Health Supreme by Sepp Hasslberger

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April 30, 2005

An Economy Of The Commons - Economic Law, Ethics, and Paradox: Is There a Way Out?

The concept of a "commons" as a piece of land or other resource open to use by several members of a community, although not owned by any one of the users in particular, comes to us from English history. Could money be considered as part of the commons? Wikepedia, an expression of what we might call the "information commons" says in this article it could:

Commons are a subset of public goods; specifically meaning a public good which is not infinite. Commons can therefore be land, rivers and, arguably, money. "The Commons" is most often a finite but replenishable resource, which requires responsible use in order to remain available.

Money of course is indissolubly linked to the larger questions of our economy.

Silvano Borruso who teaches at the Strathmore School in Nairobi, Kenya argues in "Economic Law, Ethics and Paradox: Is There a Way Out" target="_blank">?" not only that money should be treated as a commons instead of being illegally created as credit by banks, but that we also must find a way to get back to the idea of the ownership of land having, as he calls it, a social function.

- - -

While Borruso's paper is written with a special regard to the views of Catholics on economics, he gives a good historical overview which boils the subject down to a few basic questions. The solutions he discusses point towards transferring both money and land to serve the users - to form a commons equally accessible to all - although he does not use that term. And no, he is not advocating to abolish private property.

"... if economics is to become a social science, analysis has to start with the truth of things, continue with the virtue of justice, and end by assigning their rightful places to the approaches of the past 200-odd years: Liberal, Marxist, Austrian, ecclesial and Georgist-Gesellian. The argument hinges on the Land and Money questions, which modern economics persists in not addressing."

Quoting from his conclusion:

"I like to compare the economy to a bird, which everyone, from “experts” to common folk, assumes to be flightless because nobody has ever seen it fly. And nobody ever saw it fly because in truth it never flew. But it does not follow that our bird does not fly because it has no wings. Its wings are stuck to the body by captured land and double-faced money. Since a flightless bird is easier to control than a flying one, the vested interests that know the real nature of the bird have done everything possible to keep the existence of the wings concealed. By and large they have succeeded, and for millennia at that. Ever since economics became a science (of sorts) its practitioners have concentrated not on the wings that they failed to see (or deliberately concealed, it’s not up to me to judge), but on the bird’s legs, beak, feathers and so forth. They have reinforced and streamlined all that gear, but it is obvious that without freeing the wings the bird will never fly, which is what it is supposed to do."

Interested in a study of some of those basics economists keep ignoring? Then I recommend you download and read Silvano's paper.

It has been published in Arpejournal - The American Review of Political Economy. (PDF of the paper here" target="_blank">)


See also this article by Silvano Borruso:

MLOLONGO - An African economic miracle?

6 000 inhabitants, five clinics, two primary schools, two churches, no end of pubs, two supermarkets, a booming construction industry up to and including five-storeys buildings, four filling stations, one casino with live entertainment, a cyber café, photocopying centres, but no slums, no beggars, no street children, no banks, no government presence and (almost) no crime: not bad for a place that as recently as 1984 was no more than the usual expanse of African bush on a narrow strip of land (50 x 1000 metres approx) between the old and the new alignment of the Mombasa road, some 15 km from Nairobi City Centre.

In mid 1980s the sand traders from Machakos district, some 30 km further east, found that by dumping their lorry loads along the old alignment of the Mombasa road, not more than 50m from the new, they avoided the weighbridge charges. Smaller lorries coming from Nairobi did not have to pay. The avoidance was therefore fully legal, taking place under the very eyes of the police. As a matter of fact the trade continues: heaps of sand still wait for buyers next to the north expanse of savannah. Two attempts were made over the years to block the old road so as to prevent lorries from using it. The first was a bulldozer digging an ephemeral ditch across it. The second was the police erecting a low-lying barrier high enough to let a car through but not a lorry. This was effective for the couple of weeks it took the lorries to open a detour around it.

