We should not expect a good constitution from the prevailing morality but, on the contrary, can expect the

"The art of progress is to preserve order amid change and to preserve change amid order."

"One of the flaws of war is that it makes more bad people than it eliminates!"

"If the people were wealthy they could not be easily kept within legal limits."

"The stocks in stores and shops are the true working capital of any country."

"Legal tender is an especially low type of despotism."

The goods warrants shall not be subject to a general compulsory acceptance or to a forced value. (Both, in combination, constitute what has been understated as "legal tender".) Only the issuer and his debtors must accept them at any time at their nominal value. Thus, in the general market, the goods warrants may be freely offered,

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accepted or refused, they may stand at par with their nominal gold weight value, circulate even at a premium or suffer a discount (and be consequently accepted only by a few, if anyone - apart from the issuer and his debtors).

Thus an over-issue which would lead to a general price increase, i.e. an inflation, cannot be caused by these certificates. It is impossible to put exchange media without legal tender into circulation in excessive quantities because a discount would form very rapidly and they would consequently, become immediately and widely refused or correspondingly discounted in general circulation. Thus, without legal tender one cannot inflate a currency, even with the worst intentions. (The worst intentions are indicated by the insistence upon the continuance of legal tender - under all kinds of superficial pretences. For a more thorough but not yet comprehensive discussion of Legal Tender see PEACE PLANS No. 19A.)

On those who cannot imagine any other money than legal tender paper money, Karl Marx remarked, in his "Kritik der politischen Oekonomie" (Critique of Political Economy), which was first published in 1859 and which Marx called, in 1858, the fruit of 15 years of economic studies:

(Let's give even "the Devil his due"! Even Marx was not always wrong in all his observations, however flawed his ideology & proposals are as a whole. - J.Z., 10.12.02.)

1/8 Limited Validity or Circulation Period of the Goods Warrants

Goods warrants should possess only a limited circulation period of about 3 months during which their value would remain unchanged.

This would assure the reflux of these certificates to the issuing centre and would thus prevent the hoarding of this kind of paper money much more effectively than could be achieved e.g. by the weekly affixation of stamps as suggested by the money reformer Silvio Gesell. No additional administrative labour would be required as it would be just a time limit compared to that of the statute of limitations.

The limited validity of these goods warrants would correspond to the limited durability of the goods and services that are ready for sale. A clearly recognisable impression on each certificate must point out the end of this period.

Under normal circumstances almost all certificates will have returned to the issuing centre long before this period has expired

Nevertheless, one has to decide what should happen with the few goods warrants which have not returned to the issuing centre within the prescribed period. (This does naturally not refer to those kept by collectors.) Various shop association banks will have different rulings on this:

a) One possibility would be to declare these certificates as completely invalid, like forfeited theatre tickets, railway tickets or postage stamps and to altogether refuse their acceptance.

b) Alternatively, the issuing centre could accept such certificates still - with a discount. Thereupon even the shops might still accept these notes at their nominal value - but only in payment for otherwise hard to sell goods. Otherwise, the shops might also accept these notes only at a discount, letting the bearer suffer the loss, or they would refer him to the issuing centre. The issuing centre then might exchange these warrants, at a discount, against those amounts of other cash which it received from the shops in amortisation of the shops' debts, in place of the goods warrants which were returned too late. If a discount is offered, it could be further increased after more time has elapsed, to provide a further incentive to return the certificates before they become altogether valueless.

c) Another option would be the establishment of a credit with such certificates over which the holders could dispose only at the discretion of the shops or banks granting this account.

d) Overdue certificates might also be considered as acceptable for the establishment of long-term deposits.

e) One exception in which the issuing centre should still accept these invalid certificates at their nominal value would be the payment of old debts, which were due before the goods warrants became invalid. Overdue debts of third parties could also be paid in this way. Thereupon, after fees are deducted, the claim of the bank against such debtors would be transferred to the one who paid in the overdue certificates.

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From time to time the issuing centres would make announcements on the disposal of such certificates.

The debtors of the issuing centre must also be obliged to immediately cancel the goods warrants, clearing certificates etc. they receive, either in the presence of the one who makes the payment to them or as soon as they have received the payment, e.g. by mail. Moreover, they have to use these cancelled certificates as soon as practicable for the repayment of their debt to the issuing centre.

The same applies to any amounts of these certificates which go beyond the sum of their debts. The customers are not aware whether they are still debtors or not and have an interest to see these notes withdrawn from circulation and replaced only by new, separately founded and sound issues. The storekeepers do not lose anything thereby. They can still acquire an account credit with these certificates as the issuing centre. (This would, naturally, also help to withdraw certificates which come closer to their expiry date.)

The issuing centre will not return the goods warrants received during a business day into general circulation - apart from the issue of small change by the cashiers. Instead, the issuing centre will destroy the goods warrants received during a day's business on the next day of business, at the latest, after registering the numbers of the certificates returned, and will include these returns in its published reports.

By means of this procedure, one remains fully aware of any still circulating certificates. The printing costs are minimal. The number check can now be computerised with reading pencils and other automatic gadgets. By ending the "circulation" or rather "oscillation" of the goods warrants at this stage - and replacing them only by new issues in new credits - one achieves that the goods warrants are usually returned long before their expiry date and that thus all payment transactions tend to be conducted with goods warrants valid still for a number of weeks.

(To keep a similar control over its issues - as far as this can be done by a central bank, the Bank of England still cancels and destroys the notes returned to it. - Information supplied by Ulrich von Beckerath in the fifties. Whether this still applies now, I do not know. - J.Z., 10.02.02.)

1/9 Repeal of the Legal Claim of Creditors to Payment in Cash

The issuing centre as creditor and its creditors, those who established an account credit at the issuing centre with goods warrants, must renounce any legal claim they may have to payment in cash (State coins or State paper money or even private gold or other rare metal coins). Instead, they will receive a claim to clearing, of the same value, a claim to be realized in most instances not by such cash payments but by payment in goods warrants and clearing certificates.

The promise to pay one's debt, after a certain period is expired, in a particular means of exchange, that is to be provided by others and thus not easily obtainable for anyone at any time up to the required amounts, is in reality a speculative dealing in futures, an empty sale of cash at a future date, a forward transaction or time bargain.

This kind of business is in almost all countries either prohibited or very restricted, because of its associated risk, the likelihood that frequently such contracts cannot be fulfilled, or it is only permitted when "hedging" takes place or a premium is agreed upon in case one of the parties wants to with-draw from such a contract.

This risk is presently disregarded with regard to cash transactions and this can have the most serious consequences during monetary crises. For that reason, the goods warrants must not promise a redemption in cash or rare metal upon demand or even, as with the old Scottish Banknotes, after the expiry of an optional period.

(A further discussion of this question can be found in the 3 books by Ulrich von Beckerath reprinted in Peace Plans Nos. 9-11.)

1/10 Text of Goods Warrants, Denomination and Typification

A corresponding inscription must exclude any uncertainty on the kind and value of the goods and services promised through the goods warrants. To simplify matters, only one example of a goods warrant text is given in the following. Many other wordings are possible. But the essential points are contained in this text:

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The print will cover both sides. Some of the text could be done in small print, other features should be stressed. The certificates should be made out in money denominations, typified and standardised, but colour, layout, impressions and even size should clearly distinguish them from the government's paper money.

The stocks in the stores cannot be exactly determined every day or for every day of issue. The same applies to the total of the outstanding notes. The amounts and values involved vary continuously. Thus these balances are only to be published periodically.

1/11 Limits of Goods Warrants Issues

For monopolistic and coercive means of exchange (forced currency) there is no useful measure to determine whether too many or too few were issued. Thus any economy in which a monopoly for the issue of standardised money tokens exists and in which the notes issued are legal tender, will continuously fluctuate between inflation and deflation. Moreover, even in the middle of a galloping inflation will such a currency also reveal deflationary symptoms.

The exact measure for the proper amount to be issued of exchange media without legal tender is very simple: It consists in the free market rate of these exchange-media. As soon as a few goods warrants too many were issued, a small discount will appear on the market, first of all in the wholesale trade and in money exchange centres. The least discount would be very rapidly publicised and it would lead to a wide-spread discount and refusal of these goods warrants. Only the debtors of the issuing centre would still like to accept these warrants then - as they could immediately pass them on to the issuing centre at their nominal value.

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If the issuing centre were to continue with the issue of its certificates, while a discount exists, then it could do so only if it is prepared to suffer a certain loss - a rather unlikely case: While issuing the certificates at a discount, it would have to accept them immediately from all its debtors - who in their own interest would somehow acquire the certificates - in the payment, even advance payment of their debts, at par. If it would have no debtors left who are willing to accept discounted certificates then not only wide-spread but general refusal to accept its certificates would result and bring further issues to a stop. Moreover, this might make future issues difficult to impossible for this issuer.

Thus the self-interest of the issuing centre will prevent over-issues.

1/12 Discount of Goods Warrants

The possibility of a discount is all essential for the functioning of the goods warrants system. Every discount happening, published or heard about will bring these certificates where they belong: to the debtors (shops and manufacturers), and from there to the issuing centre where they finally disappear from the circulation. What would happen if the goods warrants received at some places a discount, before their cover (shop- and debt-foundation ) would be exceeded? Would this lead to a loss of confidence? Would a 'run" on the shops and the issuing centre result? Would the system collapse because of this?

This discount would disappear automatically after a short time because

a) the debtors of the issuing centre would continue to accept the certificates at their nominal value and pay their debts with them,

b) wage earners would bring the certificates into the shops, in payment for whatever goods and services they want, at their nominal value, and would thereby get rid of these certificates and their distrust and

c) the issuing centre would buy up, at par, goods warrants which are elsewhere discounted and would use for this purpose other means of payment it has received.

The only ones who would be disadvantaged by such occurrences would be those who, out of ignorance, had accepted the certificates at par but then passed them on only at a discount. One might even say that these people would have deserved their loss and that, monetarily, they would have to grow up still. In future they would either refuse such certificates outright - if there are any difficulties in passing them on. Alternatively, they would accept them only with a corresponding discount, or, fully informed on all utilisation options for the goods warrants, they would accept and pass them on at par.

1/13 Use of Goods Warrants

The commercial and everyday use of the goods warrants, clearing certificates etc. would be the same as with cash today or with ordinary sound commercial bills. Employees would often hardly notice the difference as they could purchase with the goods warrants as if they had received cash. Employers, especially manufacturers and wholesalers, would accept private bills "for clearing only", after a short experience with them, probably with less hesitation than they would accept today's bills promising cash redemption, seeing that the clearing bills would eliminate the risk involved in the cash promises.

1/14 Forgeries

The goods warrants system offers no incentive to forgers. The time frame for circulating forged notes is as a rule to short - seeing the short circulation period of the goods warrants. Moreover, the circulation area (area where they are readily accepted in general circulation, as local currency) is for each of the many issuing centres to be expected, so limited, compared with today's national issues, that any large issue of forged notes within this limited area would very soon encounter suspicion and those who would attempt to pass the forged notes would also be much easier to identify.

(The accountant of a large Australian department store which issues shop currency for consumer credit purposes - more on this in a future PEACE PLANS issue - told me once that he never encountered or heard of a case of such notes being forged. Mostly these notes are returned within a few days to the store.)

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1/15 The Granting of Loans

The goods warrants etc. will be issued as loans and will serve as means to repay the loans. The demand of debtors for these certificates will give them a sufficient reflux.

It is not always advisable to hand over the goods warrants to the borrower himself. This is only required when goods warrants are e.g. borrowed by a manufacturer for the purpose of wage payments. More often it would be safer to hand over the goods warrants only to the creditors of the borrower. The danger of the abuse of a loan would thereby be diminished. Thus, if a member receives a loan from such an issuing centre, he will, as a rule, not receive this amount in cash (in goods warrants) but will be credited with the corresponding amount. He will hand his bills in to the issuing centre which will take over their payment from this account credit.

Loans will be granted to persons or firms that have received services or deliveries, want to pay for these, but cannot do so immediately through cash payments (or account transfers), e.g. to retailers who have purchased stocks of goods.

Another option would be to give those persons advances in goods warrants who have already sold goods but are still waiting for payment, e.g. employers who have sold their products to wholesalers or wholesalers who have made sales to retailers.

Formally, the loan will be granted in either of the following two forms: As a loan on or as a purchase of short term claims, of employers against wholesalers - if it is a loan to employers.

The shopkeepers will receive goods warrants loans against the obligation to accept the goods warrants without limits, like cash, to cancel them and use them for repayments of their debt or for the establishment of account credits.

Wholesalers would receive goods warrants loans only in return for short-term claims which they possess against retailers.

There will always either be a loan on such short term securities or an outright purchase of such securities - both, naturally, with a discount as a service charge and to cover any risks involved.

1/16 The Circuit of Goods Warrants

The shopkeeper will pay for his purchases from wholesalers either with the goods warrants or with a draft upon the account credit given to him by the issuing centre of the shop association. The wholesaler uses these means of payment to pay for his purchases from the manufacturers. The manufacturers redeem the cheques received at the issuing centre, the bank of the shop association and receive goods warrants in redemption. With these they pay their labourers and employees. These, in turn, purchase whatever they require, with these means in the various shops and thereby enable to shopkeepers to repay their loans.

The employer can discount a commercial bill he received from a wholesaler at the bank of the shop association (which issues the goods warrants) and then pay his workers with the goods warrants thus received. From the workers these goods warrants flow back into the shops, from there to the wholesalers who are then enabled to redeem their own commercial bills, which the shop association bank will present to them.

Quite obviously, this kind of circuit, wherever it begins and whatever route it takes, provides the shops, the wholesalers and the manufacturers with sales, the manufacturers with means to pay wages and the workers with paid labour.

1/17 Loans on Claims

Even if the shop association bank merely grants a loan on claims of an employer and does not purchase them outright, the agreement on this will have to give the shop association bank the authority to dispose of the claims as if they had been purchased. For instance : If the shop association bank utilises a clearing bill of textile manufacturer X to purchase from him a quantity of textiles, upon the order of an associated shop, then the manufacturer is to be credited with this amount, his debt is to be correspondingly reduced, he will no longer have to redeem this particular security in the end - because he has already done so, with his services, in advance. Neither will any of the intermediate other holders have to handle this bill again.

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The form of a loan instead of a purchase would increase the security for the Shop Association Bank. If, for instance, among the clearing bills given as security by an employer to the shop association bank, there happens to be a bad one, then, in case the bank has only made a loan against it as security, the employer is immediately responsible for it. In the other case, when it has purchased the bills, it would itself have to bear the risk (or at least part of the risk as one of the acceptors). Once the shop association bank has settled down to its business, then it may only purchase clearing bills instead of merely granting goods warrants loans on them. It would thereby simplify its accounting procedures.

1/18 Claims which Can Be Discounted or Serve as Basis for Loans

The goods warrant system is also to prevent the hoarding of goods warrants. To achieve this, the claims acquired during their issue (whether by purchase with the goods warrants or merely as securities for the loan of goods warrants) must all be short-term clearing bills or equivalent short term clearing certificates. Only thus could a continuous demand for the goods warrants be established, one which would assure their reflux. The debtor expressed in these clearing bills must be a firm which either produces or has in stock goods which are in daily demand. Among these items must be food. Thus, as such debtors the following would be suitable: storekeepers, farmers, mills, bakers, bread factories, canneries and corresponding wholesalers. To obtain such bills is no problem but merely a task which any bank could easily solve.

If anyone who wants to borrow goods warrants cannot supply securities which can be used any time or at least within a short time, then some guarantor must do it for him. Such guarantors could demand a fee for this service.

1/19 Condition for Loans: No Extraordinary Price Increases

Shopkeepers who have borrowed goods warrants or whose stocks serve as cover for goods warrants, must not increase their prices beyond price movements of the general market - as long as their loan runs or as long as they are members of the Shop Association Bank. Otherwise their whole debt to the shop association bank would fall due immediately. Thus they may not require a higher price when payment is made in goods warrants or offer only inferior products for them. They may not even ask a prospective customer, before a purchase and its price is agreed upon, whether they would like to buy with cash or goods warrants. In most instances, and in their own interest, as cooperative owners of the shop association bank, they would avoid such practices.

1/20 Maximum Amount for Credits

To reduce the risk of issuing such credits, the shop association bank should never grant a single firm more than 10% of the total of its currently issued goods warrants.

1/21 Business Area

Such credits in goods warrants will only be granted to traders and manufacturers within a radius of 25 km around the issuing centre. Thus the shop association bank could at any time easily check the credit worthiness of the applicants and their use of the credits. Most of the goods warrants issues would thus tend to become local currencies.

1/22 Fee for the Use of Goods Warrants

The debtors should be charged such a high fee for the use of the goods warrants that they have a sufficiently strong interest to repay their loans as soon as possible. As a cooperative the issuing centre would from time to time distribute the income derived from such fees - less administrative, insurance and reserve amounts - among those debtors who have not fallen behind in their payments. Thereby the fees for all those repaying their loans punctually will be reduced to the administrative costs and those of the risks involved. These costs are, as has been shown by Proudhon, Gesell and many other money reformers, relatively small or large only in relation to very small loans. This distribution could take place according to the principles for the distribution of dividends in cooperative insurance companies.

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Only for mortgage and other long-term loans are high interest rates often hard to bear. (Many American building and loan associations - which between them financed a large percentage of all homes in the US - demanded and received, even under a stable currency, 9 % interest for their building loans and could, consequently, pay their savers 7-8% interest. Thus, in some cases, even as high and even higher interest rates are not too high.) The goods warrants system is primarily designed to overcome monetary crises and to normalise all monetary transactions by the granting of short term credits in form of goods warrants and other clearing certificates. Only here could interest rates be greatly and directly reduced, as above indicated, while still fully utilising them as part of the price mechanism.

If a borrower should fall behind with his contractual obligations towards the issuing centre then he should not only have to pay the usual fees but also interest on the outstanding amounts.

To simplify matters, the user fees are to be determined in fractions of the initial loan amounts regardless of the continuing amortisation, i.e. in flat-rate interest rates.

1/23 Repayment and Cancellation

Every goods warrant received by the debtors of the issuing centre is to be cancelled and returned to the issuing centre. If and to the extent that the debtors debt is not yet due or his receipts exceed his debts, the debtor will be credited for the goods warrants on an account at the issuing centre and he could immediately dispose over such funds by cheque.

1/24 Repayment with Clearing Bills Issued by Oneself

If a debtor, through no fault of his own, is unable to repay his debt with goods warrants or cash, then the issuing centre will be satisfied with receiving from him clearing bills, e.g. for a debt of $ 100.00 about 15 clearing bills for $ 10 each. These clearing bills would have to be accepted by the debtor, whenever they are presented to him in payment, i.e. he would have to redeem them with his own goods or services as if they were goods warrants or cash.

1/25 Debt Foundation as Guaranty for the Reflux of Goods Warrants etc.

When the goods warrants are issued, then they derive their value from their shop foundation. When they stream back to the issuing centre, then they are valuable through their short-term debt foundation. (Naturally, the shop foundation is also a kind of debt foundation.) The debtors of the issuing bank express a continuous demand for these certificates. They are all the time repaying the certificates received to the issuing centre.

Should anywhere in the circulation a discount arise of the goods warrants, due to an undervaluation, then the debtors of the bank would acquire these for them cheap certificates through cash purchases and would immediately utilise them to reduce their debt. The discount would then be a pure profit for these debtors. (Naturally, they are only obliged to accept these certificates at their nominal value in the sale of their goods and services, not when they purchase them for cash. Other debtors would simply advertise, to increase their sales: We still accept goods warrants which are reported at a discount, in all our shops at their full nominal value, or even at a small premium! (They might do the latter out of the profit margin expected from additional sales.)

1/26 Surcharge in Cases of Repayment with other Means of Exchange

To assure the reflux of the goods warrants and to increase the demand for them, the issuing centre might reserve the right to charge a small fee if debtors pay back their debts to it not in goods warrants but with other means of exchange.

1/27 Reflux by Means of the Purchase of Goods Warrants

All other means of payment received by the issuing centre are to be utilised to purchase goods warrants of the issuing centre on the open market. This would also help to keep them at par with their nominal value.

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1/28 Time Limit for Loans

The shop association bank will, as a rule, grant only short-term loans, The maximum period of these loans is 3 months. In particular cases shorter periods will be determined - in relation to the average turn-over periods of the enterprises desiring the loans.

1/29 Repayment in Instalments

The borrowers must oblige themselves to repay their loans in weekly instalments amounting to at least 1/4 to 1/12th of the loan.

1/30 Legal Form of the Issuing Centre

It appears most sensible to establish the shop association bank as a cooperative of its lenders and borrowers, i.e. especially of the storekeepers, wholesalers and manufacturers. The cooperative shares would not have to be paid in in cash but could be paid in bearer bonds which the issuer would have to accept in his payment transactions like cash.

Capital in the proper sense would not be required to any considerable extent by the issuing centre. Required would merely be the establishment and maintenance of an office with office facilities. Initially, one of the members could probably make rooms and facilities available for this purpose, also the labour required.

Apart from this only a small reserve fund might be necessary. Working capital would not be required by this bank as its task would merely be to mobilise or liquidise the capital of its members - consisting in their capacity to supply goods and services in daily demand - by means of the goods warrants system.

1/31 No Business Secrets

The public should always be enabled to inform itself sufficiently about all details of these issues. Thus the following should not be considered as business secrets:

The names of the debtors of the issuing centre, the total of the issued and of the still outstanding goods warrants, their numbers and series, the kind and extent of their cover and foundation which assure their reflux, and the processing of the returned certificates.

Some of these details could be stated on the certificates themselves. Others could be published in notices exhibited at the issuing centre and in the premises of its debtors, mainly the shops. Their detailed balances are also to be published in the press. They should at least once a week publish their goods warrants circulation and the total of the short term claims serving as their backing - in one of the daily papers. Their books and other records relating to the issue of goods warrants etc. should always be open to public scrutiny - to the extent that this can be arranged within normal office procedures.

1/32 Clearing Centre

All shop association banks are entitled and obliged to mutually clear their due claims against each other. They have to establish a special clearing house for this purpose.

1/33 The Position of Employers in the Goods Warrants System

Employers receive claims against their wholesalers who distribute their products. They can either give these as securities for a loan to the shop association bank or sell them to it. With the goods warrants thus obtained they can pay wages, salaries, suppliers and their personal expenses. They, their employees and their creditors will then make purchases with these goods warrants in the shops. Consequently, the stocks in the shops diminish and the retailers place orders with their wholesalers for restocking. These orders are passed on by the wholesalers to the manufacturers and thus assure further sales to them. The cover of the goods warrants in these cases would consist out of the products of these employers which have already been sold to the wholesalers and retailers.

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The manufacturers and other employers may also issue clearing certificates in which they oblige themselves to accept these certificates like cash whenever anybody purchases anything from them or pays debts to them. They may sell these against goods warrants or use them for the purchase of raw materials. Still more obviously than in the above instance, they would thereby provide themselves with sales - to the extent of their issue of clearing certificates.

1/34 The Advantages of the Goods Warrants System for the Workers

They will in future no longer be laid off when their employer cannot obtain a wage payment credit from the banks. Thus the danger of unemployment is largely abolished for them. The comparatively small unemployment which now and then results in certain branches of industry and commerce, due to technological innovations, can largely be abolished by means of re-training credits granted by new credit institutions which are still to be established.

The abolition of the note-issue monopoly will lead to the end of any shortage of exchange media. Thus the workers would no longer have to sell their goods, their services: their labour, at emergency prices. (This dilemma is especially vexatious in underdeveloped countries, which have not yet fully converted to a monetary economy and is often indicated by extremely high interest rates and extremely low wages. The latter are naturally also due to low productivity, but not exclusively so.)

In quite general terms, one can state that by means of the goods warrants system the needs of the workers can be transformed into demand that is sufficiently supplied with exchange media or currency - to the extent that they are able and willing to work.

1/35 The Advantages of the Goods Warrants System for Wholesalers

Seemingly, the wholesalers are not aided by freedom to issue notes, seeing that already before the introduction of free note issue they had made use of a limited freedom to issue, consisting in the right to issue sound commercial bills of exchange. They issued these bills and largely cleared them rather than redeeming them in cash. However, only when the goods warrants system offers the employers the chance to be continuously and sufficiently supplied with means of exchange for wage payments, while it offers the retailers the opportunity to sell all their wanted stocks, can the wholesalers expect to be also fully employed in their role between the producers and the retailers. Moreover, after the introduction of the goods warrants system, they could no longer be driven into an economically unjustified bankruptcy by means of a legal claim of all creditors to payment in cash. All such claims would be transformed into a right to clearing only - unless the contrary, cash payment, has been expressly, voluntarily and privately agreed upon. Even then some courts might decide that nobody could be sued to pay such "gambling" debts in this way. (Any dealing in futures is a form of speculative gambling, even if the item to be delivered in the future is cash. which is more often short than ready or readily available.)

1/36 The Advantages of the Goods Warrants System for Independent Professionals

The independents, like doctors, lawyers, barbers etc., could also receive goods warrants based upon their ready for sale services, in form of loans from the Shop Association Banks. Likewise, loans to manufacturers could also be granted by these banks and in goods warrants with regard to the service cover offered by these professionals. They will find it easier to get short term credits and their customers will be more liquid - and more numerous, due to full employment.

They could also associate into large groups and issue their own means of payment. Cases are on record, mainly for China, where even single barbers, restaurants or brothels issued their own tokens, which were willingly taken within their neighbourhoods. Naturally, few would want to go back to this kind of decentralized issue - but it should not be prohibited, either. The traffic will bear, i.e. generally accept, only those exchange media, at least as local currency, which are convenient enough, that is widely enough accepted by a variety of service and goods centres, as already stated above.

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1/37 Individuals as Issuers of Goods Warrants

At least at first most individuals will probably be unable to make use of freedom for note issues. Immediately they will derive only indirect benefits from monetary freedom like full employment and higher wage or cooperative incomes.

Later on, when the clearing system has been fully developed, they could buy locally current goods warrants with their own clearing certificates - based on and expressing their own ability to give services or goods in return, valued in x grams of gold. The clearing house would see to it that these certificates would get into the hands of those who can use the services of these individual issuers. They would hire them and offer them their own notes in return, on pay days. Most likely, a single employee or worker could circulate his own certificates only in a limited circle of acceptors and there only with a discount of, let us say 10-30%. But, quite obviously, he would supply himself to the same extent with work as he would succeed in getting his own clearing certificates accepted, to the same extent as he was thus enabled to pay for his requirements.

1/38 Goods Warrants Issued by Large Firms

Larger firms could make use of the issue freedom themselves. The smaller ones would have to associate for this purpose, e.g. all the small shops in a large shopping centre. They also could issue clearing notes, in money denominations, standardised and typified, in which they oblige themselves to accept these notes like they would accept e.g. gold or silver coins of equivalent values or denominations or weights. With such notes they could e.g. pay their tradesmen, their suppliers and, after coming to an agreement with the tax office, their taxes. They might also be able to pay railway and postal charges in this way. It would be the task of the decentralised banking system, connected by clearing houses, to see to it that these clearing notes would be used as means of payment against them.

Certain firms would have it easier than others to issue such goods warrants or clearing notes and get them accepted. Among these are, obviously, large department stores, especially chain stores, railways (where the cover consists in tickets, that is in the readiness to transport), post offices, water works, power plants like electricity works and gas works, mines, large agricultural enterprises and insurance companies. Goods warrants of such firms could also largely circulate in the general circulation, at least in certain localities, and could be used for the payment of wages and salaries. There are many precedents for such issues on record.

A goods warrant of this type might have the following text:

"This goods warrant, which is not legal tender but may be refused and is subject to a free market rate, is accepted by ................... from ........... to ......... like ready cash to the value of xyz grams of fine gold. This obligation applies also to the canteens of this firm and to all the sales outlets conducted by it."

1/39 Principles and Conditions for the Granting of Long Term Credits

in Goods Warrants by Shop Association Banks

When goods warrants are lent out on long terms they will nevertheless stream back to the shops within a short time. The shopkeepers would then have sold their stocks in return for goods warrants which they cannot utilise until the long-term credits are due to be repaid. These goods warrants would then possess no other cover than this one and it would come into existence only in the long term future. The storekeepers could indeed present these goods warrants to the issuing bank but this bank could then not refer them to any place which would have to accept such goods warrants immediately. Only a fraction of them would be required, from time to time, to pay back long term loans on instalments. Consequently, these goods warrants would suffer a considerable discount and would soon be refused in general circulation.

In long-term loans the borrower is only obliged to accept the goods warrants up to the amount of the next repayment instalment that is due in a short time, and he has to return the warrants thus received to the issuing centre. Otherwise, we would not have a long-term loan.

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Consequently, the shop association bank will be able to grant long-term credits in goods warrants only if and to the extent that other persons are prepared to stand guarantors with their ready for sale goods and services in daily demand, for the time period that is agreed upon in the loan. This could be arranged in the following way:

These guarantors or suppliers of the long-term capital (they could be workers or pensioners and need not be capitalists in the conventional sense), could accept goods warrants in their usual payment transactions and deposit them at the Shop Association Bank in term deposits.

As these term deposits are then acquired with goods warrants which otherwise would have been used by the debtors of the issuing centre for the repayment of their short term debts, these debtors would now be correspondingly short of goods warrants.

Thus, on the one hand, in order to abolish this money shortage and on the other, in order to grant the long term credit, the issuing centre would again issue goods warrants to the amount of the long term loans (covered by equivalent term deposits and to the long-term borrowers.

These borrowers will then pay with the loan their expenses, e.g. wages or new equipment. The producers of the latter could then pay wages with these goods warrants. From the workers the goods warrants would stream back to the shops and these would repay their short-term loans. Thereupon the first kind of circulation would come to an end, the one involved in the issue of the long term credit. The bank would not grant this credit itself. It would merely act as a mediator. Lastly, economically, the long term loan would be granted in form of goods and services - by those willing to make such investments. The money used, the goods warrants, would merely be the veil, as W. v. Goethe used to say, hiding these goods and service transactions. This would be the technique for normal cases, i.e., when there are no special sales difficulties for retailers.

If there are any sales difficulties and the retailers are sitting on unsaleable goods stocks, then they would also be prepared to make these available on long terms, in order to make at least some use of them still. They would also oblige themselves, in advance, to do so, if this would be one of the conditions.

The Shop Association Bank could issue goods warrants upon the declarations of these suppliers of long term capital that they would accept the goods warrants up to such and such amounts in their sales, and establish with these goods warrants long term deposit accounts at the bank. To assure that these goods warrants are at any time usable against these subscribers to the long-term loan, these acceptors would have to take up the same obligations which a debtor of the shop association bank has. They have, indeed, obliged themselves to make available their goods and services on long terms and must not be enabled to evade their obligations.

Thus, finally, the goods warrants issued in these long term loans will get into the hands of these subscribers and will be used by them to establish their term deposit at the bank. The issuing bank will, naturally, not circulate these goods warrants again but destroy them. They have then fulfilled their function.

What would happen during the repayment of such long-term credits in goods warrants? The issuing centre, shortly before the long-term credits are due to be repaid, or shortly before instalments are due, could issue new goods warrants up to the amount of the due credits or instalments, to those who possess long-term deposits with it. These goods warrants, or others to the same amounts, would finally get into the hands of those who are the long term borrowers and with them they can pay back their long term debt - or the due instalments.

Alternatively, the borrowers could also cede short term claims, which they may have, e.g. against wholesalers, to the issuing centre. Based on these claims the issuing centre could then issue goods warrants and repay with them the long-term deposits.

Thus, even the long term credits would, under the goods warrants system, be granted (or rather mediated) and repaid only with goods warrants circulating only for a short period.

