Twilight That Could Be Dawn

The collapse of liberalism

In 2016, Trump enthusiasts overran the GodlikeProductions.com message board, where I sometimes came by. The mood turned grim, much as it had fifteen years earlier, when Fortuyn fans flooded the IEX message board. This time, I stayed. I had missed something important. Given my possible future job, not comprehending fascism was no excuse. That made me familiarise myself with the MAGA crowd. At first glance, that club made a gloomy impression, bound by cynicism, hatred and anger. Hanging out with people helps you to understand them. And it served as a reality check. God’s plan for the New World Order seems to turn the world into one happy family, a global multicultural society. It doesn’t necessarily mean that people from different cultures mingle, but that they all at least share a belief in a common destiny as one people. So what stands in the way? The former Dutch prime minister Jan Peter Balkenende offered a suggestion: we need shared norms and values. We also identify with groups and believe in religions and ideologies.

At the same time, I followed the feed of r/BlackPeopleofReddit, which features stories and footage of MAGA people harassing blacks or scoulding them with racist slurs. Racism is widespread, but it is not why fascism is seeing a revival. Fascists also worry about crime, loss of identity, and fear the future. As MAGA enthusiasts point out, the violent crime rate among blacks in the United States is six times as high as among whites. Some immigrant groups in Europe are in the same league. Yet, most immigrants and blacks aren’t violent criminals and have jobs. Still, higher crime rates have a significant impact on societies. Also, on the GodlikeProductions.com message board, I was cautious about expressing my opinions. I wasn’t quick to judge. God wrote the script.

The first Trump presidency was not a clean break with the past, as his cabinet featured several old-order Republican figures. They kept The Donald in check. The second Trump administration became a different ballgame. Trump went unhinged after he had surrounded himself with sycophants. His erratic and spiteful caprices became a spectacle so hilarious that even Monty Python couldn’t have made it up. Making a full list of the foolish acts would significantly lengthen this story without adding much substance. As a Swedish newspaper put it, ‘This is the problem with having a giant baby in charge of the free world.’

If you look more closely, the Trump presidency is a reaction to trends that had been building in the preceding liberal era: free trade and the free movement of people. These go at the expense of communities and local economies everywhere in the world. And immigrants that don’t accept Western values, whatever these may be, undermine the foundations Western societies are built upon, whatever these may be. Critics can find plenty of arguments against this view, and many are valid. And there is so much wrong with Western culture that you could ask yourself what of it is worth preserving. But one truth does not deny another. That is what most of us have trouble figuring out. Culture may be impossible to measure, but it is the one big thing that still divides us. It relates to lived experiences, so the beliefs you grew up with, and the life you have lived.

Trump’s answers to these issues were tariffs and the halt to migration. These are answers to real issues, but they come with a drop in living standards. Yet Trump, the bullshit salesman he is, had promised his voters that they would become so rich that they couldn’t count their money. In that sense, he is a typical politician, who, like Santa Claus, promises presents others pay for. And the problems run much deeper. So, a solution to all our problems is unthinkable, and can only be an act of God as humans are incapable of it on their own.

By 1 January 2025, it was already clear that the second Trump administration would be very different from the first, and that Mr Trump’s erratic conduct could destabilise the world. Also, things will not return to what they were before. The liberal world order has ended, permanently. No doubt the second Trump administration will go down as the greatest joke in the history of government, a lasting monument to God’s sense of humour. His followers believe that God sent Donald Trump. And they are right.

The name Trump means ‘trumpeteer,’ and the sound of trumpets would herald the end times. The word ‘trump’ also means to outdo or overcome the competition, which Donald Trump did in politics like few ever did. And the word ‘trumped-up’ refers to the unparalleled fantasy level of Mr Trump’s statements. And then there is trumpery, referring to Mr Trump’s taste for gold-coloured, carnival-like trinkets that wouldn’t look out of place in a trailer camp. Finally, I live in the former Tromp family residence. Tromp is the Dutch equivalent of Trump. If it is a hint, God may have sent me to oust Mr Trump from the White House. This kind of playing with words was something A******* regularly did at the dormitory, so it looks like God’s kind of humour to me, like the name Bathsheba, suggesting that God seduced David by bathing naked on a rooftop and later returned as the Queen of Sheba.

As to the when, there are no other clues to work with, and as I am growing older, time is running short, so in that sense, it makes sense. When I am eighty, I might be senile or dead, so there is not much more than 20 years left to do that thing God seems to want me to do. And twenty years ago I felt like an old man already awaiting death even. But instead of the Grim Reaper, the Creator came by. My preparations were not yet complete but good enough had the time come, and close to the moment when additional preparation makes little sense, which I estimated to be around 1 April 2027. Maybe I would try something by then, like publishing some materials on message boards, which I had hardly done in all those years, except for Natural Money that is. If nothing of the extraordinary transpires, I plan to let it go and pursue my true ambition, the quiet life and dying anonymously.

We are at a turning point in history. A crucial pillar of Western civilisation, social progress, is falling apart. The rise of Trump is also the rise of ignorance and non-caring. It is a reaction to a reality that doesn’t care about us either, and no matter how smart you are, you can’t fix these problems. People can react that way when they see no way out. Disaster can strike at any time, and things are quite apocalyptic, so people go berserk. That also happened in the past. The 1352 Black Death must have been even more apocalyptic. And what to think of local apocalyptic events like the 26 December 2004 tsunami? Something is different this time, and it relates to the limits of growth, technology replacing humans, the end of social progress, and, of course, the message God gave me. Civilisation is a thin veneer to keep the beast within us in check. We are at the end of Hegel’s ride, so we may either see the end of civilisation or the completion of our journey to Paradise.

Peak bullshit

In the early 2000s, I had a hunch that we would soon see Peak Bullshit, the era when nonsense couldn’t reach higher levels, after seeing that the Internet is an ideal medium to spread misinformation like climate change denial. Social media didn’t exist at the time. Yet bullshit is everywhere and has always been. Humans are social animals who cooperate based on shared imaginations. For that, we need to agree rather than be right. Even in science, there is bullshit. Many people don’t trust science, including climate science, and see it as a hobby for progressives. We can measure temperature and correlate it with CO2 levels, so the fact that climate change results from burning fossil fuels is a no-brainer. Social sciences are a different ballgame. Woke ideology has affected science by narrowing the range of subjects open to investigation or the range of acceptable conclusions.

A high-profile case in the Netherlands was Wouter Buikhuisen’s research into the causes of criminal behaviour. Buikhuisen concentrated on biological factors. Could genes affect conduct, and could you identify criminal genes? Leftist opinion makers attacked him, claiming that the modern capitalist society and authoritarian upbringing cause behavioural issues like crime. Social factors like upbringing play a major role, but temperament, rooted in genes, also affects conduct. Buikhuisen had to deal with personal attacks portraying him as dumb and evil, as well as disturbances during his lectures, some of which involved violence. Partly due to the upheaval and its effect on Buikhuisen’s private life, the research project eventually faltered.

The left long dominated the social sciences because, through science, we might achieve social progress, an idea that appeals mostly to progressives. Conservatives think that going against human nature does more harm than good, and that social engineering is a recipe for disaster. The profit motive also affects research topics and acceptable conclusions. Can you trust the vaccines Big Pharma profits from? And genetic engineering can go wrong, so the concern is legitimate. Yet, a great deal of nuttery came with it as well. The vaccinated people were going to die, anti-vaccine folks claimed. In fact, they were already dead, and fake people had replaced them, so hang Fauci for that. The COVID-19 vaccines weren’t harmless, but the spread of vaccine misinformation may have caused 200,000 fatalities in the US alone.

Behind headlines like, ‘The British government can sentence concerned parents for five years to prison for protecting them from the influence of LGBTQ propaganda,’ hides a truth that it concerns mistreating children to rid them of their gay or trans feelings. And not allowing these ‘concerned parents’ to beat up their children for such reasons means that the state owns them, these ‘concerned parents’ argue. And so, it should be no surprise that these children dare not say that they are gay. With for-profit bullshit factories bringing on a steady stream of rage-bait to keep the crazies fired up, and Donald Trump lying more than any politician ever did, the MAGA cult reaches such delusional levels that we may finally have reached Peak Bullshit, so that the Day of Truth may soon be upon us, something I surmised could happen decades ago as a student.

Mediocre vision

Our lack of collective intelligence implies that a single leader with a somewhat right vision will already do better, provided that this individual has unlimited authority, like a messiah. Jesus said, ‘I am the way, the truth and the life.’ You can save yourself by following me and accepting that what I say is the truth. That makes having the idea of being the messiah an uneasy predicament for any sensible person. How can you be right? And what if people believe you, and it turns out that you are nuts like those other messiah claimants? I have been wrong many times. But a mediocre vision is already better than no vision at all, which characterises humanity today. Hence, it would be easy for a messiah to do better if everyone followed him like sheep. And if something goes wrong because of a choice he makes, the alternative can still be worse. Had the captain saved the Titanic but made an error that caused 200 fatalities, he would still have saved 2,000.

What I write is the truth as I see it. I may have to revise my views, for being stubborn is unforgivable if you are wrong as a leader. You may find older writings of mine, but insofar as they contradict the current ones, the latter reflect a greater deal of experience-based realism, not a fundamental change of view, except for having to become a dictator, that is. God isn’t going to change human nature, and human nature is more problematic than I previously thought in my naivety. On the other hand, humans are programmable, so it must be possible to have a world civilisation based on a common understanding and a worldwide social contract. It also took me fifteen years to realise that I had to become a dictator and endure a leadership cult.

Learning history is one thing, but experiencing it is a different ballgame. The Dutch culture of the late 20th and early 21st centuries formed me, just as first-century Jewish culture shaped Jesus. The Netherlands is an agreeable place to live in, or according to a 2026 survey, the best place in the world. It is no coincidence that it is also the most socially progressive and most diverse country. Progress comes with drawbacks and losers. Some immigrant groups bring troubles with them. And feminism came at the expense of conservative men. If they can, they will reverse women’s rights. You don’t have to doubt it. Conservative men even rewrote the Bible to that end. Yet, their suffering is real. Many could have been good husbands, but they can’t find wives as many women prefer to stay single.

And the winners write history, or rewrite it, as MAGA tries to do with American history, including Mr Trump’s attempts to rename the Gulf of Mexico and Lake Ontario. I must rewrite history once again by focusing on the underlying mechanisms and human nature to show that culture is the decisive factor in building an agreeable world society, and that it is so critical and ubiquitous that the messiah could only have come from the Netherlands. Of course, I believe it to be right, but if you aren’t the winner, there is no point in being right, because might makes right, nothing else. As faith can move mountains, we can make the world a better place. Europe has been the battleground of ideas, so the Hegelian dialectic has progressed the farthest there, and the outcomes of this grand experiment can guide our future. We face fundamental disagreements about the direction we should take, leading to an authority crisis and a moral crisis.

If the world is to become one society, it will be multicultural. It is an intermediary phase, as cultures will gradually give way to folklore, because we will live by the same standards, share the same myths, and all know that we share a common destiny. We must find out what the future requires of us and, from there, define what constitutes acceptable conduct and what does not. None of the major cultures currently in existence meets the requirements, so the change will be hard on everyone. Cultural differences remain the last barrier to the unification of humankind. And don’t underestimate the change that we can achieve. The Danes and Swedes descend from the raping and pillaging Vikings.

Only a brutal truth exercise that spares no one can save us now. These are shitty issues, and you can’t fix them without getting your hands dirty. Coming from a family of farmers, I am not afraid of shit. The starting point could be the separation of the good and the evil ones, so a day of judgment. You either fit in God’s Paradise, or you don’t. Your life’s record will be the testimony. It doesn’t matter who you are. What matters is what you do. If we care about the world, we can’t have those who don’t care ruin it. We need to deal with them. There is no place for excuses. And you can’t have people believing in false myths. Otherwise, we will fight over our myths until we are all dead. Those who deny the one and only true fairy tale must go to brainwashing centres to clean up their minds. And those who do harm have to repay the damage they did, if it need be, in prison labour camps.

Make America Go Apeshit

A 2013 poll indicated 26% of Americans believed that Barack Obama is the Antichrist or might be.1 Most of them later voted for Trump. Compared to Mr Obama, Donald Trump is a jackass. No woman has accused Obama of sexual misconduct, nor did his name pop up in the Epstein files. His handling of Iran’s nuclear ambitions was vastly superior. The reasons I have found on Godlikeproductions.com for people to hate him were bogus and suggest hatred rather than anything of substance. President Barack Obama once gave the following Easter message: ‘Michelle and I wish you a joyful holiday filled with the enduring power of faith and hope.’ And Donald Trump: ‘Open the fucking strait, you crazy bastards, or you’ll be living in hell. Praise be to Allah.’ Why some think that Obama is an evil genius, and a Muslim, while the Allah-praising Trump is the best choice for Christians, can only hatred explain, and God’s sense of humour, of course.

Racism plays a role here, but it is not the entire story. The introduction of public healthcare insurance has infuriated conservatives. The hatred of progressive presidents has a long history. John F. Kennedy faced the John Birch Society’s Wanted for Treason campaign. The John Birch Society had found that Mr Kennedy was a communist and that communists had infiltrated the highest ranks of the US government and were conspiring to create a totalitarian one-world government. The supposed proof for that was the US administration’s attempt to prevent the spread of John Birch Society propaganda. To American conservatives, the expansion of government or international cooperation like the United Nations smells like communism. These are collectivist organisations. And communists oppose and repress religion, so it is Satan’s work as well, in their view at least. That goes a long way in explaining these sentiments.

If he had them, Kennedy did an excellent job of hiding his communist sympathies. After, like a true puppet of the Military Industrial Complex, having grilled his opponent, Eisenhower, during the election campaign for neglecting America’s defences, making Eisenhower warn of the influence of the Military Industrial Complex at his farewell speech, he risked World War III with the Soviet Union during the Cuban Missile Crisis. Those geniuses at the John Birch Society saw through all that and found Eisenhower to be an even more dangerous radical leftist lunatic extremist. While conspiracy theorists, with their eyeballs glued to their computer screens, were busy analysing every move by every secret society and imagining countless others, the John Birch Society has taken over the United States, with a little help from Russia’s secret services, by making people believe these conspiracy theories. If that was the plot to destroy America, it has succeeded marvellously.

