourselves to others. If you want to belong to a group, you often need what others have as well. If you are a fan of FC Barcelona, you buy items from the fan shop and attend football matches to fund the outrageously overpaid players with your hard-earned money. Many of us seek status. For men, status gives mating opportunities. No matter how old, annoying or ugly a billionaire may be, he attracts good-looking fashion models. Those who can afford it buy Gucci bags, Ferrari cars, and Rolex watches, only to show others that they can. It would be a waste to give money to the poor. I also didn’t hand out marbles to those who didn’t have any.

Our capitalist religion teaches us that we deserve a reward for our excellence in ruining God’s creation. After all, it is hard work. And if we buy these luxuries, some of that wealth will trickle down to the children working in the sweatshops that produce them. It is an inefficient way to end poverty and requires more resources than are available. Humanity’s current lifestyle already requires more than two Earths to sustain. And if everyone lived like the affluent, 80% of the people would have to die. But humans are not creatures of logic. We are social animals who cooperate based on fairy tales.

Ideally, you can achieve a higher status by being helpful to others or contributing to society. That motivates us to help and contribute. And we are thankful to those who bring food to the table. It is the businesspeople who pay for our groceries. You wouldn’t have anything to eat if they weren’t busy squeezing money out of something, even when we could do without that something, and even if it is slowly poisoning us. We would be starving in the capitalist economy if we didn’t make and trade all that useless stuff. And not everyone is fit to run a business. It is why we value entrepreneurs so much.

Tell me true, tell me why, was Jesus crucified?
Was it for this that Daddy died?
Was it you? Was it me?
Did I watch too much TV?
Is that a hint of accusation in your eyes?
If it wasn’t for the Nips
Being so good at building ships
The yards would still be open on the Clyde
And it can’t be much fun for them
Beneath the rising sun
With all their kids committing suicide
What have we done?

Pink Floyd, The Post War Dream

The Japanese have worked hard to get ahead, putting the British shipyards out of business, only to see their kids committing suicide. The Chinese are following suit. Why can’t we be happy? It is not that the Japanese didn’t have enough. When you have enough, you don’t need more. Jesus said that it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God. The phrase ‘you’ll own nothing, and you’ll be happy’ appeals to our deepest fears of a dismal future in which we starve while being fed propaganda. We prefer a fatal excess of material goods to the bliss of the needy North Koreans. Somehow, we think that the choice is between capitalism and socialism. Can’t there be something better?

Economic growth in the European Union has lagged behind that of the United States in recent decades. And due to its stellar growth, China has overtaken Europe. Europeans work fewer hours and retire earlier than Americans. Europe doesn’t innovate as much because Europeans are more risk-averse than Americans. Europe has fewer billionaire venture capitalists willing to take risks with their excess capital on new ideas that are usually products or services no one needs, but generate money for investors.

Europe has more regulations and fragmented markets. It lacks tech corporations like Apple, Facebook, Google and Microsoft. Still, without the products of the Dutch corporation ASML, there would be no Apple, Facebook, Google and Microsoft. And also no NVIDIA. The most crucial tech industry is still in Europe. Europeans have fewer children, so the population is ageing and close to declining. European worker productivity lags as Europe has fewer money-generating bullshit activities. European and US manufacturing output have fared similarly since 2000. And if you correct for purchasing power, European countries do better. Life in the US is more expensive, which boosts GDP.

Some say Europe is becoming an open-air museum, a place to visit for those who want to see how life was in the past. Still, Western Europe has less poverty than the US, and Europeans live longer. Europe looks more like Paradise than the United States or China. Are Europeans happier? The World Happiness Report puts eight European nations in the top ten. Only happiness is hard to measure. Finland is number one on the list, but it also has high alcoholism and suicide rates. Like Americans, Europeans increasingly fear the future and vote for fascist parties and leaders.

Will we never be satisfied, no matter how rich we are? Or do the statistics not reflect real life? Or is it perception because we live by stories rather than facts? Or do people sense that things are heading in the wrong direction? Discussing statistics is tricky. Talking about open-air museums. The Old Order Amish are happy people. They don’t need much to live in Paradise. And they don’t have statistics. Only a Paradise can’t do without a strong protector, thus an 800-pound gorilla who scares the hell out of potential invaders. Europe and the Pennsylvania Dutch could count on the protection of the US Army. But who will keep God’s Paradise safe? Captain Obvious has the answer.

Modernisation

You can only say that things are heading in the wrong direction if you expect disaster or when you have a vision of how things should be. Otherwise, there is no right or wrong direction. The ecological apocalypse may kill billions, and technological development could end humanity, but are these terrible things? It depends on whether you think humanity is precious, which is merely an opinion. Modernisation has had its critics. They weren’t that stupid, except for believing we have a choice and can change the system. We might if we are all on the same page, but that requires a miracle.

Mahatma Gandhi believed industrialisation wouldn’t solve the problems plaguing the Indian poor. He urged Indian villagers to remain self-sufficient in food, make their clothes, and avoid the temptation of mass-produced consumption goods. When Gandhi lived, most Indians were hardly better off than their forebears had been before British colonisation. Today, poverty in India has declined dramatically. The Unabomber claimed in his manifesto that the Industrial Revolution had initiated a process that would eventually destroy humanity through technology and end freedom by forcing us to adapt to machinery.