Naturally, long-term deposits would not have to be used. Their equivalents might be preferable, e.g. in form of transferable accounts or bank bonds, most suitably - bearer bonds.

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These long-term deposits, accounts or bonds could and should bear interest.

But the bank should not oblige itself in advance on the rate of interest it will pay. The long-term investors could e.g., cooperatively or as partner share in whatever profits are made from a business, after all costs and risks are paid for.

The issuing centre should also remain at liberty to repay such credits at any time if it does not find any investment opportunity for them.

Such long term assets with the issuing centre could either be established only for certain periods or for indefinite ones. Then long-term loans could only be granted for corresponding periods and amounts (or balances). Alternatively, they could be established for indefinite periods. Then both sides should have the right to give notice.

When notices have been given for amounts larger than the current repayments are, then the issuing centre should make repayments either only in the sequence of the notices, or in instalments on all deposits which are in the process of being withdrawn.

In any case minimum amounts should be determined which could be with-drawn every month outside the sequence determined by the date of the notices.

Whichever withdrawal policy is pursued, it must not bear any inherent risk and must be clearly announced in advance to all customers of the bank.

One of the self-evident precautions should be a rule that the bank would not be entitled to grant any new long-term loans as long as all credits subject to notices or due are not repaid.

Moreover, to assure the rapid reflux of the goods warrants granted in long-term loans, these loans should only be paid out to the extent that the borrower has expenditures and they should be made at these times or shortly before.

Those seeking long-term credits could also issue goods warrants of the following kind or attempt to sell or convert them:

"From such and such a date onwards I will accept this certificate in all payments to me like ready cash of such and such an amount and value, but retain the right to supply the bearer instead with legal tender of the stated amount."

In inflationary times the issuer would better promise, as voluntary alternative, gold coins or gold certificates or other cash. Otherwise his potential creditors would fear that they might be cheated in the now conventional way.

The only way to use goods warrants for the financing of those capital goods, which for their production require a long time, would be the following (when no long-term credit of the above indicated kind can be arranged):

The issuing centre discounts short term promises, of those who placed orders for the long-term capital goods, to make advance payments in short intervals. Then, to the extent of these advance payments, due within a short time, goods warrants could be issued because their reflux and thereby their par value would be assured.

2/1 Freedom to Issue - even for the Treasury

The freedom to issue notes does not only permit private people to transform some of their capital (that consisting in consumer goods stocks, readiness to offer specialised services or labour power) into means of exchange. Even the State and municipalities, as well as the treasuries of exterritorial and autonomous communities of volunteers, could utilise this freedom. They could do this by transforming their capital assets, their tax-rates or contribution claims, into means of payment.

The method so far used for levying taxes, rates or contributions has forced everyone, who either has or wants to pay his taxes, rates or contributions, to first of all acquire means of payment for this purpose by selling his goods, services or labour for them. This method disregarded altogether the monetary condition of the market, whether it was or was not sufficiently supplied with means of exchange. The issue of special tax- rate- or contribution-based exchange media will see to it that the market is always sufficiently supplied with suitable means of exchange for this purpose. Even in normal or good times the issue of such tax foundation money (or contribution money) is to be recommended to prevent deflationary blockages.

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At a time when the tax collectors gather to themselves 30-40% of the national income in form of taxes (that was noted in 1959 - by now the percentage has possibly about doubled) without providing sufficient means of payment for tax payments, sales difficulties and unemployment are the inevitable result of such deflationary policies.

(They forcefully extract these enormous amounts from all economic transactions and then do not always and immediately spend all these amounts again, that bringing about money shortages. - J.Z., 10.12.02.)

2/2 What Is State Paper Money when It Is not Redeemable -

and Does not Possess the Legal Tender Characteristic?

It is then no more than a clearing bill drawn by the treasury upon the taxpayers, i.e., it is a paper money with tax foundation. All paper money today has a degree of tax foundation - but it is distorted and prevented from working properly by the presence of the forced value for its paper "value standard" and forced acceptance for these notes: by legal tender. (On the effect of legal tender upon any currency compare PEACE PLANS 19A.)

2/3 What Is the Essence of Tax Foundation?

If a paper money is not redeemable in gold then it is sufficient to preserve its par value with gold currency that places which offer products or services in daily or general demand do accept it like gold money. One can on the one side consider tax receipts as goods in daily demand and the State's services as services daily and generally demanded. (However enforced that demand is.)Thus the tax foundation of paper money is just a special case of what otherwise can be described as acceptance-, debt - or reflux-foundation.

Tax foundation means that the State can give its paper money a value by accepting it at all its pay offices at its nominal value, in the same way as cinemas and theaters give value to their tickets by accepting them for their performances. The stamps of the Post Office and the tickets of the railways are similar examples.

That taxes are today compulsory changes nothing in the principle involved here.

The voluntary - but contractually binding - contributions of private and competitive insurance companies offering similar services to those desiring them, would permit the issue of the same type of clearing certificates. Only here they would better be called something like contribution-based money, to indicate the voluntary nature of such payments.

The tax commissioner exerts a steady and certainly large enough (however enforced) demand for paper money. This demand suffices to keep the value of the paper money steady, at par with e.g. its gold value, if a gold weight units is accepted in it as its value standards.

If the State's central bank issues paper money up to the amount of short-term treasury bills given to it as security, then these paper notes are in effect conveniently denominated and standardised pieces of these treasury bills. The treasury bills or debt certificates of the State are finally redeemed with tax revenues consisting of the paper notes received. This closes the circle. Naturally, if a treasury were to issue this kind of paper money by itself, as has often been done in the past, then it could save the interest it has to pay to the central bank for the discounting of its treasury bills.

Is there a limit for this kind of monetary anticipation of tax revenues? Experience has shown that the treasury could circulate the tax claims it has for the next 2-3 months in form of standardised and typified paper notes in money denominations, could use them e.g. to pay e.g., its public servants, pensioners and suppliers, without these notes suffering a discount against their stated gold value. The demand exerted for these notes, by the taxation machinery, would assure that.

Once the tax payer has delivered these cut-up treasury bills to the taxation office (directly or by means of his bank) and has thus fulfilled his tax "obligation", then the taxation office can destroy these tax warrants. They have then fulfilled their function. The State has covered its expenditures with them. The tax payer was assisted in acquiring the means of payment for the tax burden imposed upon him.

Thus the proper cover for State paper money consists in taxes imposed by a government and the readiness to accept that State paper money at all tax offices in payment of taxes - at their full nominal value. In other words, the tax foundation of a paper money is the confidence of the population that it can with these means pay its taxes or,

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otherwise expressed, that the State will almost certainly levy sufficient taxes. This confidence can be justified even by such States and powers which are not able to pay in the conventional sense.

Already Adam Smith knew this kind of foundation for means of payment and wrote in the section "Of Money" in his famous "The Wealth of Nations":

2/4 Why Should such Paper Money never Possess Legal Tender?

The tax foundation means only a very limited legal tender, namely that towards the tax offices. A general legal tender would give the State paper money a general debt foundation. Everyone could then pay all his debts with it, not only his tax-debts, and always at the nominal value of this paper. Thus the State could issue much more paper money than would be justified by its tax receipts, i.e., an inflation, an over-issue with a corresponding depreciation, becomes possible, mostly even likely.

Under legal tender a means of payment is at the same time value carrier and value standard and thus an inflation or over-issue of the value carriers leads simultaneously to an inflation of the value standard. As under such a system all prices are fixed in this legally enforced value standard, and as everyone within a country has to accept these paper value tokens at their nominal value, an overissue of such means of payment leads inevitably to a general price increase.

As opposed to this, an over-issued means of payment which is not legal tender (in general circulation, i.e. must be accepted at face value only by the issuer, and, perhaps, his debtors) could depreciate, at least in the general circulation, but would be unable to influence the general price level - because it is not at the same time the value standard. Those few people who, apart from the issuer and his debtors, would accept it at all, would accept it only at its market rate, leaving the price and wage levels, reckoned in stable value standards, untouched. Thus legal tender provides the legal option for any government to engage in an inflation. What every government has in abundance is motives for an inflation. There are only rarely intelligently directed protests against such a procedure. It amounts to a secret taxation of all creditors and can be carried out as an administrative measure, i.e. even without parliamentary consent.

In short: Without general legal tender an inflation is impossible.

While today hardly any university in the world or any textbook really teaches anything about legal tender and its inflationary tendency (apart from merely supplying a formal definition), the disadvantages of a paper money economy, of a forced currency, were known a few decades ago to almost every economist. They did not use the term "inflation". Instead, they dealt with the depreciation of money under the headings: Paper Money Economy, Forced Currency or Legal Tender. Far from praising legal tender, they considered certain phenomena as self-evidently associated with it:

Still more interesting is a short remark by Laves, who in 1890, in his book on "Die Warenwaehrung" (The Goods Currency) said:

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"'We will naturally disregard the excessive fluctuations of the monetary value under a paper money currency. Such a currency is almost a mockery of the demand that a value standard be unchangeable. All disadvantages of fluctuations in the value of money appear here many times over. Already in moderately disturbed periods a country is continuously in a feverish condition thanks to this strange institution. A demonstration of the monstrous disadvantages is currently offered by the conditions in Argentinia."

Thus, at his time. one had to refer to Argentinia if one wanted to explain what an inflation is!

Further severe condemnations of Legal Tender can be found in PEACE PLANS' first monograph on this subject, No. 19A, especially on pages 13, 14 & 19, in the remarks by Adam Smith, the US Constitution, Madison and Adolf Wagner.

That a State should be obliged to accept its own tax warrants (more accurately: tax anticipation certificates) at any time at their nominal value, independent of their current market rate, i.e. that they should be forced currency or legal tender towards the State, is really self-evident: Everyone must naturally recognise his own debt, by letting it be reckoned or counted against himself as a means of payment. You must recognize your own IOU's against yourself and so must the State.

As Prof. Dr. Felix Dahn said in his "Deutsches Rechtsbuch" (A German Book on Rights):

The unrestricted right of the people to refuse any paper money offered, make the abuse of the note issue right either by the State or by private people impossible.

2/5 When Must the Issue of Tax Warrants Cease?

The proper upper limit for the free issue of tax warrants is determined by their free exchange rate. As soon as their exchange rate has fallen to 99% of their nominal value, the general circulation is sufficiently supplied with means of exchange for the payment of taxes. Then further issues should cease until the exchange rate has brought these tax warrants again to par with their nominal value expressed in whatever currency unit or value standard is used.

If the State were to continue issuing paper money in spite of its discount, to those who would not refuse to accept it altogether because of the discount, but who would accept it with a discount, then it could only harm itself - for the

tax payers would acquire these notes in order to pay taxes with them at their nominal value. They might then even pay taxes in advance, if the discount is high enough. The State would thus always have a loss corresponding to the discount of the tax-warrants and could not use them for all payments. If it persisted in making such losses then the discount and the losses would increase and more and more people would come to altogether refuse to accept these notes - unless they have still taxes to pay with them. When even future tax claims are paid-up with discounted tax warrants, then there would be general refusal to accept these notes. But long before that stage would over-issues have ceased. (Alternatively, this government would have fallen because it could no longer pay even its public servants, policemen and soldiers.)

When advance tax payments are made with depreciated tax warrants then loan certificates are to be given in return, whose gold value is guaranteed and whose par-value should be maintained by free transferability and interest payment as well as by the acceptance of these certificates, once due, and shortly before, in payment of taxes.

2/6 Value-Preserving State Paper Money Can only Be Issued upon Short-term Tax Claims

State paper money that is not covered the tax receipts of the near future has neither a sufficient reflux, nor, in the absence of legal tender for it, in general circulation, sufficient utility and therefore insufficient acceptors. The continued offer of means of payment thus constructed leads inevitably to the depreciation of such means of payment.

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The current offer of tax warrant money must always be in a proper relationship to the present or shortly to be expected demand for tax warrants for the purpose of tax payments. If taxes are set too low (in relation to the issues) or are due only at some considerable time in the future, then correspondingly less tax warrants can be issued.

If a State would need more short-term means than it could acquire in this way, i.e., if the exchange rate of its tax foundation money would have fallen to 99% of its nominal value - before it would have issued sufficient of this money for its requirements, then it would have to increase taxes and, based on these, issue further tax warrants until their exchange rate has again fallen to 99% of their nominal value.

Lorenz von Stein was, apparently, the first to determine that tax foundation gives a paper money a par value, without legal tender, equivalent to the tax receipts during three months.

2/7 No Monopoly for the Issue of such Means of Payment

Freedom of note issue means that means of payment can be issued wherever, whenever they are needed and by whosoever is suitable as an issuer - provided only they find willing acceptors and do in no way defraud them. Thus not even any particular centralised pay office should possess a monopoly for the issue of tax foundation money. The diverse exterritorial and autonomous communities of volunteers to be expected in the future (if there is to be a future) will probably possess their own issuing centres for their voluntary contribution money. Municipalities will issue it, if they consider it necessary, in the some way as a federal government would. (Compare e.g. the issue of demurrage money with tax foundation in Woergl, during the great depression. See on this the discussion of this experiment in many passages in PEACE PLANS Nos. 9-11.)

This would mean the simultaneous and decentralized issue of such money tokens and thus a more even and regular supply of the economy with means of exchange.

It has often been observed that under today's centralist issue of exclusive currency some districts are better and others worse supplied with means of exchange. Moreover, under the present system even in the same locality both, deflationary and inflationary phenomena can be observed at the same time. For instance, there are some, who have no cash income or only a subsistence income - in depreciating currency, and others, who are over-supplied with paper money - often coming fresh from the printing press, like the politicians, the administrative fat cats and the lower ranks of the public service. Yes, there are indeed people who at the same time, not only for ideological and tax reasons, retreat to barter conditions and subsistence economies on the land. To some extent the monetary conditions of underdeveloped countries are still with us.

2/8 Gold-Clearing Currency

A paper money with tax- or contribution foundation becomes automatically and without a gold reserve or convertibility or 100% gold cover, a gold-value means of payment - under the conditions of a free market for gold - by an obligation on the certificates with something like the following wording:

"This certificate of 10 gold dollars (or 1 gram of fine gold ) is accepted by public pay offices at its nominal value in the same way as a gold coin of the same denomination would be accepted."

2/9 Surcharge in Cases of Tax Payments with other Means of Payment

In order to furthermore assure the par-value of this kind of paper money, the treasuries could order that all or a part of all taxes should be paid only in this kind of paper money. Otherwise, a premium payment would be due - whenever other means of payment are offered instead.

When, consequently, other means of payment are received in payment of taxes or other dues, then the receiving pay offices must utilise these already on the next day for the purchase of their own tax warrants or contribution money still in circulation.

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2/10 Limited Validity for Tax Warrants?

Tax foundation money need not become invalid after a certain short period. The more such certificates are hoarded or even destroyed, the more could be issued by States and municipalities because then the certificates will not as soon suffer the discount as they would without this hoarding or destruction. Should hoarding afterwards cease rather suddenly, then there would be two options designed to avoid considerable discounts:

1.) The State could accept advance payments of taxes.

2.) It could also issue a gold-value loan which could be subscribed with this depreciated tax foundation money at

its nominal value.

Naturally, by limiting the circulation period to about 6 months, most of these cases could also be avoided.

2/11 No Secrecy for the Issue of Tax Warrants

All public bodies and authorities issuing tax foundation money should, if possible, announce daily the amount of taxes claimed by them, the amounts not yet paid in upon these due claims and the amount of the tax warrants still in circulation and their current market rate.

2/12 Summary

Fundamentally, all kinds of paper money issued and circulating today amount only to paper money with a kind of tax foundation, i.e. their value consists lastly in the fact that one can buy tax receipts with them.

Alas, today's paper money with tax foundation possesses some serious flaws:

• It is the only cash payment means permitted and does not suffice to mediate all desired exchange transactions.

• It is at the same time means of exchange and standard of value. It possesses legal tender.

• It is centrally issued and, consequently, many areas and circulation spheres are insufficiently supplied with it.

These mistakes and the resulting disastrous consequences for every economy should be avoided by the future tax foundation and contribution based paper money.

The issue of all kinds of money tokens should, in future, be free and decentralized, i.e., undertaken by as many issuing centres as are deemed necessary by the participants. The abolition of the monopoly would abolish any shortage of means of payment for tax and contribution payments.

The separation of the value-standard from the value-carrier or means of exchange - through the introduction of the gold-clearing currency (even this one would not be enforced but would be a freely competitive solution leaving other standard choices untouched), would lead to stable value reckoning.

The free exchange rate or market rate for all means of payment, in combination with freedom to issue exchange media, by all those able and willing to do so, would prevent over-issues and thereby inflations, as well as under-issues and thereby deflations. Good money would drive out the bad.

In future, finance ministers in countries under economic depressions - if after the introduction of note issue freedom such conditions could still occur - would no longer worry about accumulating over-due tax assets which they are presently unable to mobilise, due to a depression. On the contrary, they would welcome such assets and mobilise them, turning them into cash in the way above described. Thereby they would greatly contribute to overcome an economic crisis.

(No longer would e.g. large firms be aided by cancelling their tax debts while their smaller competitors, employing between them possibly more people, are ruthlessly driven into bankruptcy because of tax debts, hardly gaining anything for the treasury, just because such a procedure is politically more opportune. Naturally, in the long run and as soon as possible all enterprises and individual producers and consumers should be exempted from all compulsory levies, tributes, robberies, extortions or blackmail, commonly called taxes.

Tax exemptions, as granted now, unequally and under emergency conditions, are not the ultimate solution.)

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3. Gold Clearing Currency within a Free Market for Gold - and for all other Metals etc.

- Prof. Heinrich Rittershausen, during the Great Depression.

What are the characteristics of a gold clearing currency and a free gold market?

• Value standard is the weight unit of fine gold on the free market.

• The redemption of all certificates expressing gold values takes place only on the free market, not by the issuers. (Unless special contracts are made among volunteers willing to face the risks involved. By all means, let them have the supposedly one and only "100% gold dollar". )

• Everyone has the right to possess gold coins and gold bars and to offer them in payment.

Since today, as a consequence of a long agitation against gold, many are still convinced a gold currency would be the result of some financial conspiracy or, anyhow, a diabolical invention, even gold pieces should today no longer have legal tender. That could infringe the religion of such people. After two or three years of experience with all kinds of other value standards even the beliefs of such people might change. Important is that legal tender is not essential for gold. Most people would only be too satisfied with being paid in gold pieces, or gold certificates and might even make concessions to those paying in gold.

Everyone has the right to accept gold pieces as means of payment or to offer to pay with them.

At the same time' no one has a legal claim to payment in gold, unless this is based on private contractual arrangements and even then withdrawal premiums should be agreed upon to cover the time dealings risk involved.

Gold coins are not and will never be numerous enough to enable us to cover all payment transactions with them. There is also the fact that no one has the right to impose them as an exclusive value standard and exchange medium, no matter how good and efficient they may believe this medium and standard to be.

To protect debtors whenever it is too difficult, nay, sometimes, impossible for them to pay with gold pieces, the legal claim of creditors to gold pieces is repealed or not re-established and it is replaced by a claim to payment in gold values unless some other value standard has been contractually agreed upon.

All enemies of gold currency mix up gold pieces and their commercial and economic characteristics with the legal claim of creditors to be paid in gold coins.

After this legal claim to payment in gold is repealed, the quantity of circulating or hoarded gold coins is no longer of importance. Trade is then independent of it.

As said before, contracts providing for payment in gold should contain a withdrawal premium. (The latter might not be permitted merely at the discretion of the debtor but perhaps at that of an agreed upon arbitrator.)

Moreover, everyone has the right to use gold pieces as value standards. For instance, storekeepers may price all their goods in gold prices. All debt contracts, like wage, rent and loan contracts, might contain value preserving clauses which take the value of a certain quantity of fine gold in coins or bars as a base.

The repeal of the legal claim to payment in gold means here that anyone may still reckon in gold weight units, i.e., one may take up a gold loan (which may also be given in gold values rather than in fine gold) but is not legally obliged in consequence to deliver to one's creditor a certain quantity of fine gold but only its equivalent value in some other acceptable form.

This right includes the right to issue means of payment which express gold values but which do not promise redemption in or convertibility into gold. The issuer must only be prepared to accept them in all his payment transactions like the equivalent and stated quantity of gold.

The government mints are obliged to coin out gold bars into gold coins, without limits, just upon payment of the coinage fee. They do not have any monopoly for issuing gold coins, either. Anyone has the right to coin gold pieces or let them be coined by others, provided only weight, fineness, diameter, thickness and issuer are indicated. Consequently, the price differential between gold bars and gold coins will remain small.

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Everyone has also the right to produce or order standardised bars of fine gold or other rare metals and to freely trade with them.

To be repealed are all gold coinage, gold export and gold import restrictions, all State gold prices, notification, licensing and delivery obligations for gold - and, naturally, silver and other rare metals (I will not go into the discussion of radioactive metals here!) - that are suitable for coinage etc.

(Gold used as a value standard and or as a means of payment, the purchase and sale of gold and its coinage and the production of bullion bars must also be exempted from taxation. It must no more be taxed than the weight, volume or length units should be taxed. - J.Z., 10.12.02.)

The government gold hoards, established by exploiting the tax payers under false pretenses, are to be dissolved. This could be done e.g. by coining them and using them for government expenditures. Then, for the time that all government expenditures can be paid for with these coins, all otherwise due taxes should be cancelled, e.g. all taxes otherwise due during the next xyz days. (Alternatively, the victims could get their share in them in the way described in PEACE PLANS 19C.)

Publicity of the gold trade and announcement of the paid, offered and demanded prices as well as the turnover, would also be essential for a free gold market.

For any country with a truly free gold market and free gold coinage etc., the acquisition of gold is usually no problem. Gold usually streams to the places where it has the greatest purchasing power - unless it is forcefully prevented. Thus a relatively even distribution takes place. This has been called the "law of the fluctuating gold quantities".

This is important, for any rare metal currency under which no rare metal coins circulate cannot persist in the long run. It would founder on a justified distrust against it. Everyone must have the right to test the value of his paper certificates on the rare metal market, not only by enquiries but by real exchanges. Only then can a value standard gain and retain trust and confidence and deserve them. (Trust and confidence do have their role to play in any economy - if only they are not made the sole "foundation" - which usually requires a confidence trick and can be only temporarily successful.)

Would the transition to such a system be difficult? Under complete freedom debt contracts would, inevitably, be expressed in gold dollars, e.g. gold value mortgages would be agreed upon. Thus, step by step, this or that gold price or gold wage being agreed upon, and before it even becomes generally noticed, without further losses of purchasing power between intelligent people and without the tax department receiving more or less taxes, the old gold currency and standard could be re-introduced but without the past excesses:

a) the obligation of the central bank or other banks to deliver gold pieces upon demand,

b) the necessity for banks and, indirectly, for all creditors, to restrict the granting of credits when gold flows off to

foreign countries.

The same principles apply to silver coins and silver bars. Both standards could peacefully and without causing any harm coexist with each other (and other value standards) under the parallel currency system, i.e. under free exchange rate between them continues.

Naturally, everyone should also be free to agree with his associates upon any other base than gold or silver. But it can be safely predicted that even they would soon find out that gold weight units are by far the least evil (fluctuating) ones that are so for available, for debtors and creditors alike, if only all above indicated rights and obligations are upheld.

4. Free Trade System, Introduced by Free Ports and Free Trade Zones

and in the defects of trade statistics." - Ulrich von Beckerath

4/1 The Fundamental Aims of Free Trade

Repeal of all import and export levies, licensing and quotas, monopolies, subsidies, price controls and of all foreign exchange restrictions, in short, complete separation of the government from all foreign trading.

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4/2 Principles and Facts upon which Free Traders Rest their Case

The means of payment used to pay for imports, even when they are gold coins instead of the today generally used paper means, will inevitably sooner or later stream back and lead to corresponding exports. Thus import and export are as in-separable as breathing in and out. Thus no government need concern itself in anyway with the preservation of the so-called balance of trade. No government should do so, anyhow, because it will never be as much interested in achieving mutually profitable exchanges as the foreign trade merchants themselves.

Likewise, the taking up of credits in foreign countries or the granting of credits to foreign countries is exclusively the concern and risk of those who want to take or give such credits. It is up to them to take all advisable precautions, e.g. by means of credit insurance - which should also be a private business. (Governments are only good in writing foreign debts off!)

After the above indicated economic restrictions and borders have been abolished, division of labour between the peoples of this world will be greatly promoted. This would have the same favourable effect upon the general standard of living and economic development as the previous abolition of custom barriers within countries had. Indeed, it would only be an application of the same kind of measure on a larger scale.

As a result of improved international division of labour - after the introduction of Free Trade - the tendency would be for everyone to produce at his location and under his natural conditions etc. only that what he could produce with the least effort and lowest cost, for a world market. Moreover, consumers would have the option to buy the best and cheapest goods from anywhere in the world and could thus increase their standard of living.

The international competition introduced by free trade would likewise lead to better and cheaper products and services.

What influence free trade would have upon the establishment of world peace was already stated above.

4/3 The Ideal of Protectionists

In essence it consists mainly in buying as little as possible in foreign countries, thereupon to buy at higher prices in the own countries and to accept the resulting lower standard of living, while attempting to sell as much as possible in foreign countries, thereby reducing the goods offered in the own country still further and making goods more expensive at home, and then to utilise the proceeds from exports not for purchases from foreign countries but, instead, for the granting of long term credits to foreigners, credits which many people in the own country vainly try to obtain. When a few years later the foreign debtors begin to repay their credits, and lastly they can do this only through goods deliveries to us, the protectionists would rather cancel their debts than accept goods from them. Consequently, and fundamentally, and to that extent, the own export products were then given away. To realize this nonsensical system the protectionists are prepared to commit many offensive acts and even crimes, all quite legally, naturally: searches of private luggage, confiscation or imposition of high fines for infringements of their absurd, immoral and harmful rules, shooting of smugglers or black marketeers, who are trying to carry on a free trade regardless and, naturally, try to prevent arrests for moral deeds, devaluations of the currency in order to promote exports and reduce imports.

Inevitably, this kind of system brings a high degree of corruption with it (which under these conditions is often better than incorruptible customs officers would be - but why should one have to buy them in the first place?), a reduction of the standard of living and also, perhaps worst of all, something like a permanent condition of war, at least a trade war, between national economies. This kind of warfare is conducted by methods designed to harm other nations as much as possible, regardless of the indirect and equally large harm done as a result of such actions to the own nation. All over, the subsidised or even given away export goods (greatly reduced compared with the volume occurring under Free Trade) are out of proportion to the total harm done by the various existing restrictions of Free Trade and are, anyhow, offset by that part of one's taxes which the own government uses for similar subsidies to other countries. Sometimes, the protectionist myths on trading can lead to real wars. (Protectionist opinions and practices were involved in causing both World Wars! - J.Z., 10.12.02.)

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4/4 Free Trade and Tolerance

The human right to engage in free trading gives everyone the right but obliges no one to utilise the advantages of Free Trade for himself.

The majority is today economically so ignorant that in theory and as voting cattle, it supports protectionism, votes for corresponding representatives and would even, in a referendum, without sufficient prolonged enlightening efforts preceding such a referendum, decide in favour of the protectionist system. Nevertheless, almost every protectionist passing a frontier and given opportunities to ignore such trade restrictions to his own and clear advantage, makes some attempt in this direction, i.e. with words most protectionists declare for protective tariffs but in practice they are inclined to exempt themselves from them.

The question and problem is: In what way could an enlightened minority, right now, claim the advantages of Free Trade for itself without having, first of all, to defeat the prejudices of the majority? How could it, at the same time, propagate the advantages of Free Trade in such a convincing way that, finally, the protectionist majority would be converted to Free Trade?

The tolerance principle in its new version, the right of individuals to secede, to experiment and to make any kinds of contracts among themselves, show a way out:

These rights give the enlightened minority the option to enjoy, in the middle of Protectionists, all the advantages of Free Trade among themselves, "at their own risk and expense", and to do without all of the supposed advantages of protectionism, also "at their own risk and expense".

These actions would all occur "at the own risk and expense" anyhow because any Free Trader could rightly dispose (and would only want to dispose) only of the own products and services and purchasing power (apart from those entrusted to them for this purpose).

These Free Traders could conduct Free Trade between them either in form of a tolerant economic experiment or within an international exterritorial and autonomous community of volunteers who are Free Traders and who seceded from all the present protectionist and territorial State associations.

If the Protectionists were right, then the Free Traders would, by their behaviour, harm only themselves. Their enterprises and exchanges would soon fail and they would be turned into convinced Protectionists. Thus, if they were logical, the Protectionists would promote this kind of free trading.

With what arguments could one suppress Free Trade under such conditions? (The question of employment is discussed elsewhere.)

4/5 Precedents

Those who want Free Trade for themselves in form of tolerant economic experiments, as well as those who will associate in one or several free trading exterritorial and autonomous communities of volunteers, will establish institutions comparable to the free ports and free trading centres and fairs of the Middle Ages and to the still existing and expanding free port and free trade zones of today.

Some of the still existing free ports and free trade zones are in Hamburg, Bremen, Singapore, Penang, New York, Colon and New Orleans. (By 1959. I am tempted here to expand this section and give references but will rather leave this to future microfiched monographs.)

Such places have the following characteristics: Goods may be imported and exported duty-free, may be stored, transferred or processed. In Colon and Hamburg as well as in the 6 or 7 such zones now in little Taiwan, whole industries can be found. Many tax and regulation exemptions are granted, at least for prolonged periods. They do not practice fully free trading but rather interesting approximations to it.

Even Protectionists do often favour one or several such centres for their own countries but usually seem constitutionally unable to expand these examples to the whole country.

Smaller scale instances after the second World War were the special shops by occupation forces in Germany and Japan. The presently very numerous duty-free shops for international travellers show how far such tolerance can go, namely to retail shops, not only at airports but also spread over a city.

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4/6 Details on the Free Trade Zones to Be Established

The local organization of free traders determines and privately purchases suitable locations for stores, warehouses, exhibitions, sales centres and even factories. Then, either in the own name or in that of its members, it conducts foreign trade exchanges, especially duty-free purchases. It makes agreements on the transport of the acquired goods to its centres, may even form its own transport organization.

Finally, it will sell the thus imported goods to its members, largely upon orders. To promote its rapid expansion and to go along peacefully with the protectionist associations in its neighbourhood, it will refuse to make any sales or take any orders from non-members. Anyone who would want to claim the advantages of Free Trade for himself would have to proclaim himself quite openly a Free Trader - by becoming a member.

Not only duty free shopping centres should be established - and these might go down to small free trading storekeepers - but also whole free trading industries, which could join as members and consequently acquire all materials, goods and equipment from overseas without special restrictions, permits and duties.

They could likewise export all their products and services anywhere in the world where there are free traders willing to buy them, without let or hindrance by any government.

Most likely, the establishment of such free trade centres will only be a transitional measure. Once they can be freely established, once every individual can freely decide for himself whether to live as a Free Trader or as a Protectionist, whether unrestricted imports and exports are advantageous for him or not, most people would soon join one or the other free trade association - and free trade would soon become general - apart from some sectarian and limited persistence of some protectionist restrictions which would affect the others no more than e.g., the meatless days of some religious people.

The number of such free trade communities should not be limited in any way in advance. But it can be estimated that one such centre for every 10,000 inhabitants would probably suffice in the beginning. As indicated before, some of these centres may be as large as a large industrial enterprise or a group of them. Others might be confined to a single corner shop. These centres, within easy reach of most Protectionists, would, I believe, propagate the benefits of Free Trade so effectively and rapidly that, if I were involved, I would take out no more than a 6 month lease on such places.

4/7 It Is up to the Protectionists to Arrange for the Barriers to their Trade which they Believe they Need

It lies in the nature of these institutions and their principles that they and their members are not subjected to any tariff-, foreign exchange - and other "protective" rules passed by Protectionists - with the unanimous consent only of Protectionists.