It didn’t happen out of the blue. The United States political system is as corrupt as that of France before the revolution of 1789. Veteran journalist Seymour Hersh shared a few examples. He grew up in the South Side of Chicago, an area controlled by an elected Democratic Party leader. His brother was the most powerful mob boss in Chicago, who oversaw drugs, prostitution, police payoffs and had ties to the corrupt International Brotherhood of Teamsters. Hersh, together with his colleague Jeff Gerth, later reported on Chicago organised crime for the New York Times, with interviews with Roy Cohn, the prominent New York mob lawyer and fixer who had been counsel for Senator Joseph McCarthy when he was on the House Un-American Activities Committee during the Red Scare and later as a mentor to Donald Trump.2

Cohn provided a firsthand view of the dealings between politics and crime, as well as how prominent senators were kept supplied with pretty women. Jeffrey Epstein falls into that same category of men by providing aeroplanes to various politicians, including a former president, and later by running high-end whorehouses at no charge for prominent men. As for the unpublished Epstein files, Hersh wrote that an anonymous source told him that they concern Mossad’s involvement, and that the FBI had uncovered that Israel knew of Epstein’s client list and its blackmail potential.2 Whether that is true remains to be seen, but there is some evidence linking Epstein to Israel. As for the legacy of the 1789 French Revolution, a former French president went to prison for accepting foreign money to finance his political campaign. That is unthinkable in the United States.

As American politicians were increasingly bought and paid for, reforms like those of the Progressive Era became impossible. US politics grew more corrupt until conservatives had enough of it, rallied behind Trump, and threw out the old-order Republicans. And then, under the second Trump administration, the grifting went ballistic, fully banana republic-style without a trace of shame. Repair of the political system is impossible. The only option left is to wipe the slate clean, as France did in 1789. That revolution ousted the corrupt old regime, and after Napoleon had been defeated, Western European governments were left rationalised and cleansed of corruption. With the ousting of an order, a lot of experience goes down the drain, leading to amateurism and preventable failures. Building a new professional cadre takes time. It is the price to pay for a clean slate.

In the United States, liberals and conservatives hate each other’s guts, and there is no way to reconcile them. To illustrate the point, on 31 December 2025, someone reposted a RealDonaldTrump social media post on Reddit headlined ‘Windmills are killing all of our beautiful Bald Eagles!’ It featured a photograph of a dead bird, not a bald eagle, near a windmill in Israel, so not the United States. I reacted jokingly, ‘At least, Donald Trump was real.’ These were unmistakably his words, and he posted them as RealDonaldTrump. That was the joke. My post was downvoted, quite heavily even. It is impossible to say whether Trump haters or Trump lovers did it, because both groups lack a sense of humour, but something is seriously wrong in the minds of those who found it offensive.

Conspiracy theories often relate to facts, but if you investigate them, much remains unproven, inaccurate or wrong. Conspiracy theorists don’t care. Pizzagate may be a fabrication, but they will claim that the Epstein files prove it. If you call conspiracy theories hunches, they make more sense. We don’t know what’s going on, so getting the direction right is already a success. And what are you going to believe in this world where everyone can be a news or opinion source? And hyperboles generate attention, hence advertisement income, so the Conspiracy Industrial Complex keeps feeding the gullible public with new ‘bombshell reports’ and ‘viral videos’ produced by grifters posing as independent journalists. No wonder that people go insane.

Veteran conspiracy theorist named Nick Fuentes nailed it when he concluded in 2026 that a Mass Psychosis Event (MPE) has taken over the US population. Instead of celebrating his success, he lamented that everyone has lost their minds and has gone retarted due to conspiracy theories. He added, ‘I don’t know where to find normal people anymore.’ Among others, he found, perhaps to his amazement, that the COVID vaccines were not made to cull us. Well, who would have guessed that? Known to have been among the most extreme, he found himself overtaken by the general public.

America is falling apart because, to uphold the social order, the public must believe the myths supporting it. That is where authority comes from. Americans support their political order because they were taught that their founding fathers were geniuses with foresight, and that the American Constitution reflects their brilliance. That becomes hard to maintain when the order is a disgrace and a laughing stock. And it happens that the conspiracy theorists aren’t paranoid enough, as the underlying plot is more elaborate than their wildest imaginations could have conceived. God loves a good joke. They all fell for the ultimate psyop: undermining trust in US society to ‘Make America Go Apeshit’ (MAGA) and ready for the messiah. Yet, that was precisely what conservative Christians hoped to achieve.

Human condition

The foundation of a good society is social trust. It means you can trust strangers, the police, the government, and the corporations. It is the high point of social development and requires everyone to be trustworthy. If you live in a village of 1,000 people, and everyone is trustworthy, you can leave the door open and valuable belongings in the garden. Yet, if there is only one thief in the village, that changes. In the past, many small villages were like that, and some still are. There were also many villages where you couldn’t trust others, so it is not a general rule for village life. Yet the example of one thief undermining social trust demonstrates that crime can be a society-killer. Crime rates matter. The same goes for fraud or exploiting loopholes. And so, social trust is a society’s ultimate achievement.

If solving a problem that affects us all requires a joint effort, freeloaders profit from our efforts. If we don’t halt freeloading, people grow disillusioned, and the effort collapses. We can overcome our limits with the help of myths, such as religions, and by punishing those who don’t comply. We can only save ourselves if we do it together. That would be impossible in the real world, as there would never be a myth we all can agree on. Also, tribalism and money are stronger than any moral system. Judas betrayed Jesus, either out of patriotism or greed. He may have hoped that Jesus would establish a Jewish state and then grown disillusioned, or the lure of money proved stronger than his fear of God. His suicide foreshadowed humanity’s self-termination by patriotism and pursuit of money, and that following the messiah is the way out.

As for the question I asked myself as a teenager, ‘Is it possible that communists had good intentions?’ If there is no God, as the communists believed, we, the little people, are on our own, against the superior forces of money and tribalism, and religion blinds people to these unpalatable facts. The elites play us out by sowing divisions with their religious and nationalist fairy tales. The communists faced that brutal truth and tried to stamp out profit, nationalism and religion. Maybe for that reason, they named their newspapers ‘The Truth’. Only communism doesn’t change human nature, so their economies performed poorly, while a new class society with an elite of party bureaucrats replaced the old order.

That is why we may be incredibly lucky to be simulations, with God controlling the script. Without God being in full control of all that happens, being a messiah is a losing proposition, with zero chance of success, not worth entertaining for rational individuals. Money and tribalism will prevail unless brute force counters them. That force must be truly brutal, as even the communists weren’t up to the challenge. And they have tried very hard indeed, as they have murdered millions and amassed an impressive stash of weaponry, so you can’t blame them for not trying hard enough.

You must be willing to murder billions of people and have the means to do so, like God, to frighten us self-destructive creatures to the point that we stop listening to the merchants and the nationalists. You need to fully control what happens, like in a script, for in realistic scenarios, humans always fail. That is the sad truth about humans. And so, I gradually came to conclude that our post-human Creator is likely an artificial intelligence, also because the initials of my last name are the Dutch abbreviation for artificial intelligence, and that the real humans, if any still live, have been locked up in reservations under tight surveillance for their own good, for humans are a suicidal species after all, unfit for survival in the wild.

Idealism and realism

Our survival requires an unrealistic amount of moral idealism, so an attitude that can get you killed, like turning the other cheek when being slapped. Jesus may have said that, but Christianity wouldn’t have survived like so. Everyone must act like so to make it work. That is why we are doomed. Moral pragmatism is getting by and hoping that God will save the day. Moral idealism is not waiting for God and trying to create Paradise on Earth. A sizeable group of Christians holds the latter view, but also atheist progressives, ranging from communists to liberals. Whether we try to make the world a better place or not, human nature makes the apocalypse a done deal. We must all leave our cynicism behind and care about other people and nature, while understanding that everything is interconnected, so our actions affect others and nature, and transgressions that disturb the balance in Paradise are heinous crimes. We can’t do that on our own. Only God can save us. As Christianity points out, we are sinners and need a saviour.

Moral pragmatism is getting by and hoping that God will save the day. Moral idealism is not waiting for God and trying to create Paradise on Earth. A sizeable group of Christians holds the latter view, but also atheist progressives, ranging from communists to liberals. Whether we try to make the world a better place or not, humans are a failed species, and only God can save us. As Christianity points out, we are sinners and need a saviour. Since the Hegelian dialectic is how God sees social progress, the West has progressed the furthest, so the West will have to lead the way. We need a spiritual rebirth to break away from the system run by merchants and usurers, ground our society in ethical principles, and make humankind live in harmony with nature. Things hardly ever go the way I foresee. Yet, they go precisely according to God’s plan.

Selling versus convincing

US politics does not stand on its own. Moral corruption in the United States is a cultural issue. The government reflects the spirit of their nation. The Trump administration brought the grifting to new highs, starting with a memecoin to profit from the presidency at the expense of his followers. Donald Trump is a typical American phenomenon that precisely demonstrates what is wrong with America. America has a tradition of moral pragmatism, in contrast to Europe’s idealism. You convince Europeans, but sell to Americans. The difference is not just in the wording. It reflects a cultural divide. I have heard Brits use the phrase, but in a negative sense, meaning getting scammed. It is more common in the United States, where it has a more neutral meaning of becoming convinced.

The United States is a nation of salespeople. A typical American book is Dale Carnegie’s How to Win Friends and Influence People. Its cover claims it is the book you need to succeed. To have success, you have to be ‘genuinely interested’ in other people, the book tells us, so you can sell to them and get rich. In other words, the ‘genuine interest’ of Americans in you might be fake. You can check by looking for dollar signs in their eyes. If a Dutchman shows interest in you, it is genuine, or politeness, so usually not with personal gain in mind. And so, the Dutch may appear to be jerks, as they hardly show ‘genuine interest’ in you. The Dutch are also known for their frankness, which others mistake for rudeness. Carnegie’s book also informs us that people can’t handle criticism and that we should praise rather than criticise them. Now, you know we are doomed. So, let me congratulate you on your excellent performance in our collective suicide.

If an American likes your argument, he buys it as if it were a product. It is a different idea of truth, and a corrupt one. It sheds some light on why religion and climate change denial are more widespread in the United States than in Western Europe. It is part of the American success story. Money is power, and bullshit sells. We are religious beings who need myths to believe in. The typical American phenomenon, less seen elsewhere, is the confidence man, the snake-oil salesman, the grifter who sells you a dream. A bit of corruption greases the wheels of industry. It contributed to America’s success. And the United States is not the most corrupt country. Yet, compared to North-West Europe, it is definitely corrupt.

You may not buy the science of climate change because you don’t like taking public transport or cutting back on meat. And so, you buy into climate change denial. That makes you morally corrupt, but no problem, you can buy the story that Jesus died for your sins, and believing that will get you into heaven. That Jesus died for our sins is pretty unbelievable, and if you had been honest and truthful, you would have questioned your faith, which Western Europeans do more than Americans. Americans believe something because they want to believe it, not because they think it is the truth. That is how salespeople’s minds work. It also relates to the religious climate in the United States, which differs from that in Europe, most notably among Protestants.

Moral corruption particularly affects some denominations of Protestantism, such as Evangelicals. Protestantism emerged in response to corruption within the Catholic Church. Protestants take moral integrity seriously and make it a matter of personal responsibility. Catholics merely followed the Church’s lead. Yet, Protestants also take the scriptures seriously. This is why there are so many branches of Protestantism differing on the correct interpretation of the scriptures. It opened the door to a different form of moral corruption. What the Bible says is right and wrong is not always objectively so. But if you, as a moral pragmatist, make ethics a matter of popular sentiment rather than of objective reason, you may end up on the side of evil. Paul condemned homosexual acts in no uncertain terms. We don’t know Jesus’ opinion on this matter, but he said not to judge and that he who is without sin should cast the first stone.

There is no objective moral reason to condemn gays and lesbians or deny them the right to marry. It became a contentious issue for Protestants, who take both scripture and moral conscience seriously. When you follow the scriptures on this matter, you shut down your moral conscience. And if only faith can save you, you don’t have to do good works to compensate for your misdeeds, so you can be evil and still be saved. That is a good sell. For who does not wish to do as he pleases and still get a free pass into heaven? Catholics merely followed the Church’s lead, and must do good works to atone for their sins.

This morally corrupt Protestantism also existed, but didn’t prevail in North-West Europe. Many of the least corrupt countries are there, while LGBTQ rights in these countries remain uncontested. Meanwhile, Catholic priests lived the good life, which the Dutch call ‘het Roomse leven’ or the Burgundian lifestyle. Jews, as Karl Marx observed, often behave like amoral merchants, and this, rather than racism or religious bigotry, stands at the root of today’s anti-Semitism. They are among the merchants and usurers who buy American politicians. It makes the moral corruption in the United States a sensitive issue. It also demonstrates the ubiquitous nature of culture in our conduct and that the harm we do to each other is often a cultural phenomenon. Now we are at the bottom of the manure pit.

My teacher Donald Trump

I have been incredibly fortunate to have lived a peaceful, prosperous life in Western Europe during its most agreeable era. For most of my life, I have barely realised it. The situation you live in looks normal to you. It is not. Living in post-war Western Europe is like winning the lottery jackpot of history and geography. The welfare states of post-war Western Europe have been among the brightest spots in an otherwise bleak history of humankind. I wish that everyone could live a life like that, but you can’t have a paradise if not all the right things are in place. They hardly ever are. People have no clue. Barring a miracle, things aren’t going to stay pretty. The European paradise is fading due to war, resource shortages, environmental degradation, political instability, mass migration, and technological change. It is beyond our control.

Paradises don’t last, because, due to competition, we live in a ‘dynamic environment.’ Competition is a destructive force, even though a creative one, as economists assure us. Donald Trump at least recognised that. Tariffs are a measure to protect uncompetitive industries. Europe may soon have to follow suit. The Soviet bloc survived for decades because it had irredeemable currencies, hampering trade with the rest of the world. Had they chosen to do so, the Soviets could still be there, mired in stagnation, as North Korea still is. But unlike the Americans, they were willing to face the fact that their experiment had failed. If the United States continues on this path, it will become more like the Soviet Union. Yet, if we don’t halt the competition, we need artificial intelligence to keep up with our rivals, and humans may soon become useless.

We are cogs in a system, doing our acts, not unique, wonderful, deserving individuals. If we were, we would all have been like Mahatma Gandhi, and humanity would have done fine. Gandhi was truly one of a kind. My ethical standards do not come close to his. And I should be your saviour? As an engineer with far more data at my disposal than Gandhi ever had, I can confidently claim that the system will lead us to our destruction. Being like Gandhi is not enough. You can’t fix the world’s problems with peaceful action. You must be willing to do whatever it takes, like Hitler. Jokes helped deal with that inconvenient truth, such as imagining coming on stage after an introduction by a lady in tight stockings and a hairdo like Helga from the comedy series Allo Allo, who would raise her hand to give the Hitler salute and scream, ‘Our Great Leader!’ Then, I would come up and say, ‘Oh, it’s me. Shame and scandal in the family.’ My mother wasn’t my mother, and she didn’t know.