We shouldn’t romanticise the past. Billions are still poor, but poverty has declined. The Industrial Revolution created an engine of permanent change, driven by competition, economies of scale, and innovation. We have become cogs in a system over which we have no control. Communities disappeared, giving way to societies. And the competition never ends. Humans emerged as winners in a contest between species known as the struggle for survival. They then turned into the destroyers of other life on Earth.

Humans innovate faster than other species. We have eliminated the competition, taken over the planet and killed many of the plants and animals that once lived there. The remaining wildlife lives in a few reservations. Artificial intelligence will soon outcompete us. The driver of competition is trade. Without trade, two countries can’t compete, not even two villages, for that matter. And that is our ultimate challenge. The prospect of continued competition is mass destruction. So it would be better to stifle all innovation with red tape than to let things continue as they do. It is a matter of life and death.

Why things are getting more evil

What we see as good benefits something, and what we see as evil harms something. So what you think is good or evil depends on the something you have in mind, what you believe is beneficial and harmful, whether you believe intent matters, and what you think the consequences of choices are. And so there is room for debate. Intent is an interesting issue. You can make the same choice, such as euthanasia, out of compassion, out of cruelty, or based on a principle you believe in. Consequences may also matter. Evil intent can have favourable outcomes, while good intent can bring disaster. That has been an argument in defence of capitalism. The capitalism-socialism debate originates in divergent views on law and morality within the Western tradition.

In the Anglo-Saxon world, with the Common Law, individuals are sovereign, and ethical philosophy is pragmatic. It means that moral rules are a social agreement, so good and evil depend on popular sentiment; freedom is the ability to do as you please, and outcomes matter more than intent. In continental Europe, with Civil Law, the lawmaker is sovereign, thus the king or the people in a democracy, and idealism dominates ethical philosophy, most notably in Germany. It means that good and evil are absolute, freedom means liberating yourself from your lower urges, thus becoming rational and morally upright, and intent matters more than outcomes. Adam Smith was a pragmatist from Great Britain, while Karl Marx was an idealist from Germany.

Adam Smith, the founder of modern capitalist thought, argued in his book ‘The Wealth of Nations’ that self-interest in a market economy promotes overall economic well-being, as ‘it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.’ In other words, self-interest rather than benevolence fills our stomachs. Conversely, socialist systems, despite being invented with good intentions, led to poverty and famine, so they are evil. Traditional moral systems regarded self-interest as evil and benevolence as good. Capitalism thus comes with an inversion of that morality, and it ultimately became greed is good. It reflects pragmatic moralism rather than an idealistic or absolutist take on ethics.

Capitalism rewards individuals for their ability to generate money by transforming natural resources and energy into waste and pollution, by producing things we don’t need in a competition that will end in disaster. Whatever intentions the greedy may have, their efforts bring about an apocalyptic catastrophe that some major religions have long predicted. We can be pragmatic and judge the greedy not by their intent but by the outcomes. And we can be idealistic or absolutist, arguing that markets have no morals. Individual market participants may possess moral values, but markets never do. There are always people willing to do the trade. When there is demand, there will be supply. The trader’s ethic is no ethics at all. Money corrupts everything, including the government, and that is why things are getting more evil.

Karl Marx wrote in his famous book that capital is dead labour that, like a vampire, only lives by sucking living labour. In capitalism, the dead eat the living, which eventually leads to a zombie apocalypse as predicted by ancient Christian prophets. The specifics of the events do not precisely match those in the Book of Revelation, and somehow they never do, despite the frantic efforts of religious people to prove otherwise. But every sizeable inheritance or successful launch of a new corporation that gets us hooked on things we don’t need is the birth of a new zombie.

And the innovation never stops. Vampire capital, or private equity, is the latest brainchild of capital owners to suck more money out of us. The giants, such as Apollo Global Management, Blackstone, and the Carlyle Group, control $8 trillion in assets. Over 18,000 private funds operate in the US, mainly investing in medium-sized companies. The figure grew by more than 50% in the last five years. According to McKinsey consultants, global private equity assets reached $13 trillion in 2023.5

Here comes just one example. There are countless others. About 70% of nursing homes in the United States are for-profit. They have increasingly merged into larger chains, often owned by private equity firms. Two-thirds of the nursing homes’ cash flow comes from Medicaid. The company Manor Care had 25,000 beds and was the second-largest nursing home chain in the country by 2017. A private equity firm, The Carlyle Group, acquired it in 2007 through a leveraged buyout.

Carlyle sold the land on which the nursing homes stood to a company specialising in providing real estate to healthcare providers. Carlyle pocketed the proceeds from the land sale and used them to pay off the debt incurred in acquiring Manor Care. Manor Care then had to pay rent using its Medicaid revenues, while Carlyle took the operating profits. With this new rent burden, Manor Care’s margins contracted. Carlyle then insisted on cutting positions and wages.5

The quality of care deteriorated as the chain struggled financially and laid off staff. In the wake of the private equity purchase of Manor Care, nurse staffing fell, and resident deaths increased by 11%. Bills, mainly to Medicare, increased by 8%.6 Code violations soared. Lawsuits from relatives spiralled, and Manor Care went bankrupt in 2018. That was a lot of money for lawyers, also. There are plenty of examples. When a private equity firm acquires a doctor’s practice, it starts employing profit-boosting strategies, including surprise billing. Private equity firms remove doctors from insurers’ networks, allowing them to bill patients for far more than insurers would pay.