What Protectionists can demand from Free Traders would perhaps be some kind of identification card as free traders. The precedent could here be the exemption of certified members of a foreign diplomatic legation from all custom duties and searches. To supply this precedent may be the best service diplomats ever supplied. The Free Trade organizations will permit the Protectionists to establish custom-barriers around their centres (as long as Free Traders can easily pass them) provided that they are established exclusively at the expense of the Protectionists who profess a belief in the value of such barriers,

The Free Traders will also be prepared to let all transports from and to its centres be sealed by Pprotectionists - again, at their expense.

It would not object, either, if the Protectionists were to punish, quite severely, all those of their own members who somehow obtained duty-free goods. But it reserves the exclusive right to give any reprimand or impose any contract penalty upon the own members who might have had dealings with outsiders.

The Free Trade associations will also not mind if Protectionists look into their business records - as far as business procedures permit - to find out who are their members, when and where and what kind of goods or services it expects, produces or has for sale. To that extent it would assist the Protectionists in imposing restrictions on fellow-Protectionists. The more the absurd restrictions are enforced against supposedly consenting Protectionists - who at

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any time would have examples of free trading before their eyes - the faster these restrictions would be abolished.

The free trade associations will also be prepared to employ former custom duty officers as employees, storemen and packers and perhaps as security men. The finally resulting general free trading would multiply international trading. The thereupon growing trading companies would accept former custom duty officers as employees - provided they have not become too corrupt and on this these companies themselves might be best informed. .

General monetary and financial freedom would also ensure that no unemployment would result either among these officers or among the workers of formerly protected industries.

4/8 What Will Free Trade Associations Use as Means of Payment?

Full freedom in external trading means, among other things, that one can use any kind of means of exchange and any kind of value standard as well. Thus the Free Traders will use any kind of means of payment, value standard and clearing method which would satisfy their commercial partners, regardless of current predominant theories and practices. Whatever means of payment and standards they might apply, the Protectionists could never rightly complain that they would be harmed by these payment alternatives. In the following some options for the payment of imports will be discussed:

Payment with foreign exchange: The free trade associations will only use those foreign currencies which they have themselves acquired by their exports or which they have bought, at favourable rates on the more or less free market of the Protectionists. Should a protectionist government categorically refuse to sell them any foreign exchange, then they would not mind this either - for they would not depend upon any foreign currencies.

But if they do use foreign currencies they would not harm anybody thereby: All foreign currencies used by the free trade associations would either be obtained by their members in a country through exports, or by non-members in this country and sold to the free trade association. If not obtained by either of them for exports, then they would have been obtained in loans which are, sooner or later to be repaid in exports. Thus, if these foreign currencies are now used for the payment of imports then they are exactly balanced, apart from time differentials, by corresponding exports. Thus the Protectionists can raise no logical objections, no complaints about wrongs or harms done by such usage.

Payment with the currently circulating State paper money: When imports are paid with the own national paper currency no harm or wrong would result. either. The above described case would simply occur in reverse: The import would cause and make possible the export. For each State paper money note that has found its way into a "foreign" country (All these terms will have to be revised after the introduction of exterritorial and autonomous communities of volunteers, seeing that nations acquire quite a different meaning then and "foreigners" will be everywhere and recruited even among the own family members and friends.), there will lastly be only one usage: Taking it as a means of payment for foreign imports from us: in payment for our exports. They must flow back in order to be useful and must in this bring about a corresponding export (apart from destructive and give-away games which make no economic sense at all).

The Free Traders will utilise the exchange rate agreed upon between governments only to the extent that it agrees with the free market rate. Thus the paper monies used by them could, if the imports paid with them are extensive, and not at the same time offset by payments with them for exports, suffer a considerable discount (against their nominal value) or fall in the exchange rate against the foreign currency. Would this be a disadvantage? No, for the greater such a discount or fall would be, the greater would be the incentive for all "foreigners" to acquire these paper means cheaply (due to the discount or fallen rate) and thus buy bargains from us. paying with this exported paper currency and thereby returning it to us and removing any excessive discount or too low rate. At the same time, the fall of our paper money on foreign exchanges would inevitably reduce interest in imports because then our paper money could be given in payment only at a discount or at an unfavourable exchange rate which would

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increase the price of imports reckoned in the own State paper money.

Thus the balancing of imports and exports would happen automatically in these cases also, without any government intervention.

What would happen if a foreign central bank were to use the State paper money received from us as a "foreign exchange cover" for its own paper money? If our central bank were then to ignore the present of corresponding goods and services thus made to us - in return only for printed slips of paper - if it really became worried about these outstanding paper claims against us, then it could enforce their reflux by e.g. declaring that these notes would become invalid within 6 months and that everyone, with the exception of the foreign central bank, could exchange them for new notes.

Alternatively, it could use the chance to issue tax foundation money and thereby increase government revenues by issuing as many new notes with tax foundation as are hoarded by the foreign central bank.

Should the notes hoarded or kept as reserve in foreign countries suddenly stream back, then they could be transformed into long-term loans by their acceptance, at their nominal value, regardless of any discount they may have in all other transactions, in subscriptions to such loans.

Moreover, note issue freedom would soon teach everybody, even the presidents of the central banks and the other monetary experts of governments, that one can issue sound means of payment without a costly cover in form of foreign means of exchange. Thus the Protectionists would have no serious objections against this kind of payment procedure. (Naturally, they can always invent some more nonsensical arguments but they can all be settled by an arbitration court both parties agreed upon.)

Payment of imports with gold coins or assignments upon a gold deposit: If someone has gold coins or gold certificates, then he should also be free to use them in payment for imports. As long as the legal claim of creditors to payment in gold is repealed and gold is at most a payment which a debtor may force upon a creditor but never one which a creditor may force out of a debtor, and as long as all debt obligations are fundamentally payable through clearing, an outflow of gold coins in payment for imports would not prevent anybody from fulfilling his payment obligations.

Moreover, gold has the tendency to distribute itself evenly among all civilised and trading people, not only under the "pure" gold currency, where gold is the exclusive means of payment, but also under the gold-clearing currency and while a free gold market exists, i.e. about the same quantity of gold which is lost through imports comes soon back in payment of exports (unless all kinds of government interventions prevent this). Thus the Protectionists would not have anything to object against this kind of payment, either.

Payment with clearing certificates: The means of payment most frequently used by the Free Traders will be clearing certificates. They are available to everybody to the desired extent. They are not manipulated by a government, like State paper money presently is. They preserve their value, e.g. by gold reckoning, and contain no term risk as all other debt obligations do, which do not promise ready for sale goods or services but instead cash without there being a certainty that the required cash would really be available when needed. These clearing certifi-cates will consist e.g. of shop foundation money and of standardised and typified claims against producers, in small round figures, in which these producers oblige themselves to accept these claims like cash whenever anybody buys anything from them or pays other debts to them. They would retain the right to deliver instead gold coins or "local currency". Useful would be especially the clearing certificates of agricultural sales cooperatives, large machine manufacturers and mines, and among these especially those firms working mainly for exports.

Quite obviously, this kind of payment for imports would automatically lead to corresponding exports.

A limited circulation period for these clearing certificates would assure sales before the goods represented by them deteriorate or become outdated and would prevent the hoarding of such certificates by foreign central banks in form of a "foreign exchange cover".

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Every discount a clearing certificate would suffer in a foreign country, would merely help to speed up its reflux, i.e. its utilisation against us in payment for our exports.

Everyone who considers not only the goods side but also the payment side of all foreign trade transactions and takes the possibility of free exchange rates and of private clearing tokens into consideration, must sooner or later bow to the logic of the Free Trade arguments. Protectionists usually consider only the goods side and even of this only the first half.

4/9 Should Free Trade Be Introduced even with Communist Governments?

To me it seems self-evident that no Free Trader should be "free" to supply e.g., the Soviets with arms and other military equipment. Indirectly, he would thereby infringe the human rights of others and no right authorises anyone to infringe the rights of others, especially when the rights infringed appear to be of a higher order. Morally such deals would be no better than supplying known violent criminals with arms. One would thereby become an accessory to many violent crimes.

Free trading with communist regimes should therefore be confined to raw materials and consumer goods which are not essential or important for war preparations.

All goods getting to Soviet Russia and Red China in this way could advertise the freer countries. (Really free they will be only after the realisation of all the economic and other rights described in this book.)

The Soviets or Chinese communists could not simply use the consumer articles thus obtained for their armament workers and soldiers (unless they were given long-term credits as at present) because a genuine trade is a two-sided process. They would have to supply equivalent values (even if they are supplied by slave labourers). Under their system of centralised planning and direction, these equivalents are certain to cost them more (at least in wasted slave labour, whose cost is not only their low maintenance but does include the extra they could have earned as free labourers due to the increased productivity of free men ) than the goods we would produce for them, in exchange.

Moreover, the economic system of the communists will see to it that a great percentage of the goods they import from the West will be wasted in one way or the other - while the West would almost optimally utilise its imports from the Soviet Union and Red China. Consequently, free trade would strengthen the Western economies more than the communist ones. What more could we ask for?

Even during wartime can Free Trade largely be continued by free countries. As Friedrich Schiller, in his history of the secession of the Netherlands from Spanish rule reported, the people in the Netherlands had free trading relations with everyone during the struggle, even with the Spaniards, and their wealth and their economic and military power grew steadily during this period while Spain simultaneously declined and grew poorer because it was despotically ruled. A more recent example: During WW II a black and therefore partly free market flourished between the subjects of two governments at war with each other, the Japanese and the Chinese one. Details can be found in Readers' Digest, Pacific Services Edition, Feb. 1944, p. 13.

4/10 Is the Transition to Free Trade too Difficult?

Consumers would, obviously, have no difficulties to adapt to the offer of a greater variety of goods at reduced prices. They would no longer have to work in order to provide monopoly earnings to protected industries - i.e., industries protected against their free consumer choices. They can retain what was so far wrongfully charged to them. With the savings made they can buy or order other goods and services. (Thereby they would reemploy as many people as they would first disemploy, given a free choice with their money.) Thus this kind of change could not be used as a valid objection against the Free Trade system. A complaint would here be comparable to the one by wood suppliers upon the abolition of the burning of witches and heretics. They also suffered a loss of income because they could no longer sell wood for the stakes.

A far more radical change occurs regularly at the beginning of every war, when an economy gears up for the

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production of war materials. Naturally, these industries have then no sales problems but neither would any industries under monetary freedom have - as long as they produce something that is in demand and do so at compe-titive prices. Admittedly, a lot of featherbedding and mismanagement would have to be thrown overboard.

In case of war the transition to a very different production does also take place under difficult conditions: numerous workers are called up and unskilled ones have to take their place in a short time, transport routes are largely blocked by troop transports etc., the change in the kind of goods produced is usually larger than the one to be expected upon sudden introduction of Free Trade, e.g., foreign markets and sources suddenly dry up or are cut off. Nevertheless, the adaptation does takes place and the process is rapidly reversed when the war ends. The economy is much more adaptable than most Protectionists believe - if only it is not hindered by numerous laws and regulations.

The issue of standardised and typified private means of exchange would offer the possibility to abolish any unemployment occurring, within days at most, and thus full employment could be achieved without the sacrifices and losses demanded by the protectionist system.

Admittedly, Free Trade will require great changes in almost every economic sphere but a destruction of the economic system would be impossible under economic freedom. Those firms which would have to make large changes very soon would also benefit from cheaper imports - and the whole world market would be thrown open to them (at least to the extent that they use their own clearing certificates as means of payment, by-passing the current monetary and exchange restrictions).

4/11 Is Free Trade only Good for some People and Harmful for others?

Many opponents of Free Trade assert that Free Trade would be good only for "strong" countries, i.e. countries with many raw materials or cheap labour or much capital and consequently many highly productive machines, for countries with a well developed economy, while it would have disadvantages for countries without any of these supposed pre-conditions. The "weak" countries would be unable to compete with the "strong" ones on the world market, they would be flooded even at home with the products of the strong countries, could not sell any of their goods, whereupon a huge unemployment would result. The "strong" countries would grasp all of the world's trade and they alone would enjoy full employment. All these objections go far astray:

Free Trade is very important for countries without raw materials because only under Free Trade could they be sufficiently supplied with cheap raw materials.

Free Trade is also essential for countries with an expensive labour force, in order to reduce the costs of living of these labourers and thereby avoid still further wage increases. It would further be required by these countries in order to keep their expensive workforce continuously and fully employed - within the framework of an international division of labour.

Free Trade is necessary for countries short of capital - so that they can import the required capital, in one form or the other and consequently develop their own competitive industries. For a long time the United States imported development capital from the "stronger" European economies - until this situation become finally reversed. Countries free to import capital can soon become capital exporting countries. Afterwards, they exploit machines rather than humans.

Generally, Free Trade is necessary for undeveloped countries to speed up their development with the aid of countries which are ahead of them.

Any "weak" country can in some sphere or the other successfully compete with all strong country. Countries which otherwise may be "weak" have usually as a pre-condition for rapid development, an abundance of cheap labour power - which could make them correspondingly "strong".

What merchant of a strong country who has not altogether lost his senses would flood any other country with his goods if this country could not now or in the foreseeable future offer anything in exchange?

If a country would really have nothing to offer, then it simply could not engage in any trading with other countries. Free Trade would change nothing in such a situation. As soon as value is demanded, offered and agreed upon in exchange, the feared unemployment would not occur.

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Whosoever believes that the "strong" countries could gather all of the world's trading to themselves, overlooks that trade is always a two-sided business. He asserts, in essence (without being aware of that) that some "strong" nations could then "usurp" all export business and could do altogether without any imports. This would mean that the "strong" countries would supply all the "weak" ones free of charge with all kinds of goods and services and would turn themselves thus into the over-worked slaves of the "weak" countries.

Naturally, this would not occur under Free Trade. But today, under the protectionist system, such a tendency can indeed be observed, especially in endeavours to export at any price, even if this means making presents to "foreigners" at the expense of the own taxpayers.

Underdeveloped countries are insufficiently developed because, among other things, they suffer under protectionism and possess not even a well developed central banking system and far less a payment system resting upon freely competitive note issue.

What would a continuous flooding of "weak" countries with cheap products of "strong" countries mean in practice? The "weak" countries would receive from the "strong" countries and for their usually deteriorated means of payment large quantities of cheap quality products while the "strong" countries, with the inferior means of payment received, could purchase from them only a few and expensive goods of inferior quality. This, if it really were possible, would certainly not be a disadvantage for the "weak" countries about which they would have any cause to complain. Unfortunately for them, this kind of thing does not take place, either, in reality. If the competitive situation were really like this then simply no exchange would take place.

Under freely floating exchange rates a purchasing power parity between the currencies of these countries would soon be established, one which would lead to equitable and mutually profitable trading, would prevent the "flooding" and "conquering" of markets and sales difficulties. When the own currency has sufficiently fallen in foreign countries against their currencies, then even our expensive goods will appear cheap to them.

As long as no government interferes, purchasing power parities of the currencies of countries trading with each other (whose citizens are free to trade with each other), would very soon develop and remove most of the expected and predicted difficulties. The concepts of "strong" and "weak" countries become then quite meaningless. All of them would then be internationally competitive - although their standard of living might greatly differ. The "strong" country could then acquire the currency of the "weak" countries quite cheaply (in reality only in accordance with freely determined world market prices) and thus buy cheaply in the "weak" countries, while the "weak" countries would have to use much of their own currencies to purchase anything from foreign countries, i.e. imports would be very expensive for them. Thus there would be no incentive for them in multiplying their imports. Imports would not flood their markets. Naturally, their general standard of living, although increased through Free Trade, would still be lower than in the "strong" countries.

(To answer all the myths of the Protectionists with the best replies so far made would require an encyclopaedic effort. Microfiche (*) would be an ideal medium to compile all such contributions and to publish a manageable encyclopaedia of this type. Plan 183 in PEACE PLANS No. 8 discussed Free Trade with communist countries in some detail.) - (*): (Now I would add CD-ROMs. Few would be required to record and sum up all of this controversy, stretching over centuries & several languages and numerous writers. - J.Z., 11.12.02.)

- David Wiek: ANARCHY 8.

- W. J. Cameron

• Leonard E. Read in; "Meditations on Freedom", p. 23.

- Heading of chapter 12 in Cornuelle's "Demanaging America".

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Conservative Election Manifesto: A Better Tomorrow, 1970,

quoted in: "Down with the Poor", Churchill Press, p. 74.

5/1 Principle: Everyone Becomes an Owner of Means of Production

The basic idea of advocates of productive cooperatives is not to abolish the private property in means of production, as communists and many socialists want to do, but instead to turn, as far as possible, every working person into an owner of means of production, one with all rights and obligations of a proprietor, and thereby to fully utilise the profit and creative interest of all working people in an enterprise, not only that of the former employer, and thereby to increase the productivity of enterprises and the earnings of all participants.

Already much can be achieved with mere suggestion box schemes (as mentioned in the introduction to PEACE PLANS Nos. 20/1) and with work-cooperatives, gang work or group work as described e.g. by Hyacinthe Dubreuil. (See a review of his main work in Peace Plans No. 13.) (Later I microfiched the whole of his most important work: A Chance for Everybody, which was reviewed and recommended by Aldous Huxley in his "Ends and Means". - It was kept out of print, like many other significant works, for all too long. - J.Z., 11.12.02.)

5/2 Cooperative Property as Distinct from the so-called People's Property

Cooperative shares allow a collective and yet individualized ownership in means of production.

As an individual can rarely save enough capital to permit him to buy a large enterprise and as automation has not yet advanced sufficiently, and never might, to permit him to run a whole large business on his own, the task consists in establishing some collective or cooperative form of ownership which does not in the least reduce initiative, responsibility and profit incentives for individuals, but, instead, promotes them. (Most productive cooperatives in the past have not held to this ideal. They rather tended to make a religion out of a concept of cooperation which was seen as the opposite of competition, out of egalitarian principles and practices and democratic procedures, so that they were often worse run than the managed enterprises of today. In them the human productive and creative potential of the participants was barely touched. (They have given the very concept of "cooperatives" an ill repute among free marketeers, in the same ways as "competition" has become an ogre in the minds of "faithful" "cooperators". - J.Z., 11.12.02.)

The collective or cooperative property relationship must be fundamentally different from the so-called people's or national property in State enterprises.

The form of a share company formed by cooperators could achieve this fundamental difference if, for large enterprises, it is combined with a decentralized form of association, in which the sub-groups or departments enjoy a large degree of autonomy and a considerable separate interest, assured e.g. by separate profit and loss accounting.

Preferably, a productive cooperative should go the whole way and consist exclusively out of genuine proprietors. This would require that each member would have to purchase, immediately or on terms, a minimum number of cooperative shares.

Earnings would have to be distributed in accordance with the work-services supplied by each member and also corresponding to the amount of capital the individual made available to the cooperative.

When capital is not monopoly or spurious capital (like an investment in a legalized privilege) then it is in essence nothing else than pre-done labour expressed in monetary units, labour which has not yet received its final reward. This pre-done labour greatly increases the productivity of a cooperative and can therefore claim a special reward or share in form of an interest rate to be determined by the cooperators themselves. Whoever makes pre-done labour available has also the right not to be exploited: the right to the full proceeds of his labour (as measured on a truly free market ).

In all the following sections only productive cooperatives are discussed while consumer cooperatives are largely ignored. The reason for this is that productive cooperatives are presently hardly developed and usually very badly organized, i.e., not in accordance with free market economics and the nature of free men.

They are more the product of ideologies than economic knowledge and understanding (I would like to hear of exceptions to this rule!) and have given the whole cooperative movement a bad name. They are also usually subjected to many legal hindrances (even if they are well-meaning ones) and many prejudices work against their establishment.

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The development and spread of sound productive cooperatives has hardly any inherent and natural limits. Only very efficient employers of the old type could compete with them and only inferior workers would be unable or unwilling to shoulder the self-management responsibilities involved.

One of the major tasks consists in subdividing large coops into many independent sub-coops.

Another task is the discontinuance of the practice to hire for long periods, or even permanently, mere employees, i.e. workers who are not also cooperative share-holders - rather than independent sub-contractors, alone or in work groups or in work-coops. Thus, to prevent a kind of exclusive and privileged cooperative capitalism of the founding members or long-term members, and to avoid the disadvantages of the employer-employee relationship, the constitution of each productive cooperative should determine that, apart from trial or training periods, it will not employ anyone as a mere employee. Enlightenment among cooperators should reach a stage where they would do this voluntarily and in their own interest.

5/3 Establishment of Productive Cooperatives through the Purchase of Existing Enterprises

The establishment of productive cooperatives should occur rightfully, especially without confiscation, State subsidies or "occupations", through the purchase of existing enterprises by their employees, who organized themselves in a cooperative or partnership association. As employees possess as a rule not sufficient savings, nor a chance to save enough to permit them to buy an enterprise with cash, one of the remaining options would be to acquire an enterprise through instalment payments. The technically and financially best method for this, now frequently used by financiers among themselves, would be to purchase the enterprises using freely transferable bonds or other securities issued by the new cooperative, as means of payment. These securities are then to be gradually redeemed, in instalment payments, over a period commonly running over 10-25 years. Such bonds are today negotiated at the exchanges as industrial bonds.

As a result of such outright purchases the cooperators will, as a rule, have to pay out less in amortisation of the loan involved, including interest and interest on interest, than they would have had to pay out in dividends from the earnings of the enterprise for the some period, in case the enterprise had not been transformed into a cooperative. In practice, these term payments would be made out of the additional earnings achieved through the transition to cooperative production.

One of the many beneficial side-effects would be that the cooperators, finally constituting the majority of voters in political elections, would see to it that they are no longer highly taxed as today the entrepreneurs are, who are presently all too frequently considered as "capitalistic enemies", as the "rich who ought to be soaked". (The "share" of the State in the earnings of an enterprise, in form of diverse taxes, is today often already as high and sometimes higher than the total expenditures for wages and salaries. Consequently, the State as exploiter has largely taken the place of the previous supposedly exploiting employer. Today's entrepreneurs are as a rule content with 5-10% of the total earnings of an enterprise. Thus tax resistance and reform resulting from the transformation of enterprises into cooperatives, would on its own already considerably improve the economic position of the cooperators.

A short study of the almost daily published reports in the mass media of profit and loss accounts of today's share companies (this applies to conditions in Germany and countries with similar share company legislation only, but the relationships and percentages can be supposed to be similar in similarly developed countries) could enlighten everyone rapidly about the relationship existing today between wages and salaries on the one hand, combined with fringe benefits and social insurance premiums (*), and the profits, dividends, interest payments and taxes on the other hand. (I used to have an extensive collection of reports of this type. Anyone with access to similar reports by large companies can check out this generalisation. Only firms with relatively high capital investments per head of the employees, like mines and waterworks with large dams and hydroelectric schemes, formed exceptions from this rule.) - (*) Wage-related burdens laid on enterprises are already - by 42-47 % in Germany and 75% in France - higher than the gross wage payments! - Prof. Heinrich Rittershausen: Wirtschaft (Economy), Fischer, Frankfurt/M, 1976, p.11.

(My father, K.H. Zube, pseudonym: K.H.Z. Solneman, in his: The Manifesto of Peace and Freedom, The Alternative to the Communist Manifesto, 1977, 1983 - published in my version in PEACE PLANS 61-64 and microfiched in the printed version in PEACE PLANS 1324, pointed out that by 1975, at least in somewhat developed countries like Germany, the small and working class savers had already, between them, enough money on their bank accounts to purchase, if only they wanted to, the controlling interest of all the German share companies six times over! So far they have not even seriously discussed their option to thus and quite peacefully and rightfully take-over the enterprises they work in! Instead, their heads are still full of trade unionist prejudices and class-warfare notions and they engage in the usual anti-industrial actions called strikes and believe to gain thereby! - There are, naturally, many countries still in which employees are much worse off than they were then in West-Germany. In these the above-mentioned purchase of enterprises with self-issued securities would still be advisable, i.e. the payment of the take-over costs, out of the proceeds, in instalments. - J.Z., 11.12.02.)

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The purchase of enterprises by their employees (in the way above recommended) is especially advisable in times of economic depressions or recessions because then the enterprises can be purchased cheaply.

Once a few productive cooperatives of the above indicated kind have been founded, survived and are successful, most other enterprises would be likely to be similarly transformed, at least in the long run. Only a few and very capable employers would be able to compete successfully with these cooperatives, could e.g, afford to pay their employees higher wages than they could earn as cooperators elsewhere. Such private enterprises would certainly not constitute a problem.

The resistance among the employers against the transformation of their enterprises into productive cooperatives is smaller than the numerous mental reservations which most labourers and other dependent employees have against such a transformation. The employers would receive a secure annuity out of this sale and the enterprise they might have established themselves, one of the achievements of their lives, would be more likely to be continued in this way. Moreover, their continuing managerial income could be high, if they continued as experienced and popular managers or executives of the coop. Many employers would make their own life-long employment in an executive position one of the conditions of their sales contract. They would largely be freed from the enterprise risk which so far they had largely shouldered themselves. They too would finally have more regular and much shorter working hours - if they wanted them.

5/4 Will the Unions Prevent these Reforms?

Once union functionaries recognize that, e.g., as secretaries of productive cooperatives, they could be better paid and have more independent and more satisfying positions, they would soon no longer fight against a transformation of employer/employee organisations into productive cooperatives. Every coop will require many intelligent people who are good writers and talkers & used to taking the initiative. They could even offer them more influence than a union could. Their new work would most likely be much more pleasant and their working hours much shorter. The excitement of fighting employers and manipulating men would largely be replaced by the creative challenges of production problems.

5/5 Closed Cooperatives as Opposed to Open Cooperatives

The so far indicated productive cooperatives would use only means of production which do not constitute monopolies. For all other enterprises which utilise one or the other "natural monopoly", open cooperatives should be established according to the model described below. The ordinary cooperatives here discussed should be free to refuse to accept anyone who is applying for membership. They could do this e.g. with reference to the fact that he might join a competing coop or even establish his own. In practice, as a result of full employment, which would follow from freedom for note issues and other liberating measures, almost every cooperative would welcome any new applicant with open arms. But no one should be granted a "right" to become accepted as a member by any such ordinary productive cooperatives.

5/6 Main Problems: Management and Marketing

Most of the productive cooperatives so far established failed. Among the major reasons for their failures were the problems they had in arranging management functions efficiently and in assuring sales. Mostly we had cases of tradesmen who associated in cooperatives believing that good tradesmanship would be all that would be required to make their coops a success. Usually, they understood little of the administrative labour associated with a productive enterprise and of the marketing organization required and even less of the requirements of fully free markets.

Difficulties in finding a suitable director and salesmen are abolished, to a large extent, by not considering all of the present ones as enemies but rather as potential allies. At least all the capable ones among them should be retained in their present positions or even promoted.

Sales difficulties lying not in personal disabilities but in economic causes, could largely be abolished by freedom for the issue of notes and other clearing certificates. Without issue-freedom any form of organization is dependent on the exchange medium in circulation, its quantity, quality and distribution. Then, when e.g. the monopolised

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State paper money is largely hoarded, many enterprises simply have to shut down, regardless of their organisational form.

Under monetary freedom, the payment of raw materials, machinery, interest and loans, after an agreement with the taxation office, also of taxes, could be done by many productive cooperatives largely with clearing certificates based upon their own products and services. The earnings and profits of their members could initially be largely paid in warrants upon their own canteens, then in goods warrants with shop foundation issued by consumer coops in the neighbourhood, (acquired in exchange for the own clearing certificates or claims arising out of sales to wholesalers), and finally in the goods warrants of regular Shop Association Banks as were described above. Thereby a productive cooperative would automatically assure sales for itself corresponding to its expenditures, earnings and profits.

All laws and regulations on cooperatives, which are all too often only obstacles for the establishment of new cooperatives (Many require e.g. a minimum capital for their establishment and it is to be paid in cash!) should either be abolished, ignored, or by-passed by voluntary agreements.

5/7 Distribution of Profits

The net earnings of a productive cooperative can only be determined at the close of an accounting year. (Modern computerised accounting may already have changed this situation.) Thus the cooperators should only receive advances, which somewhat correspond to their work and capital contributions, and these should be paid out, like wages, in short periodical intervals. The total of these advances should not exceed 90% of the net earnings in the previous year. Thus the income of the cooperators would have to fluctuate only once a year. (Not all cooperators will remain prejudiced against fluctuating earnings.)

5/8 Appeal to the Capital Market, when Necessary

If the own capital of a cooperative would not suffer to cover its capital requirements, then it could either increase the minimum cooperative shares or appeal to the free capital market, e.g. by asking for subscriptions to a loan or by issuing industrial bonds. It should offer such creditors in all its meetings the same voting rights which working members have. When, for instance, one cooperative share would correspond to one vote, then these financiers and small

investors should receive a number of votes corresponding to the number of their shares, or bonds or loan certificates of the same denominations. The working members of the cooperatives, seeing that they do not only invest their capital but also their labour power for long periods, might be given as many additional votes as correspond to their annual earnings in relation to the value of one cooperative share ( which is the equivalent to one vote).

5/9 Responsibility of Members

In case a productive cooperative is dissolved, all its members are responsible for its debts in proportion to their shares in its earnings. Their responsibility does not altogether end with them leaving a coop before it would close down, at least not for the debts existing at the time they were leaving. Naturally, all such debts and assets should already be determined at the time of their leaving.

5/10 The Organs of the Cooperative

The supreme body of productive cooperatives should be the general assembly of its members in which every member should have the same active and passive right to vote unless someone possesses more than the minimum number of cooperative shares , or is an investor with rights as indicated above. Those with more shares will get correspondingly more votes. Likewise, some coops might determine that a certain amount of work earnings would give the equivalent of one vote.

The general assembly should make decisions with a simple majority. But for changes of the constitution of a cooperative, a 3/4 majority should generally be required. The some 3/4 should be required for the dissolution of a coop.

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The general assembly also elects the directors for a certain period. They are responsible to it and can at any time be recalled by it. All other leading positions are to be filled by elections only among those who would have to work directly with and under them and are recallable by them, also.

The general assembly will also elect every year a supervisory board, consisting of members of the coop, whose sole task is to be a watchdog over the directors and to give frequent reports to the members.

5/11 Particular Advantages of Cooperative Production

a) No More Strikes

Fights for increased wages are impossible in a cooperative for it has neither employers nor wages. Against whom could the cooperators strike? They could simply replace an incapable director. Working time and individual earnings they determine themselves, in accordance with their previous earnings, their orders, their will to work, and their individual abilities and special training. If they believe their income to be too low and that the sales of their products would not be too much reduced thereby, then they would further increase the price of their products or attempt to cut costs further. If sales fall, they will satisfy themselves with lower incomes and consider further cost cutting and diversification of production.

Never will they be able to complain about an employer who is supposed to exploit them. They will begin to think like businessmen rather than as "wage slaves". The own experience with a free market, outside their enterprise and also within, will soon give them the required economic knowledge.

Strikes are an outdated and unreliable method compared with the threat of or the act of giving notice in order to join a productive cooperative or to establish one:

If workers, instead of engaging in wage struggles and industrial war for more than a century, had proceeded in this way for 10-20 years, then they would have become cooperative owners of most enterprises long ago.