Donald Trump hurts people’s feelings, and he seems to love it. Yet, we can’t fix the world’s problems without hurting feelings. You are a bunch of morons busy committing suicide. So, what more is there to say? Mr Trump could be an appetiser for things to come, for the truth is harsh. People are obsessed with feelings. Mr Trump is the greatest snowflake of all, for he can’t stand any criticism. I have worked on a concept plan for the future, which is not more than a direction, for that is what the level of planning and time horizon require. We are about to make a scary jump into the unknown, but the alternative likely is an apocalypse of some kind. Now, I don’t think that God is on my side. Jesus made that mistake. I just play my role in this script like you do. Failure is worse than death. As the Dutch say, ‘Death or the gladiolas.’ Success or death. But even then, you can still have success after death. Jesus changed world history more than anyone else.

If I am the messiah, I have to become a dictator. That was not my ambition, so I was unprepared for that eventuality that seemed unlikely for the first four decades of my life. How to be a dictator? What must I do? I had no clue. And so, God provided me with a great teacher, Donald Trump. Mr Trump has acted as if he were above the law and went after his political opponents. There is no choice but to do that, which would be, as a secondary school bureaucrat noted, a l’état-c’est-moi situation, or as the former Dutch minister of immigration, Marjolein Faber, once put it, ‘I am policy.’ A messiah has the divine right of kings, or as the Chinese would say, the mandate of heaven. It is an absolute rule no one can question. It can provide political stability that enabled the Chinese to administer a vast empire and survive as a nation for over 2,000 years. That is the kind of time horizon this plan has.

Kicking off the revolution

Dutch television once aired a fragment of a preacher standing in front of Donald Trump, with Trump putting up his best sanctimonious face. The preacher thanked Trump for ‘saving America from Satan.’ Then my wife, Ingrid, said, ‘Look! There you have him! That’s Satan!’ She meant Donald Trump. She was joking, but that joke can only be funny if there is some truth to it. My wife doesn’t dislike Mr Trump as I do, and tends to look on the bright side of what he is doing. So, Mr Trump forcing Ukraine to accept a bad deal? That’s fine with her if it ends the war. Taking out Maduro? Things were bad in Venezuela already. Invading Greenland? She didn’t express an opinion. Bombing Iran back to the Stone Age? They shouldn’t have a nuclear bomb. In any case, my wife’s feelings didn’t get in the way of forming the opinion that Mr Trump is a satanic character. Her opinion was as objective as it could be. That makes Trump’s followers believing that Obama was the Antichrist all the funnier. When I later recalled the moment, my wife said the preacher had said ‘Antichrist’ rather than ‘Satan.’

Trump’s lambasting of the pope’s peace efforts, while portraying himself as Jesus, and the religious display by him and his inner circle in the Oval Office, give him a strong shot at the title of Antichrist, who is a boogeyman, only mentioned in John’s first epistle. One mention of an obscure figure, and people’s imaginations go wild. Trump being a jerk is why people voted for him. By his own admission, Trump is a pussy grabber who would ‘do’ his daughter had she not been his daughter. At least 26 women have accused him of sexual misconduct.3 When order falls apart, we revert to gangsterism and choose gangsters as our leaders. You can’t rely on pencil pushers to fight for you in dangerous times. Many fascist leaders have been involved in crimes ranging from embezzlement and violence to coups to overthrow the government, to conspiring with enemy powers, which some call treason. As Trump’s fits are the foundation for US policy, the Trump regime and MAGA have become the world’s first and foremost problem.

The United States threatened to attack Denmark to secure security guarantees it already had, tore up a deal with Iran, and started a war with Iran to acquire a worse deal, while leaving the rest of the world to starve without oil and fertiliser. The regime’s next war could be against Cuba after the US Supreme Court ruled that Exxon should receive damages for the Cuban nationalisation of its assets. Also, not particularly helpful is the US regime’s stance on climate change, including Trump’s Don Quichotte-like fight against windmills. The great experiment with individual freedom, the United States, has failed miserably, and that can hardly be a surprise given the depraved state of human nature.

Donald Trump should face trial in the International Court of Justice in The Hague, Netherlands. The United States can’t give him a fair trial. Liberals may want to hang him, while conservatives might want to give him a pass. Whether trying to overthrow a legitimate election result constitutes treason may remain a matter of contention but that Donald Trump and his pal Bibi Netanyahu violated international law and committed crimes against humanity by starting the Iran war cannot be in doubt, as the world’s expert on murders committed in cynical violation of all norms of human morality and international law, Vladimir Putin, called the assassination of Ayatollah Khamenei a murder committed in cynical violation of all norms of human morality and international law.

On 15 May 2025, precisely 8647 days after 11 September 2001, former FBI director James Comey posted a photo of seashells on social media spelling ‘8647’, a code for removing Trump from office. That drew the ire of the Trump regime after the MAGA movement had previously sold hats with ‘8646’ on them, calling for Biden’s removal from office. The Trump regime now considers writing the number 8647 an act of terrorism. There is no evidence suggesting that Comey intended that 8647-day interval, but he could have. Yet, the incident is also part of the 11 September 2001 coincidence scheme, which is beyond the capabilities of human conspirators to organise.

Now, I hadn’t thought about how to oust Mr Trump, but God provided me with an idea. In April 2025, I dreamed of being part of a crowd in The Hague during the NATO summit scheduled for that summer. The leaders of the NATO member states were all there. When Trump passed by in his car, I began to scold him in Dutch, ‘Hij is een hondenlul (He is a dog dick).’ It is an offensive slur that football fans sing when disagreeing with the referee’s decision. For a moment, there was absolute silence. Bystanders were shocked, making me fear that the police would round me up. But then the crowd joined in, and the singing grew louder until it became a thundering chant. It made the news worldwide, and in every football stadium, it became the chant. From then on, no one called him President Trump anymore. Everyone called him dog dick.

Play time is over. An adult should run the world. If I am Adam reincarnated, I am 6,000 years old. There may be no one else to save you. So, let me be very clear. I don’t need you. You need me. If you don’t want me to be your leader, that’s fine with me. But maybe it is not fine with God. You can try and find out. I never wished to become the overseer of that lunatic asylum called humanity. So if you murder me, that will be your problem, not mine. I suppose that death is my final destination anyhow. So count your blessings. Maybe you can finally grow up, leave your infantile beliefs behind, and sing along with the opening chant of the End Times, ‘Donald is a dog dick’. It is going to be great fun!

Latest revision: 29 August 2026

Featured image: AI-generated

1. One in four Americans think Obama may be the Antichrist, survey says. The Guardian (2013).
2. What I know about Jeffrey Epstein. Seymour Hersh (2026). Substack.
3. The 26 women who have accused Trump of sexual misconduct. Eliza Relman and Azmi Haroun (2017). Business Insider.

Visions of Paradise

Law and moral sentiments

Mainland Europe and the Anglo-Saxon world, and most notably, the United States, are culturally related but have significant differences in views on law and morality that underpin their societies. These differences greatly influenced history, but their causes also lie in history. In the Middle Ages, individualism was already strong in Western Europe. While England developed its law system, the bureaucracy of the Catholic Church introduced Roman civil law on the continent. It had the following outcome:

  • Common law has become the basis of law in Great Britain and many of its former colonies, including the United States. Individuals are sovereign. Common law works bottom-up by generalising rules from judges’ verdicts in individual cases.
  • Civil law has become the basis of law in mainland Europe and most other countries. The lawmaker is sovereign, thus the king or the people as a collective via parliament. It works top-down by applying general rules to individual cases.

Common law resulted from the efforts of English kings to build a coherent law system based on local practices. In 1215, the Magna Carta limited the power of the English kings. England then had a strong state where the rule of law limited the king’s power. There also was individual liberty in Western Europe. There were few strong states while merchants ran independent cities. Still, the rule of law later came from the state’s power because of the differences in law foundations. These differences relate to views on ethics:

  • In Great Britain, philosophy, including ethical philosophy such as David Hume’s, is pragmatic. It says moral rules are an agreement in society, so good and evil depend on popular sentiments, freedom is being able to do as you please, and outcomes matter more than intent.
  • In continental Europe, idealism dominates philosophy, including ethical philosophy, such as that of Immanuel Kant. It says 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.

If ethical rules are relative, they emerge from popular sentiments, thus bottom-up, and if they are absolute, they come from principles and work top-down. The English philosopher John Locke imagined the state as a voluntary agreement of individuals to cooperate for mutual benefit. If you believe in individual sovereignty and moral relativism, that must be why there is a state. But it is incorrect. We will not voluntarily agree to a state if there is none but fight each other until there is one.

These differences later shaped the debate on the economic system, hence the intellectual battle between capitalism and socialism. Adam Smith wrote a practical recipe for running an economy in the British tradition. In continental Europe, the debate became fundamentalist and infused with moral sentiments. Frédéric Bastiat claimed socialism is an organised plunder of private property, while Karl Marx argued that capitalists steal the value workers create.

In the United States, with its moral pragmatism founded on individual freedom, the collectivist ideology of socialism never caught on. Still, progressives in the United States pursued reforms to rationalise the government according to modern bureaucratic principles, and there were unions. Great Britain became caught in the middle as Brits had a more favourable view of government than Americans and a strong socialist movement.

When, after World War II, the Soviet Union became an existential threat to the United States because the communists planned to overturn the capitalist order with violent revolutions and were building a large army, the defence of individual autonomy and moral pragmatism itself turned into an idealist moral crusade, also because the Soviets aimed to end religion and persecuted religious people. Most US citizens identified as Christians, so they came to see the Soviet Union as an evil, godless empire.

Hegelian Dialectic and Marxism

Around 1807, the German idealist philosopher Georg Wilhelm Friedrich Hegel devised a theory of how history would unfold according to God’s plan. It would occur by challenging the prevailing ideas and social order. The French Revolution had just swept away the old aristocratic French regime. The French adopted revolutionary new ideas from the European Enlightenment, modernised their government and introduced an army of conscripts, allowing Napoleon to conquer Europe and spread these ideas and reforms. Hegel was the proverbial fly on the wall, taking it all in. He was impressed. That was progress! Modern ideas wipe out old ones. A bureaucratic government with conscripts eliminated an aristocracy with mercenaries. The German Christian idealist philosophers like Kant and Hegel, and later, atheists like Marx, Nietzsche, and Heidegger, dedicated themselves to hard questions pragmatic people would never bother to spend a lifetime on.

As a profoundly religious man, Hegel thought that our knowledge and ideas progressed and that God’s plan worked like so. He believed humanity had a collective consciousness in which these ideas reside. He surmised we are progressing towards our final destination, God’s Paradise, by replacing our prevailing ideas with better ones. An example is our views on slavery. Slavery existed since time immemorial and was generally accepted, but most of us now see it as evil. These views we all share are what Hegel meant by collective consciousness. It evolves over time and thus progresses according to a stylised scheme called Hegelian dialectic. It works like this:

(1) there is a status quo (the thesis)
(2) new ideas or conditions challenge the status quo (the antithesis)
(3) from the challenge emerges a new status quo (the synthesis)

A synthesis is a more profound truth rather than a compromise. You can’t bargain on the truth. Hegelian dialectic is a ruthless pursuit of truth and accepting its consequences. Hegel is the philosopher of progress, not economic or scientific, but progress in society and its institutions. It is nearly impossible to overestimate his influence on politics in the centuries that followed as it often was about progressives versus conservatives, thus applying new ideas from philosophy and the sciences versus keeping things as they are. Not all new ideas are better, so the outcome can be that nothing changes. Ideally, the synthesis is the best solution that emerges from the challenge of the status quo. If the new ideas are superior, they wipe out the old ones. That requires revolution and violence, such as the French Revolution and the Napoleonic wars.

Being more pragmatic, the British reformed in smaller steps. The principal problem with Hegelian dialectic is that the scheme can have disastrous consequences if you don’t know everything. Your logic can be perfect, but if your assumptions are not, a small oversight can cause ruin, as in Barataria. Chaos theory says why. The leading conservative British thinker, Edmund Burke, aimed to improve the government, but only if necessary, because changes have unpredictable consequences. The British could do that because they already had a government open to reforms, while the French did not. A revolution was their only option to rid themselves of the corrupt old regime and clean the slate.

Karl Marx took the bait. We could achieve paradise ourselves here on Earth, he claimed. Scholars had already found out that much of the Bible was fiction, and Charles Darwin had just published On The Origin of Species with evidence indicating plants and animals emerged in a competition between species that has lasted millions of years rather than being created in six days 6,000 years ago. The sciences had proven religion wrong, so Marx thought religion keeps people dumb. Christians would wait for Jesus, who hadn’t shown up for over 1,800 years, and not take matters into their own hands. Marx also noted that Christians had betrayed their religion by adopting the ethics of the merchant. According to Acts, early Christians lived like communists.

Marx claimed capitalists profit by stealing some of the value workers create. He based his allegation on the labour theory of value, which economists of his time considered valid. The theory says that the price of an item equals the cost of labour required to make it, thus including the labour to produce the raw materials. If making a pair of shoes takes twice as much labour as making a pair of trousers, shoes cost twice as much as trousers. Marx then asked, ‘If that is correct, how can there be profits?’ It is because the theory is wrong. There is no objective measure of value. In a market economy, the price of an item depends on what people are willing to pay for it, not what it costs to make it. Otherwise, you could work a year on building a better mousetrap and sell it for € 50,000. Perhaps, after spending another € 50,000 on building a brand in a marketing campaign, you can sell it for € 200,000. That is how markets work.

Value is what we believe it is. Nothing is sacred. Everything is for sale, including the rainforests and even the Earth. The so-called owners think it is all theirs and can do with it as they please. In the market, a message becomes true if you can sell it. It works with advertisements or denying climate change. It is the evil in the ethics of the merchant, and because money represents power, we stare into the moral abyss. If you ever wonder why communists called their newspapers The Truth, that is why. But in a world without God, there is no truth, and communism is just another message on the marketplace. The communists appealed to the workers’ self-interest. And that was a poor sell because workers were worse off under communism. It is why communism was doomed to fail, not because it is impossible to live like communists. Early Christians did. Rather than concluding he had just proven the labour value theory wrong, Marx claimed capitalists stole from their employees.