Then there is Big Pharma. Pharmaceutical corporations pay doctors for prescribing their drugs. Their marketing efforts contributed to the opioid crisis in the United States. An example is Purdue Pharma, which developed, manufactured, and aggressively marketed opioids for decades, causing addiction and overdose deaths. After the settlement, the Sackler family, who long owned the corporation, walked away with billions. Many Americans don’t trust their healthcare system, nor do they trust pharmaceutical corporations. These feelings, the COVID-19 vaccine scare and conspiracy theories led to an estimated 200,000 fatalities in the US because of not taking these vaccines.7

Big Pharma funds healthcare research, so there is reason to be sceptical, or even distrustful. On the other hand, many ‘independent research’ and ‘independent magazines’ are a business model for quacks and snake-oil salespeople, who sell alternative treatments and sensational stories. Quackery is even more lethal and driven by that same profit motive. And the death toll of not taking the vaccines likely vastly outstripped the number of people who died from them. It is a sign of something more troubling. Money has corrupted US healthcare, along with the rest of US society, to the point that not only is trust in healthcare collapsing, but trust in society itself is as well. And with good reason. Americans pay more for healthcare than anyone else, while they hardly live longer than Cubans, a destitute people suffering under a failed communist experiment.

We live by stories

Most of us wouldn’t be so depraved as to do what the private equity firms do. If you are rich already, how can you be so evil that you want to make money out of denying the elderly their care or defrauding unsuspecting patients? That is because markets have no morals, and the merchant’s ethics are no ethics at all. There is money in it, and it is legal, so it happens, because money is our highest value rather than caring for patients and the elderly. But it is profoundly evil. Jesus said that you can’t serve both God and money. The Dutch call this issue ‘the merchant and the vicar.’ You are either on the side of good or on the side of money. There is no compromise. So far, money always wins. In that sense, and some other ways as well, Marxism is Christianity without God. And that is no coincidence.

To change our course, we need a new foundation for our culture, values, and way of life, but that requires a new world religion. Traditional peoples saw nature as sacred. Likewise, we can see God’s creation as sacred. We are here to keep it rather than to destroy it. In 1854, the Native American Chief Seattle gave a speech when the US government wanted to buy their land. A redacted version of his oration became a rallying cry within the environmentalist movement. In that version, Seattle reportedly said,

How can you buy or sell the sky, the warmth of the land? The idea is strange to us. Every part of this earth is sacred to my people. We are part of the earth, and it is part of us. The white man does not understand our ways.

One portion of land is the same to him as the next, for he is a stranger who comes in the night and takes from the land whatever he needs. He leaves his father’s grave behind, and he does not care. He kidnaps the earth from his children, and he does not care.

We might understand if we knew what the white man dreams, what hopes he describes to his children on long winter nights, and what visions he burns into their minds so they will wish for tomorrow. But we are savages. The white man’s dreams remain hidden from us.

Chief Seattle and his people had lived simple lives in their own Eden. He saw that the white man was on a road to nowhere. He dreams, not much unlike the poor sobs who invented agriculture 10,000 years ago, that if he works hard, his life will be better. Today, nearly everyone else follows the white man’s path and many work even harder than the white man. Poverty is declining worldwide, but the Earth can’t sustain our lifestyles. And artificial intelligence may soon make us obsolete. Will we ride towards our destruction, or can we be content with having enough? And how do we get there? That is not merely an economic question. It begins with our values and the dreams we live by.

Featured image: Bicyclists. By FaceMePLS from The Hague, The Netherlands – Buitenleven / Country Life. Wikmedia Commons. CC BY 2.0.

1. Investor Insanity? The Degenerate Economy Index Up 130%. Boaz Sobrado (2025). Forbes.
2. Real gross domestic product per capita in chained 2017 dollars (A939RX0Q048SBEA). Federal Reserve Bank of St. Louis.
3. Sapiens: A Brief History of Humankind. Yuval Noah Harari (2014). Harvil Secker.
4. American workers are stuck in an ‘infinite workday,’ according to Microsoft report: ‘People are feeling very burnt out’ Sophie Caldwell (2025). CNBC.com.
5. Private equity: vampire capital. Michael Roberts blog (2024).
6. Private equity: health care’s vampire. Steffie Woolhandler, David U. Himmelstein, Elizabeth Schrier, and Hope Schwartz (2024). Statnews.com.
7. Estimated preventable COVID-19-associated deaths due to non-vaccination in the United States. National Library of Medicine. Katherine M Jia, William P Hanage, Marc Lipsitch, Amelia G Johnson, Avnika B Amin, Akilah R Ali, Heather M Scobie, and David L Swerdlow.

College Noetsele

School Newspaper

nivtricLeave a comment

When I was sixteen, the school newspaper suddenly retired. The editors lacked inspiration. It had become an infrequent occurrence, marked by political activism over cruise missiles and little to do with the school itself. They tried a new name, School Hangover, because the old name, Athok, was rather uninspiring, but for some reason, it didn’t bring in a new wave of writerly inspiration. My experience with the funny newspaper I made with my cousin led me to figure that I could be a school newspaper editor. My friend Arjen found it a good idea and contacted Erik to join the editorial board. Arjen believed Erik was a popular guy, which could help the newspaper. And even though I didn’t like him, I accepted him on the editorial board. Erik was an annoying individual. We had fought. He proved to have good writing skills, and his editorials filled the first page.