A cooperative of wharve labourers might indeed not go on strike against an employer - it would have none - but against a ship owner, by refusing to load or unload a ship. If they break their work contract, then they could be sued for damages, also by class actions of their victims. If they reserve in their work contracts a "right" to themselves to engage at any time in anti-industrial actions, then they could not expect to get many work contracts. If they engaged in criminal assaults and intimidation against groups of workers or individuals willing to undertake the work the striking men refuse to do, thereby also infringing the right of their customers to hire alternative contractors, then, under a just system, they would be charged and treated as criminals. But the more they would come to understand the workings of a free market and the more the indirect benefits of it, like full employment, would be felt by all, the rarer would these cases become. "Wharfies" (as they are called in Australia), who attempted to set up an exclusive organization to exploit the natural monopoly of a harbour, would either encounter well protected competing groups or would be transformed into open cooperatives, even against their will, cooperatives which many of their present victims would join, with decisive voting powers. Compare the notes below on open cooperatives.

b) Rationalisation

Rationalisation measures are today frequently neither proposed nor demanded by workers and unionists because they save labour. On the contrary, frequently they are systematically boycotted or prevented in order to avoid lay-offs. Thus wages remain comparatively low and prices relatively high.

In cooperatives everyone would have an interest in cost-cutting or quality or productivity increasing rationalisation measures because they would increase earnings, shorten the working hours or make work easier and nobody would

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have to be afraid of unemployment. At most their kind of jobs would be changed. Cooperators could not become unemployed because they are co-owners of the enter-prise and because monetary and financial freedom would have abolished unemployment generally. As co-owners they might declare in favour of a general reduction of working hours (for those who want reduced hours) or for a change in the products or for an expansion of production. Under free market conditions, including freedom for the issue of private money tokens and securities and freedom in the choice of value standards, industrial credits could be easily obtained. Naturally, every cooperator would be free to either leave and sell his shares or retain them as a now all the more profitable investment, while he would work in other cooperatives, where his own special abilities could bring him higher earnings.

c) Increase of Productivity by Subdivision of Large Cooperatives into Small Subgroups

If one considers the State as a cooperative insurance company, its taxes as premiums, its administration and social services as the services of this insurance company, then it becomes clear that even the smallest savings, e.g. in electricity to power the lights of an office, would lastly be to the benefit of all the insured. (Unfortunately, here they cannot so far opt out and make other, more suitable arrangements with other insurance bodies or remain self-insured.)

But the advantages for the individual who should switch out the lights are so small, seeing that they are so widely shared around and, likewise, the disadvantages of not switching them out are so dispersed and small for the individual, that this cost factor (among many others) is usually overlooked or ignored and such possible savings do not take place. The same applies to every one of the myriad activities of the "insurance company" called the State. Combined, all these little acts of waste amount to a great burden upon the tax payers, the "insured".

A similar waste takes place in large private firms, like e.g. Siemens in Berlin with more than 100,000 employees. (In my time in Berlin. - J.Z., 11.12.02.) Some waste or destruction by one of the employees would, equally distributed among the employees, burden him and the others only with 1/100,000 of the costs involved, if it was worth $ 10, then with only 0.01 cents! Consequently, almost no one bothers.

From this and similar considerations, it follows that there is for every kind of enterprise, even a cooperative enterprise, a certain optimal size. The same applies for certain operations to be done within enterprises. The optimal size for groups within enterprises doing certain sections of the social production process is usually between 2 and 3o persons. Within such small coops everyone tends to know everyone and every waste and every cost saving and improvement does significantly affect the earnings of each member. Thus all see to it that no one within the group wastes too much and every improvement potential is sooner or later explored and realized.

Thus all enterprises, which certainly or possibly have exceeded the optimal size, as a whole or in their departments, ought to be subdivided - in accordance with the wishes and abilities of the participants - into numerous more or less independent sub-cooperatives, at least with their own profit and loss accounting, corresponding as closely as possible to the optimum size for each operation.

These subgroups act like internal sub-contractors to the entire firm. They contract e.g., on the supply of raw materials and finished products and the use of equipment with the main coop and guarantee a certain product or service, of certain standards for certain periods. The main company would then largely be reduced to being a coordinator and conducting "external affairs". The original shoe manufacturing firm Bata in Czechoslovakia has possibly applied this system first, successfully and on a large scale. In the US this system, introducing market relationships within enterprises, has been called an "agoric" revolution, from the word agora = the market. It is a rational undercurrent in the present workers control movement and has been previously described in this series in plan 183 in PEACE PLANS 8 and in plan 226, pp. 1-46 in Peace Plans 13.

Without this kind of decentralisation scheme many productive cooperatives could become as inefficient and unsatisfactory to work in as other large enterprises.

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d) Higher Quality of Products

Under today's system the quality worker does not necessarily earn more. He may have to use more time and energy than bad workers and might not be any better paid. The quality worker might even be blamed for working too slow! Thus the quality of the products tends to become reduced to the lowest acceptable level and all too many workers continue under the illusion that the harm through shoddy work would have to be born only by the employer and the customers.

In a cooperative every cooperator would be directly affected in his earnings if he himself or others in his group would produce shoddy goods. Thus each becomes interested in quality products, not because some boss wants them but because their own earnings demand them.

e) Personal Independence

A cooperator is no longer truly subordinated to and dependent upon superiors whom he, together with a few fellow workers, has elected and may recall. Indeed, in many cases he would be much closer to being an independent businessman. Instead of having to obey or give notice he can now have his say - as long as he does not hinder pro-duction - and can also have a real influence on decision making, at least within his own sphere of the process of production. He would never be helplessly exposed to arbitrary actions by superiors - or coercive unionists. Cooperators will be able to speak up and largely also act upon their convictions - if only they can convince their fellow workers that their ideas and proposals are creative and not counterproductive.

Only rarely will they be able to select the best kind of foremen and directors on their first try. But the profit motive and its rapid feedback process will see to it that they will make better decisions soon. A merely popular guy, for instance, whose decisions would rather lead to losses than additional earnings, would not remain in any elected and recallable leading position for long. Workers would not have to rely exclusively on their own judgement in order to judge advanced qualifications but would hire the services of one or the other certification and guaranty company.

f) Working Hours

The cooperators determine their working hours themselves. Naturally, if they want to shorten them considerably, without simultaneously and proportionally rationalising their work, they would have to be satisfied with lower earnings. Individual cooperators would also have considerable freedom in arranging shorter or longer working hours for themselves with corresponding lower or higher earnings.

g) Earnings

The cooperators themselves determine - dependent only upon approval by their more or less satisfied customers - their working time, kind and volume of production, investments, prices of the finished products etc. Their earnings will then correspond the value of their product on a free market - less all the fixed costs involved.

If they appear to low to them then they can only hold themselves responsible and they will have it in their power to improve the situation.

h) Management Mistakes Will Become Less Frequent

After a few dozen general assemblies, the cooperators will have won insights into economics which even many of the present entrepreneurs do not have. Why? Very powerful people cannot stand being contradicted and so very often they are not or not sufficiently contradicted when this is required. Many wrong decisions follow from this. In cooperative assemblies everyone can freely speak his mind. The subdivisions of cooperatives will see to it that each will have a channel for his opinions and ideas in accordance with his level of interest. Those disinterested will stay away. All participants will have a similar financial and working interest in the proper decisions. Wrong decisions will hurt them in their pockets. Those who gave the right advice will be better listened to next time. Experience will be the best master.

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There is no intention here to dispute in this rough and ready way all benefits of modern management methods. But the further these have gone away in the management of people from hierarchical decision-making towards personal incentives at every level and decentralized responsibilities, towards self-management in short, the greater have its successes often been.

Other kinds of management capabilities and training can be hired in form of consultants or contracted or elected in form of cooperative members with such special abilities and training.

I have no illusions about mass meetings or committees always making the right decisions. But these meetings are distinct from many others in that they decide only the own affairs and have in these a profit and loss interest. Moreover, there will be many such meetings at many levels, each attended by those interested at that level by those who have most to win or to lose.

What one expects from such a re-organization largely depends upon what one expects from man as a free being. Many libertarians still wrongfully believe that man as a producer needs a master over him. I hold that properly organized cooperatives will refute this belief.

i) "Go-Slow" Policies Will End

Wages of workers remain all too often the same, whether particular workers produce much or little. Even when they work on piece work, they have often experienced that when many workers produce above the normal rate then the normal rate is simply increased and the value of the extra efforts flows rather into the pockets of the entrepreneur than into their own. Whatever happens actually, this is the impression the workers often have and their reaction is predictable: More or less formally they agree upon taking it easy and going slow, producing under their capacity and thereby, indirectly, do also lower their wages and their purchasing power. Their additional earnings must become much more directly related to increased turnover and profits from sales than happens through piece work and no one must be authorised to determine cut-off points and minimum quotas for them. That does not mean that they will not have to haggle and bargain out the value of their particular contribution to the product of an enterprise with other work groups within a cooperative. In this they will even have to compete with outside contractors offering the same services.

Cooperators would harm no one but themselves with go-slow policies. They are, generally, interested in utilising every minute of their working time for production and ever increased productivity. Thus they will not take unnecessary "Sickies", either, especially when they have also organized their own sickness and accident insurance and the costs of loafing would have to be born by their mates. These find out, often long before a doctor, whether one of them is truly sick and unable to work.

Related to going-slow agreements are pretended hyperactivity as soon as a supervisor is near, combined with comparative relaxation or even inactivity as soon as he is out of sight. In a cooperative, particularly a properly sub-divided one, the full profit motive and proprietary interest applies to everyone and loafers will not be carried at the expense of other cooperators. Instead, their lower income would be determined by the evaluations of the other cooperators.

Today the appearance of being busy is given frequently by employees, e.g. by sales personnel in department stores, who are not supposed to sit down (even if seats are provided) when there is nothing to do. Cooperators would be inclined to make each job rather as easy as possible, as long as productivity does not suffer.

j) Jobs According to Ability

In a cooperative everyone has a considerable influence on the kind of his contribution or job. Likewise, his fellow cooperators have an interest in finding the job for him which is most suitable for his abilities. Thus, to a higher degree than is presently the case, people will get into the positions corresponding to their abilities and interests, where they tend to be most satisfied and most productive. In short, larger freedom in the choice of jobs and professions will also be introduced within enterprises. Connections or friendships with powerful people would no longer help, at least not for long.

k) Increase of Productivity through Job Rotation in Relatively Simple and Monotonous Jobs

Today workers are often tied (due to unemployment) to simple and monotonous jobs for years. Change into others

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depends upon approval by superiors for whom increased productivity and worker satisfaction will not always be the first consideration. Consequently, certain workers tend to deteriorate at least as human beings whose creative potential is not sufficiently utilised, then also as producers whose quality and quantity of output suffers.

Cooperators will much more rapidly agree among themselves to make their jobs more interesting (job -enrichment) by re-arranging them or less boring by frequent job exchanges (job-rotation).

1) Theft and Embezzlement Will Be Reduced

Theft by employees of raw materials, tools and finished products is very common today. Workers often believe they would merely harm the employer in this way and not themselves and their fellow-workers, at least indirectly. Moreover, believing to be exploited, they often try to "get even" in this way. Once they consider such items as their own property and that of their fellow workers the situation will be different. Those who steal from their fellow workers are never very popular and would be much more easily uncovered. To that extent security guards would usually not have to be hired by cooperatives. Moreover, they could save much in record-keeping which is based on the assumption that every employee is a potential thief.

m) Waste and Abuse through Neglect and Maliciousness Will Become Less Frequent

Neglect and abuse lead today often to waste and a short life-span for tools and machines. In a coop the fellow workers would demand an indemnity payment in such cases from the culprits. Employers, at present, are much less likely to find these offenders and tend merely to write-off such losses, together with other production costs.

n) Amenities

Apart from paternalistic firms and labour legislation, amenities and investments which would facilitate work are frequently not provided today. Most cooperators would be willing to make such expenditures for themselves, e.g. provide better ventilation, seating for jobs which could be done sitting down, or better seats etc.

Even if they did nothing of the sort, they would only have themselves to blame and their output would be less likely to suffer from job-dissatisfactions.

a) Less Supervision Required

Cooperators, in their own interest, will as a rule work industriously, compete with each other, spur loafers or see to it that they are paid correspondingly less. They will not require any special supervisors or incentives or disincentives for that. Their inherent ones will be enough. The only norms and quotas they will have to follow are the ones they set themselves. Thus their supervisory and administrative costs will be greatly reduced.

p) Superfluous Jobs Reduced

Superfluous or unprofitable jobs are today often ordered by superiors who want their department to appear very busy, in order to justify demands for still more staff and workers and to give the impression to their superiors that they would have thought of everything. In a cooperative such abuses would be prevented by the profit incentive every cooperator has. Nobody could or would force them to do jobs which would be unprofitable for them and no one else would be prepared to foot the bill for such jobs.

q) Corruption Avoided

There will also be less corruption in cooperatives because the supervision of every cooperator by his fellow workers is almost 100% and, primarily because the cooperators are not just representatives disposing over the property and services of others, but of co-proprietors. Every harm to the whole enterprise and to the cooperative group they belong to would also harm themselves. Self-inflicted wounds are rather rare.

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r) Just Determination of the Individual Share in the Profits

Today there is often the same rate of pay (determined by collective bargaining) for different jobs and output and for the same kind of work different pay (according to age and seniority). One can almost say that the contracts made by union functionaries with coercive and exclusive powers have turned this absurd and inequitable procedure into a system.

Employers and supervisors, even with the best of will, can often not determine the difficulties experienced in certain jobs as well as the workers themselves. Thus the latter will gradually and job by job develop experience and systems based on them to measure individual contributions, in the attempt to come close to just individual shares. The subdivision of large coops into small autonomous work cooperatives will be a great aid in this. But not all jobs can be thus measured. There are e.g., certain clerical jobs whose particular activities would be hard to impossible to measure and compare. Here another practical method could be applied. Whenever several cooperators with comparable abilities apply for the some job, then it should be circularised on job bulletin boards and the salary should be determined according to the law of supply and demand. The one willing to do the job for the lowest salary, equal capability presumed, would receive the job. Naturally, it would not be a sinecure either. Someone might turn up with superior qualifications and he would get the job even at a higher pay or someone else might undercut him by demanding less for the same job.

In cooperative production anyone believing that his particular share in the profits would not correspond to his work contribution, would have to come to an agreement with his fellow workers. It would have to be determined at whose expense his share should be increased. Thus the constitution of many coops would determine that everyone applying for a higher share should name at the same time the individuals or groups whose earnings should be correspondingly reduced, because they are, supposedly, overpaid. In case of disagreements the jobs involved will frequenty be swapped, at least temporarily, until finally agreement will be achieved in most instances. As most of these work groups will also be affinity groups of basically compatible people, lasting disagreements on such subjects will be rare. Incompatible people will go their separate ways in separate associations.

5/12 Summary

The main flaw of most of today's so-called "free enterprises" with a hierarchical structure and based largely on subordination, allowing free enterprise and initiative only to a few on the top, usually misnamed "capitalistic" enterprises, as if the others, even national enterprises and many of the nominal cooperatives would not have the same flaws and characteristics, lies in the fact that the enterprise and its products belong to those who directly provided the capital, that these are usually not identical with the workers and that the workers are more or less on a fixed income, regardless of their individual contributions and of their inclinations and abilities, in a prescribed and supervised role.

From this do inevitably follow ignorance and disinterest of the workers regarding the functions of the enterprise. They tend to give as little to the enterprise as possible or as they can get away with and to grasp as much in form of income and fringe benefits as they can get. The employers have the directly opposite interest: They want the maximum output at minimum costs. From this follows a permanent condition of either hot or cold industrial wars, all very wasteful and harmful to both sides. (Hyacinthe Dubreuil called the employer-employee relationship therefore: "A condition of organised antagonism." - J.Z., 11.12.02.)

At the same time, the present shareholders understands as a rule as little of the activities of "his" company as the workers of this company do, has no interest in the business conduct of his company than is absolutely necessary for the receipt of his dividends. In case something goes wrong, he will rarely try to reform his company but rather change-over to other shares. This ties in with the over-size and lack of subdivision of most share companies which give most share holders as little influence in stockholders' meetings as voters have in political campaigns.

(Add to this that at present many of the top managers are, like top politicians, more concerned their "image" and their temporary high salaries, share options and golden handshakes, sometimes with other fringe benefits, including power, fraud and corruption, than with running their companies profitably. Like with their lowest workers, their rewards are insufficiently related to their performance. They are often given the opportunity to extract much more out of a company than they do put in. - J.Z., 11.12.02.)

All these evils would be largely abolished by productive cooperatives, by people who are workers and shareholders of enterprises at the same time and who are sub-divided in groups which maximise their common interests.

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The employer-employee relationship can probably not be abolished altogether. But one could achieve that it would be abolished wherever it becomes an obstacle to technical progress, where it amounts to an unjustified guardianship over employees and where there is any danger that under it the product of work would be unjustly distributed.

The various productive cooperatives would naturally be free to decide what, how and where they produce something. Insofar there would be no distinction between them and other private firms or free enterprises. Difficult to sell goods they would as a rule produce only upon orders and advance payments and goods in daily demand for the free market. In essence, they would merely consistently apply free enterprise and free market methods not only externally but also within their enterprise, more or less turning every participant into a "capitalist" or "socializing" every "capitalistic" enterprise. These distinctions would lose their meaning for them.

Through the advantages of cooperative production compared with the average employer-employee-based production, and according to experience so far gathered, the average income of the members of a new cooperative will immediately rise by about 20-30 %. Later it will rise in accordance with the productivity increases due to additional rationalisation measures realized by the cooperators.

(As the example of Matsushita Electric - National, Panasonic, Technics etc. - shows, where one employee submits in the average 8 written suggestions per year, it would be hard to overestimate the possible speed of rationalisation measures following the release of everyone's productive energies and talents.) - (A still better but also mere suggestion box scheme at Sony did achieve, already years ago, an average of no less than 350 improvement suggestions per employee per year. Most of these suggestions, in the better schemes, were found acceptable, applied and rewarded with bonus payments. - This experience alone indicates an enormous, previously unsuspected and unused creative potential of ordinary human beings, within their work sphere and it can make one somewhat optimistic about human nature, when set free in its creative activities. - J.Z., 11.12.02.)

The presently predominant employer-employee relationship is in its effects one of the strongest supports for communism and other forms of coercive socialism. Cooperators would be immune toward the promises of communists, State socialists and trade unionists. Those striving toward a communist/socialist world revolution of a totalitarian character would thus suffer a severe set-back, if not defeat, if one were to utilise the advantages of free-enterprise or laissez-faire economics also within present productive firms by a corresponding re-organization, brought about in a voluntary and businesslike way. This method would use all the advantages of capitalism (without any privileges) for production and distribution by discontinuing its ineffective organisational forms.

If one admits that the aim of rightful socialistic attempts is to secure the right of workers to the undiminished value of their product or service (their contribution to them, as measured on a truly free market, then one will also have to admit that properly organised cooperatives are "socialistic" enterprises, the only enterprises in which this right was so far widely realized for large groups.

They would also avoid the bureaucratic exploitation which is inherent in State socialistic experiments.

As indicated above, this kind of free market capitalism or voluntary cooperative socialism can be established without State subsidies, State regulation, expropriation or nationalisation, simply by self-help measures of interested individuals, utilizing market methods and business-like purchases and credits. Right from the beginning no violence or fights or sacrifices are required and additional profits for all concerned could be obtained already during the first year.

(The literature on what is called, among other things, "organization development" is so immense that all these ideas, proposals and experiences have not yet been sufficiently surveyed and evaluated as they should be. Nor is all of it sufficiently published and kept in print. Use of CD-ROMs would make that possible and could lead to much faster theoretical and practical progress in this sphere. - I did my bit by microfiching some such writings. - J.Z., 11.12.02.)

6. Open Cooperatives according to Theodor Hertzka, to Abolish the Monopoly Position

6/1 Unlimited Acceptance of New Members

Those monopolies resting upon special legislation will be abolished by the proposed human rights, described above and compiled in the appendix. There remain natural and socially essential monopolies like land, mineral deposits, but also some electricity works, railways, telephone networks etc. i.e., enterprises against which competition is either impossible or very hard or expensive to establish.

Provision must be made so that cooperatives possessing such monopoly enterprises will not abuse their monopoly position and exploit all other citizens dependent upon their services.

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Some form of "socialisation" (or open-market arrangement, involving individual consumer and producer sovereignty - J.Z., 11.12.02.) will be required as a solution. If these cooperators retained absolute private property rights in their monopolistic means of production, then they could abuse their monopoly or oligopoly to gather monopoly earnings from their fellow citizens, corresponding to the absence of or impossibility of free competition that would be involved. This is an unpopular abuse - although often not as harmful as is widely supposed - and it could easily be avoided by allowing everyone to share in or decide upon such monopoly earnings. As soon as this possibility would be created, many would make use of it. The higher the monopolistic part of the prices of such an enterprise would be, the more people would want to join it, thereby doing away with these unearned profits. Monopoly earnings would be reduced until they become as low that they are then insignificant. From then onwards, the members could earn only the average work income of people in similar positions and the rush to join their enterprise would come to an end. No one would want to share just average earnings or below-average earnings by joining such an enterprise as a worker, no more so, anyhow, than he would want to join any other enterprise.

Any present enterprise based on the employer-employee principle or even on the cooperative principle could refuse to accept new members. (Compare the present closed "shops" of medical doctors, lawyers, plumbers, electricians etc.) Precisely in this an "open cooperative" would be different. It would be "open" towards everyone who would want to work in it, even if he is already a member of other cooperatives. Consequently, an open cooperative could no longer exploit anyone by demanding excessive prices for its services. (Taxi proprietors are now usually "closed" enterprises due to legislation achieved by them, leading to only a certain number of taxi-plates being issued.)

This kind of freedom of movement for workers into jobs and enterprises would prevent most attempts to collect monopoly profits from "natural monopolies". Most members would be aware that the attempt to rise prices to gain monopoly profits might bring such a rush of competing workers into their firm that their earnings might temporari-ly fall well below the average earnings. Knowing this, the attempt will rarely ever be made.

This "openness" would thus mean that such a cooperative would to have accept, as far as technically feasible, if necessary through shortening the labour hours, all those applying for work with it, no matter whether the present members like this or not. (The same applies to additional productive investments. Here I will not take up the controversy on legal patent monopolies, which I do oppose. - J.Z. 11.12.02.)

For professional or trade people this would, naturally, require that they do also possess the necessary abilities and knowledge. The public is in no way to be excluded when tests of this kind are to be conducted.

(Competing certification systems and evaluations of them should also be established or tolerated. - J.Z., 11.12.02.)

Only if and when there is no work at all available for someone, which corresponds to his training, ability and willingness to work, and if he could not be trained within a short time, either, should an open cooperative be allowed to refuse work to someone.

Naturally, every member of such an open coop could leave such an enterprise again after having given notice.

6/2 Participatory Decision Making by all those Interested

On the one hand, the number of labourers which can be employed in certain jobs is physically limited. Thus a crane operator cannot, during his shift, be replaced by two or three others or effectively aided by them. On the other hand, the working hours should not be reduced to ridiculously short periods, like e.g. 15 minutes daily - while in other enterprises it would generally still be 6-8 hours.

Thus, if, due to an excess influx of new workers, the working time of an enterprise would have to be reduced excessively, without correspondingly reducing the earnings, then still more people might want to join such an enterprise, not because of above average earnings of these cooperators but because of their below average working hours. Consequently, the earnings of these cooperators would fall still further.

Those joining last, or marginally, would consider such jobs only as second or side-jobs and the original members would be forced to look for other jobs, in addition to this one, in order to make a living. Quite a few would not be pleased with this development and it is one which can be foreseen and against which they could take certain precautions, if they wanted to. (They could e.g., donate the monopoly profits for the next x years to some research foundation.)

Another evil would remain: if only the working cooperators had a vote on the pricing of their monopoly goods or services, then they could still largely dictate prices, i.e. could still exploit their consumers, those of them who would depend on them.

Therefore, open cooperatives should also be open not only to labourers, professionals and investors wanting to join it but also to people who do not want to do any more than to vote in their general meetings.

Consequently, when members of an open coop tried to uphold monopoly prices, and would not reduce them as suggested above or dispose of these earnings as hinted at above, then it could happen that many of their consumers would join them just in order to vote for lower prices of their products. The cooperators could then no longer complain about an excessive influx of additional labourers because the lower earnings would deter such an influx. (There could still be cases where even price reductions might not help sufficiently: A pricing allowing the cooperators only normal earnings at normal working hours, i.e. preventing excessive influx and monopoly price exploitation of the customers, might lead to a situation where the existing demand at the lower price could no longer be satisfied. In these - probably rare - cases, the cooperators might be wise to make long-term commitments for donations with the amounts gathered as the difference between the prices required for their work efforts and the prices they would have to charge, at market level, in order to avoid rationing their products. They would, in these cases, pay some-thing like a voluntary "single tax".)

If any coop applied chicanery to prevent members from joining or to make new members leave again then again interested people must be free to join in the general assemblies to put an end to such abuses.

At the same time, these mere voters could not vote the prices down below a level which would permit the workers normal earnings because then this activity would soon come to a stop, people not finding it any longer worthwhile to work in such an enterprise. Thus, in spite of their formal voting powers, these consumers will only be able to vote-in prices corresponding to free market prices. Any prices above or below this level would harm the consumers.

6/3 All their Business to Be Open to Public Scrutiny

In order to prevent that the influx of new workers becomes too small or too large and to assure that the job changes required do take place with sufficient certainty and fast enough, every "open cooperative" should also be "open" in another sense: Everyone should be enabled to inform himself without any difficulties about the prices, turn-over, profit and work situation, the debts, assets and other economic facts about all open cooperatives or, in other words, no such enterprise should have business secrets. All essential facts on its production and its earnings should be periodically published, Everyone interested should have, as far as business requirements permit, a chance to peruse such a company's books and records.

If this takes place, then everyone can easily find out what kind of natural monopoly enterprise offers him the highest income and the most favourable work conditions and would then tend to apply for jobs with such companies. These open coops would have to accept him, if this is physically possible and thereby every monopoly enterprise would lose its chance to make monopoly profits. The influx of new labour would occur within days, sometimes within hours after the facts were published. Such an enterprise is then no longer a monopoly enterprise - but, instead, an "open cooperative", a somewhat "socialized" enterprise that is, in some real sense, with regard to its natural monopoly, a "public property". (But without the disadvantages of a nationalized one. Free movement of individuals in and out of such enterprises would "demonopolize" them and avoid bureaucracy. - J.Z., 11.12.02.)

6/4 The Essence of Open Cooperatives

With the exception of the above indicated special features, everything that has previously been stated on productive cooperatives of the ordinary type does also apply to these "open cooperatives". Through freedom of movement into monopoly enterprises, in combination with the participatory decision-making right of every interested person and the publicity for all business activities of such companies, every natural monopoly enterprise would lose the disadvantages of monopoly enterprises: low productivity, excessive prices, exploitation of all other producers and consumers, and would win all the benefits of free competition for itself. Thus the open cooperatives would be

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another instance for the old insight that through the completely free play of all economic forces the harmony of all economic interests can be achieved.

6/5 Any Remaining Monopoly Earnings Will Be Donated by the Open Cooperatives

The different productivity of e.g. different soils and mineral deposits leads often to a great profit differential between enterprises which had basically the same expenditures to get into production. (In case the differential is not already collected in form of site rent by the land lords or former owners.) If land and mineral resources are not considered and legally protected as exclusive private property but instead considered as natural monopolies to be rendered harmless in one way or the other, granting everyone access to these means of production - without infringing the rights of workers and investors, e.g. by transforming such possessions into "open cooperatives", then this difference in the earnings potential would still create a problem in some instances and attract an excessive number of workers and investors to particularly fertile stretches of land and high concentrations of minerals. They would have natural monopoly earnings even if they charged no monopoly prices but just ordinary market prices - due to their lower costs. Although they could sell below market prices - they could not satisfy world demand for their products. Thus too low prices would increase demand for their products so much that soon rationing would be required, with all its disadvantages. As long as they continued to charge market prices, they would continuously get an excessive influx of labourers. To deter this, they should, as already hinted at above, promise to set aside a sufficient percentage of their profits for some or the other project promoting the "common good". One such purpose would, obviously, be the financing of any enterprises which would help to break the monopoly position of the enterprise concerned. Other projects to be financed in this way could be research into reducing occupational hazards of the industry. In this way and for these enterprises an acceptable compromise between the ideas of Theodor Hertzka and Henry George could be achieved.

(It must be admitted that not all of the "natural monopolies" will last forever. Technical progress makes some of them superfluous. For instance: Many to most railways have lost their natural monopoly position to motor vehicles, roads and air transport. Some power plants are likely to lose their natural monopoly positions when alternative energies become more cheaply available. Vast telephone networks are beginning to lose their natural monopoly position to satellite networks. - J.Z., 11.12.02.)

6/6 Land Monopoly

Every unlimited property right in land constitutes a monopoly because land is available only in a limited quantity and can, with small exceptions, not be produced by man. The same applies even when land belongs exclusively to those who work it. Nationalisation of land would lead inevitably to all the evils accompanying any administration by the State. Any economic activity should always be left to those who themselves and directly feel the financial and other successes and losses of their own activity. Public servants do receive their fixed salaries regardless how of productive or unproductive the enterprises administered by them are, largely regardless even of how harmful or even wrongful their activities are.

To tax away the site rent is not yet a satisfactory solution nor always a just one, particularly when most of the development costs have been paid by private enterprise. Especially when such funds go into general revenue and then finance a bureaucracy, military establishment and various other unwarranted subsidies, then one can hardly call these funds "socialised" in any sympathetic sense. Moreover, even if a limited government is the initial aim, even these territorial governments do always have the tendency to become unlimited, as the U.S. has probably shown most extensively.

The best practical applications of Henry George's land reform ideas, that I know of, are the land trusts developed by the U.S. School of Living and the Proprietary Communities as described by Spencer H. MacCallum in his work: "The Art of Community" (Institute for Humane Studies, Cal., 1970). In both instances the land thus community or privately owned and privately leased, should neither be too small in area nor too large so that the existing monopoly becomes really broken to a significant extent, at least locally, while no new monopoly, even a reformist one, is being set up. Many other land reform ideals could be peacefully coexist and they could all be based on peaceful purchases from the present owners. Some of these were discussed in PEACE PLANS No.5, more will be in future issues. Here I just advocate Theodor Hertzka's solution, the "open cooperative" ownership of land, as a means to secure to everyone his equal right to use land and its mineral deposits. In this organisational form, as

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stated above, everyone who wants to work in such a cooperative, must be accepted as a member, even if this would require a reduction of the working time of the members of the cooperative. The rights of all those, who have already worked on and otherwise invested in that particular land, must naturally also be respected by the open cooperatives, i.e. they are to be credited with all improvements due to their efforts and investments. (Dr. Theodor Hertzka's main work on this subject: "Freeland, a social anticipation", was reprinted by Gordon Press, N.Y., in 1972. Its sequel, "Travel to Freeland" will be translated for this series. In both works he offers refutations to almost all conceivable objections - and also over-expands his main scheme.)

(Particularly these of his works do contain some other interesting "utopian" ideas. By the way, they turned a 16 year old Ulrich von Beckerath from a Marxist into a Libertarian. - J.Z., 11.12.02.)

The following objection appears to be serious at first : Hertzka's principle of the open cooperative would lead to a wasteful use of land. Everyone would endeavour to draw as much value as possible out of the soil, in the shortest possible time, perhaps leaving nothing but a wasteland behind. References are then often made to the wasteful use of land in times when much more land was still freely available, like during the settlement of North America. But precisely this latter condition does no longer apply. Land that can be freely used and then discarded is today available only to a very limited extent. And precisely the organisational form of the open cooperative could prevent its abusive use - by allowing all objectors to join!

Moreover, only relatively few workers would want to move like nomads from one area to the other, always in search of the highest possible temporary gains. They are usually more or less attached to their homes, gardens, friends and relatives and only large financial advantages could induce them to move. But precisely large financial gains they could not make through this cooperative form; just good working and investment incomes would be possible. Newcomers to any particular land area would also always earn less than those who made investments in land improvements long before they came and the newcomers would have no right to deprive them of the value of these improvements.