Soon after the sand trade began, the first shops started appearing. They mostly sold food and drink, but in no time other services were provided for: tailors, clinics, a locksmith, shoemakers etc. It did not take long before wooden shacks gave way to stone and cement buildings. By the 1990s Mlolongo was booming, while officially continuing not to exist. Even today it is useless to locate it on a map. An interesting phenomenon is that neither politicians , nor street preachers, nor NGOs find a ready audience in a fully employed population. And the inhabitants do not look forward to having such operators in their midst.

What is the explanation of such an extraordinary phenomenon upsetting all the clichés about Africa?

As Henry George (1839-97) used to say, capitalist A and worker B do not divide between themselves the wealth produced by B. They divide what is left to them after landowner C rakes in his rent, usurer D his interest, tax collector E his extortions, and a whole line of parasites from F to Z their more or less visible cuts. It is evident that the Mlolongo dwellers avoid, or evade, some of that. Not all, for sure, otherwise the place would not differ much from an earthly paradise. A tentative, necessarily incomplete, analysis follows.


Land

What strikes a visitor first is the difference between the north side of the new Mombasa road where Mlolongo lies, and the south, which sports a few buildings and a vast expanse of undeveloped savannah. The difference is land speculation.

Land is not free on either side of the road, but the system of tenure is leasehold in the north and freehold in the south. Result: the lease price paid to the Mavoko Municipality would be wasted by anyone not developing the land paid for. Hence the booming construction.

On the south side, the landowner sits on his daily appreciating but empty property, unwilling to sell and waiting to make a kill. The perverse system of taxation that Kenya has inherited from the British rewards the idle landowner’s sloth, while punishing the working people’s industry. The perversion consists in the fact that the value of the idle property increases by the day not because of what its owner does, but because of what the people on the other side of the road do. If the attention of tax collector E was diverted away from the fruits of Mlolongo people’s labour towards the immoral (but legal) earnings of that representative of class C, Mlolongo would take off economically way beyond the dreams of every academic economist.


Location, location, location  

Mlolongo is far from being self-sufficient. It grows no food and produces no goods in any quantity to speak of. There is plenty of work, which keeps everyone busy, but few stable “jobs.” Its main asset is, without doubt, its strategic location.

Whereas the distance from Nairobi City Centre is some 15 kilometres, that from its outlying industrial area east of the city is no more than 5-8 km, a long but not exhausting walk in the cool of the mornings and evenings.

The same distance separates it from Athi River and Kitengela, on the opposite site. The employees of the two big cement factories located there find cheaper accommodation in Mlolongo than in either Athi River or Nairobi.

The weighbridge station, where all the lorries coming from Mombasa must stop to weigh in and pay accordingly, is a net asset for Mlolongo. The clientele from the stopping lorries adds not only to its colour but also to its income, making it possible, just, to avoid the usurer’s grasp.


Money

As there are neither banks nor other lending institutions, the locals must rely on outsiders’ spending enough on their services as to allow them to import foodstuff, “mitumba” and other necessities, while paying local wages.

Put it another way, they are out of reach of usurer D’s grasp, and money circulates instead of being hoarded. Every single construction is an entrepreneur’s, capitalist-labourer in one; there are no loafers and no pensioners that one can see. Perhaps one day they will appear, but not now that the place is so young.


Taxman E

He is certainly not conspicuous. People do pay VAT, but only on stuff they import from Nairobi and other centres where the taxman is active. He could not be bothered with a place that according to his records does not even exist. How many people pay income tax is anybody’s guess, and the weighbridge deals with people bringing in lorry loads measured in tens of tonnes, not of kilograms. It is an obstacle less in the way to development.


Bribery, corruption and parasitism F - Z

When a petty bureaucrat realises that he/she has power over his fellow citizens, it becomes extremely difficult to resist the temptation not to turn that power into a source of extra income. Invoices from export-import companies, for instance, usually include the item “facilitation,” meaning bribes paid to custom officials to let imported items through. Such officials do not exist in Mlolongo. Whether they will one day is anybody’s guess. For the time being it is a bureaucrat-free area, and the locals are very determined that it stay that way.