And so, the editorial board became Arjen, Erik and me. Arjen suggested adding another guy without writing skills to the board for his muscle. It probably was a joke, but I am not entirely sure. We figured we could write 6 pages every 3 weeks instead of 100 pages once or twice a year. We named the paper Ikzwetsia after a humorous paper that circulated among the fifth-graders a few years earlier. A classmate, Hendrik, added a few drawings. We filled the rag with juicy gossip about teachers and fabricated stories to make it more amusing. To show you what it was like, here are a few gossip items,

Mr. Van den Brink’s lessons from economics are not particularly interesting. Remarks from pupils, such as, ‘The snow goes more up than down,’ make this clear.

During a heated discussion, the truth came out. ‘We teachers are not people,’ said Mr. Blaak from mathematics. We had always thought this, but never dared to publish it.

At the school’s back entrance, a garbage container has been defaced with the inscription ‘new janitors’. So far, no one has dared to open this container.

Mr. Nauta from business accounting recently walked to the emergency building 400 without glasses, while he was supposed to be in the main building. He explained this coincidence with the strange statement, ‘You can only see from the inside if someone is crazy.’ Mr. Nauta forgot to mention that this can also be noticed in someone’s words.

There were also some rude jokes, like,

There is a particularly great interest in Mr. W in Hollywood. This interest has been the case since it became known that the ET doll is broken.

Some teachers were in a difficult spot. If we were aware of that, we didn’t make jokes about them, or we complimented them in disguise,

Mr. Kamps, from religion, does not believe in paranormal phenomena. So, we have at least one normal teacher walking around the school.

Mr Kamps had lost his son. These news items were facts mixed with fiction. There had never been any interest in Mr W******** in Hollywood, but he somewhat resembled ET. Somebody had written ‘new janitors’ on a garbage container. The part about no one daring to open it was a joke. Mr Kamps definitely said he didn’t believe in paranormal phenomena. Finally, Mr Nauta likely had forgotten his glasses and ended up in the wrong building, and he did explain the coincidence with that bizarre remark, but I wasn’t there when it happened. We also had political jokes like,

College Noetsele may be used in the film ‘Alexander Dobrin.’ In this multi-million dollar American feature film, several shots of the school building will appear. The film deals with the deplorable conditions in the Soviet gulags.

The conditions in the Soviet gulags were deplorable, and Americans were spending big on propaganda, selling us that message, or so was the intended meaning. Another item mentioned that a teacher, Mr Koster, was to take part in the film, as Karl Marx statue, that is. He looked a bit like Karl Marx and had the same posture and beard, so that’s why, not to mention the fact that he was an active member of the radical-left political party PPR (Political Party of Radicals). There was also a film section. A group of film enthusiasts who believed themselves to be cultured organised film evenings at school. Their film selection centred on artistic content. Not all of these films proved suitable for a conservative Protestant school. One of them, Narayama, featured a scene in which a man had sex with a dog. It generated a lot of ado, or, as Erik put it, ‘The suspense became too much for some people.’ They had left the building. Art must have a deeper meaning, and if that is absent, it must shock people.

Geraldine wrote some of the film commentaries. She was a girl in my class with a striking hairstyle, was a bit alternative, dressed in an outspoken way, and flaunted her interest in art and literature. Once she had written a particularly lengthy commentary on the classic All About Eve, I had shortened it a bit to fit the page, which offended her, probably because she believed the editing violated her artistic integrity. I didn’t see my writing as art, so it had to fit the available space, but she might have had a different view and believed that space had to adapt to her writing. Marilyn Monroe, who was building her career, played a small part in the film All About Eve, a noteworthy coincidence as it would later turn out.

In the paper, I indulged myself in writing an imaginary story about the school, a crime detective series with the Cultural Council, which had, amongst its tasks, overseeing the school newspaper. It had a secret service stealing the newspaper’s secrets. The editors were the police detectives solving the crime. It was a loony story featuring a teacher disguised as a standing twilight lamp, a preparation for a theatrical play that looked like a love affair between two teachers, a wild-west-style shoot-out and a dangerous-looking Basset hound with a degree in psychology. And it contained witticisms like, ‘He lay there as lifeless as a football match in Enter.’ Some children came from Enter, a village near Rijssen, and the guys were fanatic supporters of the local football club Enter Vooruit (Enter Forwards). So, apart from them, everyone had a good laugh.

Ikzwetsia became popular very fast and was a headache for the school board. Children brought copies home. Some parents complained, while other parents enjoyed reading the rag. We presumed the name Ikzwetsia would be telling enough, as it referred to the Dutch word for talking nonsense. But some people took it seriously nonetheless, so we added a cautionary note on the front page, saying, ‘Whoever takes this rag seriously is not taken seriously.’ Unlike the previous school paper, we didn’t need money from the school board. We covered the expenses with subscription fees. Sales also covered the funny newspaper’s costs, and we didn’t intend to become the school’s official newspaper, so I had prepared a budget.

Latest revision: 10 June 2026

Featured image: College Noetsele by Historische Kring Hellendoorn-Nijverdal, from MijnStadMijnDorp, CC-BY 4.0

1919 Cover of The Natural Economic Order

Feasibility of Interest-Free Demurrage Currency

nivtricLeave a comment

Setup

Natural Money is an interest-free demurrage currency. It features a holding fee on currency and a maximum interest rate of zero on money and loans. The Natural Money currency is an accounting unit only, as the holding fee, which may range from 0.5% to 1% per month, makes the currency unattractive to hold. Therefore, the currency will not circulate, nor will someone invest in it. Cash, bank deposits, bonds, stocks, real estate, and other investments aren’t currency and therefore not subject to the holding fee. Not paying the holding fee and the curtailment of credit, and thereby inflation, caused by the maximum interest rate, can make lending at negative interest rates attractive.