Furthermore, by now most farmers are aware that the greatest profits cannot be made from unimproved and virgin land but from capital and labour intensive land improvements. They are frequently so productive that they pay back the investment within 12 months. Thus a wasteful use of land would be rather unlikely, especially when, under monetary and financial freedom, credit for land improvements could be obtained relatively easily.

That initially a fertile virgin soil is always somewhat exploited, i.e. deteriorated, is self-evident and there is no intention here to avoid that. It does not make economic sense to artificially improve the fertility of land which is already better than most other land. But to use it and to maintain its fertility does usually make economic sense.

Far from being deplorable, the tendency to use primarily the most fertile soil, in combination with the removal of all national barriers, would have a very desirable consequence: Too much labour would no longer be wasted on relatively unproductive land, achieving only inferior harvests which can be sold only due to the protectionist system. Instead, most primary products will be produced in the most fertile areas of the world and those who want to produce them would move there. Alexander von Humboldt estimated that all of mankind, at his time about 1,000 million people, could easily get all its food supply from one river valley alone, that of the Amazon. Perhaps one will come to utilise all these possibilities only after the introduction of open cooperatives, of exterritorial and autonomous communities of volunteers, freedom of movement and freedom of trade and monetary and financial freedom and then produce all the food, fibre, oil etc. requirements of mankind with a fraction of the present labour, investments and land, in a few areas of the world. Strong tendencies in this direction can already be observed now.

6/7 Real Estate Property and Right to Living Space

Repeal of monopoly property rights in land used agriculturally or for mining, would not abolish the right to living space and the right to supply oneself with work. Both these rights require for their realisation if not exclusive proprietary rights then at least exclusive use-rights in defined areas or spaces. Thus the kind of freedom of move-

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ment into enterprises that would be introduced through open cooperatives, should not be extended to blocks of land which do not exceed a certain size, are soon to be used by the owner for building or are already used for building purposes. Agreements among the citizens living in an area will lay down guidelines on this which correspond to local conditions. The same applies to industrial structures on land.

Such properties should also be freely transferable. Consequently, a small amount of site rent would remain under this system but it is here assumed that this land cannot be better distributed than through free transferability and free pricing for housing and industrial blocks of land, in accordance with supply and demand. Whatever neighbourhood associations will be established by the citizens of various exterritorial and autonomous communities of volunteers in an area, will probably determine, from time to time and for considerable periods, what use could be made of local land and what sizes should not be exceeded by private blocks in order to satisfy, as far as possible, all demand for them. Here, again, a merger is likely to take place with the ideas and practices of private zoning, uncovered by recent research and with the administration concept of "proprietary communities".

For the keeping of title registers to land titles the principle which was, at least at one stage, already recognized in the U.S., that the private title books of lawyers and solicitors are recognized in courts, will possibly find general recognition, so that not even a local government need be concerned with that aspect.

6/8 Conversion of Monopoly Enterprises into Open Cooperatives

Means their Proper Socialisation or Transformation into Free Market Enterprises

The property of an open cooperative can be considered as "socialized", accessible on the free market, as granting the access to the means of production desired by many who possess only their labour as capital. Whoever would doubt this could convince himself simply by joining one of the open cooperatives temporarily, either as a co-worker or as a co-investor or a co-advisor. Most socialist writers considered it as self-evident that socialisation would have to consist in nationalisation. After the experience with nationalisation in the Soviet Union, one must accept as proven that State capitalism is worse than private capitalism (where most of the productive capital, apart from labour, is in the hands of relatively few people, even if, as under "pension socialism" the nominal titles lie lastly with the insurance claims and small bank savings of the masses). The nationalist-collectivist combination of political power with economic power deprives the workers completely of their rights.

The few socialists who made a distinction between nationalisation and socialisation have made no clear proposals how the socialisation could be realized - apart from a mess of contradictory, coercive, counter-productive and self-defeating controls.

Hertzka's open cooperative is, as can be seen from the above, open at least in three ways to every member of human society and thereby the property of such a cooperative, especially its productive capital and its land, must be considered as socialised. Without government directions, controls and confiscation, the productive capital of an open cooperative is accessible to every individual. The socialisation is thereby placed into the hands of self-selected individual people and thereby can and will not be carried further than is really necessary, i.e., it will be applied only against natural monopoly enterprises. If and to the extent that they realise monopoly profits, they will be thus "socialised" - as a result of free individual actions.

When realized, this ideal means that, without bloodshed, new laws, confiscations or demagogic appeals to mobs, every day the benefits derived from all monopolistic means of production are distributed among all producers fully in accordance with their work and capital contribution, simply by several hundred people - in a country like Germany - changing every day from an ordinary cooperative to an open cooperative - because they expect a personal advantage from this. Any centrally planned and directed production of these "socialised" enterprises from any outside bureaucratic machinery is superfluous.

Theodor Hertzka said on this, fittingly, in "Reisenach Freiland" (Travel to Freeland ):

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An enterprise run by an employer corresponds often only to the profit incentive which the employer has, a cooperative only to that of the present cooperators.

A natural monopoly privately owned appeals only to the profit motive of the owner. But if people can freely share in the earnings from this monopoly - by working with it or investing in it, or can have an influence on its pricing policy, as voters, then the production in such enterprises will be in accordance with the profit motive of all concerned.

If equal rights of all in economic activities are considered a basic characteristic of socialisation - or of free enterprise and free market activities - then an open cooperative, applied to natural monopolies, would fulfil the requirements of socialisation - and of free enterprise and a free market.

To avoid, in the period of transition, any disturbances which might even deteriorate into civil war, and because the present monopoly owners, including the land owners, must naturally be indemnified for their capital investments, open cooperatives should only be established like any other productive cooperative or other enterprise, i.e. through the purchase of existing enterprises by their employees and managing staff, organized in cooperatives or partnerships, using industrial bonds as means of payment. The above described characteristics of open cooperatives would tend to assure a just purchase or sales price.

As cooperatives and open cooperatives do no longer exploit anyone and can be considered as "public" or socialised enterprises, accessible to all citizens, benefitting all citizens, they should be exempted from all tax burdens which do not amount to fees for services desired and used by them.

7. Free and Private Building and Housing Market

A free housing market means: abolition of all interferences with and regulations of the housing market, the abolition of housing commissions, forced tenancy, rent ceilings, restrictions of the right of landlords to give notice, abolition of all special taxes on housing land and houses etc.

One of the most unpleasant side-effects of government interference with housing was that, in a country like Germany and for many years, one half of all court suits consisted of disagreements between landlords and tenants. (In short, the more the State attempted to provide equity in this sphere, the worse both sides felt and probably were treated.) Consequently, all courts were over-burdened and all settlements required still more time.

Rent control robs on the one side the landlords of a great part or all of their pre-done labour, in form of their houses and leads on the other side to extra high prices for the few flats that are not subject to rent control. Moreover, it prevents the building of blocks of flats for profit and the building of family homes - to the extent that neither can compete with rents which are artificially kept low. Consequently, a real housing shortage develops which the State-run system cannot rapidly and economically overcome. Moreover, the limitation of the right to rent out unused living space under conditions mutually agreeable, leads to a situation where much of such living space is left rather unused than subjected to bureaucratic control. (The subsequent government "solution" to this problem consists then in measuring all available living space and allocating it bureaucratically, whereupon then, in countries like the Soviet Union, all those not specially favoured by the bureaucrats, have to be satisfied for many years with less living space per person than most prisoners have in the more civilised countries.

In Germany, after World War II, the official housing commissions and their activities were so expensive that for the equivalent expenditures every year 100,000 dwellings could have been built. Among the many other defects of such a system are, naturally, extensive corruption and favouritism and delays which lead to waiting periods for several years - and finally to housing commission homes which may be 50 miles away from one's place of work, making one further dependent upon public transport or public roads and public transport policies.

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Far from achieving a just distribution of the available living space and promoting the building industry, and helping the tenants, coercive interference with the housing market prevents the just distribution of the available space, as it suppresses freedom of contract and the price mechanism, and it preserves and increases the housing shortage by largely preventing private building efforts.

A free housing market means nothing else but the absence of any State interference under any pretence in the housing market. Only violent crimes, theft and fraud involved should concern the government courts - as long as there are only government courts.

7/1 House Building Must Be Liberated

The main obstacle to private house building (for others, not for oneself) lies in the risk of inflation. Thus legal tender for State paper money is to be repealed and the prohibition of value preserving clauses for the mostly long-term building loans. Only then would private financiers get sufficient confidence to invest their funds in blocks of flats. Whoever possesses capital and must expect that he will be deprived of it by devaluations, inflations, taxes, price control or confiscation, will not be inclined to make loans wherever he is exposed to such dangers and wrongs. He will rather waste it, gamble it away or otherwise amuse himself with it, or hide it away, safe but unproductive, or will transfer it to wherever he believes it to be safer. The strictest controls could prevent only a small percentage of this natural reaction.

Private house-building is also indirectly restricted through the note issue monopoly. This limits turnover credit and thereby the total turnover, and thus the sum total of all surplus earnings over current consumption which could be utilised for long-term investments e.g. in the housing market.

Maximum interest rates, trustee acts, building regulations, coercive zoning, privileges for building workers, compulsory licensing for all building activities and jobs are other minor but still important restrictions of the free housing market which prevent its full development.

7/2 Disadvantages of the Provision of Housing by the State

Whoever ignores the above hinted-at legal obstacles to house-building could easily come to draw the wrong conclusion: private house building has failed and must be replaced by that of the State, financed out of general tax revenues.

The repeal of all restrictive laws in this sphere would soon show how false this conclusion is. Prejudices in this sphere could also be much faster abolished if the costs and risks, to which they lead, would have to be born exclusively by the voluntary members of an exterritorial and autonomous community of people, who do believe in government or community intervention in this sphere. For others it would almost be self-evident that the tax funds collected from a people impoverished by excess taxes for a great variety of public expenditure programmes, by wars, arms races. inflation and currency shortages, protectionism and other interventionist actions, would be insuf-ficient to rebuild what has been destroyed during war years, replace what ought to be condemned because of age, and add what is required due to population growth and refugee movements. For almost every government many other tasks are much more important than house-building. Even if government departments worked at this task at their full capacity (i.e. when there is not another credit restriction, often due to the myth that "over-full-employment" would be possible and the belief that a boom could possibly "overheat"), then the most exaggerated political promises to provide much and cheap housing would, as a rule, provide only the presently registered requirements within 10-20 years. Over such a long time (apart from the fact that few would volunteer to wait that long) a much higher demand might arise.

That a government house-building programme is always associated with an enormous degree of waste and corruption and that the costs of publicly built accommodation is, in spite of inferior quality, often much higher than the privately provided living space, is already widely known - and experienced over and over again .

But all too few people pay attention to the absurd consequences for individual taxpayers: Those who, under great personal sacrifices have finally succeeded in building a home for themselves, are under this system forced to provide also the funds for those people who, to say the least, were less industrious, productive and provident.

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In extreme cases they were forced to finance thus people who earned more than they themselves did and who paid controlled rents which were lower than the repair costs for a home.

On the other hand, rents for accommodation provided under such "social" building programmes are often comparatively so high that only relatively well off people can afford them, while the capital costs for providing such accommodation are largely provided by people who live in slum accommodation, because they cannot afford anything better. Moreover, due to slum clearing, these poorer people might then even lose this cheap slum accommodation, in order to make room for "public housing" which they cannot afford! Language often fails to clearly describe the wrongs and absurdities of such policies. (Let the victims of such policies and institutions secede from them! - J.Z., 11.12.02.)

The ideal of the followers of a government-planned economy (as if the private economy worked without plans and as if ruling people could more intelligently dispose of other people's money than these people could or would themselves) is that only one institution is authorised to grant building credits. Consequently, anyone whose credit application is refused by this centre cannot proceed with his building project. Any of the frequent financial crises of governments today leads probably to ten-thousands of such cases in large countries. (Naturally, government-financed and built accommodation will then be rationed and allocated by the usual "honest" bureaucrats and the usual shortages will occur. Very few will get the kind of housing they like. Some joker once said: If the Sahara were nationalised then, after a few years, a shortage of sand would happen even there. But I doubt that bureaucrats could be as efficient sand miners, exporters and transporters of sand. - J.Z., 11.12.02.)

7/3 How Should Private House Building Be Financed?

Freedom of choice for value standards (requiring among other things a free gold-market), freedom to use value preserving clauses in long-term contracts, freedom of contract regarding interest rates, freedom to issue medium and long term securities, together with the larger offer of capital which will indirectly also result from free note issue (larger turnover leading to larger production and then more savings) will facilitate the private financing of home building. Then, within a few years, like in Germany before WW I & II, the offer of housing will tend to exceed the demand for it - like it does now regarding office space. The emergency prices for accommodation, resulting from the housing shortage, will then fall to normal levels.

A special kind of credit insurance, the mortgage insurance, in combination with mortgage banks, could further facilitate the private financing of housing.

Moreover, once licensing, inspections, building codes, union privileges, tariffs against prefabricated homes etc. are abolished, the prices for standardised, prefabricated and modular housing could come down close to the price of a good car - and, correspondingly, financing of housing would be much less of a problem. (Compare the suggestions of Buckminster Fuller on this. - J.Z., 11.12.02.)

7/4 Tax exemption for New Buildings and Building Credits

After the 30-year war (1618-1648) and the Seven Years War (1756-1763) Germany was very rapidly restored, essentially by granting reconstruction credits based on rare metal values and by exempting new buildings and credits for them from

all taxes. (In Pomerania ALL taxes were abolished for 2 years!) That was a great incentive for all potential creditors to finance reconstruction.

Thus, together with the above proposed monetary freedom system, a law should be passed which would exempt all new houses and other buildings and credits for them for several years (20 years should today be the least!) from all income and capital or wealth taxes. The country which introduced such a reform would receive a flood of refuge capital from all over the world and could, with its aid, overcome its housing shortage still more rapidly.

Under present tax rates (and other confiscatory measures against land lords) there is no great incentives to produce something like buildings which can be so easily taxed and tend to be so heavily taxed, regulated and controlled - so

that relatively little building results and also only a small tax total. Under tax-exemptions for new buildings and building credits there would at least be more turn-over- and wage taxes and less expenditures for unemployed people. Thus one should expect the tax department to promote such a reform - if one could expect it to act rationally. As it is, irrational penal tendencies in tax laws often outweigh economic considerations, and they are much more popular with ignorant voters.

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7/5 Development of Saving and Building Cooperatives

The establishment and development of building cooperatives should be promoted.

They promote purposive saving for future house-building and for the repayment of housing mortgages granted by them. As a rule they take only contributions from members who thereby, sooner or later obtain a claim to a housing loan. Their high interests on savings accounts do also attract non-members but their income consists mainly out of the regular savings instalments made by members and the amortisation instalments and interest payments of their debtors - those who have received a housing loan from them.

Even under a stable currency should their interest rate be set rather high, at about 7-10%. Then those, for whom the repayment of the loan, including the high interest rate, is still cheaper than their rent, will apply for the loan as soon as possible. Those, who can accumulated only small savings per year, will voluntarily postpone their loan, while they receive the high interest rate on their savings deposit and help to provide the means for those who do not want to wait as long. Some will then even postpone the loan application altogether and wait with their building project until their savings plus the high interest have reached the sum required. The interest on these savings deposits and the interest on the loans must be so high that the waiting for the building credit is as advantageous as the early granting of a building credit. Consequently, the high interest rate can make an allocation system for credits largely superfluous. Rather than not having enough funds, these building cooperatives might then often have more liquid funds than they can immediately invest. (Then they should lower the rate, thereby reducing deposits and increasing loans.) If the reverse should happen and less funds are available than the members want to obtain as loans, then a waiting list could be laid out and the members would get their loan when their turn comes.

(Those who saved up, with high interest, half the building costs and then borrowed, at high interest, the second half, would, in balance, gain as much in interest as they paid and might thus be considered as having gained their loan interest-free. - J.Z., 11.12.02.)

Because of these peculiarities the interest rates at building cooperatives should rather be called a premium for waiting, paid by those who do not want to wait to those prepared to wait because of the premium.

They should require regular repayments in equal sums.

Such self-help institutions have already built a large percentage of all privately owned homes in the developed countries. The building and loan associations of the US, at one stage, had financed up to 75% of all private homes. By rationalisation and through liberation from government controls they can further increase their share of this important market.

7/6 Rationalisation of Building

There is such a vast scope for improvements here that only the barest hints can be given. Required would be especially the abolition of all coercive building codes and a much more efficient system for the enforcement of private contracts than the present government courts provide, moreover, the abolition of all international barriers against the flow of prefabricated homes. Buckminster Fuller reckoned that, as a consequence, the future home need not cost more than a good car and he may well be right - if we allow the miracle of the market to work.

The abolition of unemployment - largely through freedom of note issue - and the ease of obtaining bank credits from free banks for the purpose of rationalisation measures, in combination with the high wages to be expected when labour-intensive jobs are no longer the ideal, and with the relative shortage of labour, would assure that all possible rationalisation methods would be rapidly applied. E.g., new tools would soon save much of the costs of bricklaying. Plastering machines would be handled by unskilled labourers etc. One Western Australian firm offered to train bricklayers, sufficiently, within 3 weeks and to guarantee the brickwork they would do afterwards under the supervision of an experienced bricklayer!

The seasonal unemployment of building workers could largely be overcome by utilising large cheap shelters, like blow-up domes, or erecting at such times predominantly buildings which are less climate sensitive, like steel frameworks with aluminium cladding etc. There is no technical obstacle to fast, cheap and good housing and building but too many meddlers and parasites are in the way.

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7/7 Cooperatives of Building Workers

Cooperatives of builders would be easy to establish because little initial capital is required. The building costs are usually covered by those who place the orders and their creditors. As in this organization form every member has a strong financial interest in improvements, the tendency to rationalise building methods and reduce costs will be further increased. At the same time, the cooperators would to some extent be together responsible for mistakes made in the building which would provide an incentive to produce quality work.

(After WW II in Australia small temporary building coops were established by groups returned soldiers, each of whom acquired at least some special building skills and then they helped each other to build their homes. These building coops were rapidly successful - and then disappeared! - J.Z., 11.12.02.)

8/1 Repeal of Compulsory Insurance with a Monopolistic Insurance Authority

Within everybody's obligation to assure as far as possible a minimum standard of living for himself in case of inability to work, due to sickness, accident or age, and to do the same for one's dependants, especially in case of one's death, everyone has the right to arrange for this kind of security without the aid of any officials and departments, through private organisations and the conclusion of suitable contracts. A case could be made for a "compulsion" to insure oneself against such common risks of living (In different exterritorial and autonomous communities of volunteers different arrangements of this or other kinds will be made.), but there should be no compulsion to insure oneself with a particular insurance authority (unless one prefers such a "solution" among volunteers). Those communities which agreed that all their members should insure themselves against such risks with some insurance company or the other, or should take equivalent precautions, would probably appoint a supervisory body which would see to it that the members fulfil this obligation - to which, as voluntary members, they would have given their consent.

8/2 Self-Financing of the Private Social Insurance Companies with their Own Contribution Money

Every insurance company should be authorised to pay its pensions and other benefits as well as the wages and salaries of its employees in its own service warrants, which are standardised, typified and in denominations like money. The reflux and thereby the par value of these warrants could be assured by the insurance company accepting them in payment of contributions like cash, i.e. at their nominal value, regardless of their current market rate. In general circulation, these clearing certificates should not have any legal tender. We have here, if one con-siders the insurance premiums as voluntary taxation, some kind of tax foundation. For details see the work by Ulrich von Beckerath reproduced in Peace Plans No. 11.)

(As far as their investments are concerned, these should not be subjected to monetary despotism, taxation, trustee acts and other government interventionism, confiscation and exploitation, not to trade union monopolies and powers, as are now many superannuation funds. - Under free competition both health and old age insurance could become rather cheap. The really needed insurance against health catastrophes would then be much cheaper than insurance for the costs of every visit to the doctor or chemist, which can be self-insured against, by most earners in developed countries. I will not go into details here. - J.Z., 11.12.02.)

8/3 Abolition of Interest Ceilings

All laws and regulations limiting the height of interest rates should in future be repealed, especially for the funds accumulated and invested by social insurance bodies. The higher the interest rate is which the insured receive for the capital accumulated by the insurance company, the higher could be their pensions become or the lower their premiums.

If there were no interest, a man working 40 years and wanting afterwards for 20 years a pension of $3,000 p.a., would have to put aside, for 40 years, $ 1,500 p.a. If he gained instead 15 % interest on all his premiums (based on credit-insured productive investments) then his premium for the same pension could be reduced to no more than 13 dollars yearly for 40 years! If he would want a higher pension, let us say, $ 30,000, he would still not have to pay more than $ 130 p.a., i.e. much less than people do usually pay now in order to gain quite moderate pensions. For a premium of $1,300 p. a., about equivalent for many people to what they now are forced to pay towards the govern-ment-run social insecurity which they can expect from it, they could then gain $ 300,000 p.a. - for 20 years, i.e. they would be multi-millionaires! How many people are aware that the government prevents them from becoming millionaires? What would happen if the woke up to this fact?

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(Another way to instant riches, not only after 40 years, but also blocked today by governments - and a way to overcome this blockage, was described in Peace Plans No. 19 C. - It would effectively expropriate the bureaucracy for the benefit of its victims.)

Some might object that 15% interest p.a. are unrealistic and too high. They would be right if the borrower could only clear 5-16% on such capital. But what if he can make, under a free economy and with rapid technical, agricultural and scientific advances, 45% to 150% p.a.? Is such an interest rate still too high for him then? I believe that e.g. old age funds should be primarily invested in all such opportunities (naturally, credit -insured!) and that there will be many such opportunities in the future and that there were already quite a few such opportunities in the past and present. Enemies of "usury" would be free to form their own communities, granting within them whatever little capital they accumulate interest-free to each other.

(Adherents of free pricing and free enterprise and free investments in this sphere would want to see the predone-labour (capital) of the investors rewarded with a fair share in the additional productivity achieved through their investments, ideally through a correspondingly fluctuating interest rate. - J.Z., 11.12.02.)

8/4 Safeguarding Insurance Fund Investments by the Reform of the Trustee Acts

Some form of "trustee acts" seems to exist in every "advanced" and "civilised" nation. They regulate a great percentage of the national wealth, funds like those of people under age or in mental homes, funds of foundations, unions, communities, churches, savings institutions and the enormous funds of social insurance bodies, especially the reserves of the pension funds. They do usually require that a large percentage of these funds be invested in government insecurities - just because these seemed, especially during the 19th. century, to be the safest investments. Now these investments assure only one thing: A nominal repayment in inflated paper money. Nevertheless, this legislation continues in full force and nationalises and wastes probably more wealth every year in these countries than the local communists and socialists would dare to propose. Much of the funds being thus forcefully channelled into these directions (which also usually include first mortgages - on a paper money basis!), excessively low interest rates in these investment spheres result, while rates for industrial investment credits are simultaneously rather high.

Even if issuers of industrial bonds are free to offer these on a gold accounting basis and thus largely inflation -proof, the trustee acts would still force the funds concerned to invest not in such good papers but in proven bad ones instead, under the legal pretence that the "bad" ones would be "secure". Thus the industrial sector, due to whose activities these funds were accumulated in the first place, is largely starved of these funds. Many economically useful and profitable plans cannot be realized because due to the trustee acts the banks and insurance companies cannot advance the capital they have for these projects. Instead, they must put them into relatively unproductive and low interest-bearing investments and are, finally, repaid in inflated and almost useless paper money.

An increase in unemployment, excessive insurance premiums and all too low pensions are among the results. Relatively low productivity and a correspondingly high price level are among the other effects.

We have here another case proving how important Jefferson's and Paine's proposal was to limit the validity of all laws and regulations to a relatively short period. Luckily, similar proposals are presently being revived in the USA - under the term: "sunset laws".

Even apart from inflation, the compulsion to invest funds in government securities is another wrong form of "forced loans". Most tax payers are also members of social insurance bodies. Thus when they are forced to repay these government loans, taken up from social insurance funds, they are forced to indemnify themselves for the raids by bureaucrats against their funds. Thus they are forced to pay these amounts twice, once as contributors and later as tax payers. (This in the best case, when the funds are not destroyed by inflation and when a government actually makes an effort to repay the public debt.) (The Nazis managed to invest these so confiscated funds in their armament preparations for WW II!)

Consequently, the trustee acts are either to be abolished or at least to be amended in the following way :

1. Investment in government securities is interdicted as being much too risky and basically wrong.

2. Value preserving clauses are to be agreed upon for all such investments of a medium and long-term kind.

3. Credit-insured investments are to be considered as sufficiently secure in the meaning of these acts.

Anyone further interested in this subject should study Prof. Heinrich Rittershausen's monography: "Die Reform der Muendelsicherheitsbestimmungen und der industrielly Anlagekredit" (The Reform of Trustee Acts and Industrial Investment Credit), Fischer, Jena, 1929, 96pp. I hope to be able to offer a translation of this work soon, in this series.

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8/5 Decentralisation into many Local Insurance Cooperatives

To reduce fraudulent claims for health insurance benefits, save costs in gaining new members and to reduce administration costs in short, to allow the lowest possible premiums, as many small local insurance companies or insurance cooperatives should be established of the members of firms as is possible. Within such insurance companies members would know each other and would keep each other in check. They should have at least about 150 and at most about 1,000 members and, to cover themselves, they should take out re-insurance or form guaranty-associations as was proposed already in 1900 by Prof. Bleicher.

8/6 Separation of the Old Age from the Invalidity Insurance

Old age is very different from invalidity as an insurance risk. The higher mortality is, the lower could be the contributions to old age insurance. With invalidity the reverse is the case. The earlier it occurs, the higher must be the contributions to cover it - provided the contribution period is not decisive in working out the sum of the pension. Especially in such cases the length of the contribution period should not be decisive. Consequently, either different insurance companies should conduct these different kind of insurance cases or the contributions for these two risks should be independently determined, independently changeable and the capital amounts accumulated from them should be separately administered and used only for their particular risks and claims arising out of them.

To obtain full monetary and financial freedom, not only free banks must be freely established but also all restrictions on private stock exchanges and other exchanges must be removed. E.g., the licensing for the issue of securities and the registration of dealings in securities must be abolished. Bearer-bonds must be permissible. No such exchange centre is to have a statutory monopoly. Stockbrokers should be self-regulating and everybody should be free to set himself up as a stockbroker. Publicity for all transactions must be as complete as possible.

Under such conditions honesty among stockbrokers became once proverbial. As a result of numerous attempts to further increase honesty among them by a variety of legislative measures, they have so much lost their good reputation that honesty among stockbrokers is no longer proverbial.

One of the best short defences of the rationale of exchanges and explanation of the socialist opposition against them can be found in U. v. Beckerath's work: "Must Full Employment Cost Money?" on p. 159 of the reproduction of this work in PEACE PLANS No. 10. The passage is fundamental for the understanding of monetary and financial freedom.

An expansion of publicity in stock exchange reporting that is significant was reported in the same work and issue on page 197.

In 1954 U. v. Beckerath wrote another short paper on kind and importance of stock market trading:

"It does obviously make a difference whether interested people associate in groups or appear singly on the market. The English wholesale company of consumer cooperatives, for instance, negotiated with Asian tea syndicates. It owned several steamers for food transports. Thus it achieved quite different prices than those prevailing in a bazar in Morocco, where small single tea traders deal with single customers - and sometimes haggle for a long time. In exchanges whatever is traded is exhibited in samples. In trading outside of exchanges differences occur often on whether a supplier has supplied what a customer had ordered. Trade on exchanges is so developed that whole shiploads of goods can be turned over in a few moments. The contractual conditions are carefully worked out and standardised. Thus disagreements are rare." (Tea is still abundantly provided, sometimes at almost ridiculously low prices, if one does not insist upon top quality. To what extent has the tea-market been de-monopolised, compared with other markets for other standard consumer items? - J.Z., 11.12.02.)

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"In stock exchange trading everything is mediated through brokers. These know all the trade practices by heart. While trading outside of exchanges even experienced merchants do sometimes forget important points.

The major part of the world's production is brought to the consumers by middlemen. These are led by other motives than the consumers. Instance: During the latest cacao boom most of the middlemen kept a cool head and merely acted deaf when there were no cheap offers at all while very expensive offers were shouted.

This was soon effective. Everywhere long available cacao stocks became visible and prices fell steadily. The German chocolate manufacturers are already reversing the small precautionary price increases they had made. If, instead, single consumers negotiate then, when cheap offers are not made, they are all too ready to offer exaggerated prices. The exchanges offer the opportunity for anyone interested to obtain knowledge of all offers. The system of stock exchange news brings an element into trading which is missing wherever there are no exchanges. Continuous information on trading and production break many attempts to monopolise something already in the first beginnings.

At the exchanges dealings in futures are undertaken - except where foolishness prohibits them. This kind of term business allows people to assure themselves of sales for long periods. Withdrawal premiums permit them to withdraw from such commitments under bearable conditions.

The people, especially the workers, will enjoy complete economic freedom only when they come to use the methods of stock exchanges for themselves."

Please note that the following are views I held in 1962 at the latest and that I may have improved upon them in plan 228 in Peace Plans 13, pp. 71-81: "Some Notes on the Possibility of a Tax Strike" and in plan 223 in Peace Plans 14, pp. 30-75: "Voluntary Taxation" and also in Peace Plans No. 19C, of which I have recently put out a second and enlarged edition. Here I will merely translate what I had written then. Do not blame me for the flaws in this section - you may already find them corrected in the above contributions.

More essays on this subject will be published in future issues. I have seen at least some of the other plans in the libertarian press for the transition from a taxed to a free society and would like to bring together all such projects in a number of microfiche.

(For the time being, PEACE PLANS 13, 14 & 19C are among those few made freely available by me, upon request, via e-mail, in RTF, until they become available on a website or and on a CD-ROM. - J.Z., 11.12.02.)

Voluntary taxation follows as a technical detail automatically from the right of individuals to secede from a government. Even those levies, which formally are forcefully collected from members of exterritorial and autonomous communities of volunteers, are in reality voluntarily paid taxes or contributions if and as long as the members can make use of their right to secede. Seemingly, and according to some theories of consent, tax payment in democratic States takes place already today voluntarily. The freely elected representatives of the people are supposed to make only those expenditures which are desired by the voters and are to raise the funds for them from the voters by taxes which they find tolerable and at tax rates they are willing to bear. That is the all too imperfect theory of the matter. It does not agree too well with reality. The right to elect representatives for a period during which they can do almost anything they please, does not suffice to protect the rights and interests of the voters. At the very least, to protect their rights and interests better, the presently very limited right to vote ought to be supplemented by the right to recall representatives and officials, to vote in referendums or to secede as individuals (thereby casting a 100% veto vote regarding one's own affairs).

Reasonable beings would voluntarily determine a minimum amount which every member of an exterritorial and autonomous community would have to pay as a tax, fee or contribution. This amount would then be raised directly or indirectly in accordance with whatever tax or collection system is preferred by that community. They would also reserve to themselves the decision how most of these funds ought to be spent. They could do this through elected and recallable representatives, always with the safety valve that they could escape from their "representatives", laws and institutions by individual secession. They might be satisfied with whatever constitutional safeguards they would arrange. They might also determine their common expenditures largely by referendum - from whose decisions minorities could secede.