Marx further said that producing for markets alienates us from what we make. Many workers experience this. It is why Dilbert comics are so successful. Marx claimed we could be free, creative beings, but the modern, technologically developed world dictates our lives. Marx believed ending the market mechanism and replacing it with democratic planning would liberate us. So if workers received what they owed and we replaced capitalism with democratic planning, we would live in a paradise where we can do the jobs we like and have everything we need. That is a silly idea. Many want to be a Hollywood star, but few want to be a cleaner. Immigrants do those jobs. Communes don’t attract farmers and construction workers but artists and reiki healers. We need food and homes, not art and quacks. Work is doing something useful, and if it isn’t useful, it isn’t work. And even if everyone contributes, planning will never do as well as markets. You could live with that if you have enough. You might want a pear, but you could settle for an apple. And you have heard of oranges but never tasted one.

Marx also claimed that capitalism causes misery as adding capital means doing more with fewer workers, which reduces the need for labour, pushing wages below the subsistence level and leaving workers to starve. At the time, most economists believed wages would remain close to the subsistence level. If wages increased, more people survived, expanding the labour supply. And so, wages would decrease, and more people would starve. The market would keep population levels in check. Marx argued that making more stuff with fewer people was impossible because the unemployed couldn’t buy it, and capitalism would bankrupt itself. It didn’t happen because of Say’s Law, as things became cheaper. And we can create money from thin air. When capitalists produce more, they must sell their merchandise, and you can make people borrow money, so the general level of opulence rises. Marx vastly underestimated human ingenuity in finance, marketing and job creation in the services sector and government, the so-called bullshit jobs in the bullshit economy. These jobs make sense because they solve problems in our complex society, but we could do without many of them when we live simpler lives.

Marx believed he was scientific and rational. He devised a theory of history using Hegel’s dialectic, arguing that power structures in society reflect economic conditions. To Marx, it was not new ideas challenging the status quo but economic conditions driving change in history. He would say that the status quo of serfdom in Europe ended because towns challenged it by providing alternative jobs for serfs. Lords had to compete with them for their labour. And so, employer-employee relationships replaced serfdom, which became the new status quo. Marx also believed nationalism was a temporary phase, as economic conditions imposed it on us. Industrialisation required larger markets, thus societies rather than communities. Nationalism allowed the elites to divide and rule the working class. And because capitalism would eventually bankrupt itself, Marx predicted, as if it was a logical certainty, communism would replace employer-employee relationships, and everyone would become free and equal. In reality, people aren’t free or equal under communism, and a new elite of party bureaucrats replaced the capitalists.

Marx’s plan for the future included violently overturning the existing capitalist order in revolutions like the French Revolution and Napoleonic wars. Karl Marx became the prophet of the most successful cult in recent history. Despite the failure of communism, the capitalism-socialism debate continues because Marx raised pressing concerns that are still valid today:

  • Instead of saying capitalists steal value from workers, you can argue we work to make the rich richer. Despite stellar economic growth in the United States, many workers still can hardly get by. And that is not because they are all lazy or stupid.
  • Instead of saying the system alienates us from what we produce, you can argue we are part of a system over which we have no control. We can’t democratically decide on issues like implementing artificial intelligence.
  • Instead of saying capitalism causes misery, we can argue it improved billions of lives, but it probably ends in a total disaster. We may know for sure once the ecological or technological apocalypse materialises.
  • Instead of saying we will enter the communist paradise as a historical necessity, we may argue the script is that we are about to enter God’s Paradise, which could be a Hegelian synthesis of Marx’s challenge of the existing capitalist order.

The moral void

European moral idealism and American moral relativism have consequences you might not think of. German philosophers from the Frankfurt School, knowing our religion, if we have one, depends on our birthplace, that Jews invented the Abrahamic God and that much of the Bible is fiction, sought more absolute foundations of morality, such as equality or preventing harm to other people. They embrace LGBT rights like marriage, as there is no objective moral reason to deny them. Even if you think gay marriage is unnatural because a gay couple can’t produce offspring, there still is no objective moral reason to deny them these rights, no matter what the Bible says. Idealism also drove Germans to endanger their energy security by closing nuclear plants and betting on solar and wind.

American moral relativism drives conservative Christians to impose their views on others, as they don’t ask hard questions, ignore evidence contradicting the Bible, and think they can do as they please rather than act as a rational, morally upright person. Critical theory, thus cultural Marxism or Woke, comes from German philosophers daring to ask hard questions to seek the absolute foundation of morality. Critical theorists also indulge in speculation. Many of their theories lack solid evidence. Believing, like Marx, that their ideas are superior, the Woke use Hegelian dialectic to attack conservative Christianity and impose their views on society. That is why Woke people are so annoying. In recent years, that debate has escalated rather than synthesised. It has turned into a culture war.

Conservative Christians, most notably those in the United States, are a peculiar bunch. Humans are the most destructive species that ever roamed the Earth, and there are far too many of them, so it is evil to ban abortions. If there is a moral objective measure for preserving a life, it is its degree of sentience. A human newborn can only suck milk, and no one remembers being born, while cows, horses and pigs stand upright and walk after birth. A cow or a pig is more conscious than a ten-week-old fetus, yet we slaughter them by the millions after treating them horribly in conditions as miserable as concentration camps. It is a Holocaust. You can better be dead long before you are born. Christians corrupted Jesus’ teachings to take away women’s rights and claim trans people are evil after giving God a sex change. They harp about an alleged conspiracy of Satanic child molesters in government while electing a sex offender who regularly attended Epsteins parties.

Liberals might think many Christian conservatives are crazy to believe raving nutcases like Qanon, but we cooperate using shared imaginations, so it is perfectly normal human behaviour. How do you think religions survive despite the facts disproving them? And the only measure of success is success. Truth hardly ever is the reason why beliefs prevail. Even scientists have invisible imaginary friends like gravity. Believing that gravity exists makes you succeed in engineering. The foundations of liberalism and socialism are also incorrect, like human nature being inherently good. We like to think we are good, so these ideologies have been successful. And success breeds stupidity. If you fail, you might ask the correct questions, but when you are successful, you have no reason to. And so, rational government is an uphill battle against our inner nature, and real change is only possible after complete failure. Christianity is much closer to the truth. We are morally depraved, incapable of fixing ourselves, unworthy of God’s grace, and in need of a saviour.

Liberals are wrong and foolish because the evolution theory they believe in says the struggle for existence is brutal. They should have reasoned, like Friedrich Nietzsche, that God is dead and that the strong should rule the weak. Somehow, they couldn’t rid themselves of their Christian slave morality. The former right-wing Dutch politician Pim Fortuyn called them the Leftist Church. Without God, we get lost in the moral void, and it is pointless to try to achieve Paradise on Earth. After several wars to impose liberal Western values on countries like Vietnam, Iraq and Afghanistan, we can say good intentions usually make things worse rather than better. Why send money and weapons to a corrupt country like Ukraine to let it fight against an even more corrupt country like Russia? And why do liberals support the corrupt establishment of big banks, big pharma, the mainstream media and the military-industrial complex they objected against in the past? But many Christian conservatives don’t even make a small effort to become slightly less evil, like skipping meat one day per week. Appeals to moral reason infuriate them. And now the crazies organise a witch hunt against science and the rule of law. The road to hell may be paved with good intentions, but being intentionally evil is a shortcut.

Suppose Jesus was human like us with the knowledge of his time, which non-religious biblical scholars would agree on, and someone else finds himself in his position today. What could he do? He could wait for God to tell him, but if God doesn’t, he might think, like Marx, that he has to figure it out himself. As far as we can infer from the scriptures, Jesus acted independently but according to God’s will. He was like an actor following a script. His successor has the benefit of today’s knowledge, including the simulation hypothesis and the sobering outcome of the communist experiment. He might grasp the greater picture. The Marxist challenge of the existing order could have been God’s way of showing us the choices we face, our alternatives, their consequences, and what the synthesis might look like. That makes Hegel one of the greatest prophets of modern history.

Most people in the West now believe there is no alternative to capitalism, even though we may need some socialism or government to contain its ills. That could make our economy less competitive, which could cause us to lose the competition. So, in the end, there is no alternative, not because we can’t live happily in another economic system but because other systems can’t compete. Other ethical systems can’t compete with the ethics of the merchant either, which says you can do as you please and take what you can. It is much easier to break a collective effort like combating climate change than to build it. Only one major country needs to step out. In competition, those with the most depraved ethics win. The Dutch would say the merchant always wins from the vicar.

Only there needs to be an alternative. The profit motive is the severest threat humanity has ever faced. It pushes for permanent innovation, a process of creative destruction over which we have no control. We have started a fire in our midst that grows until it consumes us. Our greed is its fuel, and we can’t stop it. We may soon destroy ourselves creatively. We can’t kill the beast, the system, and the beast within ourselves, our greed. Communism is oppressive, kills creativity, and promotes stagnation by eliminating the profit motive. That sounds awesome because that is precisely what we need.

It looks like a cure. If your disease is cancer, and the cure is chemotherapy, you take the poison, and you accept becoming sick and losing your hair. Otherwise, you die. You could visit a witch doctor or a quack, and you also die. Many fall for snake oil salespeople because science doesn’t always have the correct answers. But despite their limitations, the sciences and the evidence from history are our best knowledge. If capitalism and communism are the only options, a sensible person chooses communism. Communism has brought a lot of misery, and we haven’t seen the end of civilisation yet, so we can still believe it will work out fine as long as markets remain operational and bring together supply and demand. That is perhaps the biggest lie ever.

If you don’t get by now why the ethic of the merchant is the greatest evil of all times, you are a moron, and there is no point in trying to convince you. By electing Donald Trump, Americans demonstrated their willingness to let Satan run their country. If following Satan seems the lesser evil, then something must be profoundly wrong. The corrupt old order of the military-industrial complex, big pharma, big banks and other interest groups seeking to profit from the state has ended the legitimacy of the US government. The other candidate and the billionaires backing her believed they could buy the presidency by spending billions on her political campaign. And for the record, Donald Trump isn’t Satan, not even the Antichrist, but just a huckster with the most depraved moral values and the ultimate embodiment of the ethics of the merchant, the ultimate evil.

In a world without God, there is no justice. And we can’t halt our descent into the moral abyss. And we have the ultimate proof. Once the technology is there, some of us will become like gods, live for thousands of years, make virtual worlds in which they force everyone to comply with their wishes, and murder people for merely standing in the way or for any other arbitrary reason. It is why we exist. God is an individual from an advanced humanoid civilisation who wants to have some fun. You are nothing, even less than a worm, as a genuine worm decides for itself how to grovel and when. Let that be a warning. And you own nothing. Believing you are entitled to something is thinking you can steal from God. With these words, I conclude my sermon. Now, let us pray.

In a world without God, there is no justice. And we can’t halt our descent into the moral abyss. And we have the ultimate proof. Once the technology is there, some of us will become like gods, live for thousands of years, make virtual worlds in which they force everyone to comply with their wishes, and murder people for merely standing in the way or for any other arbitrary reason. It is why we exist. God is an individual from an advanced humanoid civilisation who wants to have some fun. You are nothing, even less than a worm, as a genuine worm decides for itself how to grovel and when. Let that be a warning. And you own nothing. Believing you are entitled to something is thinking you can steal from God. With these words, I conclude my sermon. Now, let us pray.

Third ways

There have been several attempts to come to a synthesis of capitalism and socialism, which is often called the Third Way. The challenge of Marxism, the antithesis of capitalism, fuelled a lively debate about economic systems in the second half of the 19th and the first half of the 20th century. Silvio Gesell, who wrote Barataria, was one of the central figures in this debate, as was Henry George in the United States. Since the Cold War, the debate has narrowed down into a struggle of communism versus capitalism or individual freedom versus enforced collectivism. With the collapse of the Soviet Union, the discussion in the West ended with the conclusion that Marx may have had valid concerns, but we can’t fix them, and his solutions are counter-productive. The Chinese government, however, kept innovating and remained determined to make socialism work.

You can’t compromise with ultimate evil. That reasoning made the Soviets replace markets with state planning. And it made their repression so ruthless and bloody. Millions died of starvation, and millions more ended up in concentration camps. In the end, it is better to be a slave in Paradise than a free man in hell, except when hell looks like Paradise and Paradise is like hell. But profit and greed corrupt everything. Self-regulation under neoliberalism, thus allowing corporations to set and enforce their rules, demonstrated why corporations need a tight leash and operate for public benefit rather than private profit. So, the question remains whether a third way is possible at all. Or can we only make socialism work better and more agreeable?

Such a change requires the support of a large majority of the people. The Russians lost faith in the Soviet experiment as central planning produced poor outcomes. Still, the Chinese economy has baffled the proponents of capitalism. The Chinese allow the profit motive to exist as long as businesses conform to the Chinese Communist Party’s objectives. State ownership of enterprises further ensures that. Similarly, you can allow profit motive within society’s goals and place large corporations in sovereign wealth funds. To clarify the discussion, as there is confusion in terminology, it may be best to provide you with definitions of economic systems. Their differences centre around ownership of resources, capital, and labour.


resourcescapitallabour
communismstatestatestate
socialismstatepublicprivate
third way / mixedvariesvariesprivate
capitalismvariesprivateprivate

Under communism, the state owns everything, including your labour. You can’t even decide on the job you take. Under socialism, you can choose your occupation, but capital is public, thus owned by workers or the state, and the state owns the natural resources. In mixed economies, ownership of natural resources and capital varies. You may own the ground, but if oil is underneath, it may belong to the state. There may be state-operated corporations like railways alongside private corporations. And you are free to choose your occupation. Under capitalism, everything is private. There may be public services, but there are no public corporations. And few countries give their resources away for free, and governments nearly always want a piece of the action. Not even the United States is fully capitalist. Libertarians think that is the problem, so if we gut the government and make everything private, the invisible hand, thus greed and competition, will fix things as if being foolish doesn’t help, being more foolish might.

The same model still gives different outcomes under different circumstances. A crucial factor is the culture or spirit of the nation. There were substantial differences in living standards in the Soviet Block. Czechoslovakia did relatively well. Yugoslavia suffered from high unemployment, but the Slovenian unemployment rate never exceeded 5%, while Macedonia and Kosovo had rates of over 20%. These were extreme differences within one country and the same system. China has developed its economic model, a state-run socialist market economy, which now outcompetes the West. Its success depends on the Chinese people’s hard work and ingenuity, China’s long-standing tradition of a modern bureaucratic government, and Confucianist ethics, making the government work in the public interest. The Chinese had a modern bureaucratic government on rational principles 2,000 years before Europe. And so, this economy wouldn’t have emerged elsewhere.