Natural Money features a separation between regular banking, also known as commercial banking, which involves lending and borrowing, and investment banking, also referred to as participation banking, which involves participating in businesses. Regular banks guarantee returns to their depositors and use their capital to cover losses. Participating banks have shareholders who share in the profits and the losses. These two bank types should remain separated, even though one bank might offer both in distinct accounts. A commercial bank’s funds should be used only for lending. The maximum interest rate limits lending, allowing equity to replace debt in the financial system.

Evidence from history

There is little historical data on the subject of interest-free demurrage currency. Financial systems founded on interest-free money with a holding fee have never existed. There were holding fees and interest bans, but the combination of both has never existed. More importantly, a usury-free financial system requires a high-trust society founded on moral values where investments are safe, and is only feasible with the help of several relatively modern financial innovations. That all seems too good to be true, but we can have dreams. And so, the evidence from history is of limited value.

Several ancient societies have seen usury-induced economic crises. Extreme wealth inequality, often accelerated by usurious lending, regularly coincided with societal collapses. It is a recurring pattern that has existed since time immemorial. The Sumerians were already familiar with charging interest and its disastrous social consequences. Sumerian rulers began implementing debt jubilees as early as 2,400 BC, cancelling debts and freeing debt slaves. Other cultures, such as those in Israel, have banned charging interest. Israel also had debt jubilees every fifty years.

The Egyptian grain-backed currency existed for over 1,000 years, suggesting it provided monetary stability. Nevertheless, ancient Egypt has seen economic crises, often due to droughts causing crop failures, high taxation during warfare, or a weakening central government. The government mitigated famines with its grain reserves, but prolonged famines depleted these facilities, leading to civil unrest and, sometimes, a collapse of order. There is no evidence of social benefits of this money for Egyptian society. Charging interest was common, and Egypt had debt cancellations.

In the Middle Ages, the Church forbade charging interest. Christians, like Jews, were each other’s brothers and couldn’t charge each other interest. When economic life became more developed, the ban on interest became difficult to enforce. In the 14th century, partnerships emerged where creditors received a share of the profits from a business venture. As long as the share remained profit-dependent, it was not illegal, as it was a participation in a business rather than lending at interest.1 Islamic finance works with similar principles.2

In the 17th and 18th centuries, interest ceilings replaced bans. To circumvent the interest ceilings, a creditor and debtor could secretly agree on a fraud, whereby the creditor handed over less money than stated in the loan contract, so that the borrower actually paid more interest.3 More recent experiences with Regulation Q in the United States, which imposed maximum interest rates on bank accounts, suggest that a maximum interest rate is enforceable only if it does not significantly impact the bulk of borrowing and lending.4

An effective ban on usury requires a society grounded in moral values rather than profit. It requires us to live modestly and within the planet’s limits. It also requires societies to care for vulnerable individuals, so that they don’t fall prey to usurers. You shouldn’t charge interest, not merely because it is illegal, but because it contributes to something profoundly evil. That points to a broader problem. We should care about the world and consider the consequences of our actions. Even when what we do is legal, it doesn’t mean that it is good.

Implementation

To implement Natural Money, interest rates must already be low or negative. Attempting to lower interest rates when market conditions don’t justify that move would likely scare investors. Low interest rates require trust, which requires financial discipline, including fiscal discipline from governments. That doesn’t equal austerity, since governments earn interest on their debts when interest rates are negative. The transition preferably is a gradual process that the authorities communicate in advance. Whether that is possible at all remains to be seen, as the implementation may occur in exceptional times.

If there is still a functional currency, the first step is for the government to balance the budget. The second step is to decouple cash currency from the administrative or central bank currency. The move encompasses retiring central bank-issued banknotes and replacing them with treasury-issued banknotes. Not everyone will hurry to a local bank office to exchange banknotes, so the central bank-issued banknotes must be exchangeable at par for the new banknotes for a considerable period.

As long as interest rates are significantly above zero, a holding fee won’t bring them down. Setting a maximum interest rate can lower interest rates by curtailing credit, thereby cooling the economy. To avoid disrupting financial markets, the implementation must be gradual. The maximum interest rate should be high enough to avoid disrupting the economy. Initially, authorities could set the holding fee at a low percentage, or not at all. As interest rates fall, authorities can lower them.

The zero lower bound is a minimum interest rate. It operates like a price control by preventing interest rates from moving freely to the rate where supply and demand for money and capital balance. That is to the advantage of the wealthy, as they can take the economy hostage by demanding a minimum return on their investments. When returns are low, investors may prefer cash over investments, which can hinder an economic recovery. Economists call it liquidity preference.

Low interest rates can prompt lenders to seek higher yields and take on more risk. Low interest rates allow borrowers to take on more debt. Low interest rates can promote investments that become unprofitable when the economy slows down. A maximum interest rate can prevent these situations from happening. A maximum interest rate caps the risk lenders are willing to take and promotes a deleveraging of balance sheets, so that even low-yielding ventures don’t go bankrupt because of interest-bearing debts.