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One of the best and most democratic methods appears to be the following: While every member is obliged to pay a certain agreed upon total, the disbursement of this amount among the various common projects of the community could be left altogether to the contributor's discretion. He would be free to pay his whole tax amount or parts of them, as he pleases, to the institutions of his choice, which in his opinion need funds most of all or whose activities ought to be expanded - again, in his opinion. This would require a listing of those institutions whose activities are recognized for the time being - and their account numbers, e.g., public libraries, schools or sports fields. This public spending or budged system would be almost infinitely adaptable and would starve those institutions which do not find sufficient approval and support those well which do.

The tax offices would then have to publish statistics on the government expenditures, list the subsidised institutions, the sums of the subsidies, how far the voluntary tax contributions from individual taxpayers fell short of or exceeded the target of these institutions during the last year - or other agreed upon period, what particular expenditures are planned by these institutions for the current period etc.

The full balance sheets of any such institution should be available to every individual contributor upon request.

The tax office could then insist only that the taxpayer present it with receipts from the recognized institutions amounting to the total required from him.

Naturally, whosoever, in spite of all bitter experiences with tax offices and bureaucratic spending machines like parliaments, does still possess sufficient confidence in them, should not be prevented from assigning to them his whole contribution, to be spent as now, at their discretion.

This system would be practised among volunteers who have enough in common to voluntarily join a particular community and remain in it. Thus the views of the members will be similar on many points. They will thus support most of the institutions most of them really want - if, e.g., they could not be financed sufficiently by fees, foundations or in other ways.

They would soon discontinue granting official support or recognition to institutions which, as they can find out from their statistics, would only be supported by a handful of members.

Thus they might come to determine a cut-off point from which onwards support for institutions would become altogether a private affair. Dissenters could secede and form communities where such expenditures might be the main expenditures.

A system of voluntary taxation does not mean that people could go into debt to the community, by using its services and then refusing to pay. Probably a much more effective and forceful debt collection would be practised then compared to the ones we see at work at present.

There were precedents for voluntary taxation: the voluntary contributions of the Persians under Darius, of the patricians in the cities of the Hanseatic League, the public income declarations of taxpayers practised in Italy after World War II (in which they often declared a higher income than they actually had - in order to obtain credit more easily!), and the high contributions which certain religious sects demand from their members in order to maintain the various charitable projects of these religious organizations.

Ideally, and in the long run, prices, fees, contributions, subscriptions and donations should replace all taxes and all institutions now requiring tax support will one day be considered with the high degree of suspicion and horror they deserve.

But it should also be clearly understood that even a 99% progressive income tax or death duty, when agreed upon among the members of an exterritorial and autonomous community of volunteers, is not a tax in the present sense but rather a "religiously" motivated donation. Only the forceful imposition of one's expenditures upon non-consenting others, and their corresponding enslavement, is a moral abomination and an anti-economic absurdity. If the victims consent, then they should be free to suffer whatever pleases them.

I confidently predict that when all the other reforms proposed in this book have been realized, then there will not be many people left who are prepared to voluntarily suffer the costs of armaments for large-scale wars or the costs of military slaughters for undefined and undeclared, immoral or irrational purposes. How to deal with misguided people, with criminals and madmen is to some extent described in Sections V-VII.

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Any contributions to any "insurance" the government supplies and may formally deduct from wages and salaries as "premiums", are essentially taxes. Many countries have already recognized this and finance their "unemployment benefits" out of general tax revenues. From their very nature as taxes one can already safely predict that these contributions or the general tax revenues will be lower the higher unemployment is. In short, the income of this "insurance" will be at the lowest ebb when it is most needed to pay the promised "benefits" at the time of the highest unemployment.

If the same total of contributions as in "normal" times were raised at such times, then this would mean that much higher taxes than before would have to be demanded from the reduced number of workers. This extra burden would then very likely lead to the dismissal of still more workers (excepting only the tax avoidance industry).

Similar considerations apply to capital and reserve investments made by such "insurance" corporations. Most of the accumulated premiums or reserves are not held in cash but are, instead, invested, ideally in productive enterprises - and on long terms but under a withdrawal notice. If they were only invested on short terms, then the long term capital market would be deprived of these amounts and thus some unemployment would follow. When invested on long terms and some unemployment occurs, then the debtors will be given notice to repay these amounts - sooner than they expected - which would, most likely, leave them short of funds, so that they might have to put more of their employees on the street.

As demonstrated elsewhere, under monetary and financial freedom such "insurance" provision would be seen to be unnecessary and would not be made. Most of the existing involuntary and long term mass unemployment is due to interventionist legislation (especially the legislation upholding monetary despotism). This legislation, in its turn, rests upon popular myths and errors, which are subject to fashions and the laws involved are not consistently applied either.

These interventions can also exceed any predictable degree or form. Consequently, these risks cannot be suffi-ciently predicted and covered by a proper insurance arrangement - quite apart from the inherent difficulties and counterproductive results of raising funds for unemployment benefits, which were hinted at above.

In 1956 Ulrich von Beckerath commented on this:

Ulrich von Beckerath's views on this whole subject, here only summarised, were shortly stated by himself in Peace Plans No. 10, p. 179.

The subject is so important that it should be dealt with in some special dissertations. I have heard so far only of one private study, made by Dr. G. Ramin's Festmarkbank, in Germany in 1924, which found that a large percentage of the total note circulation issued at that time, when all phenomena of a deflation were present and unemployment was high, had accumulated at various government offices and their bank accounts and were held there, pending disposal, for considerable periods. In other words, these notes fulfilled their intended function as exchange media only at bureaucratic speeds and in the bureaucratic sphere - while the private economy was short of exchange media. Government unemployment offices act similarly, even if unintentionally and unaware.

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Based on considerations like those above, the Berlin Programme of the "Society of 1952 to Fight the Causes of Unemployment" demanded the repeal of all such monopolies and restrictions. See Section XI of this programme, reproduced in Peace Plans No. 41, page 61.

A later German law on this subject, dated 23.12.1956, did not repeal the monopoly for employment services but, instead, made it still more exclusive and added an interesting new "task": The authority thus established is now also to avoid any "shortage in labour power" or, in other words, to see to it that unemployment might never become so low that the "industrial reserve army", consisting of unemployed would thereby become "endangered".

What hope is there for people who, without protest, without even a murmur, accept such treatment as their "fate"?

Here also, any State or private monopoly is wrong, exploitative and contradictory, seeing that people have the right to move themselves and their goods as cheaply and efficiently as possible and no transport organisation should have any other function. A high standard of living rests essentially upon the free exchange of goods and services, produced under a system of division of labour, and thus upon efficient transport. Any transport restriction must therefore reduce the standard of living.

That private and competitive railway-, bus- tramway and taxi companies are quite viable, that they do not need any monopoly or privilege and that they can effectively compete with similar institutions set up and maintained by governments, has often been shown, mainly by enterprises in the U.S.A.

In Market Street in San Francisco there were even, until 1944 two competing tramway companies operating on different rails. After their final municipalisation no economies of scale were observed. On the contrary, services went down and prices up. John Gunther reported details on this in: "Inside U.S.A.", Hamish Hamilton. London.

That nationalisation or State control of transportation enterprises should be avoided or reversed follows from the numerous cases in which governments abused their powers in order to limit competition against privileged institutions. Thus bus and truck companies able and willing to transport persons and goods much cheaper than the State railways, were forced to charge similarly high prices or were, sometimes, not licensed to offer their services at all. In the early seventies, a private bus company around Sydney had installed modern air-line type seats in its busses. The then ruling transport minister forced the company to throw out these much more comfortable seats, arguing that this example would be dangerous: people might demand the same good service from the government busses!

In some cases private railways might still have a natural monopoly position. In these cases the above discussed principle of "open cooperatives" could be applied in order to avoid a monopolistic exploitation.

(After ca. 150 years of mismanagement of State railways in Australia it was finally revealed that during all that time very much corruption and mismanagement had occurred! Some limited reforms did taken place afterwards. Will we have to wait for the rest for another 150 years? - We still suffer under the effects of "Ministers for Transport". A friend, B.C., many years ago, suggested that they should be renamed: "Ministers Against Transport". - J.Z., 11.12.02.)

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Large enterprises can easily be financed (for their current expenditures) with the goods warrants system. Dr. Walter Zander has made a special study of this possibility - which was reproduced in PEACE PLANS No. 9. To my knowledge no one has developed these ideas further. Otherwise, I am aware how much the above notes have become dated during the last 20 years, after they were written. They are no more than the barest hints towards some of the many options - under freedom. Many articles and even books have been published on this subject during the last few year but all this material has still to be integrated and sufficiently publicised. For this microfiche (& CD-ROMs!, J.Z., 02.) would be an ideal medium wherever copyrights are not restricting such an attempt. At least the subject of private roads will be taken up again in a future peace plans issue.

14/1 No Monopoly for any Power Plant

It is economically desirable to produce and distribute energy cheaply. Every monopoly for either production or distribution of power does unnecessarily increase the price of energy and reduce consumption - and thereby the general standard of living. Where and to what extent private competing power plants could be successful could only be decided from case to case and should be decided by those who invest their capital or labour in such attempts. It is certain that energy monopolies will prevent the establishment of competing power plants even there where they would be desirable and profitable. To force enterprises, which could otherwise obtain their energy requirements much more cheaply, to purchase them from at high prices from monopolistic plants and distributors is a severe case of abuse and exploitation.

That power plants can be privately run is still proven by the remaining private power plants in the U.S.A. That competition among power plants is possible and desirable is perhaps best demonstrated by the conditions in Seattle, Washington, USA, where a private and a municipal power plant have been competing with each other for years and have produced, as a result, the lowest electricity rates in the U.S.A. and perhaps in the whole world. (Details in John Gunther's book: Inside U.S.A.".

14/2 Socialization (via Open Cooperatives) for those Power Plants with a Natural Monopoly Position.

The difficulties of transmitting electricity over long distances leads frequently to a situation where consumers have no alternative power plants to choose from and the one nearest to them may have a natural monopoly position, like e.g., the one and only suitable dam site. Once the transmission problem is solved and all power plants feed into a network, many of them could compete with each other and the organization of an open cooperative would then only have to be considered for this transmission network. In the meantime, all existing natural monopoly power plants should be organized as open cooperatives, by a take-over bid as suggested above. Whoever can forget about the class warfare notions behind the current threat of WW III should at least remember how strong the animosity to corporations is even among present libertarians and how often unionised power plant workers hold whole nations to ransom or put them under a state of siege.

14/3 No Nuclear Power Plants

(By, e.g., size, centralisation, subsidies, privileges, unionisation, State licensing & guaranties, exempting them from complete insurance cover, State contracts for the supply of material for nuclear weapons construction. One might also consider them as mere branches of governmental bodies like the Atomic Energy Commission. They served also as cover or excuse, under the description of "peaceful use of atomic energy" for the governmental nuclear war mass murder preparations. Do they really require a formal and legalized monopoly status to be recognized as institutions of privilege? Some libertarians still seem to think so and as technophiles and science fans they favour them and ignore their wrongful and harmful aspects. These would largely become revealed if their establishment and maintenance were subject to referendum approvals by those who live only a few hundred kilometres around them, i.e., within reach of winds that carry radioactive materials emanating from them in case of accidents or "normal" releases. - J.Z., 11.12.02.)

Although, apart from governmental licensing requirements these plants are formally not monopolies, they do have a few features which give them a privileged or monopolistic position:

Their construction, together with the minimum of precautions considered necessary, makes them so expensive that only a few large corporations and especially States can afford them.

Their fuel is scarce, expensive and will run out in a few decades at most.

The number of people running them is rather small. A union obeyed by these power plant workers could easily come to rule the world - if the world would ever come to use nuclear power predominantly.

Governments have allowed them to go on producing radioactive garbage without the problem of this garbage disposal having been solved yet.

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Governments have also protected private power plants of this type and their own from class actions and damage suits for air-, water- and soil pollution caused

by these plants, by the simple expedient of declaring all such pollution to be within supposedly acceptable and tolerable limits - according to standards more or less arbitrarily set by those "experts" who are willing to offer apologies for any government action. Usually they are not biologists concerned about long-term genetic implications.

The fallacies spread by government propagandists, in favour of nuclear power generation, have been so numerous and appealing that even most people of the world-wide libertarian movement have been captured by them.

The right of people, not to have these risks imposed upon them, is usually ignored, even by most libertarians who consider contributing to these risks a "private enterprise" activity. Well, so was well poisoning - for all but the victims.

This whole subject has become at least as involved as the debate on the Vietnam War, fluoridation, abortion and limited government - so it cannot be settled here. But several future Peace Plans issues will take up this particular issue in attempts to settle it.

I hold that neither a monopolistic nor a competitive production of nuclear power is the solution to the problem of providing sufficient and safe energies.

They Can Be Abused for Military Purposes

One of the main and all too often neglected threats of nuclear power production is that these reactors can be abused and have been abused (like the Indian reactor for "peaceful research") to produce the material for nuclear weapons. In case of war most of them would be as far as possible used mainly for this purpose. A sufficient control to prevent this does not appear possible under present conditions.

It is thus nonsensical to speak of an exclusively "peaceful" use of nuclear power. For those requiring government confirmation of their opinions: Bulganin spoke of the possibility to abuse nuclear reactors for nuclear weapons manufacture already back in 1956. - Would he have lied on this?

Because of this potential, and possibly also because of the radioactive pollution this would cause, nuclear power plants would be among the first targets in a large-scale war. No possible advantage from the use of nuclear energy can counter-balance this danger. Citizens enlightened on this would rather pay a few more cents per kilowatt hour than they do now for electricity than have it supplied free from nuclear power plants.

(If all their long-term costs, including their de-commissioning and those of the disposal of storage of nuclear garbage were included, the rate for nuclear power production would not be competitive. - J.Z., 11.12.02.)

Lastly, all nuclear reactors as well as all stocks of nuclear weapons must be destroyed by the peace lovers in the name of individual human rights. In the mean-time, referendums should be conducted wherever possible among the people living within the danger zone around the sites of planned nuclear reactors as well as among the people living around already existing nuclear reactors. At least after repeated referendums on this subject people will become enlightened enough to realise that every such installation is a threat to life and health of every citizen now and in future and must therefore be prohibited or destroyed. Such referendum should also decide that volunteer militias, established on freedom principles, should realise and guarantee the referendum decision.

14/4 Supply of Future Energy Requirements

through the Opening up of New and Development of Old, Cheap

and Contrary to Nuclear Power, Harmless Energy Sources

Apart from the dangers inherent in using nuclear power, other energy sources would anyhow have to be opened up soon because the stocks of uranium would soon be exhausted. Even the unlimited breeding of more nuclear materials would just multiply the already existing disposal problem for nuclear garbage.

Among these energy alternatives are especially: wind-power, tidal and sun energy, the internal heat of Earth, wherever it can be tapped close enough to the surface, temperature differentials in ocean water levels and between polar oceans and their atmosphere, tidal and wave energy not to speak of the options now possible in space to gather much more sun energy. Moreover, as long as even the waterfall power of Earth is, in the average, only used up to 10% of the total potential, it does not make sense to speak of a soon threatening exhaustion of our energy sources. All that is required is the conversion of existing sources, at a price. So far we had certain highly polluting sources like coal, oil and gas in so large quantities to tap that the price of energy had become almost negligibly low. The new technologies may not be able to offer us energy as cheap but they could still offer them in abundance.

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The sun power collected by Earth during three days corresponds to the energy contained in all known reserves of coal, oil, wood and nuclear fuels. So far only small fractions of this energy have been tapped directly. There are now many technological approaches known to tap this and other alternative power sources and many of them are already close to economical at present prices and others will become economical as soon as the rising prices for energy from conventional sources have reached their level.

Whoever believes that nuclear energy is the only way out of the government-produced "energy crisis" has not realized that a rising price for conventional sources is the only "problem" and that alternatives are now discussed in a very extensive literature, of which dozens if not hundreds of examples can be found in better bookshops.

Naturally, a complete revolution or reform of the social order as predicted by some advocates of the "peaceful" use of "cost-free" atomic energy cannot be expected either from atomic or any other energy. What reforms advocated in this book would for instance become unnecessary if "free " energy became available?

It is obviously wrong to make communication and free expression by means of letters and telephone conversations difficult or more expensive by monopolising the business of letter delivery and telephone installation and setting the charges for these services so high that they become a considerable revenue source for the State.

The restricted services of this type and the high charges are then largely obstructions of freedom of expression and information and penal taxes against these liberties. Moreover, the powers thus accumulated were always and largely are still used for censorship purposes.

All postal services and telephone and other communication channels should be offered as cheaply and rapidly as possible. This cannot be achieved any better than through free competition. If the State's corresponding monopolies would be efficiently run, if all the benefits of large size organizations would be on the government's side, then it would be unnecessary to give the government's service institutions any monopoly position.

Thus consistent advocates of government post- and telephone services should really desire free competition by private enterprises - in order to prove the efficiency of their favourite. But as many illegal attempts have shown, even one-man post offices were sometimes more efficient than the vast organisations run by governments - when it came to provide locally required services. Within a few years satellite communication might make person to person calls world-wide, simple, cheap and rapid, also electronic letter writing. In the interests of peace, such communication channels should be kept out of the hands of all governments but instead by run privately and as competitively as possible.

The same applies, naturally, to all broadcasting facilities. On the latter see plan 249 in PEACE PLANS No. 15.

State or municipal monopolies for the supply of fresh water and the disposal of sewage are also superfluous. Whenever a natural monopoly occurs - where there is e.g., only one water source - then these enterprises should be transformed into the open cooperative form discussed above. When water is really scarce, then the water cooperatives of Spain and California could be taken as precedents.

(Governmental water works seem even unable to apply the advantages of free pricing to their product and deliveries. I am charged about ten times as much for "availability" of public water than for usage of public water! Likewise for sewage. Imagine your butcher or greengrocer charging you in this way. Water is scarce in Australia and thus it is priced in a way that assures waste of it. - Complaints encounter complete non-comprehension of free pricing. - J.Z., 11.12.02.)

17. Private Garbage Removal

There appears to be no rational argument for the establishment of State or municipal monopolies even for garbage removal. That private competition in this sphere is possible is proven by the remaining private services of this kind. It is obviously wrong and uneconomic to force upon the consumers any services which they can obtain better or cheaper from others. Whoever contracted for private services of this type should naturally be freed of the corresponding part of his tax burden. Under these conditions only the very few public authorities could remain in business which are actually more efficient than their private competitors are. All these institutions would, naturally, make profit-motivated attempts to recycle their garbage acquisitions as much as possible.

(How efficient and profitable is recycling likely to be under bureaucratic rule? Maybe truthful accounts on their recycling efforts will appear only after a few more decades. - J.Z., 11.12.02.)

What does garbage removal, of all things, have to do with peace? People believing that governments are necessary

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even to move garbage away from private residences etc., are hardly open-minded to the now very necessary insight that governments are rather garbage producers than garbage removers, rather war makers than peace makers, rather wealth destroyers than wealth providers. Not trusting themselves, they came to trust the least suitable organisational form. The wrong beliefs, attitudes and methods involved in any territorial government versus citizen relationship are also expressed here and they could be gradually dissolved starting even from this seemingly insignificant and irrelevant activity.

18/1 Introduction

States and municipalities have taken over a great variety of tasks. To solve them privately and voluntarily, means, ways and enterprises have to be gradually organised. At least for the period of transition, until finally private or cooperative organizations can take over all these tasks - or agree on some very limited form of local government (perhaps comparable to the original English one so well described by J. Toulmin Smith in his "Local Self-government and Centralisation" - PEACE PLANS Nos. 22, the members of the diverse exterritorial and autonomous communities of volunteers, which live together in a certain district, might combine in a municipal organisation, or local progress association. (An alternative solution was explained in Peace Plans No. 19C.) This local association should not be allowed to establish any monopoly for any of its services. At the same time, it should not be prohibited from establishing with its subscribed funds any competitive institutions. The principle of these territorial coops should be: The local volunteer community may not force any services upon any rational being which that person wants to do without or wants to obtain elsewhere, under different conditions.

(Since then I have come more and more away from such territorial local government notions, however limited they were. - J.Z., 11.12.02.)

18/2 Remarks on some Possible Tasks of such Local Federations

It would be their task to establish or maintain some public institutions in their area. The following may be some of these. Actually, whatever institutions would be locally favoured could be thus maintained or established. As long as no dissenter would be forced to contribute or to submit to them, there would be nothing wrong with them, even if they retained all other external and internal features of local governments.

Roads and Street Lighting: Until private enterprises or foundations make the required means available, drivers and householders will have to levy the required funds in one way or the other from themselves. Naturally, private enterprises might take over these tasks at any time, even build and maintain new roads and refinance themselves afterwards from direct and indirect takings. Up to half the total mileage of new roads in NSW is still built by private developers within their developments - and upon sale handed over to the local governments! Roadbuilding cooperatives could probably undercut the present public road building teams and the private road building contractors. (A monograph on private roads is planned for a future PEACE PLANS issue. The longest article on this subject so far published in this series was in "Free Enterprise", I/4 & 5, PEACE PLANS 36-39, 1/4.)

Airports: They would have to be maintained by the local association only for a short time. Then private airlines will organise themselves to maintain and expand them. Some might have to be transformed into open cooperatives because of their exclusive position.

Good municipal schools could be maintained by private contributions. The others will be replaced by private competing educational institutions and systems. Some associations might insist that all their members send all their children to school or that they acquire a certain minimum education in one way or the other. Whosoever utilises private educational establishments should naturally be freed from that part of any levies raised for local public schools. A few parents could impart the necessary minimum education to their children themselves. They should not be prevented from doing so. PEACE PLANS No. 14 dealt with the financing of private education at some length in plan 229, pp. 1-12 & 86.

Universities: Universities or Technical Colleges should as far and as soon as possible be kept out of the hands of any governmental institution, since they would always more or less restrict or abuse their academic freedom. They should as soon as possible be made self-financing, either based on foundation funds, or bond-issues, which are

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lastly paid back when student loans are repaid, e.g. through certain liens on their earnings, after their tertiary studies are finished. Academics and students might also form credit unions, in which academics inside and outside of universities would largely appear as creditors and students as their debtors. Between them, they should earn enough to finance the costs of tertiary education. But until sound alternatives are arranged, university life should not be interrupted and the proposed municipal volunteer communities should help to continue these institutions, at least on a loan basis.

Libraries, parks, sports fields, health services etc., to the extent that they could not immediately be made to pay their way through fees and charges and before other private financing arrangements can be made, should also be continued by these local federations. Referendums among the members might decide to what extent they want to be involved in such affairs.

18/3 Community Assembly as the Supreme Body

The community assembly should be the supreme organ of this voluntary federation. Precedents are set by the numerous plebiscites in Swiss cantons, which also decide on matters like the financing of a new sports stadium, swimming pool or power plant from municipal levies in the district. The voting could be simplified by the voter sending his contribution only to his favourite public works project.

18/4 Financing of Common Expenditures

How should exterritorial and autonomous communities of volunteers contribute towards the costs of such local federations, for institutions used by all or most people living in an area? One way would be to simply charge every local voluntary member of this federation, no matter what personal law association he or she belongs to, the agreed upon membership fee.

Exterritorial communities that do no want to join such local federations - or their members - and who, nevertheless, utilise the facilities provided and maintained by the local federations, should either be barred from them or forced to contribute according to their usage. Arbitration courts could settle the amounts involved.

If a municipal federation charged too much for its services, the dissenters could easily set up a competing federation.

If not individual members but exterritorial associations paid these federation fees then they might levy them from their members in a variety of ways.

To the extent that the above hinted at public institutions will not be self-financing through charges and subscriptions, nor subsidised out of rates, taxes or contributions to exterritorial communities, many of them, at least in the long run, will probably be financed by foundations. The philantropic expenditures in the US alone, in 1961, amounted to 9,000 million dollars. One intermediary aim must naturally be to exempt all such contributions from all taxes.

I am aware how imperfect these notes on local governments are. The topic will probably be taken up in future PEACE PLANS issues. In the meantime, I just want to stress the need for individual secessionism even towards these organizations and refer the reader to Peace Plans 22, which reproduces J. Toulmin Smith's excellent work "Local Self-Government and Centralisation" and Robert W. Poole Jr.'s booklet produced by the National Taxpayers Union : "Cut Local Taxes".

In the above an attempt was made to demonstrate that government interference with the economy is wrongful and harmful and that all social and economic institutions today established and maintained by the State are either superfluous or even harmful (like housing commissions and central banks) or could easily and competitively be run as private enterprises, cooperatives or open cooperatives.

If this much is admitted then one can no longer maintain that one needs as bad, outdated, immoral and dangerous institution as the State, and has to put up with the danger of war associated with it - just because the economy would have to be directed, planned, controlled and restricted by a government.

In short: Territorial governments ought to be competed out of existence - in every sphere!

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- Article 35 of the French Constitution of 24.6.1793.

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The greatest danger of war emanates today from the dictatorially organised and ruled States, especially from the Soviet Union and Red China.

Smaller dictatorships can become a similar danger when they are backed by the great powers or when they themselves dispose of nuclear "weapons".

Democratic States possessing nuclear "weapons" can likewise start a nuclear war, even if unintentionally, e.g. as a result of a wrong radar observation, drunkenness of some officers or a conspiracy among them, or mental defects among those having their fingers on the nuclear triggers.

Moreover, every democracy in which not the people themselves but only some rulers and representatives decide about war and peace, armament and disarmament, where lives are confiscated by conscription, property and earnings by taxation and in which anti-people weapons like the ABC weapons are held in readiness - might also

be considered as a dictatorship but with the following difference: In these States nuclear weapons could still be destroyed peacefully, without violence, as a result of plebiscites against them, while in the openly dictatorial regimes this kind of disarmament could only be achieved in a revolutionary way.

A revolution is a forceful change in the political, social and/or economic order.

Any revolution which merely leads to a change in the leadership and soon establishes an as bad or even worse regime is no true revolution, rather a counter-revolution, and ought to be resisted even by dissenters and opponents of the present regime. A revolution just for the sake of revolution makes no sense at all.

A revolution is justified only when it is undertaken to protect individual human rights and the natural rights of all rational beings and also carried out with strict regard to these rights. All other revolutionary endeavours deserve to be suppressed. What degree of suppression of these rights would justify a revolution?

As long as freedom of speech, press, assembly and association still continue to a large extent, almost every necessary reform could be then realised peacefully, in an evolutionary way. Then, in most cases, revolutions are not justified and most revolutionaries are then rightly classified as terrorists. But this does not mean that particular acts of forceful resistance would always be wrong in such a "democracy":

- David Friedman in "THE NEW GUARD", May 1969.

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But all such actions, however forceful they might be, do not by themselves change the whole establishment, although they might stop some abuses, and should thus not be classed as revolutions or small revolutions but only as rightful acts of self-defence or resistance against oppression. Thus a general revolution is generally only justified when the above basic human rights are generally suppressed, i.e., when there appears to be no peaceful and non-violent way out.

The situation would be different once volunteer militias for the protection of human rights are established. Then some reforms could be realized merely by the threat that the militia would mobilise in their favour and would hold those responsible who attempt to prevent or delay them.

The situation would also be quite different once "one-man revolutions" via individual secessions and exterritorial and autonomous associations of volunteers are constitutionally recognised. Then general revolutions would become unnecessary, unpopular and prevented in most instances. Until this decisive reform has been realized, the following rule could be rightly applied:

Dictators not only suppress the rights of their own subjects but also endanger the rights of citizens of all States in their neighbourhood and of all exterritorial and autonomous communities of volunteers - as they threaten them, continuously with war and intervene in relationships which their subjects and outsiders might want to have between them. Thus revolutions should be directed primarily against dictatorial regimes and their oppressive machinery.

(Capital and property are here not considered as an oppressive machinery but rather as means by which even the poorest proletarian can speed up his own emancipation and liberation if he acquires them rightfully, peacefully, by exchange acts and credits.)

Revolutionaries must never rise against whole nations or other ill defined groups (collective enemies, i.e. revolutionaries in East Germany, Poland and Hungary should never ever mix up again Soviets with Russians and hold Russians collectively responsible for the crimes committed by the Soviets or ordered by the Soviets within a system based on the strictest military discipline in the world.

That should be self-evident: Those who are obviously oppressed and deprived of their rights. What is less obvious to most is the fact that among these are often most of the members of the oppressive institutions: their policemen, soldiers, party members, union functionaries and public servants.

As the people themselves are usually insufficiently armed, organised and trained, most rightful revolutions ought to begin and could begin with military uprisings. Subsequently, the citizens could form militias and ally themselves to the insurrectionist soldiers.

History teaches that already a minority of the population suffices to carry out a revolution. The Soviets supplied perhaps the best known example for this rule.

Not only is a minority sufficient to carry out a revolution but most revolutions are carried out by minorities. Only a minority of 5-10% need somewhat actively participate in a revolution. The majority of the population need merely sympathise with the revolutionaries.

One fact, which anyone interested more in facts than in myths, can ascertain, is that the regimes in Russia and Mainland China are not only unpopular with a minority but with the majority of their subjects and really hated by a large percentage of the population, including the conscripts.

All that this situation requires is the sufficient broadcasting of an ideal revolutionary programme.

As their oppressors pride themselves in being "revolutionaries", they could hardly and publicly object to that.

Totalitarian regimes and also ruling majorities do not only turn one or two but usually dozens of minorities into their enemies. Combined, these minorities could be numerically and in other ways stronger than any shifting

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majority based on temporary party coalitions. United by a common platform upholding all claimed individual rights and exterritorial autonomy for all volunteer groups, the minorities in this world could be overwhelmingly stronger than any national majority - and no national majority would have to be afraid of such a minority federation - because it would also be offered exterritorial autonomy for its voluntary members.

Franco against non-Catholics.) - Ulrich von Beckerath

As the ultimate aim of a rightful revolution a new, comprehensive and consistent declaration of individual human rights should be proclaimed.

For a draft of such declaration see appendix No. I.

Although this declaration should already imply a rightful and satisfactory economic and social reform programme, such a programme should also be spelled out in detail.

Moreover, libertarian revolutionaries should possess a detailed plan on how to carry out and finance a rightful revolution.

The following chapters will make some suggestions along these lines.

In the dictatorships, where these revolutions must take place, a sufficiently free and wide exchange of opinions is not possible - although it would be required to develop such a programme. Thus such a programme must be developed in the relatively free countries. From these it is then to be spread in the dictatorship, through under-ground channels for outlawed literature, e.g., by leaflets dropped from balloons and via broadcasting. Long wave broadcasts are hard to jam and short-wave broadcasts can't be jammed.

Thus the West should supply the Russian anti-communists and the Chinese anti-communists not with weapons and military advisors etc. but merely with the ideas of liberty in a ready-for-use form.

At least a considerable minority in a totalitarian country must become thoroughly familiarised with all aspects of such a programme.

It must be propagated at least months and better still years before the outbreak of the revolution and all possible objections must be thoroughly discussed and these discussions must be similarly broadcast or otherwise spread.

The totalitarians have developed the art of organising totalitarian revolutions to a science, have even established tertiary institutions for the training of their type of professional revolutionaries. Anti-totalitarian revolutionaries will have to do the same and turn their kind of libertarian revolutionary endeavours similarly into a true science. Otherwise, the totalitarian professionals will continue to win, all too often and for all too long.

Realisation of individual human rights and the natural rights of rational beings, thereby abolition of the danger of war, especially through:

1. the revolutionary overthrow of all dictatorial regimes,

2. replacement of all territorial States by exterritorial and autonomous communities of volunteers - by means of the

right of individuals to secede,

3. establishment of militias for the protection of human and natural rights,

4. a complete disarmament with regard to all weapons which are inherently offensive to human rights, especially

nuclear, poison and bacteriological weapons, carriedout by the armed people themselves,

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5. full employment, largely by means of the freedom to issue private exchange media, not only for the own

nationals but especially for refugees and deserters,

6. aboliton of exploitation and industrial "warfare" through the establishment of productive cooperatives, repeal of

all legally established monopolies and transformation of all enterprises with natural monopolies into "open"

cooperatives and

7. an end to inflation and housing shortage by means of the repeal of legal tender, issue freedom for private

exchange media, free choice of value standards and value preserving clauses for all contracts.