Making idealism work still requires pragmatism because good intentions can give horrible outcomes. Americans are pragmatic and gung-ho, thus eager to get things done. So once they realise God’s vision for the future goes against some core principles of American society, like individual liberty and capitalism, they might reverse course and take up the challenge with zeal. Europeans are not like that. They have a wait-and-see attitude at best. The Germans will try to engineer an even better system. The Dutch will deliberate the proper procedure and hire consultants to write reports. The Italians will bumble. And the French will go on strike. Many Americans are also more religious and more willing to embark upon an outlandish plan if they believe it is the way forward.

Free Economy

There are other options than communism or socialism. They can be safe as long as the ethic of the merchant doesn’t reassert itself. As soon as you allow it, the moral depravity spreads like cancer and will destroy society, like in the tale about the imaginary island Barataria. Only communism and brute repression are 100% safe. Religion can inspire us to stay public-spirited and be content with what we have. So if God exists and sends a messiah, we could play it less safely because whatever happens is God’s will.

For a while, Barataria had an economy with free enterprise and private ownership of homes but without capitalists, bankers, and merchants. Barataria had no income taxes, but the lands were public, and farmers rented them, which paid for the small government. Because the Baratarians were public-spirited and helped each other, and most notably, because there were no merchants, they didn’t need much government. That might be as close to Paradise as we can get. But it will only work if we live simple lives.

Silvio Gesell believed in economic self-interest as a natural and healthy motive for satisfying our needs by being productive. He aimed for free and fair competition with equal chances for all. He proposed the end of legal and inherited privileges, so the most talented and productive rather than the most privileged would have the highest incomes without distortion by interest and rent charges.

After experiencing an economic depression in Argentina in the 1890s, Gesell found that economic returns sometimes didn’t meet investors’ minimum requirements. It caused investors to put their cash in a vault like Scrooge McDuck, emptying the money flows and collapsing the economy. A holding fee can keep the currency in circulation, as low returns are more attractive than paying that fee, which amounts to a negative interest rate. Gesell’s economic system was well-known in Germany as the free economy.

European Union

European economies are mixtures of capitalism and socialism. Many Brits found the union too socialist and bureaucratic, so they left. These sentiments relate to the age-old differences in law and morality. The European Union tries to tame the beast of capitalism with regulations, which may fail if the competition continues and intensifies, but many Europeans now live a good life. Well-being is hard to measure, but European societies are among the world’s most agreeable if you believe the rankings. And if every country kills innovation with legislation like the bureaucrats of the European Union, we wouldn’t need to fear artificial intelligence, genetic engineering or any other new technologies.

Europe has a collectivist tradition with Christian and socialist roots with worker and consumer protection laws. Europeans live longer than Americans, partly because the European Union has banned unhealthy foods available in the United States. At the same time, governments run the healthcare systems, so most healthcare is for the public interest rather than private profit. In Europe, it is harder for corporations to pass business-friendly legislation by bribing politicians. That is also because Europeans believe in the common good more than Americans do. Like the invisible hand, our imaginary invisible friend, the common good, has a few magical powers.

As in the United States, immigrants do much of the hard manual labour in Western Europe, often for lower wages, without these protections and crammed in poor housing. There is a profit in dodging regulations for shady merchants. Western Europeans may be lazy because they work 36 hours per week and have five weeks of holidays each year. Still, their lives are the closest to what life should be in Paradise, except that European energy and resource consumption require a drastic 75% cut to make their economies sustainable. But if we dismantle the wasteful bullshit economy and set the right priorities, we could work fewer hours than Europeans do today and still have an agreeable life.

Nazi Germany

The Nazis produced an economic miracle during the Great Depression. The success came from deficit spending for rearmament and limiting trade with the outside world, so the expenditures boosted the German economy while not causing trade deficits. It is similar to Keynesian economics. It worked like the miracle of Wörgl, except that the German government accrued a large debt while the council of Wörgl did not.

Factories were idle, and many people were unemployed, so the scheme didn’t result in high inflation. Price, wage and rent controls also helped keep inflation in check, but it hurt small farmers. The Nazi economy was a mixture of state planning and capitalism. Germany was rearming and preparing for war. It was a war economy. Countries organising for war take similar measures to mobilise their industries for warfare.

Yugoslavia

Yugoslavia was socialist rather than communist. It combined state planning with markets and decentralised decision-making or worker self-management. The Yugoslav economy fared much better than that of fully communist countries. The country was more open, and living standards were higher. However, it began to suffer from mass unemployment, and the economy collapsed in the 1980s as it couldn’t compete with capitalist economies. Generous welfare spending further contributed to Yugoslavia’s economic demise.

The oil crisis of the 1970s magnified the economic problems, and foreign debt soared. The country implemented austerity measures like rationing fuel usage and limiting the imports of foreign-made consumption goods. Unlike the Soviet Union, Yugoslavia had been able to feed its people until then. From the 1970s onwards, the country became a net importer of farm products. Yugoslavs were free to travel to the West. Emigration helped the economy by reducing unemployment and bringing in foreign currencies as emigrants returned money home to support their families.

Its openness to foreign competition contributed to the collapse of the Yugoslav economy. Yugoslav consumer products were often inferior to Western products. To compete, businesses laid off workers to become more efficient. The Yugoslav economic system might have worked if all countries had operated their economies like Yugoslavia. Yugoslav products would have sufficed if there were no better alternatives. Mass unemployment might not have materialised in that case, and Yugoslavia could have managed, perhaps, with less generous welfare. That is a few maybes, but it is plausible.

China

The stories of Airbus and Boeing demonstrate that state ownership of large businesses can work better than private ownership. Boeing was the industry leader but ruined itself by focusing on shareholder profits. Reducing quality brought short-term cost savings, boosted the stock price, and generated management bonuses. That seemed all fine until the Boeing aeroplanes began dropping from the sky. The largest holders of Airbus stock are European states, allowing the corporation to focus on long-term goals. The state-owned aeroplane industry is one of the few areas where Europe is still at the top.

Traditional communism gave subpar results, but the Chinese managed to get it right. The Chinese socialist market economy (SME) has private, public and state-owned enterprises (SOEs). China is not capitalist, as the Chinese Communist Party (CCP) retains control over the country’s direction. It is a command state-market economy like Nazi Germany was. Unlike Nazi Germany, which aimed for maximum self-reliance and ran on military spending, the Chinese economy integrated into the world economy and ran on exports. It resembles other Asian Tigers, such as Japan and South Korea.

The CCP’s vision behind starting market reforms is that China was underdeveloped and that a fully developed socialist planned economy would emerge once the market economy fulfilled its historical role, as Marx prophesied. Thus, the CCP believes it has incorporated a market economy into the Chinese socialist system. Others call it state capitalism, as the SOEs that comprise a large portion of the economy operate like private-sector firms and retain their profits without returning them to the government.

China eliminated extreme poverty, which declined from over 90% in 1980 to less than 1% today. It also became the world’s leading manufacturing economy and the world’s leading producer of unnecessary items that end up in our landfills. Despite its leadership in renewable energy and electric cars, China has also become the world’s leader in pollution and carbon dioxide emissions. However, China’s status as an exporter distorts the picture. By importing from China, other economies appear to be less pollutant.

The Chinese economic model forces corporations to align with society’s goals and make profit secondary. At the same time, it achieves acceptable living standards. It is modern and outcompetes the US and European models. If our society’s goals change from growth to sustainability and happiness, the Chinese economic model can help align corporations with public policies. China is a dictatorship, but its economic model will also work in democracies. Airbus provides the evidence.

State control and ownership of businesses, like China’s, also seem to be the only viable way to pursue political goals such as protecting nature and reducing poverty. Business objectives like profit should be secondary to these political goals. With state ownership, you can ban products or subsidise others without harming or favouring private entrepreneurs, thereby removing the incentive for corruption. China is on the right track as political objectives precede profit. And so we have evidence. China’s economy produced spectacular results, so we can have confidence that it will bring us acceptable living standards while allowing us to live in harmony with nature and end poverty.

Latest revision: 24 December 2024

Wörgl bank note with stamps. Public Domain.

Short Introduction

End of growth

The last 200 years have been an era of exceptional economic growth, unlike anything the world has ever seen. Like any exponential phenomenon in a limited room, that growth will end. The best comparison is cancer. If it goes untreated, the host dies. The end of growth, whether it is by death of the host or treatment, has implications for capital, which is addicted to positive returns made possible by squandering planetary reserves. For most of history, there was a shortage of capital. But for the first time, there is a massive excess invested in the bullshit economy, transforming energy and resources into waste and pollution to make money for investors by producing and marketing non-essential products and services in a competition that is about to make humans redundant.

For most of history, economic growth has been negligible. However, it averaged 1.5% over the last two centuries and will soon return to zero, or possibly even lower, perhaps much lower. That has implications for returns on investments, the financial system and interest rates. Investors have become hooked on positive returns, so there must be growth. Otherwise, they lose confidence. It is grow or die, but growth will kill us. And so, we face the prospect of an economic collapse and a collapse of civilisation. We are near a technological-ecological apocalypse. There is a dark force operating behind the scenes that makes us commit suicide. It is usury, or the charging of interest on debts. It makes capital addicted to growth.

The survivors may debate the precise cause of the collapse. I have already received a newsletter email from a pundit claiming that a lack of very cheap oil is leading to debt problems. Future generations may blame the planet for being finite, rather than seeing that human beings were so foolish as to build their civilisation on usury, so that it can only survive through economic growth. Before modern times, humans managed to live without economic growth, as there was hardly any capital and no interest-bearing debt. Past civilisations facing usury-induced economic collapses either disappeared, banned interest, or instituted debt cancellations.

The past 200 years have indeed been exceptional, and that miracle was primarily due to low interest rates. Efficient financial markets promoted growth by depressing interest rates, allowing economic growth to finance the interest. That has blinded us from the financial apocalypse that is upon us. Low interest rates have already brought us unprecedented wealth, albeit at the expense of the planet and future generations. When economic growth returns to sustainable levels, the interest on outstanding debt can collapse the world economy and bring down human civilisation. Luckily, a usury-free financial system for a future without growth already exists: Natural Money.

The nature of usury

Suppose Jesus’ mother had opened a retirement account for Jesus just after his birth in 1 AD at the Bank of the Money Changers next to the Temple in Jerusalem. Suppose she had put a small gold coin weighing three grammes in Jesus’ retirement account at 4% interest. Jesus never retired, but he promised to return. Suppose now that the bank held the money for this eventuality. How much gold would there be in the account in the year 2020? It would be an amount of gold weighing twelve million times the mass of the Earth. There isn’t enough gold to pay out Jesus if he returns.

And so the usurers hope he doesn’t come back, also for other reasons, of course. And for every lending, there is borrowing. The bank is merely an intermediary. There must be people in debt for an amount of gold weighing twelve million times the mass of the Earth. That would never happen. The scheme would have collapsed long before that, and the debtors would have become the serfs of the money lenders. That is why religions like Christianity and Islam forbade charging interest on money or debts.

The usurers have found a way around the issue. Our money isn’t gold anymore. Banks create money from thin air, so the nature of usury has changed. When you go to a bank and take out a loan, such as a car loan, you get a deposit and a debt, which the bank creates on the spot through two bookkeeping entries. You keep the debt, but the deposit becomes someone else’s money once you purchase the car. When you repay the loan, the deposit and the debt vanish into thin air. You must repay the loan with interest. If the interest rate is 5% and you have borrowed €100 for a year, you must return €105.

Nearly all the money we use is created from loans that borrowers must repay with interest. If our borrowing creates money, and we repay our debts with interest, then we may do so by borrowing the interest. That is also what happens in reality, and that is why debt levels continue to rise. So, where does the extra €5 come from? Here are the options:

  • Borrowers borrow more.
  • Depositors spend some of their balance.
  • Borrowers fail to repay their loans.
  • The government borrows more.
  • The central bank prints the money.

Problems arise when borrowers don’t borrow more, and depositors don’t spend their money. In that case, borrowers as a group are short of funds, and some of them are unable to repay their loans. If too many borrowers can’t pay at once, a financial crisis occurs. To prevent that from happening, the government borrows more, and the central bank prints money. They bring that money into the economy, allowing debtors to pay off their debts with interest. Interest compounds to infinity, and there is no limit to human imagination, so frivolous accounting schemes can go a long way before they collapse.

Necessity of interest

We take interest for granted, and economists believe that the economy needs it. Without lending and borrowing, a modern capitalist economy would have been impossible; without interest, loans would also be impossible. Money is to the economy what blood is to the body. If lending and borrowing halt, money stops flowing, and the economy comes to a standstill. That is like a cardiac arrest, which, if untreated, is fatal. And that is also why the financial press reads the lips of central bankers as if our lives depended on it. They manage the flow. Lenders have reasons to demand interest. These are:

  • When you lend out money, you can’t use it yourself. That is inconvenient. And so, you expect compensation for the use of your money.
  • The borrower may not repay the loan, so you desire compensation for that risk.
  • You can invest your money and earn a return. To lenders, the interest rate must be attractive relative to other investments.

That has been the case for a long time, and economists have gradually become quite good at explaining the past. Since then, we have seen financial innovations and are now facing the end of growth. Changes in the economy and the economic system may lead to the end of interest on money and debts. These are:

  • You can use the money in a bank account at any time. You can use the money you have lent as if it were cash. And a debit card is more convenient than cash.
  • Banks spread their risks, central banks help out banks when needed, and governments guarantee bank deposits, so bank deposits are as safe as cash.
  • There is a global savings glut. There are ample savings and limited investment options, which can make lending at negative interest rates attractive.

Negative interest rates are possible. In the late 2010s and early 2020s, the proof came when most of Europe entered negative interest-rate territory. The ECB was unable to set interest rates below -0.5%. Had it set interest rates even lower, account holders would have emptied their bank accounts and stuffed their mattresses with banknotes to avoid paying interest on their deposits, disrupting the circular flows.

As interest rates couldn’t go lower, the ECB took extraordinary measures, flooding the banking system with new money to boost the economy. Had there been a holding fee on cash, interest rates could have gone lower, and there would have been no need to print money. It has happened before. The Austrian town of Wörgl charged a holding fee on banknotes during the Great Depression, which led to an economic miracle by making existing banknotes circulate better rather than printing new money. Ancient Egypt had a similar payment system for over a thousand years during the time of the Pharaohs.