Issues with the maximum interest rate

A holding fee will cause few difficulties, but a maximum interest rate is more problematic. Insofar as the maximum interest rate affects questionable segments of credit, such as credit card debt and subprime lending, this is beneficial overall. More serious issues can emerge with financing small and medium-sized businesses. Partnership schemes can fill in the gap, but it is hard to predict how that will play out. The maximum yield on loans is zero, making partnerships more attractive, as they can offer higher returns.

There may be objections to the limits Natural Money imposes on consumer credit. Still, there is little doubt that a maximum interest rate can improve consumers’ purchasing power, as borrowers won’t have to pay interest. As a result, there are fewer borrowing options, which may lead to the emergence of black markets. To make illegal schemes unattractive for lenders, lenders who charge interest could lose the money they have lent.

Zero is the only non-arbitrary number, making it more difficult to change the maximum interest rate. That may happen for political or other reasons. The salespeople of usury can find plenty. If it is one, why not two? Zero is a clear line. A positive interest rate, no matter how small, contributes to financial instability. All positive growth rates compound to infinity, so once we start the fire of usury, it will eventually consume us.

A maximum interest rate seems feasible if it is above the rate at which most borrowing and lending occur, thereby limiting the effects on liquidity in the fixed-income market. A maximum interest rate creates room for alternatives, such as private equity and partnership schemes. These alternatives can supplement the fixed-income market and mitigate the effects of the maximum interest rate. A maximum interest rate is beneficial overall if it mainly affects questionable segments of credit, such as subprime lending.

In the case of bonds, the maximum interest rate of zero applies at the time of issuance. Due to economic circumstances or issues with the debtor, the interest rate may rise and enter positive territory. Likewise, governments may issue long-term bonds that may have positive yields if interest rates rise later on. That is not a serious issue, as long as the interest rate was zero or lower at the time of issuance.

A more serious issue is the risk of liquidity problems. When interest rates rise, less credit becomes available at interest rates of zero or lower. Interest rates might increase due to a strong economy with inflationary pressures. There are always economic agents that must borrow at all costs to meet their present obligations, so if they can’t borrow, they might go bankrupt. Businesses and individuals need to deleverage and arrange credit in advance, such as an overdraft facility, with their banks.

Another equally serious question is the profitability of banks with Natural Money. The lending business of banks will likely shrink significantly. The assumption is that risk-free lending will be profitable. But what if it isn’t? In that case, banks may need to lower the interest rates on deposit accounts to a level below the interest rate on short-term government debt. In that case, the cash interest rate may need to be lower than the interest rate on short-term government debt to make it work.

Inherent stability

Ending usury is impossible without investors having trust in the political economy or the political and economic institutions of the polity issuing the currency. The most trusted political economies have the lowest interest rates because their governments are fiscally responsible. Natural Money requires taking it to the next level. With Natural Money, to borrow, the government must find lenders willing to lend in the currency at negative interest rates. The government will be better off borrowing at negative interest rates, which provides an incentive for budgetary discipline. That is the foundation of stability.

Extracting a fixed income from a variable income stream contributes to financial instability. Fixed interest payments can bankrupt a corporation even when it is profitable overall. Interest contributes to moral hazard, as it serves as a reward for taking risks. Investors expect to earn higher yields on riskier debt, so lenders take on these risks. The more uncertain an income source, the higher the interest rate needs to be to compensate for the risk of lending, but the higher the fixed interest rate, the more likely failure becomes, which reveals the destructive consequence of interest being a reward for taking risks.

All parts of the financial system are intertwined. Individual banks can transfer these risks to the system. And so, the risk management of individual agents can increase the overall level of risk in the system. The payment and lending system is a key public interest, so governments and central banks back it. Banks take risks and reap rewards in the form of interest, while public guarantees back up the financial system. The arrangement leads to moral hazard, a mispricing of risk and private profits at the expense of the public. A maximum interest rate can end these problems.

A maximum interest rate causes a deleveraging and a reduction in problematic debts, which has a stabilising effect on the financial system and the economy. Individuals and businesses must already take action before their debts become problematic. Maximum interest rates can distort financial markets. Most notably, there will be fewer options for smaller firms to borrow. Partnership schemes should fill that void.

Interest payments also affect business cycles. The mainstream view is that central banks should raise interest rates during economic booms to curb investment and spending, thereby preventing the economy from overheating. A rosy view of the future prevails during a boom, so higher interest rates seem justified and borrowing continues for some time. When the bust sets in, the picture alters, and an overhang of debt at high interest rates worsens the woes. It would have been better if these debts hadn’t existed in the first place.

That makes a usury-based financial system inherently unstable. Natural Money changes this dynamic. When the economy improves, higher interest rates increase the attractiveness of equity investments relative to debt. That reduces the funds available for lending. The curtailment of credit will prevent the economy from overheating and avoid a debt overhang. When the economy slows, negative interest rates provide stimulus. In the absence of a debt overhang, the economy is likely to recover soon. A Natural Money financial system is inherently stable.

Featured image: 1919 Cover of The Natural Economic Order. Wikimedia Commons.

1. Simon Smith Kuznets, Stephanie Lo, Eric Glen Weyl (2009). The Doctrine of Usury in the Middle Ages. Simon Smith Kuznets, transcribed by Stephanie Lo. An appendix to Simon Kuznets: Cautious Empiricist of the Eastern European Jewish Diaspora.
2. Sekreter, Ahmet (2011). Sharing of Risks in Islamic Finance. IBSU Scientific Journal, 5(2): 13-20.
3. K. Samuelsson (1955). International Payments and Credit Movements by the Swedish Merchant Houses, 1730-1815. Scandinavian Economic History Review.
4. R. Alton Gilbert (1986). Requiem for Regulation Q: What It Did and Why It Passed Away. Federal Reserve Bank of St. Louis.