Compare the other short summary of the peace programme in this book which is given in appendix V.

8/1 Mass Extermination Devices

As these revolutionaries are supposed to fight for individual human rights and the natural rights of all rational beings, they must not use any weapons which would inevitably kill or injure non-participants and innocents in the struggle.

This ruling would especially exclude the ABC (atomic, bacteriological and chemical) "weapons".

8/2 General Strike

A "general" strike in the meaning of its proponents is not a general strike or a strike of all - because it is assumed that it would not include the police, security forces and armies of the regime to be defeated by a general strike. Thus it can, as a rule, relatively easily be suppressed by military measures (if it is not already collapsing, after a few days, through the chaos and shortages it causes) unless the armed forces would make it a really general strike by joining it.

Why do some people assume that the armed forces must be on the opposite side? Because they have been conscripted into it or hired for it, trained, armed, uniformed and ordered to fight for the regime?

If the programme of the revolutionaries is rightful and clear, then it should also appeal to most of the members of the armed forces of a dictatorial regime - and if these went on "strike" or began a well thought-out military insurrection, then other strike or resistance actions would become largely superfluous - for who would remain to be defeated?

The "general strike" theory assumes that any dictatorship could be defeated merely by the passive and demonstrative resistance of the workers in form of a "general" strike. The Dictator would, supposedly, not be willing to execute all striking workers. To that extent the proposal is identical with that of "conscientious objec-tion" and as ineffective. For how many strikers or conscientious objectors have to be threatened, imprisoned, injured, tortured or killed - before the rest go back to work or obedience? Not everybody is made out to be a hero and the heroism of the few could be better utilised.

(Soldiers are to some extent effectively trained to fear death in battle less than military disobedience. Historical experience has shown that "decimation", i.e., the murder of every tenth of mutinous soldiers, who were unsuccessful in their uprising, usually brings the survivors back into obedience to their military despots. They do then, at least temporarily, fear such deaths more than continued obedience. - J.Z., 11.12.02.)

Another aspect these "revolutionaries" have overlooked is the fact that even in countries like the Soviet Union most of the (relatively few) consumer goods produced are not destined for the government, the ruling party and their armed forces. These are still only well organized minority groups. Moreover, the government and its main functionaries and especially its armed forces, are well supplied not only with the usual power paraphernalia but also with consumer goods, for weeks, months or even years, whilst the larder of the average worker's household is exhausted within a few days! Thus the armed forces could largely sit back and enjoy themselves in relative comfort, until the striking workers have starved themselves and their families into submission! Close observations of most general strikes that were attempted show that within a few days many of the striking workers come to realise how much they are harming themselves and begin to propose that this or that public or important service be kept operating. Few of them want to deprive their own children e.g. of milk or warmth.

Apart from its demonstrative value (and here I do prefer demonstrations and marches, after working hours), which could be countered by terror measures of the government (for which there exists a well developed science), general strikes are self-defeating by interrupting the supply of essential goods and services to the striking workers while the despotic government hardly suffers at all - in the short or medium run.

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One could compare this nonsensical aspect of a general strike with the behaviour of an army which would see to it, before a long campaign, that the production and supply of arms, uniforms, vehicles and food and drink is stopped as soon as the campaign begins.

Two World Wars have demonstrated that the power of a nation lies largely in the productive potential of its economy. Why then should resistance fighters or revolutionaries deprive themselves of most of their power by organising a general strike? (The action thinking of most unionists, like that of most voters, is all too narrowly focused on very limited and quite insufficient as well as wrongful options, namely, on strikes and voting. - J.Z., 11.12.02.)

It would only make sense if they attempted to stop the further supply of goods and services to their true enemies (i.e., not just to anyone who is supposed to obey and support a dictatorial regime, e.g. as a soldier or functionary). A detailed programme of that type, including but going beyond a tax strike and the refusal to accept a dictator's paper money, might be developed. It would be worth discussing, while a general strike proposal is just a declaration of intellectual bankruptcy.

Why, e.g., should not the workers, including all employees, managers, professionals and businessmen, keep almost all factories and other enterprises going (all those producing the goods and services they want!) on their own account?

Why shouldn't they, in their own interest, once they produce for themselves, even increase the productivity of their enterprises, rather than stopping them?

Why shouldn't they ensure for themselves employment and sales, profits and capital growth, by private issues, value protected investments and transformation to cooperative or partnership production?

Why shouldn't they immediately begin to privatise the assets so far held by the bureaucrats of the regime they hate? Why should these social revolutionaries postpone the beginnings of an era of un-exploited and free labour - by engaging in a general strike?

Whole books in favour of general strikes have been written but without answering such simple questions.

That everyone will be ready to risk his life in general strike actions should not be expected. Nor is mass-heroism required for the success of a revolution. Revolutions are mostly made only by minorities, although, ideally, in the interest of the majority, and of most other minorities, and with their tacit approval or consent. If one has a large enough revolutionary minority on one's side, then one should give it the best chances possible, should recruit for it largely from the armed forces of the regime and otherwise as far as possible arm, organise, instruct and train it in effective fighting groups and methods, designed to overthrow dictatorships and tyrannies.

The most promising attempts would be large-scale acts of military disobedience, turning into military insurrections and strikes and sabotage acts in particular enterprises like nuclear bomb factories, in firms which are essential for e.g. mass-murderous plans of a regime. Factories producing light arms, including e.g. portable guided missiles against tanks and air craft, should be kept operating - producing weapons for the insurrectionist soldiers and the new volunteer militias to be established by the revolutionaries.

Strikes like tax-strikes and refusals to accept a regime's paper money (discussed later) are also limited and discriminating strikes, i.e. they are directed not against the revolutionaries themselves but exclusively against the supporters of the ruling regime. But when, instead, surgeons, fire fighters, printers, postmen, farmers, truckies or power plant workers go on strike then, quite obviously, the human rights of innocents and even friends and sympathisers get infringed.

8/3 Conscription

Whoever would not volunteer to fight for the protection of human rights and the natural rights of rational beings but would have to be forced to do so would never be a good and reliable militia man. He could harm the cause of the revolution more than he could help it. Thus the revolutionaries, although many of them will believe in a moral obligation to risk one's life for the protection of such rights, should not attempt to forcefully recruit neutrals or dissenters.

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8/4 Plunder and Requisitioning

Revolutionaries who support themselves by plunder and requisitioning turn, naturally, most of their victims into enemies, even when before they had sympathised with the revolutionaries. This kind of support will reduce the number of supporters and increase the number of enemies from day to day and has led to the failure of many revolutionary attempts.

Revolutionaries who thus infringe property rights cannot rightly say that their aim is to protect human rights and natural rights. The end is predetermined by the means.

Moreover, due to this procedure, the costs of a revolution are spread unequally and unjustly as they have to be born only by the inhabitants in areas which are militarily occupied or fighting zones. Furthermore, with this method the revolutionaries would depend upon the relatively limited stores in the fighting zones or the areas through which they march - and they can be certain that many of the stores in these areas will be hidden from their grasp before they approach.

Consequently, it becomes impossible to assemble many troops in one area and keep them there. Their fighting force at any particular place will be down to relatively small numbers and many of these soldiers will at any time be engaged in requisitioning raids rather than soldiering. Discipline will deteriorate while requisitioning will tend to become plundering and lead to violence against local citizens.

If, at the some time, the army of the dictatorship were to pay for all its food and other requirements in cash (not too deteriorated by inflation) then it could, at the same time, dispose over most of the stores in the country and could, although its total numerical strength might be lower than that of the revolutionaries, confront them in any particular locality with superior numbers of well supplied troops, could thus defeat the revolutionaries militarily and rapidly, moving from place to place, always locally superior.

As such effects can be foreseen, this kind of behaviour must be avoided. In one way or the other revolutionaries must pay their way.

8/5 Payment with Requisitioning Certificates or Inflated Paper Money

Payment with requisitioning certificates or inflated legal tender paper money can replace cash payments only if it is accepted as such by the sellers of goods and services. But this is almost never the case when a revolution takes considerable time, its success is uncertain and the redemption of the certificates is indefinitely postponed.

When all expenditures are paid for with legal tender paper money, fresh from the note printing press and when, consequently, this paper rapidly deteriorates, then this kind of "payment" will also no longer be gladly accepted. Finally, the owners of goods will refuse to part with them for this kind of money and, when they have to be afraid of forceful acts, they will proceed to hide as much as they can.

There are only few examples of revolutions which succeeded in spite of such measures and many revolutions which failed because of them: the French Revolution and almost all revolutions in South America. (Naturally, the mere take-over of power by yet another clique cannot be considered as a successful revolution.)

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8/6 A State of Siege

A state of siege (martial law), in essence, is nothing but a system of suppression, operating against especially important basic rights: freedom of movement, freedom of assembly and association, freedom of speech and press.

A state of siege is the method of an unjust regime used to keep the people down. Members of Kapp's coup (Germany, 1920 ) intended to proclaim a severe state of siege on the morning after the coup. Most military take-overs resort to this means. Revolutionaries who fight for human rights and the natural rights of rational beings, do not consider all citizens as their potential enemies but rather as their potential friends and allies and will therefore have to operate without such methods.

Instead of suppressing human rights libertarian revolutionaries should maintain these rights as far as possible and utilise them to publicise their programme.

8/7 Blockade Measures

A blockade hurts everyone, the ones who impose it, and among those blockaded, not only the followers of a dictator but also his opponents. Those who impose it do thereby restrict also their own trading opportunities and can only wish to hurt the other side more than they hurt themselves. Moreover, since in a justified revolution a dictator would have less followers than opponents, a blockade of the areas still occupied by him, would harm the revolutionaries more than the regime.

Furthermore, no matter how short of necessary supplies some of the subjects of dictators might run, the regime, to be overthrown, will usually have still sufficient power to secure the livelihood of its supporters.

Blockade measures are thus not only wrongly imposed, under the principle of collective responsibility, but they also defeat their own purpose. They could rather strengthen than weaken a dictatorial regime.

8/8 Measures Based upon the Principle of Collective Responsibility

As long as anyone is compulsorily member of a State, an army, a union or a party, or is because of his descent or beliefs automatically grouped with certain communities, somewhat racially or ideologically distinguished, one cannot hold him rightly responsible for actions of other members of these communities. Great harm would be done to the cause of a libertarian revolution if e.g., every member of a communist party were considered and treated as a fanatic communist, every policeman and warder as a torturer, every officer as a loyal subject of the dictator and every public servant as a believer in a planned economy, opponent of a free market and productive cooperatives etc. Revolutionaries would thus drive many potential friends and allies into the arms of the dictator and would only thereby turn them into enemies of the revolutionaries. (A monograph detailing the support successful revolutionaries have received from people close to a throne, members of the armed forces of a regime or of its bureaucracy may still have to be written.)

With such methods only a terror regime can be established or maintained. Rightful revolutionaries would consider and treat everyone also as an enemy who applies the principle of collective responsibility to people who are innocent or were only forced to participate in crimes of the decision-makers.

8/9 Annihilation of the Army of the Dictator

It must be the aim of these revolutionaries to dissolve or win over the army of a dictator, not to crush it. See on this the later chapters on militia warfare.

If the conventional destruction and killing methods were applied then the revolutionaries would cease to be liberators, would have to pay a high price and might even become defeated by professionals fighting with the dictator for their lives, although they are not his fans.

8/10 Torture, Rape and other Cruelties

Even the worst criminals still possess some basic human rights, e.g. the right not to be killed without good cause, not to be treated with unnecessary cruelty. Moreover, if they would have to expect such treatment after their capture, then they would resist with the courage of desperation and exact a high price from the revolutionaries for the commission of such crimes. Thus revolutionaries committing cruel acts, assaults etc. against prisoners, should be charged before militia or other revolutionary courts. They thus committed treasonable acts which endangered the cause of the revolution. If ever the majority of the revolutionaries should commit such cruelties or such a large minority that it could not be successfully restrained, then I for one would rather wish for a victory of the old-regime.

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8/11 Arson

In most instances there is no rational case for arson. In the very few cases where it might be justified, the sites, and the people who are to burn them, ought to be very carefully selected. One is here reminded of the "Red House" in the Friedrich Strasse under the Nazi regime. Here were registered all German Jews, according to their names and addresses and in many cases the registry cards supplied the only proof that certain families were of Jewish descent. German Jews and other opponents of the Nazis knew about it and yet did not organise a suicide squad or night time

secret raid to burn this building down. The right and duty to resist would have justified this kind of arson.

(I heard about the case of a Gestapo man who worked there and who took every working day many of these cards, out in his briefcase - to burn them at home. The Soviets, after the war, treated him just like any other fanatical Nazi and he died soon from maltreatment in one of their concentration camps. I must admire his so far unsung heroism in which he risked his life daily for a long time, for the benefit of numerous Jewish fellow citizens, quite unknown to him. At the some time, I do have the suspicion that he was otherwise pretty much the average law-abiding German who would have been horrified upon hearing the suggestion to risk his life just once - for burning the whole building down. He might have replied: "But I can't do that! That would be arson!" People are all too often in the power of words or other incomplete or faulty ideas.)

8/12 General Sabotage

Anti-communist saboteurs in the Soviet Union often believe to destroy Soviet property while in reality they destroy their own and that of their fellow citizens. (Admittedly, presently they have only little if any control over it, but they do thus destroy all their chances of controlling this property in the future! In the long run, their fellow citizens will wake up to this fact and will thus become - although they may not like the Soviets, either, enemies of these "revolutionaries".

Mostly, sabotage acts have no military value. Economic disadvantages from them are mostly to be carried by the general population - the fellow victims of the regime. The standard of living of those in power will hardly be reduced by them. However, there are a few exceptions and they ought to be clarified long before a revolution happens: E.g., sabotage measures to render harmless:

1. nuclear weapons, or the places where they are produced,

2. furnaces,

3. ball bearing factories.

Such specialised jobs of destruction follow from the right and duty to resist. The above instances are important to prevent wars or bring them to a speedy end.

What particular institutions ought to be sabotaged by revolutionaries? A long discussion would probably unearth some other examples than nuclear installations. Think about it and help promote the new science of rightful revolutions!

For instance: If someone knew of the locations of all tax records of a dictatorship, all files on political opponents, if they were all on magnetic tape and someone could artificially induce a sufficient magnetic disturbance to wipe these records - then quite a few people might be inclined to say: "That's a relief!" or: "Thank God!"

One Australian Ham Radio operator told me once, many years ago, that he could overpower radio Moscow or Peking for small districts, even the sound of their TV stations, for up to 20 minutes. Only then would he be jammed. Well, repeated 20 minute sessions could get much across, in one small district after the other!

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8/13 Treatment of ALL Officers and Public Servants of a Dictator as Enemies

Admittedly, officers and public servants of a dictatorship are also among its relatively few beneficiaries. Against this, one would have to weigh their higher risk of falling victims in the next purge. Moreover, one should take into consideration that they belong, usually, to the better educated groups of the population. They have also more access to information revealing mistakes, errors and crimes of the regime. Many of them may are also, in their official capacity, better informed about the true and rightful aims of the revolutionaries than may be many of the ordinary members of the revolutionary movement itself. Not all of them study their own literature or think deeply about their aims and principles. For these and probably many other reasons, many resistance and revolutionary attempts were helped by people in high positions in the regime to be overthrown.

This is also likely to happen in the future. It might even be that the percentage of true enemies of the regime is higher among these people than among most other groups in the general population. They are also often in the ancient dilemma of executives in dictatorships: Great successes as well as small failures can cost them their heads! Stalin ordered the murders of Tuchatschewsky and Trotzky. Hitler ordered the murder of Roehm. Kruschtchow deprived Bulganin and Chukow of their power. (Please excuse the German spelling of Russian names.) Such cases are repeated over and over again and most generals are aware of them. The numerous purges in the Soviet Union proved that the public servants (party functionaries) are there in no better positions than the generals and that they are not trusted by the regime. Both groups should thus rather be considered as being as full of potential allies as of certain enemies. The large number of opportunists can also be won over. More on this under point 9.

8/14 The "No Pardon!" Practice as well as the Treatment of those, who were Conscripted, as Enemies and Prisoners of War

Revolutionaries today fight too often like partisans or guerrillas and due to such methods their civil wars draw out into years of fighting. Already merely due to the long duration of this fighting, one could expect that the hatred between these guerrillas and the soldiers of the regime will grow and grow. Combined with today's ignorance of and lack of interest in rightful resistance methods and in the absence of a well developed moral sense and moral reasoning, both sides are then likely to commit wrong and unnecessary cruelties. One of the worst of these is the practice not to grant pardon, a practice that is also based on the belief in collective responsibility.

From the point of view of revolutionaries, who want to win over the soldiers of a dictatorship to their side, this is obviously a great mistake. Most of the soldiers of a dictator will only become true enemies of the revolutionary resistance fighters when some of their comrades did not receive pardon from the "revolutionaries" but were murdered by them, after capture, possibly even after torturing them. Such atrocities were so for all too frequently committed - as if revolutionaries could thereby frighten a dictator!

Most dictatorships, apart from the atrocities they commit and which help to recruit more people for the revolutionaries, proceed against freedom fighters according to well established practices: For instance, against the resistance fighters of one province they do not use the conscripts from this province but rather those from a far away one, preferably one with a different dialect or even separate language. Mass fraternisation becomes thus less likely.

Resistance fighters and revolutionaries must finally become aware that most of the foreign soldiers used against them are not volunteers but also conscripts and that they have very similar reasons for desiring the overthrow of the dictatorial regime. Based on this insight, they should grant pardon to all soldiers falling into their hands, even the volunteers, should appeal to them to join them, and, if they do not want to do this, should let them return, naturally, without weapons and other equipment excepting only necessary clothing. They should persist in such a policy even when e.g. Soviet officers should, furthermore, force Russian soldiers to shoot captured revolutionaries. The soldiers who were captured and returned will see to it that they and their comrades become worse and worse Soviets and better and better Russians and will finally induce mass fraternisation with the freedom fighters, or start their own military insurrections. The dictatorship would have no reliable policies against such a treatment. Punishment for these returned soldiers would gain them the sympathies of those so far unaffected. Transferring them would further spread the good impression they had gained. Allotting them particularly dangerous tasks might only speed-up their inclination to rebel or desert.

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Even the so far fanatical fighters against the revolution will lose some of their zeal and will no longer fight with the courage of desperation when revolutionaries proceed in this way. In other words, the demobilisation of the army of a dictatorship might well begin in this way. Once these fanatics, for many of whom the existing dictatorship is still not radical enough, come to understand the offer of these revolutionaries, not only of pardon but of whatever economic, social and political system they prefer, as an exterritorial and autonomous system for themselves, in a community to be established by themselves, their fanaticism against this revolution and their will to fight it will begin to evaporate. Thus even these fanatics and true believers should be granted pardon when captured and should be released, after being disarmed and interrogated (without any tortures or threats of torture!). They would thus become, whether they want to or not, propagandists for the revolution - merely by having survived capture and being returned.

No hard and fast rule should be made about this return of the fanatics: If certain areas are already secured by the revolutionaries then they might keep those as POWs who, with a probability bordering on certainty, would come to fight against them again, as fanatically as before.

At the same time, those declaring that they fought the revolutionaries only under coercion and who are at the some time not prepared to join the revolutionaries, nor willing to return to a dictator's army, should be released into the already liberated areas, given some food, pocket money, transport ticket and job recommendations. That should be considered as part of the demobilisation action of the revolutionaries against the dictatorship's armed forces.

8/15 Unlimited Central Revolutionary Authority

The supreme power among the revolutionaries should never lie in the hands of one or a few authorities. The danger that just another new dictatorship would result from this would be too great. In the revolution here proposed, the ultimate power would remain with the new local militia forces for the protection of human rights and the natural rights of rational beings. Whatever limited and local or centralised authorities would be established, would be organised only for a limited time and specified purposes. Moreover, they would compete with each other, apart from their common defence federation, and be restrained by the right of recall, by plebiscites and by individual secessions. The ideal: To each the government or the no-government of his dreams! - could unite them sufficiently for military defence purposes, while at the same time disuniting them in a new way to make them militarily superior. This seeming contradiction will puzzle only those who never pondered why e.g., a free newspaper reporting all news without bias and offering all prejudiced opinions likewise an airing, is, like a free market, everyone's friend.

8/16 Espionage

Revolutionaries desiring to overthrow a dictatorship like that of the Soviets, should not bother with espionage. It is no suitable means to overthrow the Soviet regime or even to weaken it. The intelligence which they might require for their purposes would probably be volunteered by refugees and deserters.

8/17 Intoxication

Revolutionaries who take themselves serious, would interdict all alcohol and other drug consumption while on duty or on call and would destroy or remove all such substances from the front or fighting area. They would never organise premature victory celebrations in which they would render themselves senseless and could be beaten or captured by weaker but sober government units.

If liquor stores are not destroyed along the front and not even guarded by the own troops, then one could come to see a repetition of what happened during the Hungarian uprising: Russian soldiers were given so much drink before they were used against the revolutionaries that they fought half-drunk, largely only from the inside of tanks, and could not, in this condition, be induced to desert. Many, in this condition, came even to believe the propaganda lie that they would be employed in Egypt, against an invasion by imperialists!

The owners of destroyed liquor stores should be indemnified. If the resistance against the destruction of these stores should be too strong (seeing the present tendency to consider it as a basic right to drown one's reason and incapacitate one's body then these stores are at least to be put under guard.

Any restrictions of this kind should be accompanied by a notice that they would apply only for a limited and specified period.

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8/18 Barricades

How valueless barricades are during street fighting was already pointed out by Theodor Fontane, in his memoirs on street fighting in Berlin on March 18th., 1848. Berliners did again acquire more experience on this in 1945. The barricades established then, by the Nazis, carefully and long in advance, constituted no serious obstacle for the Soviets in their occupation of Berlin. But the barricades had one particular and undesirable effect: They turned almost all those into enemies who, due to the placement of the barricades, had to expect the destruction of their homes and other property.

8/19 Flags

The flags of the enemy should be left flying while the fighting goes on. They are not worth risking the life of a single man. They are symbols and nothing more. Revolutionaries fighting for basic rights will neither fear not hate nor value them highly. Leaving them flying might even help to avoid air attacks or mislead counter-attacks.

8/20 Abuse of Prisoners

Even officers opposed to the revolution or neutral towards it should not be abused after their capture, e.g. by depriving them of insignia of rank, verbal abuse or assault. If not released, as suggested above, then they should at least be granted all the rights of prisoners of war. The new elected officers and those confirmed in their positions by elections, should be given different uniforms or insignia when this becomes necessary and there is time for it.

The above listing enumerates just some of the worst abuses. A complete revolutionary programme would list them all and would make such a list very well known and would state more reasons why such practices should be avoided.

9/1 Strict Respect for Human Rights and the Natural Rights of Rational Beings

As the aim of this revolution is to protect all human rights and natural rights of rational beings, this requirement should be self-evident for all not believing in current practices and premises. Respect even for the rights of members of the enemy's forces is a new feature in this programme.

If and as long as the revolutionaries respect these rights, then they are to be considered as rational beings and can thus claim not only the ordinary human rights but also all the natural rights of rational beings. (They are listed in appendix I.)

While and to the extent that the enemies of this libertarian revolution fight against it, they are not to be considered as rational beings (unless they were forced to fight) and can thus not claim the natural rights of rational beings for themselves. Thus this appeal for respect for human rights and natural rights of rational being is not to be interpreted as an appeal for equal rights for totalitarians and other criminals. On the contrary. Their rights, like those of madmen and infants are at least temporarily forfeited as a result of their own criminal actions or ignorance of and disinterest in human rights.

Not only are these soldiers and revolutionaries to respect these basic rights in others, nay, they are to enjoy them themselves and make the most of them for their purposes.

Soldiers knowing their fundamental rights, respecting them and claiming them for themselves, tend to be militarily superior even to enemy forces which outnumber them. Moreover, consistent application of these rights in revolutionary warfare does lead to new forms of revolutionary warfare and the revival of sensible old practices which would increase this superiority further. More on this below.

9/2 Organisational Measures

One could attempt to simplify and clarify this abstract description of the main requirement for the transition from a totalitarian to a free society (in answer to the popular argument: "if they disliked it so much, they would have rebelled!") by simply stating: Someone will have to take the first step, in public, under suitable circumstances, which will induce others to join him fast. and he will certainly risk his neck - but will the totalitarian situation thereby be really better understood? Perhaps, as a thought experiment, one should consider a conventional military unit under strict military discipline. The purpose of that discipline is to prevent the expression of the common will and interest of the soldiers and to impose upon them decisions and actions contrary to their will, rights and interests. Cutting this kind of Gordian Knot is certainly not easy, especially when it is not even clearly seen! (That and how an ideal militia organization will be different will be stated later on.)

Mignet reported in his History of the French Revolution (Reclam edition, in German, 11th. impression, p. 357 on the uprising of 20.5.1795:

The terms he used will not please those with almost infinite trust in spontaneous and anarchistic mass actions. Let them speak rather of "catalysts" and "coordinators" to initiate and guide the insurrection and of widely respected or popular "councils" like the original South American republican "juntas" were (respected discussion clubs on pub-lic affairs which were almost forced into the role of a new republican government, the old royal one being widely ignored).

Thus as focal points, condensation points, information centres and initial self-governing local units, meetings of soldiers, workers and local citizens should be organized. Precautions must be taken. Armed protection of these meetings must be arranged.

The fact that they have assembled with revolutionary intentions must immediately be communicated to all troops, factories and communities in the neighbourhood and in the country, also their first resolutions and actions must be continuously reported.

The assembled proclaim their belief in or subscription to a new version or declaration of individual human rights and natural rights of rational beings (ideally circulated secretly, long before the outbreak) and swear then and there, in public, to uphold it and to convene a constitutional convention to further improve upon it as soon as the revolution has won. They also resolve to spread the text of this declaration by all available means as far and thoroughly as possible. (For a draft see appx. I.)

Then they should declare their secession from the dictatorial regime and that they favour individual secessionism and personal law associations for the future society.

These declarations are to be made public and in writing only after the revolution has won, at least in certain areas - because such name and address lists could get into the wrong hands, while the civil war is on.

Most of the assembled will then declare themselves to be, for the time being, members of a single exterritorial and autonomous community of volunteers which is based on the recognition of all human rights and natural rights of rational beings (which have so far become known) while reserving to themselves the right to establish their own and somewhat different ones, according to their choice, as soon as peace and liberty are assured by the revolutionaries.

Some other exterritorial communities of volunteers ought to be established or suggested immediately, especially

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the ones prepared to realize the full programme of the adherents of the dictatorship - among voluntary members! (To promote the desertion and insurrection or secession even of fanatics. How many different communist parties, groups and movements are there in existence now? I have lost count long ago.)

Wherever it can already be safely done, the establishment of more and different exterritorial and autonomous communities of volunteers should be promoted, as far as is possible. Especially, and in all areas already liberated, registry offices are to be set up to note down and certify the community, government or no-government choices made by liberated people. The more citizens will thus be registered, the more the future tolerant and diverse society will become believable and realized, the more will this revolution be promoted and those will join who so far stood aside, doubtfully. Naturally, communities with people holding largely conventional views will form the largest new bodies and will calm the fears of people with conservative views.

The first revolutionary meetings can do much but not everything. Thus they can largely only proclaim the option of exterritorial organisation but can definitely not fully realise it immediately. But they can definitely state: As far as we are concerned, governments and no-government associations are now competing enterprises, all with authority only over their voluntary members.

For the period of transition, and for current business, not to be decided in periodically repeated similar assemblies, representatives, delegates or councillors are to be selected and elected and announced, as rapidly and informally as possible and for short terms only, subject to recall during the next assembly, in case of serious abuses.

Normally, they should be elected for the duration of the revolution, however short that period might be, and for at most 6 months when it lasts longer. Afterwards, under the usual control measures and whatever election systems are desired by members of different communities, elections are to be conducted for constitutional assemblies. (Naturally, among the exceptions from this rule would be hierarchical volunteer communities, whose members all believe already in a certain leader and his programme.)

The initial delegates form from their ranks whatever local decision-making bodies might be required and also select delegates to a central coordinating and advisory body for the duration of the revolution. But it should not be granted any exclusive decision-making powers.

They should also and everywhere form small committees or set up arbitrators to decide the numerous rather trivial cases which would otherwise occupy too much time of the leading heads of the revolutionary movement.

These delegates, especially those of the soldiers of the newly formed militias and of the old armed forces during the period of transition, should form committees to which those outlaws could appeal for mercy whose amnesty period has expired. They should e.g. check whether someone should be freed from the outlawry declaration because he may have heard of the limited amnesty period too late. On amnesty and outlawry see below.

These revolutionary committees should as far as possible be thought about and prepared in advance. Preparations might include the preparation of letter heads and rubberstamps - so that such items would at least be available within hours. Small causes have often large effects. Without such small items the revolutionaries would e.g., have difficulties writing dismissal notices for soldiers, authorities and identification papers, certifying certain decisions, writing notices etc.

Public servants of the old regime, whose departments have not become superfluous as a result of the revolution or at least not immediately, should not be considered as enemies and be automatically dismissed. On the contrary, the revolutionaries should appeal to them to keep working but this time taking the new declaration of human rights and of natural rights of rational beings as their main manual of regulations. They should also be induced to swear to uphold these rights, should do this publicly and under threat of dismissal and forfeiture of all their pension claims.

This should especially apply to policemen and other members of the armed forces of the regime. (On judges and other officials suspected of having sanctioned or applied tortures see under amnesty and outlawry.)

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If all these public servants were instantly and automatically dismissed, then not only much confusion would result, temporarily, but the revolutionaries would have turned a large number of people, among them many highly intelligent ones, who may otherwise have been on their side or at least sympathetic or neutral, into enemies. Moreover, they frequently could not fill all thus vacated positions which temporarily may still fulfil a necessary function, with suitable people.

This procedure, with the exception of the oath upon human rights, was successfully applied e.g. by the Romans in occupied territories, by the English in India and even by Napoleon I and by Hitler,

Their oath must clearly express that in future they will, in their official capacity, always respect all individual human rights and natural rights of rational beings, that are declared and claimed., and that they will not follow any orders whose execution would infringe these rights.

The revolutionaries, assembled in productive enterprises, military camps and municipal parks or meeting rooms, should also orally, publicly and clearly declare their peaceful and friendly intentions towards all those other States and exterritorial and autonomous communities of volunteers which are prepared to respect individual human rights and natural rights of rational beings, if not within their own organizations then at least towards the members of other States and communities.

They should declare that they are any time prepared to sign a formal treaty with them on the protection of these rights. This can be done once they have their own particular institutions established and in the meantime informally, orally, in large public meetings or by mass signatures comparable to those under the "Agreements of the People" circulated by the Levellers (who were actually rather conservative civil rights advocates).

Such treaties should contain clauses on: Free Trade between the allies, supply of food and printed matters, weapons, prefabricated housing, use of broadcasting facilities of the allies for broadcasts into areas still not liberated, asylum for refugees and deserters, full recognition for volunteers wanting to practise among themselves the system of the allies etc.

Those assembled should resolve to meet again in relatively short intervals and to keep open a continuous discussion and information centre on their affairs.

Larger cities are to be temporarily "subdivided" for this purpose into communities with about 5,000 inhabitants.