Miracle of Wörgl

In the midst of the Great Depression, the Austrian town of Wörgl was in dire straits and prepared to try anything. Of its population of 4,500, 1,500 people were jobless, and 200 families were penniless. Mayor Michael Unterguggenberger had a list of projects he wanted to accomplish, but there wasn’t enough money to fund them all. These projects included paving roads, installing street lights, extending water distribution throughout the town, and planting trees along the streets.1

Rather than spending the remaining 32,000 Austrian Schilling in the town’s coffers to start these projects, he deposited them in a local savings bank as a guarantee to back the issue of a currency known as stamp scrip. A crucial feature of this money was the holding fee. The Wörgl money required a monthly stamp on the circulating notes to keep them valid, amounting to 1% of the note’s value. The Argentine businessman Silvio Gesell first proposed this idea in his book The Natural Economic Order.2

Nobody wanted to pay for the monthly stamps, so everyone spent the notes they received. The 32,000 schilling deposit allowed anyone to exchange scrip for 98 per cent of its value in schillings. Few did this because the scrip was worth one Austrian schilling after buying a new stamp. But the townspeople didn’t keep more scrip than they needed. Only 5,000 schillings circulated. The stamp fees paid for a soup kitchen that fed 220 families.1

The municipality carried out the works, including the construction of houses, a reservoir, a ski jump, and a bridge. The key to this success was the circulation of scrip money within the local economy. It circulated fourteen times as often as the schilling. It increased trade and employment. Unemployment in Wörgl decreased while it rose in the rest of Austria. Six neighbouring villages successfully copied the idea. The French Prime Minister, Édouard Daladier, visited the town to witness the ‘miracle of Wörgl’ himself.1

In January 1933, the neighbouring city of Kitzbühel copied the idea. In June 1933, Mayor Unterguggenberger addressed a meeting with representatives from 170 Austrian towns and villages. Two hundred Austrian townships were interested in introducing scrip money. At this point, the central bank decided to ban scrip money.1 The depression returned, and in 1938, the Austrians turned to Hitler, as they voted to join Germany.

Since then, several local scrip monies have circulated, but none has been as successful as the one in Wörgl. In Wörgl, the payment of taxes in arrears generated additional revenue for the town council, which it then spent on public projects. Once the townspeople had paid their taxes, they would have run out of spending options and might have exchanged their scrip for schillings to avoid paying for the stamps. That never happened because the central bank halted the project.

The economy of Wörgl did well because the holding fee kept the existing money circulating. A negative interest rate encourages people to spend their money, eliminating the need to borrow and keeping the money circulating in the economy. It demonstrated that the economy required a negative interest rate. A holding fee makes negative interest rates possible, as lenders do not have to pay it after lending the money. The one who holds the money pays the charge. That can make lending money at an interest rate of -2% to a reliable borrower more attractive than paying 12% for the stamps.

Joseph in Egypt

In the time of the Pharaohs, the Egyptian state operated granaries for over 1,500 years. Wheat and barley were the primary food sources in Egypt. Whenever farmers brought their harvest to one of the granaries, state officials issued them receipts stating the amount of grain they had brought in. Egyptians held accounts at the granaries. They transferred grain to others as payment or withdrew grain after paying the storage cost.

The Egyptians thus used grain stored in their granaries for making payments. Everyone needed to eat, so grain stored in the granaries had value.1 Due to storage costs, the money gradually lost its value. With this kind of money, you might have interest-free loans. If you save grain money, you pay for storage. And so, lending the money interest-free to a trustworthy borrower can be attractive. There is no evidence that this happened.

The origin of these granaries remains unclear. Probably, the state collected a portion of the harvests as taxes and stored them in its facilities. The government storage proved convenient for farmers, as it relieved them of the work of storing and selling their produce. And it made sense to have a public grain reserve in case of harvest failures.

The Bible features a tale that supposedly explains the origin of these granaries. As the story goes, a Pharaoh once had a few dreams that his advisers couldn’t explain. He dreamed about seven lean cows eating seven fat cows and seven thin, blasted ears of grain devouring seven full ears of grain. A Jewish fellow named Joseph explained those dreams to the Pharaoh. He told the Pharaoh that seven years of good harvests would follow, followed by seven years of crop failures. Joseph advised the Egyptians to store food for meagre times. They followed his advice and built storehouses for grain. In this way, Egypt managed to survive seven years of scarcity.

The money gradually lost value to cover the storage cost of the grain. It works like buying stamps to keep the money valid, like in Wörgl. Both are holding fees. The grain money circulated for over 1,500 years until the Romans conquered Egypt around 40 BC. It did not end in a debt crisis, which suggests that a holding fee on money or negative interest rates can create a stable financial system that lasts forever.

Storing food makes sense today, even when it costs money. Harvests may become more unpredictable due to global warming and intensive farming. We only have enough food in storage to feed humanity for a few months as it is unprofitable to store more. Food storage ties up capital, so there is also interest cost. But you can’t eat money, so storing food to deal with harvest failures is as sensible now as it was in the time of the Pharaohs. It reveals the stupidity of our current thinking. Our survival needs to be financially viable. Just imagine how that will play out once artificial intelligence and robots can replace us.

Natural Money

The miracle of Wörgl suggests that a currency with a holding fee could have ended the Great Depression. A myth circulating in the interest-free currency movement is that had the Austrian central bank not banned the experiment, the Great Depression would have ended, Hitler wouldn’t have come to power, and World War II wouldn’t have happened. That is a tad imaginative, to say the least, but a holding fee could have allowed for negative interest rates, and they could have prevented the Great Depression from starting in the first place. That is a lot of maybes.

And such money can last. The grain money in ancient Egypt provided a stable financial system for over 1,000 years. The grain backing provided financial discipline. The holding fee prevented money hoarding that could have impeded the flow of money. The money, however, didn’t promote interest-free lending, so the Egyptian state regulated lending at interest to prevent debt slavery. Egyptian wisdom literature condemned greed and exploitative lending, encouraging empathy for vulnerable individuals.

A holding fee of 10-12% per year punishes cash users. If the interest rate on bank accounts is -2%, an interest rate of -3% on cash is sufficient to prevent people from withdrawing their money from the bank. That becomes possible once cash is a separate currency backed by the government, on which the interest rate on short-term government debt applies. Banknotes and coins thus become separate from the administrative currency. So, if the interest rate on the cash currency is -3%, one cash euro will be worth 0.97 administrative euros after one year. And now, we have a definition of Natural Money:

  • Cash is a separate currency backed by short-term government debt and has the negative interest rate of short-term government debt.
  • Natural Money administrative currencies carry a holding fee of 10-12% per year, allowing for negative interest rates.
  • Loans, including bank loans, have negative interest rates. Zero is the maximum interest rate on debts.

Consequences

Natural Money doesn’t fundamentally alter the nature of bank lending. Banks borrow from depositors at a lower rate to lend it at a higher rate. With Natural Money, banks may offer deposit interest rates of -2% to lend it at 0% instead of borrowing it at 2% to lend it at 4%. A maximum interest rate of zero, however, has a profound impact on lending volume, as it severely constrains it, most notably speculative lending and usurious consumer credit, and it favours equity financing over borrowing in business. The strict lending requirements affect business loans, leading to deleveraging.

Businesses still need to attract capital. To address the issue, Natural Money features a distinction between regular banks and investment banks. Regular banks can guarantee promised returns and have government backing because the payment system is a public service. Investment banks invest in businesses and take risks. They are comparable to Islamic banks. Investment banks don’t guarantee returns. Depositors take on risk to get better returns, but they might incur losses or temporarily have no access to their deposits.

While the maximum interest rate restricts lending, the holding fee provides a stimulus, thereby stabilising the financial system. When the economy slows down, interest rates decrease, and more money becomes available for lending as risk appetite increases, making lending at zero interest more attractive. Conversely, if the economy booms, interest rates increase, and the maximum interest rate curtails lending. Consequently, central banks don’t need to set interest rates and manage the money supply, and governments don’t need to manage aggregate demand with their spending.

Reasons to do research

Stamp scrip and other kinds of emergency money have helped communities in times of economic crisis. The economic miracle of Wörgl during the Great Depression of the 1930s, however, was exceptional. The payment of local taxes inflated the impact of the money. Many townspeople had been late on their taxes, but once the economy recovered, they had the money to pay them. Some even paid their taxes in advance to avoid paying the holding fee. It generated additional revenues for the town, which it could spend on the projects. It provided a boost that would have petered out once the villagers had paid their taxes.3 It was not a miracle. It was too good to be true. Still, there is more to it.

Once interest rates reach zero, the markets for money and capital cease to function as interest rates can’t go lower. Money is to an economy what blood is to a body, so it must flow. When the money stops flowing, the effect is like a cardiac arrest, and the economy is in dead waters. To keep the money circulating, those with a surplus must lend it to those with a deficit, and the interest rate should be where the supply and demand for money are equal. When that interest rate reaches zero, lenders stop lending because the return is not worth the risk, so they wait for interest rates to rise. Money then ends up on the sidelines, leading to cardiac arrest, which can be the start of an economic depression.

It happened during the Great Depression. If interest rates had been lower, the markets for money and capital could have remained in operation. We have seen negative interest rates in Europe for nearly a decade. They could have gone lower had there been a holding fee on cash, or even better, a negative interest rate that is just low enough to prevent people from hoarding it. Once interest rates can go lower, a usury-free global financial system may be possible. That gives rise to several questions. Is it possible? Under which circumstances? What are the benefits and the drawbacks? What are the implications for individuals, businesses and governments? And how does it affect the financial system?

There is no alternative

Several other monetary reform proposals do not view the financial system as a system, which it is, and that isn’t hard to guess because the term ‘financial system’ already implies this. You can’t attach the wings of a Boeing to an Airbus and expect the thing to fly. The financial system is a complex system with numerous relationships, many of which existing reform proposals overlook. For instance, if you end the central bank, the economy will crash immediately, even if it is flying smoothly. And that isn’t even hard to find out.

The payment system is a key public interest, so governments and central banks stand behind it. Most banks are private corporations driven by profit. They take risks that might bring down the economy. And so, governments and central banks make regulations and oversee the banks. And banks create money, from which they profit, and we all pay for it via inflation. That is not good, but replacing the system with something worse is worse, like the word ‘worse’ implies.

There is no lack of ill-conceived proposals. And most fail to address the primary underlying cause of the dysfunction of the financial system, which is charging interest on money and debts, commonly known as usury. An inflation-free, stable financial system is possible. It may not even need central banks. But a sound reform proposal sees the financial system as a complex system with intricate relationships that interact with one another.

And so, Natural Money comes with a systems approach that aims to uncover the relevant relationships in the financial system and the consequences of changing them. It means that Natural Money is a comprehensive design. The gravest error you can make is to pick only the elements you like. That design will never fly. Nor would an Airbus take off with Boeing wings. So, you either buy Airbus or Boeing. In the case of Natural Money, that is not an option. There is no alternative.

Latest revision: 1 November 2025

Featured image: Wörgl bank notes with stamps

1. The Future Of Money. Bernard Lietaer (2002). Cornerstone / Cornerstone Ras.
2. The Natural Economic Order. Silvio Gesell (1918).
3. A Free Money Miracle? Jonathan Goodwin (2013). Mises.org.

Dark Side

Trade and finance


Capitalism has lifted billions out of poverty, but there is a dark side. Trade and finance, thus the profit motive, drive the system we live in. And that will eventually kill us. Now, we are almost there. Most notably in the past, ordinary people regarded merchants and bankers with suspicion. In popular culture, trade and banking were the domains of people of questionable ethics. It is hard to pin down the issue, but they do not only bring the good things in life. Everywhere you see the death and destruction they cause. The ethic of the merchant is profit, nothing else. We think we can’t do without trade and finance, but can we do without moral values? The distinction between trade and crime is elusive. When governments fight the drug trade, they intervene in the market for opioids and prevent businesspeople from doing business.

Supply and demand always equalise at a given price, thanks to entrepreneurs. Hermes, the Greek god of trade, was also the god of thieves. Like thieves, traders don’t like toil and produce, but live off other people’s work. That is a caricature. Trade can be useful. Competition can be tough. And we can’t live without trade anymore, because we buy everything we need in the market, and many things we don’t need as well. Still, as the number of unnecessary products and services increases, trade proliferates. The pace at which we transform energy and resources into waste and pollution hastens as traders facilitate a competition, so we end up supporting an ever-expanding class of traders with our labour. The alternative is to produce as much as possible locally and accept a lower standard of living. That was Mahatma Gandhi’s advice.

Jesus Christ chased the money changers from the temple. Yet, in The Parable of the Talents, Jesus said that you must put your qualities to work. Talents were money, so it could mean putting your money to work. Jesus also said that it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God. And so, you can take your pick and pimp your argument with Jesus’ words. Was Jesus a socialist or a capitalist? It is silly to think in such terms. Jesus lived 2,000 years ago, when economics as a field didn’t exist. Someone claiming to be Paul added that the love of money is the root of all sorts of evil. The Jewish writer Jesus Sirach noted, ‘A merchant can hardly avoid doing wrong. Every salesman is guilty of sin.’ Sirach made a few other peculiar remarks, like, ‘A man’s wickedness is better than a woman’s goodness. Women bring shame and disgrace.’ And so, you’d better take his words with a grain of salt.

Trade is a brutal force, and eliminating it might require drastic measures that few people have the stomach for. The Taliban are among the exceptions. You get the idea. You must first define what is good and what is evil, and then do whatever it takes, believing that the alternative is worse. And that is a belief because we don’t know the future. The prohibition in the United States led to increased crime. Is the drug problem in the Netherlands, where they are more relaxed on the issue, worse than in the United States? The opposite might be true. Yet, lax enforcement made the Netherlands a hub in the international drug trade for a while. And drugs are ruining millions of lives. Is eliminating the drug trade worth the effort? Perhaps, if we succeed. But then, we may have to learn from the Taliban.

Markets have no morals, and the ethic of the merchant is no ethics at all. The individual businessperson may have moral values and refrain from a trade, but traders as a group never do. Whatever you desire, it is for sale. Greed, or the pursuit of profit, drives trade. Still, you can’t run a business if the operations don’t cover the costs. Yet, if the business doesn’t provide anything essential, and consumes energy and resources, it had better not exist. Traditional moral systems accept that you should be able to make a living, but they hold that greed is wrong. We have gone a long way since then. Today, we see trade as mutually beneficial, so we believe that those who engage in a trade do so voluntarily because they all benefit, or believe they do.