Amish family, Lyndenville, New York. Public domain.

Economic Development

nivtricLeave a comment

Before the Industrial Revolution

Before the Industrial Revolution began in England, European crafts and sciences had already advanced. During the Middle Ages, inventions such as gunpowder, eyeglasses, the compass, the printing press, the mechanical clock, the windmill, and the spinning wheel had reached Europe from China or the Middle East. What made Europe culturally different was its individualism. In the 14th and 15th centuries, a new spirit emerged in Italian merchant towns like Venice, Florence, and Genoa. It was the spirit of the merchant which subsequently spread throughout Europe.

And so, Europeans gradually abandoned their traditional Christian values and developed a capitalist spirit by pursuing worldly wealth and pleasure rather than modesty and bliss in the afterlife. There were merchants elsewhere, but the populace held them in low regard because of their depraved ethics, as greed was their core value. It was the pursuit of profit that drove European explorations and colonialism. Making money became the new moral virtue, alongside inquisitiveness, creating a dynamic that would change the world.

During the 16th and 17th centuries, Europeans explored the world and invented the microscope, the steam turbine, the telescope, and the steam pump. Modern science began when Nicolaus Copernicus calculated the trajectories of the planets by assuming that they revolved around the Sun. Isaac Newton later formulated the laws of motion. Europeans expanded their colonial empires, thereby increasing the size of their markets, a prerequisite for the mass production that industrialisation was to bring.

The British were the most successful. Supported by a strong navy, they built the largest colonial empire. They also invented modern banking, creating money out of thin air or financing capital by imagining future revenues. In 1689, the British had the Glorious Revolution, which, like many revolutions, was about taxation. Businesspeople then took over the government. Taxation henceforth required the consent of the taxed, thus, property owners. And the state became a venture of the propertied classes, like the Dutch Republic, the wealthiest nation at the time, already was.

The taxpayers didn’t like to pay for ineptitude and corruption, so the quality of the British state improved, and the state used its military to support the colonial business ventures of the propertied classes. Great Britain had easily accessible coal deposits and developed a large coal mining industry. Due to a lack of firewood, coal had become England’s primary heating source. As mine pits grew deeper, they became prone to flooding. With no transport costs, a coal-fired steam engine to pump water out of the mine became cheaper than manually pumping with buckets.

Ignition

Trade with the colonies promoted British industries, resulting in high living standards and wages in England. In England, coal was easily accessible, so energy was cheap. In Great Britain, the aristocracy had an entrepreneurial spirit and paid taxes, making the British government a reliable borrower. Banking innovations, most notably the creation of money, made British capital markets more efficient. And so, Great Britain had low interest rates, so a low price for capital. The first machines were clumsy and inefficient, but high wages, cheap capital and affordable energy made them profitable.

This combination of factors is why the Industrial Revolution started in England rather than elsewhere. Wages in France were lower, while the banking system was less developed. The rent-seeking French aristocracy didn’t pay taxes, making the French government an unreliable borrower. Thus, interest rates in France were higher. Once the first machines were in operation, inventing new ones or improving existing ones became profitable, so British engineers got busy enhancing the steam engine’s efficiency and inventing contraptions like the spinning jenny and the cotton gin.

The fuel consumption of steam engines dropped from 44 pounds of coal per horsepower-hour in 1727 to 3 pounds in 1847, making it economical to use the steam engine for other purposes, such as trains. The dramatically improved fuel efficiency, combined with other improvements, made it economical to mechanise production elsewhere where wages were lower, interest rates were higher, or energy was more expensive. That allowed the Industrial Revolution to spread to other countries.1

It was a watershed moment. Until then, inventions were rare. Scientists made them out of curiosity. However, from then on, the profit motive generated a permanent drive to pursue knowledge and new technologies and to invent new products. In this way, economising through innovation and scale became a constant, unstoppable process that economists call creative destruction. Factories needed scale to operate profitably, while inventions birthed new industries and made others obsolete.

Humans have started a fire in their midst that continues to grow. We can’t stop it. A classic book on the Industrial Revolution used at universities is David Landes’ The Unbound Prometheus. According to Greek mythology, Prometheus stole fire from the gods and gave it to humans. The Greek supreme deity, Zeus, punished him for his act. The story parallels the biblical story of the Fall. The Industrial Revolution unleashed the unlimited fire of the gods that will devour us.

Since the Industrial Revolution, the general level of opulence has risen dramatically, though it was hardly noticeable at first. Industrialisation made craftspeople in the clothing industry destitute as they couldn’t compete with factories. Everyone else profited from cheaper cloth. Mechanisation made existing products like cloth more affordable, so people had money to spend on new products like light bulbs, making investing in new inventions profitable. Economists call it Say’s Law. More supply generates new demand.