Setbacks and difficulties

The absence, or inconspicuousness, of so many eaters of labourers’ wages goes a long way to explain the unusual prosperity of Mlolongo, but it does not mean that people there wallow in opulence. There is no poverty in the sense of destitution, but wages are low. The population is big enough to have attracted there the power company. It has connected the place to the grid, but since the water supply is a municipal monopoly, they are still without water. Every family needs 40 litres a day, which they buy from vendors at 20 cents per litre. And there is no sewerage system. Every shop-cum dwelling space owner has built his own septic tank under the property, but in the outlying areas north of the road there are still open sewers waiting to be dealt with somehow.


Hopes for the future

The Mlolongo people are as yet unaware of the ongoing monetary revolution with which thousands of communities are stepping over the danger of recession in so many parts of the world. With Argentina leading, they are taking control of their own currencies, thus bypassing the banking system, creating employment, stimulating small enterprises and avoiding crushing taxation.

The first step would be to create a small company to harvest the rainwater falling off the roofs so as to solve the immediate problem; second, to create another company to plan and execute their sewerage system; and third, to sink a borehole capable of giving abundant water to all the inhabitants.

But at this point they would doubtless attract the attention of the ever-powerful A to Z parasites. Who can tell? 

Silvano Borruso
silbor@strathmore.ac.ke
26th December 2002


Related links:

Community Currencies

XAT - Alternative Trading Network

Ripple - Mutual Trust Based Exchange 

Cooperative Individualism

My previous articles on money and interest on hasslberger.com

End debt slavery - get your T-shirt
someone put up a store on cafepress.com with slogan-laden T-shirts for those who want to start making a public impression...

Money As Debt
An excellent introduction to some of the major problems with our current economic system. Want to know what is at the root of the current breakdown of banking? It seems that what's happening today is only a logical consequence of the way our money is created.

Our whole economy is hostage to those issuing money (the banks) and a necessary consequence of today's system is that money tends to end up in just a few hands, leading to exquisite and varied problems for the rest of us ... we need some smart changes here. The video identifies the problem and proposes one possible solution. There may be others.

 


posted by Sepp Hasslberger on Saturday April 30 2005
updated on Friday June 26 2009

URL of this article:
http://www.communicationagents.com/sepp/2005/04/30/an_economy_of_the_commons_economic_law_ethics_and_paradox_is_there_a_way_out.htm

 


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Engineering Economics
The subject of economics is an extremely difficult one to make understandable, partly because there is enough official mumbo-jumbo to confuse anyone and partly because our economists are full of vague ideas of how things work, one contradicting the next. Surely enough to make anyone throw the towel and "leave it to the experts". Unfortunately, as long as we do so, we will be completely at the effect end of... [read more]
June 25, 2003 - Sepp Hasslberger

Your Bank - a Money Making Machine
Do you know where the bank gets the $160,000 for your mortgage? It's very simple. Someone walks over to a computer and types 160,000 beside your name. With only $27.93 of cash reserves for every $10,000 of assets (as of June 1999) the bank has just created the remaining $159,553 of that interest-earning money out of thin air. When, after 25 years of hard work, you pay off your mortgage,... [read more]
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..."Corporatization, the vehicle that drives economic globalization has relied on obedient politicians around the world to create thousands of laws which protect multinational corporations against competition from nationally owned companies and small business. This is called creating a “level playing field”, a curious term considering corporations don’t pay tax on their profits*. Meanwhile local businesses are burdened with high taxation and no longer protected by trade barriers. Politicians all over... [read more]
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Argentina Defies Monetary Fund - Gives Economic Lesson to Big Finance
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Canada: Class Action Accuses Banks of Illegal Creation of Money
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April 19, 2005 - Sepp Hasslberger

 

 

 


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The Individual Is Supreme And Finds Its Way Through Intuition

 

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This work is licensed under a Creative Commons License.

These articles are brought to you strictly for educational and informational purposes. Be sure to consult your health practitioner of choice before utilizing any of the information to cure or mitigate disease. Any copyrighted material cited is used strictly in a non commercial way and in accordance with the "fair use" doctrine.

 

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