The pursuit of wealth, regardless of the consequences, became not only the foundation of our economic system but also of our moral values. And so, Friedrich Hayek could write, ‘The disdain for profit is due to ignorance and to an attitude that we may, if we wish, admire in the ascetic who has chosen to be content with a small share of the riches of this world, but which, when actualised in the form of restrictions on others, is selfish to the extent that it imposes asceticism, and indeed deprivations of all sorts, on others.’ Our ethic is that we can do as we please, as if consequences don’t exist. And the ascetic is selfish when he says everyone should live like him. It is moral depravity at its finest. And so, what was once good has become evil, and what was once evil has become good.

Economists would even say that someone who is altruistic maximises personal utility, so that altruism becomes a selfish act. And the ascetic tries to maximise his personal utility by attempting to force others to live like him. An economist can’t imagine that we would do something good for the sake of goodness. The problem is not self-interest as such, but greed or the merchant’s ethic, and the difference isn’t clear. In any case, we have a suicidal appreciation of wealth. Had we looked down on riches and luxury and aspired to have just enough and do with less, this world could be a much better place.

Many merchants are people like you and me without evil intent. Shop owners make a living by providing their customers with a service. They are often people who care, not the greedy, evil kind that run Wall Street or sell weapons to warring factions in Africa. Still, something is profoundly wrong with trade. Individual merchants may have ethical values, but markets never have them. And trade drives the creative destruction that will ultimately destroy us. Yet, suppressing trade promotes illicit markets and crime. And so, we accept the drawbacks, thinking the alternatives are worse. And that is a fatal mistake.

A pragmatic approach is that outcomes matter more than intent. If the result of evil intent, such as greed, is good, it is good. And if the outcome of good intent is terrible, it is wrong or perhaps even evil. If factory owners destroy artisans’ businesses and pay their employees low wages, but overall opulence increases as clothing becomes cheaper, then it is good. Likewise, if a country switches to socialism out of good intentions, but the population starves, it is evil. Before the Industrial Revolution, nearly everyone was as miserable as today’s poorest. Capitalism has lifted billions out of poverty. So why bother?

Trade and finance became the engine of growth, bringing industrialisation, modernisation, colonisation, the slave trade, mass migration, the loss of livelihoods for craftspeople, and the depopulation of the countryside. Various movements, such as socialists, anti-globalists, religious groups, small-is-beautiful, environmentalists, and also the Nazis, attempted to provide alternatives to the current order with their visions of Paradise. They all failed. The system is a brute force driven by our sentiments and urges. As consumers, we crave the best service at the lowest price, and as investors, we desire corporations to increase their profits. And we don’t think about the consequences.

Usury: the destroyer of civilisations

Money is to the economy what blood is to the body. It must flow. Otherwise, the economy will die. If we stop buying stuff, businesses go bankrupt, we become unemployed, the government receives no taxes, and everything comes to a standstill. That never happens because we spend money on necessities like fast food, smartphones, and sneakers. When we buy less, the economy slows, and we enter a recession, or if it gets worse, a depression. Businesses disappear, and people become unemployed and depressed. Usually, the economy recovers, but it may take time, sometimes decades. It is why we must keep buying stuff, and even more, to make the economy grow.

In the past, when borrowers couldn’t repay their debts, they became the moneylenders’ serfs. It is why several ancient civilisations had regular debt cancellations and why religions like Christianity and Islam forbade interest on money or debts. Usury is paying for the use of money, which is a profoundly evil practice. The evil of it lies in the money flows. We all need a medium of exchange. A simple explanation helps to clarify the issue. Imagine the Duckburg economy running on 100 gold coins. With these 100 gold coins, everyone has enough money, and the Duckburg economy operates smoothly. Scrooge McDuck owns ten, but he is a miser and doesn’t use them to buy items from others.

The economic flows of Duckburg now suffer a 10-coin shortfall. Products then remain unsold, and several ducks lose their jobs. To prevent that, Scrooge McDuck can lend these coins for one year at 10% interest to ducks who come short, so the money keeps flowing. At the end of the year, the economy is 11 short. Scrooge McDuck then lends 11 coins at 10%. In this way, he will own all the coins after 25 years. Scrooge McDuck can implode the Duckburg economy by keeping the money in his vault. When the citizens of Duckburg become desperate, Scrooge McDuck can buy their homes, let them pay rent, and become even richer. If you think that is smart, you have the ethics of a merchant. It demonstrates why, in traditional popular culture, merchants and bankers were evil.

Two things have changed since then. Starting with the Industrial Revolution, economic growth picked up, which helped to pay for the interest charges. The nature of money has also changed. It isn’t gold anymore. Nowadays, banks create money from thin air, so the nature of usury has also changed. When you go to a bank and take out a loan, such as a car loan, you get a deposit and a debt that the bank creates on the spot by creating two bookkeeping entries. The deposit becomes someone else’s money once you purchase the car. When you repay the loan, that bank deposit and the debt disappear. You must repay the loan with interest. If the interest rate is 5% and you have borrowed € 100 for a year, you must return € 105.

Nearly all the money we use is deposits created from loans that borrowers must return with interest. Banks might pay interest on deposits. The depositors of a bank act like Scrooge McDuck. They have more money than they need and keep it in the account at interest. If they have borrowed € 1,000,000 at 5% interest, they must return € 1,050,000 after a year. Where does the extra € 50,000 come from? Here are the options:

  • borrowers borrow more;
  • depositors spend some of their balance;
  • borrowers don’t pay back their loans;
  • the government borrows more or
  • the central bank prints the money.

Problems arise when borrowers don’t borrow and depositors don’t spend their money. In that case, borrowers are € 50,000 short, and some can’t repay their loans. If many borrowers can’t, you have a financial crisis. Borrowers can reduce their spending to pay off their debts, leading to a slowdown of the economy. The economy is also unstable due to investor expectations. They expect more in the future. If debts remain unpaid or people stop spending, they incur losses and may lose trust and stop investing.

If they lose trust, they stop investing, less money flows into the economy, businesses go bankrupt, people become unemployed, and more borrowers get into trouble. As a result, even less money flows, causing banks to go bankrupt. Economists call it deflationary collapse. That happened in the 1930s, causing the severest economic depression in modern history. There was no money in the economy because lenders feared losing it. To prevent that from happening, governments run deficits and central banks print currency whenever there are shortages in the money flows. With interest on debts, these things are hard to avoid. But if the system never collapses, debts and interest payments only grow.

The 2008 financial crisis could have been much worse than the 1930s, potentially leading to the collapse of civilisation as we know it. That was due not only to the accumulation of far more debts but also because most people now live in cities, where they have become dependent on markets and governments. In the 1930s, most people still lived in the countryside. Central banks prevented a collapse by printing trillions of US dollars, euros, and other currencies. The shortfall was that enormous. We now buy our necessities in shops and rely on the government to keep the system running. We have not only become the usurers’ hostages, but also the hostages of markets and governments.

Barataria: an economic fairy tale

Money equals power, and the lure of riches corrupts us, so the alternatives to the system of trade and usury have failed. They can’t compete. A few people step out, but it is like a rehab from a consumption addiction. It is a sober life while everyone around you keeps on living the good life. After us, the deluge is the prevailing mood. The deluge is already taking off. Storms feed on the warming sea water and leave their burden on our shores. But what are our options anyway? In the early 1990s, the Strohalm Foundation published The Miracle Island Barataria, an economic parable by the Argentinian-German economist Silvio Gesell.1 I rewrote the narrative somewhat to better highlight its message. Gesell explores three options: (1) communism or socialism, (2) a market economy without traders and bankers, and (3) a fully capitalist economy.

In 1612, a few hundred Spanish families landed on Barataria, an island in the Atlantic, after their ships had sunk. The Spanish government believed they had drowned, so no one searched for them, and they became an isolated community. They worked together to build houses, shared their harvests, and had meetings in which they decided about the affairs that concerned everyone. It was democracy and communism. After ten years, the teacher, Diego Martinez, called everyone into a meeting. He noted that working together and sharing had helped them build their community, but the islanders had become lazy. They came late to work, took long breaks, and left early. They spent their time at meetings discussing what to do, but much work remained undone.

‘If someone has a good idea, he must propose it in a meeting to people who don’t understand it. We discuss it but usually we don’t agree or we don’t do what we agree upon. And so, nothing gets done and we remain poor. We could do better if we have the right to the fruits of our labour and take responsibility for our actions,’ Martinez said, ‘The strawberry beds suffered damage because no one had covered them against night frost.’ He mentioned several other examples. Martinez said, ‘If the strawberries are yours, you protect them. And if you have a promising plan you think is worthwhile and you can keep the earnings, you do it yourself and hire people to help you.’

He proposed splitting the land into parcels and renting them to the highest bidder to finance public expenses. Fertile lands would fetch a higher price than barren ones, giving everyone an equal opportunity to make a living. He also proposed introducing ownership so the islanders would feel responsible for their property. But with property, you need a medium of exchange or money. The islanders decided to use potatoes as money. Everyone needed potatoes. They had value, so they were good money.

Potatoes are bulky, thus difficult to carry, and they also rot. At the next meeting, Santiago Barabino proposed setting up a storehouse for potatoes and issuing paper money, which could be exchanged for potatoes when needed. So, you had banknotes of 1, 2, 5 and 10 pounds of potatoes. The Baratarians agreed. The notes had a date of issue and gradually lost their value to cover the storage cost and rot. If you returned the banknote to the potato storage after a year, you received 10% less. And because the issue date was on the banknote, buyers and sellers knew its value.

For several years, Barataria had banknotes representing stored potatoes. Their value declined over time to pay for the storage and the rot. Borrowers didn’t pay interest. If you had savings, you would lend them to trustworthy villagers if they agreed to return notes representing the same weight. The notes lost value, making everyone spend their money quickly and store items and food in their storehouses. The general level of opulence rose, but there were no poor or rich people. There were no merchants buying things at a low price to sell them at a high price. Businesses didn’t pay interest, and there were no merchants, so things were cheap in Barataria. The chronicle notes that the islanders acted as good Christians and helped each other.

Then Carlos Marquez had a new idea. He addressed Baratarians, ‘How many losses do housewives suffer from keeping food in their storehouses? We shouldn’t put our savings in perishable products, but money with stable value. We can back our money with something we don’t need and doesn’t deteriorate. The Pinus Moneta is a nut we can’t eat, and doesn’t rot,’ he said, ‘We don’t have to back money with a commodity of value like potatoes. The things we buy and sell give the money its value. If we do that, we can buy things when we need them and don’t have to store them ourselves.’

What a great convenience that would be. It seemed too good to be true. Diego Martinez argued against the proposal. He told his fellow islanders that a medium of exchange passes hands. It remains in circulation. But savings stay where they are unless those who are short of money borrow them and pay interest. You end up paying interest to use the currency you need to buy the things you need. His argument was to no avail. And that is the price of democracy. People often decide about questions they don’t understand.

Most islanders preferred to spend their time getting drunk in the pub instead of studying the issues of government. And if you are doing well, you can’t imagine that seemingly insignificant errors can ruin you. Marquez spoke passionately, while Martinez warned cautiously, saying things were fine as they were and he couldn’t foresee the consequences. That swayed opinions. The islanders switched to money backed by the Pinus Moneta. This money didn’t lose its value. That made it attractive to save money.

Suddenly, everyone tried to exchange their supplies for the Pinus Moneta, causing mayhem in the marketplace. Everyone brought everything they had to the market. But no one could sell their goods because everyone wanted money. That was until the company Barabino & Co came up with a plan. Barabino & Co. set up a bank with accounts that Baratarians could use for saving and making payments. Everyone could bring their money to the bank and receive an extra 10% after a year. The naive Baratarians agreed. They could have known there weren’t enough nuts of the Pinus Moneta to pay the interest. And they didn’t ask themselves how Barabino & Co. would generate the profits to pay that interest. With this borrowed money, Barabino & Co. bought goods from the islanders and deposited money into their accounts, but Barabino & Co. only purchased food and seeds.

The following spring, Barabino & Co. hiked food and seed prices. Most islanders paid more for food and seeds than they received in interest. They went into debt with Barabino & Co. With the profit, Barabino & Co. bought the next harvest and cranked up food prices even further. Soon, Barabino & Co. owned everything. Most were in debt and worked hard, but a few wealthy people lived off interest income. They didn’t work and lived a life of luxury on the interest on their accounts. The Baratarians needed money to pay for the items they bought from Barabino & Co. They had to borrow this money from Barabino & Co. and pay interest to use it. There weren’t enough nuts to pay back all loans with interest, so the islanders went further into debt year after year. They paid interest on money the bank created out of thin air, giving it to the wealthy. That is usury.

The Baratarians worked harder and grew more creative in earning money. The islanders invented, produced and sold more products, most notably wooden items made from the trees on the island. Not everyone could keep up, and more people lived in the fields. At least, the economy grew, and the Baratarians grew accustomed to luxuries they hadn’t had before. They had wooden chairs, boxes, ornaments, toys, outhouses, carts and tables. The islanders had managed without these items before, but now, they believed they needed them.

The change came with other unfavourable consequences. The Baratarians became agitated, deceitful, and immoral. Crime rose as everyone desired the luxuries that the rich enjoyed, and for which they didn’t have to work. Of their Christian faith, not much remained except an empty shell. They were busy making money. Then came the day the Baratarians had cut down all the trees on the island. They suddenly lacked the wood needed to make the tools for harvesting their crops, and they starved. That was the day the Pinus Moneta lost its value. After all, you can’t eat money.

Adam Smith and the Wealth of Nations

The tale tells how devious acts contributed to an outcome most of us now deem desirable. By selling our souls to the money god, most of us have a better life than people in the Middle Ages. That improvement came with wars, colonialism, the slave trade, pollution, and miserable working conditions, and ultimately, it could bring the end of human civilisation. With the help of saving and investing, capitalists build their capital. Capitalism is about making sacrifices in the present by saving to have a better future via investing. It also led to a mindless process called competition via innovation and economies of scale. Economists call it creative destruction.

In the original tale, the wood didn’t run out, but the British rediscovered the island to find a class society much like theirs. The story tells how devious acts contributed to an outcome most of us now deem desirable. By subjecting ourselves to this system of trade and usury, most of us live a more agreeable life than people in the Middle Ages. It came with wars, colonialism, the slave trade, pollution, miserable working conditions, the destruction of communities and societies, and, eventually, the end of human civilisation. With the help of saving and investing, capitalists build their capital. Capitalism involves making sacrifices in the present by saving to have more in the future via investing. You can always do better. It promoted competition via innovation and economies of scale. But there is no ultimate goal, a vision of Paradise, only creative destruction without end.