Due to these innovations, production costs decreased, and industrialisation became profitable where wages were lower, energy was more expensive or interest rates were higher. Industrialisation first took off in Europe and North America, but not elsewhere. One reason is that Europeans had become innovation-minded and eagerly adopted new technologies like railroads and telegraphs. These first technologies were simple, thus easy to apply, but the Chinese and others remained reluctant to use them.2

Standard development recipe

Western Europe followed quickly, helped by the French Revolution and Napoleon Bonaparte’s reforms. The French Revolution wiped out the corrupt old French regime and replaced it with a modernised, efficient bureaucracy. The aristocrats lost their power. The French introduced civil registries, rationalised the law code, standardised weights and measures by introducing the metric system with kilograms and metres, and made everyone drive on the right side of the road. Napoleon’s armies then spread these reforms over Europe. Napoleon did to Europe what the first Chinese emperor did to China 2,000 years earlier. Both reigned shortly but left a lasting legacy.

Countries Napoleon didn’t conquer, such as Great Britain, continued to drive on the wrong side of the road and use arcane measures like miles and ounces. And only in Great Britain do aristocrats still influence politics through the House of Lords. To catch up, Western Europe and the United States followed a standard recipe consisting of the following elements:

  • Creating a national market by eliminating internal tariffs and building railroads.
  • Developing domestic industries by using external tariffs.
  • Instituting banks to finance investments and stabilise the national currency.
  • Establishing a mass education system to upgrade the labour force.

These measures had enormous social consequences, which we now refer to as modernisation. Societies came to replace communities. It was the age of nationalism. With the help of mass education, everyone learned the national language, and local dialects disappeared. People learned to identify with their nation rather than their kin and village. The outcome was that modern humans rely on markets and the state more than on their family and community.

Other countries implemented the same recipe but with modifications due to local economic factors. Factory layouts that operated at a profit in Europe were loss-making elsewhere. If energy were expensive, the operation would become more cost-effective using fewer machines and more labour. Japan was the first non-Western country to follow. The Japanese had to deal with local circumstances. High interest rates made investment capital expensive, so Japanese factories held no stockpiles of raw materials and semi-finished products but let their suppliers make them when needed. So, when interest rates rose in the late 1970s and early 1980s, Western industries couldn’t compete with Japan.

There are varying views on why industrialisation succeeded in some countries but not in others. If you dare to generalise, you can make the following observations:

  • East Asian countries like Japan, South Korea, Taiwan, and later China modernised successfully. They had a sense of nation and experience with rational government administration. Their bureaucrats and businesspeople successfully implemented modernisation projects.
  • Latin American countries were less successful. They were former colonies lacking national identities. Their white elites neglected the education of indigenous people. There were a few large estates and hardly any small-scale farmers. Wealth inequality prevented the development of a middle class.
  • The Soviet Union modernised with the help of state planning. Industrialisation of heavy industries succeeded, allowing the Soviet Union to defeat Nazi Germany. Agricultural reforms were a disaster, and consumer products were of poor quality. By the 1970s, it became clear the Soviet Union couldn’t keep up with the West.
  • Several countries in the Middle East modernised with dictators implementing socialist development models based on the experiences in the Soviet Union. Some Arab countries became wealthy from oil revenues. Few countries in the Middle East have developed industries that compete in international markets.
  • Africa lagged. African borders didn’t match the tribes living there, so there was no sense of nationhood. There have never been states in most of Africa. European colonisers ended traditional forms of government and property rights, contributing to poor governance and corruption. Africans started with a disadvantage.

Industrial politics

There are requirements for a modern economy, though a country doesn’t need to meet all of them. A capable government and an educated workforce can turn a situation around. Japan has few natural resources, but has become one of the most advanced countries in the world. It was the first non-Western country to industrialise. Japan was also lucky. After World War II, it had access to US markets because it was a close ally of the United States, which needed it to help it export its way into prosperity. Argentina had fertile land and was one of the wealthiest countries by 1900, but it has since then gone downhill. To successfully modernise, a country probably needs:

  • a capable government that understands economics and is business-friendly
  • an educated workforce as workers must read, write and use technology
  • businesspeople, investment capital, and sufficiently ensured property rights
  • a large enough market, thus a sizeable middle class
  • an industrial policy, thus picking industries to compete in international markets, helping to develop them, and supporting them with tariffs or subsidies

There are several kinds of industrial politics. Neo-liberal politics aim to pursue economic growth by promoting trade, lowering taxes, and reducing regulations. Unrestricted trade allows areas and people to specialise and compete to produce more and better products, enhancing overall opulence. It also promotes a race to the bottom at the expense of our future. Industries go where wages are lowest or where they can dump their waste and avoid paying for government services.

Making the economy sustainable and people-friendly also requires industrial policies, such as reducing competition and introducing regulations and controls. And it requires ending imports from countries that don’t adhere to the same ethical standards. A sustainable, people-friendly economy can only exist on a level playing field with other economies that adhere to the same standards. These measures increase costs and reduce living standards. An extreme case is the Old Order Amish. They choose to be self-sufficient and live simple lives. Their economic model resembles community economics.

Community economics aims to enable people in a community to help each other by buying and selling goods and services using local currencies. It never became a worldwide success because communities lack the scale for self-sufficiency. There is also a lack of commitment, which is something the Amish do have. Few people barter their labour or goods in their community if they can get better deals elsewhere. Commitment is vital. Without it, there will be black markets with merchants smuggling in illicit goods.

Featured image: Amish family, Lyndenville, New York. Public domain.

1. The British Industrial Revolution in Global Perspective. Robert C. Allen (2014). Cambridge University Press.
2. Sapiens: A Brief History of Humankind. Yuval Noah Harari (2014). Harvil Secker.