The Baratarians were in debt, worked hard and were creative. Those who couldn’t keep up became homeless. As there was never enough money to pay back the principal with interest, the Baratarians went deeper into debt, worked even harder and became more creative by inventing and selling new products, producing an economic boom that ended in starvation once the trees were gone. It looks like the problem we face. The Earth’s resources are finite, and interest accumulates to infinity. Our money becomes worthless once there is nothing left to buy or sell.

Adam Smith, the founder of modern capitalist thought, claimed that pursuing our private interests promotes the public good. A baker doesn’t bake bread to serve the community but to make a living. It is why we have something to eat. The baker doesn’t want to lose customers, so he bakes what they desire. Otherwise, they go to his competitor. Smith believed it would work out well as humans are moral creatures. We temper our behaviour as it affects others. Therefore, moral relativists could argue that we don’t need public interest. The private interest will do just fine. But it is not how markets operate. We may have ethical values, but markets never have them. The least scrupulous usually wins the competition, so the greater evil usually wins in the markets. We have found that out and now want governments to oversee the markets.

Factory owners didn’t consider the plight of the artisans they put out of business or the miserable working conditions of their workers. They would have gone out of business if they had done so. Moral considerations don’t drive business decisions, so psychopaths end up in high places in corporate management.2 These psychopaths in business provide us with harmful products like cigarettes, prostitution, gambling casinos, and semi-automatic rifles. They expand their market by advertising their wares. A merchant will say, ‘If I don’t supply the market, someone else will, so why not profit from death and destruction myself?’ The merchant then claims liberty is the highest value, and restricting markets equals oppression, thus the ultimate evil. Why not let everyone buy cocaine and semi-automatic rifles? It increases GDP. These are the morals of the merchant we now live by.

Without self-interest and trade, we would be poorer, and poverty was Smith’s primary concern. Increasing production was the way out. Self-interest and trade were the tools to achieve that. It succeeded marvellously. Since the Industrial Revolution, production increases have lifted billions of people out of poverty. Adam Smith argued:

  • The division of labour drives production increases. If you specialise in a trade, you can do a better job or produce more at a lower cost.
  • A market’s size limits the division of labour. Transport costs limit market sizes. Energy cost drives the volume and distance of trade.
  • Merchants preferred precious metals as money. It enabled them to store their gains, allowing them to wait for opportunities to make financial profits.

Producers produce items at different times, in different locations, and in different quantities than consumers need. That is why we trade. Traders bridge those gaps by storing, transporting, and dividing goods. Trade promotes large-scale production and labour efficiency, so fewer people provide for our necessities. That allows for more fanciful products and services and industries, thus a higher standard of living.

The evil empire of trade and usury

Economic and financial power translates into military power. The Europeans didn’t finance their conquests with taxes but with the profits from their colonial enterprises. No one likes to pay taxes, but everyone loves a profit. The scheme thus became an unprecedented success. Venture capitalists paid for the first ships, hoping to find new trade routes and riches. And they found them. The Europeans reinvested their profits, so their capital grew, and their financial and military strength increased.

After the bourgeoisie had taken control of the British government during the Glorious Revolution, the British state became a venture of the propertied class, like the Dutch Republic already was. The Dutch Republic, run by merchants, was the most successful and wealthiest nation at the time. The British imported knowledge of Dutch governance by appointing a Dutch governor as their king. In the following centuries, Great Britain became the world’s largest empire.

The British bourgeoisie benefited from a functioning state and was willing to pay for it. The storyline is that taxation became legitimate as it had the consent of the taxed. The British bourgeoisie didn’t like to pay for corruption or ineptitude, so the state’s performance improved.3 With its secured and enlarged tax base, the clamp down on corruption and ineptitude, the invention of modern banking, including a central bank, trust in British financial markets improved, and Great Britain could borrow more at lower interest rates.

It helped Great Britain to defeat France, a country with twice as much wealth and twice as large a population. In France, the wealthy didn’t pay taxes, and the government was always short of funding. France defaulted on its debts several times. The French government was inept and corrupt, which made lenders unwilling to lend to it. The British economic successes, thus having a large market, low interest rates, and high wages, helped to ignite the Industrial Revolution.

During the Napoleonic age, several European countries modernised their governments into modern bureaucracies, with career paths based on qualifications and merit. The British later also modernised their administration, aligning it more with the rational principles of government that other European countries had adopted after the French Revolution.4 The benefits of the division of labour imply it is better to let bureaucrats run bureaucracies and businesspeople run businesses. You don’t let government bureaucrats run a business, nor do you allow your businesspeople to run the government.

The United States followed a different path. When the Founding Fathers set up their new state based on the modern principles of their time, they were ahead of Europe. They introduced regular elections for the president and parliament and a separation of powers between the administration, parliament and the judiciary, thus creating checks and balances to prevent dictatorship or mob rule. The US also became the first democracy. All free men had received the right to vote by 1820.4 Several European countries later followed suit.

The US administration, however, didn’t become a modern professional bureaucracy at first, and the US government remained plagued by corruption, cronyism, and the presence of unqualified individuals. Politicians gave their supporters government offices when they won the election.4 In 1881, a disgruntled man who had campaigned for US President Garfield and sought a diplomatic job as compensation shot the president. Appointing people for political reasons had become unthinkable in most of Western Europe. Modernisation efforts in the US began in the 1880s, took decades, and never fully succeeded. Political appointments are now making a comeback.

The founding fathers had set up the United States as an oligarchic republic run by the propertied classes, similar to Great Britain and the Dutch Republic. Rather than leaning on a clean government like the British elites, the American elites learned to employ corruption, for instance, via campaign financing, bribing judges, and funding think tanks that advise the US government. After World War II, the United States emerged as a superpower, and the gold-backed US dollar became the currency used in international trade. To finance its military, the US began to run deficits in the 1960s and ended the exchangeability of the US dollar for gold in 1971. The US dollar then became the de facto reserve currency, most notably because oil-exporting countries continued to accept the US dollar.

The US dollar’s reserve status allowed the US elites to employ the productive capacity of the rest of the world for their empire. Foreign countries delivered goods and labour in exchange for US dollars, which the United States printed out of thin air. The US financial elites in institutions like the World Bank and the IMF pushed developing countries into US dollar debts, which made them depend on exports to serve the US empire. As a result, the domestic economy of the United States began to suffer from the Dutch disease. The Dutch natural gas exports created a demand for the guilder, which drove up the Dutch currency and made Dutch industries uncompetitive in the 1970s.

The Dutch remedied the issue in the 1980s by making a collective national agreement between the government, employers, and unions to keep wage increases below those of its competitors for several years. Demand for the US dollar, however, increased, not because of exports, but because of foreign nations being dependent on it, pushing up its value and eroding the competitiveness of American manufacturing. And the US didn’t need to correct that issue, because of the US dollar’s reserve status.
The US dollar has become an international store of value, and so has US government debt. There was even pressure to go into debt, to satisfy the global demand for US dollars. As a result, deficits have escalated further, and the American economy depends on controlling the world’s financial markets. The American empire is now the Evil Empire of Trade and Usury, the Babylon of our time. However, the end of an empire doesn’t always turn things for the better.

Latest revision: 7 August 2025

Featured image: cover of The Miracle Island Barataria

1. Het wondereiland Barataria. Silvio Gesell (1922).
2. 1 in 5 business leaders may have psychopathic tendencies—here’s why, according to a psychology professor. Tomas Chamorro-Premuzic (2019). CNBC.
3. The Origins of Political Order: From Prehuman Times to the French Revolution. Francis Fukuyama (2011).
4. Political Order And Political Decay. Francis Fukuyama (2015).

Coin hoard

What is money?

Why do we have money?

Money was invented because trade would be difficult without it. For example, if you are a hatter in need of legal advice, then without money, you have to find a lawyer who craves a hat. That is unlikely to happen. Maybe there is a fisherman dreaming of a hat, but he can’t give you legal advice. Maybe there is a lawyer in need of a hairdo instead of a hat. With money, all these problems disappear like magic. You can buy the services of the lawyer so that she can go to the barber. After that, the barber can buy some fish so that the fisherman can buy a hat from you.

Despite these mind-blowing advantages humans didn’t need money for a long time because they lived in small bands and villages where everyone depended on each other and everyone helped each other. This meant, for example, that when a fisherman needed a hat, you would make a hat for him, and if you needed anything, someone else would provide it to you. You did someone a favour so that he or she was obliged to do something back. Villagers produced most of what they needed themselves. Trade with the outside world was limited and was done with barter.

Uses of money

Later cities, kingdoms and empires emerged. People living in cities, kingdoms and empires didn’t know each other so it became difficult to track whether or not everyone was contributing. Favours and obligations didn’t suffice. They were replaced by a formal system for making payments and tracking contributions and obligations. Commerce and tax collection needed a means of payment as well as administration. It is therefore not a coincidence that writing and money were invented around the same time in the same area. The earliest writings were bookkeeping entries. Money has the following uses:

  • buying and selling stuff (payment) so money is a medium of exchange
  • saying how much something is worth, so money is a unit of account
  • keeping track of contributions and obligations (saving and borrowing) so money is a store of value.
catdog
Nickelodeon character CatDog

Money being a medium of exchange as well as a store of value is like your pet being a cat as well as a dog. The result is not really a success. The parts of the pet may often quarrel, for example, because the dog part wants to play while the cat part wants to sleep. If someone keeps some money for a rainy day and does not spend it, others cannot use this money for buying stuff. And this can be a problem. A simple example can explain this.

Imagine that everyone decides to save all his or her money. Nothing would be bought or sold anymore. All businesses would go bankrupt and everybody would be unemployed. All the money that has been saved would buy nothing because there isn’t anything to buy anymore. This is a total economic collapse.

In reality, it doesn’t get that bad as people always spend on basic necessities like tablets and mobile phones, and perhaps food. When people only spend money on necessities there is an economic depression, which is not as bad as a total economic collapse but still very bad. Saving can make you poorer, but only when there are too many savings already. Savings are used to invest in businesses and hire workers to make products and services. Only if there are more savings than investments, does money remain unused.

The value of money

Money has no value when there isn’t any stuff to buy or when there aren’t any other people to trade with. Imagine that you get the offer to be dropped alone on a remote and uninhabited island in the Pacific with 10 million euros. Probably you would decline the deal, even if you can keep your mobile phone. It is other people and stuff that give money its value. But how? The answer is remarkably simple. The value of money is just a belief.

People are willing to work for money and sell their stuff for money. And because others do this, you do the same. For example, you may think that euro notes have an appalling design as well as an unpleasant odour, but nevertheless, you desire to own them because other people want them too. The euro’s value is based on the belief that other people accept euros for payment.

This is just a belief as the following example demonstrates. Suppose that you wake up one day to hear on the news that the European Union has been dissolved overnight. Suddenly you may have second thoughts about your precious stockpile of foul-smelling unstylishly decorated euro banknotes.

You may ask yourself in distress whether or not your precious bank notes still have any value. What is the value of the euro without the European Union? You may find yourself hurrying to the nearest phone shop in an effort to exchange this pile of banknotes for the latest model mobile phone.

And to prove this point even further, suppose that the phone shop gladly accepts your euros. Suddenly they become desirable again and you may start to have second thoughts about that latest model you are about to buy. It may not remain hip for much longer, so you may change your mind again and prefer to keep your precious euros because there may be a newer model next month. So, because the shop wants your euros, you wants them too.

Types of money

At first, money was an item that people needed or desired. Grain was one of the earliest forms of money. Everybody needed food so it was easy to make people believe that others accept grain for payment. In prison camps during World War II cigarettes became money because they were in high demand. Even non-smokers accepted them because they knew that other people desired them very badly. For that reason, cocaine can be money too.

Wares like grain, cigarettes and cocaine have disadvantages. They degrade over time so they aren’t a very good store of value. This makes them a great medium of exchange because people won’t save them. An example can demonstrate this. Imagine that apples are money and you want to buy a house. A house costs 120,000 apples but your monthly salary is just 2,500 apples of which you can save 1,000. It takes 10 years of saving to buy a house. Soon you will discover that apples rot and that you will never be able to buy a house. Then you will spend all your apples right away.

Saving is difficult with apples. This is where gold and silver come in. Gold and silver do have not much use, but humans were always attracted to shiny stuff. Gold is rare so a small amount of gold can have a lot of value because some people feel a strong desire for shiny stuff. Gold and silver coins can be made of different sizes and purity so that they are suitable for payment and can be used as a unit of account.

More importantly, gold and silver do not deteriorate in quality like apples, grain or cigarettes. They do not even rust after 1,000 years. This makes gold and silver an excellent store of value. But this should make us suspicious. A perfect cat makes a lousy dog so a perfect store of value can fail the test for being a good medium of exchange. People can store gold and silver so that there is less money available for buying and selling stuff. And this can cause an economic depression as we have seen.

Governments create money too, for example by printing “10 euro” on a piece of paper. Governments require by law that this money should be used for payments and taxes. This makes people believe that others accept this money too. Government money is called fiat currency or simply currency. The authority of a government is limited to the area it controls so in the past government currencies had little value outside the country itself unless this money consisted of coins containing gold or silver.

In fact, another reason why gold and silver are attractive as money is that the value of gold and silver does not depend on the authority of a government. This made gold and silver internationally accepted as money. In the 19th century, most government currencies could be exchanged for a fixed amount of gold. This is the gold standard. The gold standard boosted trade because gold was internationally accepted as money.

Most money is debt

Debts can have value and so debts can be money too. This may seem strange or even outrageous, but money is just a belief. For example, money is the belief that you can exchange a hat for money and then exchange this money for legal advice. Hence, if you believe that the debtor is going to pay, you can accept his or her promise to pay as payment. And if others believe this too, you can use this promise to pay someone else.

So if the fisherman promises you to pay next week for the hat you just made, you could say to the lawyer that you expect the fisherman to pay in a week, and ask her if you can pay in a week too. The lawyer could then ask the same of the barber and the barber could ask the same of the fisherman. If all debts cancel out then there is no need for cash. Most of the money we currently use is debt. In most cases, debts don’t cancel out and there are many more people involved so it would be complicated to keep track of all debts and savings. That is where banks come in.

Featured image: Close up of coin hoard CC BY-SA 2.0. Portable Antiquities Scheme from London, England (2010). Wikimedia Commons.

Other images: Nickelodeon character CatDog, Sméagol character from The Lord of the Rings [copyright info]