One of the most important task of these first revolutionary meetings would be to clarify their rightful relations towards the soldiers and officers of an occupation force. The workers of East Germany, in their insurrection on 17.6. 1953 failed to do this. This led to the following comments by Ulrich von Beckerath:

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a) The Revolution Should Begin with a Military Insurrection

For the military initiation of an insurrection against a dictatorship the people must largely be counted out at first. They are unarmed and not militarily organized and trained. Thus this aspect of the revolution should begin as a military insurrection. This has also the advantage that soldiers are mostly courageous people whose readiness to risk their lives for an ideal is different from that of most of the civilian population.

The Red Armies are not truly loyal to the communist regimes. But they do have to become convinced of our peaceful and rightful intentions. Most of them obey the communist rulers only because so far they always asked themselves in vain: What should we do? Their mistake is that they do not have a programme deserving the name.

Military insurrections are rendered difficult by military discipline. It has been said that the Soviets have the strictest military code in the world and I presume that they have their reasons for this. That these difficulties can be overcome is proven by numerous military insurrections and mutinies. The main fault of most of them is that they have no clear programme that is rightful, practical and attractive enough to appeal to most of the soldiers and of the general population.

b) Initial Meetings of Soldiers

A military insurrection could begin with assemblies of soldiers in which the soldiers take for themselves the liberty of speech, assembly and association which was so far denied them. They put out guards and take their arms into these meetings.

c) Secession from the Army and Establishment of the Militia

In these meetings the soldiers and officers resolve upon secession from the armed forces of the dictatorship and from the dictatorship itself - and decide to reorganise themselves, for the duration of the revolution, in form of a militia army. (After the revolution this army would dissolve itself and its members would most likely join their local militia organization where their professionalism would be welcomed.)

They swear, during these first meetings, to uphold the new declaration of individual human rights and natural rights of rational beings (Draft in appx. I. It should have been sufficiently publicised and discussed long before!), and make public their choice of officers, who were already secretly determined in advance. At the same time, they recall and dismiss all officers who do not want to join them (either releasing them or treating them as POWs) and confirm or even promote those capable officers who stand on the side of the revolutionaries.

If necessary, those soldiers and officers of the dictator who do not want to join them will be granted protective custody. Those who have not made themselves hated by many of their subordinates and who declare that, although they will not join the revolutionaries, they will give their word not to fight against them, will be given their dismissal papers, travel money and provisions to get them home.

The pay of the revolutionary soldiers should be doubled for the duration of the revolution. As the officers are already paid much more and a doubling of their pay could cause envy, it should only be increased by 50%.

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The military code of the dictatorship is to be immediately repealed, by oral declarations of these assemblies. Until militia courts have been established and a military code provided, based on individual rights, these soldiers and officers should be under the jurisdiction of the ordinary criminal courts and act in accordance with the rightful rules of international law on warfare.

c) The First Small Actions of the Revolutionary Militia

The first assemblies notify by messengers, broadcasts, telephone and any other way all other military units they can reach that they have begun the revolution and that they appeal to all other armed forces to join them.

To call for and protect factory and local citizen meetings, they send off small detachments of soldiers.

All artificial barriers between soldiers and civilians are repealed or destroyed so that an understanding between them becomes easier to achieve and maintain.

They help citizens in their endeavours to establish local volunteer militia forces by sending them surplus arms, ammunition, uniforms and some military instructors.

One of their most important and urgent steps should be the occupation of the special food and raw material stores the dictatorship has established for its armed forces and followers. In the Soviet Union (and in the West) such stores will probably last them for months. Thus the revolotionaries should first of all obtain the addresses of all these stores (this should be done before the outbreak) and send detachments to occupy and guard them in order to have sufficient supplies for the revolutionary forces.

The mutiny of 45 French divisions in May 1917 failed because the mutineers omitted doing this and were also foolish enough to throw away their arms and get themselves drunk. The "Rote Armee an Ruhr und Rhein" (Red Army near the rivers Ruhr and Rhein) constitutes another and almost completely forgotten chapter in world history. Within a few days and under the leadership of two N.C.O.s, a revolutionary army of more than 100,000 men was formed and laid siege to Wesel. But it dissolved itself as rapidly as it had formed itself - because it ran out of food and had mode no provision for financing its enterprise - which would have enabled it to purchase supplies from other localities.

If possible, all stocks of alcoholic drinks should be destroyed. At least they should be guarded against pillage.

All prisoners held captive because they claimed or applied their individual human rights and natural rights of rational beings, should be immediately released. When there is doubt then the closest local militia organization should decide. All sentences imposed by the dictatorship should be reviewed as soon as possible.

All communication centres should be occupied and protected - radio and TV stations, newpapers, printing shops, post offices and telephone exchanges - to ensure that they are available for use by the revolutionaries.

All these media are also, as far as possible to be made available for use by the public. This does, naturally, not mean that the revolutionaries should always transmit messages for the dictatorship to those still loyal to it. But in any case, they should not, as a rule, prevent the enemy's orders being transmitted by destroying transmission means which could also, later, be used for peaceful purposes. Often it will suffice to listen to these orders, translate them and to take the corresponding countermeasures.

The jamming stations are to be occupied. The jamming should be stopped. Wherever possible, the necessary technical changes should be made to use them rather for the broadcasts of the revolutionaries. Some of them should be utilised especially for broadcasts to the free countries, so that the revolutionaries have at least some direct channels to free citizens in foreign countries.

All revolutionary actions and happenings, appeals and proclamations, the whole social, economic, political and peace programme of the revolution and the new declaration of human rights should be publicised with all media available.

The special police and security organizations of the dictatorship, which served especially to suppress the opposition, should be disarmed and dissolved. Their files should be confiscated. But not all of their members should be automatically excluded from joining the local militias - although such cases should be checked quite carefully. One can find friends and supporters in some of the least obvious places and organisations.

On the purely military aspects of the confrontation with the dictatorship's loyal forces see Section VI.

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e) Amnesty and Outlawry

Once it becomes obvious that the revolutionaries will win, almost everyone will become inclined to join it. Not so in the beginning of the revolution, because of fear or vested interest. Thus the revolutionaries should provide right from the beginning special incentives and disincentives.

They will attempt to win over to their side especially some of the leading heads of the dictatorship - or, if they do not succeed in this or if these heads would be no assets for them, they will try to render them harmless. This should be done in as humane a way as possible and killing them is by no means the only method.

They could, for instance, threaten them with punishment. One old and proven method of punishment is outlawry, a procedure which not only exempts certain individuals from legal protection but also appeals to as many as possible to kill them or render them otherwise harmless. Acts committed in answer to these appeals are then not subject to punishments. On the contrary, these executioners will deserve praise.

Moreover, prizes should be proclaimed for rendering harmless one of the leading men of the dictatorial regime. For handing-in one of these leaders alive, double this prize amount should be promised. As proof for the elimination of one of these enemies, a declaration under oath should be sufficient. False declarations of this kind could be severely prosecuted as perjury and fraud.

Only the most influential and criminal men of the dictatorial regime should be singled out with outlawry. Involuntary helpers of the regime or voluntary but minor assistants, like most officers, soldiers and policemen and public servants, should, even if they do not join the revolution, merely be disarmed and sent home. For ordinary members of all communist organizations one could simply promise: Everyone of them can claim amnesty.

The fact that many relatively minor criminals would thereby escape their deserved punishment, is a lesser evil when compared with the further damage they could do if they continued to serve the dictatorship with courage born of desperation. For instance, the members of the political security forces in the Soviet Union may number 2-3 million people!

Under special conditions, even the leaders of the dictatorial regime should be offered amnesty because rapid liberation and not revenge is the main aim. Thus already during the first meeting of insurrectionist soldiers, the dictator and his most important helpers are to be given an ultimatum: Abdicate, claim asylum and swear to uphold the human rights and natural rights or rational beings and do so within 24 hours and amnesty will be granted. Those concerned might even join the revolutionaries then - in an assigned position. If they are very much hated, then a guard will be given them, passports and air transport to a foreign country of their choice. Even a small pension could be offered to them - a bargain for their surrender compared with the harm they might otherwise still do. If they should not claim asylum and amnesty under these conditions, then they should be automatically become outlawed, once the 24 hours are up.

A similar ultimatum is to be proclaimed regarding all criminal judges and other persons involved in the prosecution of political prisoners and under suspicion of having used torture to extract confessions. They, too, should be given only 24 hours for appearing before a revolutionary authority for imprisonment as POWs. Otherwise, at the expiration of the 24 hours period, they should be also become automatically outlawed.

If they cannot be convicted afterwards of having used or authorised torture or having inflicted cruel or unusual punishments going beyond their totalitarian legal authorisation, then they should also be released as soon as the enquiry in their case is finished.

The councils of workers, soldiers and citizens can prolong these 24 hour periods according to their discretion.

A special problem is posed by the existence of nuclear weapons. Should those possessing e.g. nuclear weapons also be outlawed in every case, once the ultimatum has expired? They might still possess nuclear weapons then and in their desperation might be inclined to use them. Although it would be rightful to outlaw them also, without qualifications, this would not be a wise thing to do. At the same time, as long as they have not yet given themselves and their weapons up, they should remain under the threat of outlawry and not feel safe in their wrongful position.

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For such special cases the following offer should be proclaimed: The outlawry will be lifted for anyone who, after the amnesty period is expired, surrenders at least one ABC mass murder device or proves that he has destroyed at least one of these devices. If e.g., a general would no longer have one such device left, in order to save himself, then he is no longer a large threat and there is no need to remove the outlawry.

This special amnesty should apply even in those cases where the culprits have already used some nuclear devices against the revolutionaries. Naturally, while they are still in power and in possession of some of these devices and have not surrendered, no efforts should be spared in attempts to execute them. The arsenal now available to poten-tial executioners of tyrants is now larger than ever before and a determined small group, with suicidal courage, could eliminate almost every one of them soon. Even among their most loyal guards there will be some who will be strongly tempted if the prize put on the heads of their charges is, let us say, 1 million gold dollars plus full amnesty for the executioner.

f) Peace Declarations towards Foreign Countries

At the end of the first meeting of revolutionary soldiers they should proclaim a Peace Declaration towards all freedom loving people in neighbouring countries and appeal to them to support them in their fight against the dictatorship, e.g., by founding, together with them, an international militia federation. If such an organisation should already exist, then these soldiers would merely join it, by unilateral declaration.

Their peace declaration should also contain an assurance that they have no territorial aims and desire free trade relationships immediately. Moreover, they should declare that all special acts and clauses directed against "aliens" would be repealed and that as many foreign observers should be sent as possible, that these would be welcomed and in no way restricted.

9) Disarmament with Regard to Weapons which Infringe Human Rights

One of the first and most important tasks of the revolutionary militia forces would be disarmament with regard to all weapons whose very nature is contrary to human rights, i.e. weapons which cannot be used without also injuring or killing innocents and non-combatants, especially all mass extermination or anti-people weapons like the ABC mass murder devices.

This kind of limited and yet far-reaching disarmament should be resolved upon in referendums during the first revolutionary meetings.

The destruction of these "weapons" and of their production facilities, by the militia, would mean their destruction by the armed people themselves and not by the government. The monopoly of governments to decide upon disarmament measures, on nuclear arms and their production and use, of bacteriological and chemical weapons, should be immediately repealed - by their potential victims.

Governments had their chance to conduct an effective disarmament long enough. They have not used this opportunity and could not use it because they are governments of territorial States. (See Section I.) All territorial States are therefore, by means of individual secessionism, to be transformed into exterritorial and autonomous communities of volunteers. As such they neither could nor would want to produce nuclear weapons or would want to use them or have motives or targets for using them, as was discussed above. Thus the nuclear arms race would come to a stop and these new communities would engage in nuclear disarmament even unilaterally.

But libertarian revolutionaries should not wait until these new protective communities are completely organised and finally become effective in this respect and destroy the nuclear and other weapons which are superfluous for them and dangerous to possess. These revolutionaries will want to destroy these weapons immediately, as far as possible. For this purpose they must, first of all, occupy and guard the nuclear weapons stores and all nuclear reactors (as their radioactive material is sometimes being used for weapons manufacture or could be so used).

Already before the revolution, they should have noted all these places and drafted plans for their occupation. They must also see to it that they have enough nuclear technicians, bomb disarmers and radiation screening material on hand to permit them to disarm these weapons fast and to handle the thus released radioactive materials relatively safely.

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As these nuclear weapons materials cannot be destroyed (except by chain reaction and as we can hardly wait until their radioactivity is naturally exhausted, these stocks of nuclear materials should be subdivided into sub-critical masses of which at least a dozen should be required to construct a single primitive nuclear explosive device. Each local militia organization should then be given the task to guard one of these units, in lead containers, until their final disposal can be arranged.

Heavy water might be the only material which could be safely disposed of by dispersal in the seven seas. If fine dispersal in the oceans would be to risky, would increase the radioactivity of ocean water too much or increase the risk of gradual biological concentration of these materials in the food chains of the ocean, then some of the better disposal methods proposed for the disposal of large quantities of radioactive garbage from nuclear reactors might be applied to these materials - all under close supervision by militia forces. Most of these materials are probably still not artificial but just concentrations of natural deposits and could be buried again with the same relatively small risk we suffer by the mere existence of such deposits in the ground. One ideal disposal method would naturally be to shoot these materials with many rockets into the sun.

Nuclear weapons stores and factories (including the "peaceful" reactors) can only be protected against external enemies with nuclear weapons. Against an attack by revolutionary forces from their neighbourhood, an attack carried out with conventional firearms, they would be hard to defend. If the defenders used in this case nuclear weapons they would have to be suicidal.

But why should they want to guard and defend nuclear weapons and nuclear installations when this would only lead to their outlawry and they would be able to claim amnesty merely by surrendering some nuclear weapons? The propaganda against these weapons and installations, begun already long before the revolution, should have convinced many of them that nuclear weapons are superfluous for defence and are rather a threat to basic rights and liberties. The revolutionaries would continue this propaganda, as far as it should still be necessary, and consequently, there will be only few serious fights for the possession of such installations. Often it might be enough to blockade these installations to achieve their submission.

It is not impossible that the employees in such institutions are most receptive for the revolutionary's freedom and peace programme since they are truly sitting on "powder kegs" and would be among the first to die during the next large-scale war. Thus they might not even wait until militia units "knock at their doors" but might destroy their nuclear devices and installations on their own initiative.

One could expect that, once the revolutionary militias in the dictatorially governed States have destroyed all nuclear weapons in these countries, then, in the relatively free countries, few would hesitate any longer in destroying all nuclear weapons, and places for their production, as well.

(The case for unilateral nuclear disarmament is discussed somewhere else. On the whole question see especially Peace Plans Nos. 16-17: An ABC Against Nuclear War.)

Wouldn't there still be the danger that a considerable number of nuclear weapons would be hidden by fanatics and later used by them, in terrorist threats - to become the rulers of the world? Wouldn't many nationalists want to hide some in order "not to make their fatherland defenceless"? How could a complete nuclear disarmament be achieved and a disarmament with regard to similar mass extermination weapons of the chemical and biological type, and who could carry it out?

During one of the first nuclear disarmament conferences, when no one could come up with workable suggestions on how to discover hidden nuclear weapons, the famous nuclear physicist Robert Oppenheimer stated that he knew of a simple means to find them. Excitedly, his colleges clamoured that he reveal, instantly, what means he would propose. His reply was, that everybody would already know the means and how to apply it: A simple but strong screwdriver - with which to unscrew or break open every box or cupboard in the world, large enough to hold a shielded nuclear device - in order to find whether they would contain one. There would be no other means. Otherwise, one might stand 1 meter away from a lead-insulated nuclear explosive device, be equipped with the finest instruments, and still could not point it out.

This more serious than joking reply points out the impossibility for any government to control the nuclear disarmament of its opponents sufficiently. If his answer is basically correct then from it results a duty for every adult citizen to become, at one stage, like all other adult citizens, an honourable disarmament inspector! No hiding place in the world would escape the watchfulness and industry of all citizens in the long run.

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From the right and duty to resist follows, in my opinion, a right of every rational being to search any suspicious places, including private buildings, for hidden ABC mass murder devices. The right to privacy, private property and inviolability of the home does not include, I hold, the right to possess and keep in readiness nuclear weapons or

even considerable quantities of radioactive materials, regardless of the purpose one has for them. I presume that as a rule, in practice, these rights will be exercised as follows:

Anyone who has some reasons for believing that at any particular place some nuclear weapons etc. might be hidden, notifies the nearest volunteer militia organisation, which considers the case, decides on it, orders a search and carries it out.

As an additional precaution, high prizes should be promised for the destruction of every nuclear weapon or other mass extermination device as well as for revealing their location.

h) Timing the Beginning of the Revolution

The revolution should, ideally, begin during long daylight hours, i.e. in summer and during dry weather. Moreover, it should rather begin during the middle of the week, Tuesday, Wednesday or Thursday, and not shortly after or before a weekend because at the latter times the purely private interests predominate.

Because already on the first day as much as possible should be achieved and the regime should be given as little time as possible for its counter actions, it should begin as early as possible, maybe at sunrise.

As it would be dangerous if too many persons would know the exact date, a very small number of persons should be selected whose first revolutionary acts are to serve as signals, in every district for the general rise against a dictatorship.

i) Where Should the Revolution Start?

The revolution against the Soviets should begin in Moscow and in all other Soviet government centres, as well as closely as possible to all nuclear rocket bases and air fields for nuclear armed bombers and ships - so that those in power would have the least incentive and opportunity to use nuclear devices against the revolutionaries.

They are unlikely to act suicidally if they are granted an amnesty (when they surrender within 24 hours) as well as guards, a pension, and an aeroplane to fly them to a country of their choice. If the revolution is started in this way, then the revolutionaries could also immediately proceed with their nuclear disarmament programme. (The same applies, naturally, to bacteriological and chemical weapons.)

Other suitable starting points for the revolution would be places close to the national border, provided only that a) the revolutionaries do not receive military assistance from across the border and b) the fact that they are not receiving assistance from a "national enemy" is sufficiently publicised - so that this action cannot be interpreted as a foreign invasion. These starting points would have the following two advantages: The dictatorship would hesitate in using nuclear weapons in these areas, in order not to become involved in a nuclear war and in case the revolution should fail. Then the participants could retreat across the border - as many Hungarians did towards Austria when their revolution failed. Naturally, the inclination of dictatorships to begin wars when revolutions threaten, should also be taken into consideration - and countered as far as possible by demonstrating the "unreliability" of the armed forces of the dictatorship. Some people might consider it a drawback that a friendly frontier would be so close to these revolutionaries. They might not fight with the courage of desperation but rather retreat across the border. There is something to that but at the same time: a mass escape from a dictatorship must also be considered a large victory against it - and the West should welcome, nay even invite it in many ways. Moreover, the revolutionaries could and should facilitate the escape of noncombatants across a border.

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The danger of nuclear weapons (of still "loyal" troops) being used against the revolutionaries) is very much reduced when the revolution would start simultaneously in very many different and widely spread locations. For this the fact that the Soviets, for instance, have already widely dispersed their own troops (in order to give no mili-tary commander too much power against them and some rightful ideas, and, perhaps, also as a precaution against nuclear war) will be helpful for the revolutionaries. Ideally, the revolution should begin simultaneously in all these military camps, as a military insurrection. The revolutionaries should make certain, as far as is humanly possible, that at least all units armed with nuclear devices (and B & C weapons) are involved.

What should happen if the dictatorial government were to decimate, with the nuclear weapons and troops remaining loyal to it, every tenth insurrectionist garrison and give an ultimatum to the others: surrender, or else!?

This case is unlikely because the revolution is to begin in the government centres and is to include all nuclear installations. Then the loyalty of loyal troops cannot be relied upon if the threat, they are to exert, implies a nuclear pattern bombing of their own country and even of themselves, being surrounded by the revolutionaries.

Moreover, all decisive supporters of the dictatorship would in this situation be under threat of outlawry - while an attractive amnesty offer is made to them.

To this must be added the courage of desperation of the revolutionaries who, knowing the dictatorial regime, would not expect "mercy" from it, even if it were verbally offered to them in such a situation. They would rather rely on the solidarity and disobedience of their comrades, who are given orders to murder them.

Naturally, a 100% security against this happening cannot be obtained. Here one should be aware that even now all countries are engaged in a huge game of Russian Roulette with regard to all ABC "weapons" and that we do have to take some risks to end this in-tolerable situation - which in the long run offers only the certainty of disaster.

j) How to Prevent a New Military Dictatorship

The insurrectionist soldiers would not be the only military power. Instead, everywhere volunteer militias will be formed. Moreover, the revolutionary army is to be dissolved, by a resolution of its members, as soon as it has fulfilled its purpose - and, like after the defeat of the Czar's regime , the over-riding interest of these soldier will be, in most instances, to go home. Due to monetary and financial and general economic freedom, they will not have to be afraid of unemployment.

An important factor will be that these soldiers will not be sworn in to obey certain leaders and their instructions absolutely but rather to defend the human rights and natural rights of all rational beings against all such instructions (whenever they are in conflict with them). They will be under military obligation to disobey and render harmless anyone who attempted to usurp sovereignty over them or others.

Moreover, these revolutionaries will know, appreciate and use the right to secede from the revolutionary army and from the State, like from a church. They will be prepared to defend this right as one of the main achievements of the revolution.

I am well aware how limited my military knowledge and revolutionary knowledge is and how sketchy, consequently, the above programme must appear. But I am also aware that it requires only the pooling of available knowledge of a more or less informal libertarian General Staff to compile a comprehensive and detailed programme of this type, one with a very good chance to achieve a libertarian, largely non-violent "blitz" revolu-tion. Efforts in this direction are long overdue and I hope to promote them with the above.

Some more details will be found in Section VI on the Militia.

The following chapters deal mainly with the economic and social reform measures of these libertarian revolutionaries.

A) Monetary Revolution

a) Occupation and Closure of the Central Bank

One of the mainstays of modern dictatorships is their central bank. It can, e.g. by blocking all wage payments, all insurrections within a few days - unless the revolutionaries are prepared for such attempts.

With the aid of the central bank every dictator can finance his machinery of power especially through inflation,

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foreign exchange control and the "exchange" of government promissory notes for privately accumulated capital. Through these insidious policies their subjects often become expropriated without becoming fully aware of the factor, or only when it is too late for resistance.

It is very instructive to ponder the fact that the Communist Manifesto worked out by Marx and Engels in 1847/8 demands precisely the present condition and this as a means to expropriate the bourgeoisie and to establish the dictatorship of the proletariat. It said explicitly:

In 1848 this point was further clarified by a leaflet of the Communist Party which said, under point 10:

Even without thus intentionally abusing the central bank, the mere fact of the centralization and monopolisation of the issue of money tokens leads to a shortage of means of payment, especially in revolutionary times. The resulting blockages in exchange and production do then soon lead to conditions under which the previous life under the dictatorship appears in a much better light. A counter-revolution by the followers of the dictatorship would thereby be greatly facilitated.

Thus the central note-issuing bank is to be occupied and dissolved. To prevent that the dictatorship could abuse it again, after a temporary military success has put it again in possession, all note stocks not yet issued and all printing plates should be destroyed. The printing press itself should be used by the revolutionaries to produce their own tax- or contribution-based revolutionary paper money without legal tender.

It is also quite possible that the dictatorship will rather destroy the central bank than let it fall into the hands of the revolutionaries, under the assumption that these revolutionaries would, like other revolutionaries, want to abuse it as a means to inflate the currency further and thus to finance themselves. The regime, due to its very nature, is unlikely to understand that these revolutionaries could finance themselves much better than by an inflation.

(Compare also the last part of 4B-d.)

b) Proclamation of:

the Repeal of Legal Tender,

the Monopoly Position of the Central Bank,

the Freedom to Issue Means of Payment and

the Right to Engage in Clearing whenever this is Possible, and by any means available.

c) Establishment and Initiation of Numerous Clearing Centres and Banks of Issue,

Especially of Cooperative Banks of Retailers, and for Paper Means of Exchanqe.

That these revolutionaries would in no way obstruct free private coinage and 100% gold or silver covered gold or silver dollar certificates, should by now be self-evident. But they should not be dependent on possessing sufficient gold or silver for monetary purposes. Sound means of exchange, even those reckoning in gold and silver weight units, can be cheaply produced with certain techniques, using as raw materials only paper, ink, printing presses and skilled labour and some office space. Other "capital", apart from some intelligence, would not be required.

The revolutionaries could issue sound tax-foundation or contribution-foundation paper money.

(They might also declare that taxes and contributions paid to the revolutionaries would ultimately be converted by them into shares in privatised assets of the regime. - J.Z., 12.12.02.)

The revolutionaries should also declare that private note-issuing banks, clearing centres and similar institutions are no longer limited by any compulsory licensing requirements.

Here is a short summary of the subsequent monetary revolution:

The goods warrants issued by the associations of retailers and the tax- or contribution-based paper money of the revolutionaries between them are to take the place of the regime's paper money, but without its legal tender flaw and its monopolised and centralised issue.

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One suitable way to direct the private, optional, market rated and competitively issued notes into the hands of wage earners would be to discount with them and for the employers of the wage earners the promissory notes, commercial bills and IOUs etc. they have received in payment for their products from their customers, mainly the wholesalers.

Those employers working for orders, e.g. ship yards and builders of large machinery, should only receive these banknotes in return for short-term payment promises of the customers, obliging them to make regular and periodical advance payments for the order.

In some areas the canteens of large enterprises will have to take the place of a retailers' association, e.g. in case of mines in outback areas.

The banknotes or goods warrants issued in this discounting of bills etc., would be used for wage payments and pay-ments to suppliers. From these they would stream to the retail shops in payment of goods and services, from there to the bank, where they establish a credit upon which the retailers can draw cheques to pay for their orders from the wholesalers. Then the bank clears these cheques against the bills and IOUs of the wholesalers. Bills and IOUs from other localities will go into bank clearing and those claims which can be locally utilised will be obtained in exchange.

d) Proclamation of Freedom in the Choice of Standards of Value and

Establishment of a Free Gold Market and

Introduction of the Gold Clearing Currency

All currency laws and laws on the trade with gold and other rare metals should be repealed with this proclamation. But until people have adapted to this new freedom, trading will largely still go on using the old currency units until they are competed out of existence:

9/4 B) Financing of the Revolution

a) Some Remarks on the Importance of the Ability to Pay as Foundation for a Successful Revolution

A precondition for the ability of revolutionary troops to operate is that they are sufficiently supplied with food, uniforms, weapons and quarters. Provided the revolutionaries can pay for these necessities with a means of payment that is gladly accepted by the population and not only hesitatingly, for lack of a better one, as is, for instance, the case with the continuously depreciating legal tender paper money, then they would possess a means of power against the regime to be overthrown that was already feared by ancient heads of States and quite rightly so. Caesar, for instance, prohibited the possession of more than 100,000 Sesterces. Any subject possessing more could have endangered his position. The Jesuits in Paraquay went further and prohibited their Indian subjects the possession of any means of payment whatsoever. Goethe commented to Eckermann on the saying by Byron: "Much money and no authority!" (re-translated from the German) that, indeed, the possession of much money would emancipate a man from authority.

Today's governments are also frequently afraid of the independence people could acquire through the possession of gold (still the most stable means of payment) or other cash.

Thus shopkeepers in East Germany are under legal obligation to deposit their takings, apart from small change, every day at the State bank. Generally, in countries ruled by communist regimes, the possession of means of payment in form of gold or other currency not authorised by the government is outlawed.

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As gold draws, among other things, food from distant districts with greater force than a magnet draws iron from close proximity, any army whose own means of payment would be accepted like gold would be independent.

It does not require proof that a revolutionary army would not be able to get any credit for its purposes from the only creditor in a totalitarian State, that State's central bank, or from any of its branches. At the same time, any revolution has to be regularly financed because it lasts usually at least several days, if not for weeks or months, like a war.

Moreover, the dependants of the revolutionaries must be supplied.

Furthermore, the rest of the population will be much more sympathetic towards the revolution when it can have the justified confidence that the new revolutionary government (or the various new autonomous and exterritorial communities of volunteers) will be able to keep up social services and to avoid a money shortage which would last-ly lead to a barter and subsistence economy and a slavish dependence of most people on the few who still have means of payment to spare.

Ulrich von Beckerath commented on the East German uprising of 17.6.1953:

b) What Is the Influence of a Revolution upon Payments and Credits?

Almost every revolution leads to an extensive hoarding of means of payment. Under a centralised and monopolistic money-issue system this hoarding leads inevitably to a catastrophic money shortage.

Why does so much hoarding take place at such times? Most people attempt to accumulate as much cash as possible for emergency cases, like unemployment or escape. Thus all purchases of goods not urgently needed are postponed, likewise the payment of debts. Banks do no longer grant credits because they believe that the revolution would endanger repayments. Money transfers do not take place when there is no certainty that the delivery or crediting will take place at the other end. As soon as it comes to fighting, banks (and retail shops) are as a rule closed and their books and accounts are removed, secured or destroyed. Thus, at least temporarily, the whole system of non-cash transactions breaks down and, consequently, the need for cash grows enormously - while the supply of it is drying up.

Moreover, refugees fleeing the fighting zones take much cash with them and thereby increase the currency shortage.

Furthermore, all regimes will attempt not to let any cash amounts collected at any government office fall into the hands of the revolutionaries.

Add to this the fact that most revolutions bring extra taxes with them, which requires that, at least temporarily, more means of payment are withdrawn from circulation.

The consequences are sales difficulties and thereupon production stoppages and unemployment. These consequences do further increase the tendency to hoard all available cash.

Thus, based on the general experience that cash becomes short, quite suddenly, in revolutionary times, the revolutionaries must consider how they can replace the missing and needed means of exchange.

c) Financing of a Fighting Revolutionary Militia Army

c/1) Cash Payments instead of Pillage

Revolutionaries fighting for human rights must not loot or requisition but must, instead, pay for all equipment and stores they need in cash and that with means of payment that are free of legal tender and subject only to a free market rate.

For this only means of payment are to be considered which are so well founded that everyone takes them readily and at their nominal value. Then the population will no longer hide its food stores etc. from the revolutionaries end will be less inclined to offer information to the regime because it is embittered about plunder or similar coercive acts. On the contrary, it will then rather endeavour to obtain more supplies for the revolutionaries, from other areas.

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The revolutionaries should also pay any price asked for. All the greater will be the supply and the competition among the suppliers. Thus the prices will soon fall towards general market levels.

The military disadvantages of pillage were recognized, among others, already by Shakespeare. In King Henry V, Act 3, scene 5, he lets King Henry V state:

c 2) Issue of Tax Foundation Money

These revolutionaries will finance themselves mainly by the issue of tax foundation paper money without legal tender, which they will accept at all their pay offices in payment of a revolution tax. Compare on this the excellent essay by Holzhauer: "Barzahlung und Zahlungsmittelversorgung in militaerisch besetzten Gebieten" (Cash & Means of Payment Supply in militarily Occupied Territories), Fischer, Jena, 1939, 115 pages with bibliography. (In PEACE PLANS 428ff, S. 935. Reproduced as manuscript, with some notes by my, in PEACE PLANS 531.)

The imposition of special taxes would be necessary as otherwise the continuing expenditures, e.g. for pensions and salaries, could not be covered and because there is no certainty that the revolutionaries will come soon or completely in possession of the current government revenues. (Compare on this Peace Plans 19 C and the essay on financing defence in Peace Plans No. 41.)

c 3) Tax Levies and the Use of these Funds

Taxation is continued for the time being but no longer by the dictator or for his benefit but, instead, by and for the revolutionaries. The tax departments and local tax collecting agencies will then be organised or induced to transfer the collected funds no longer to the dictator, his authorities and armed forces but to the revolutionary authorities, instead.

Should some of the tax departments refuse to act like this, then the revolutionaries would establish their own tax collection agencies (until voluntary taxation has become general) and will declare that all public servants, who continue to work for the dictatorship, do thereby lose all their pension rights and that anyone who continues to pay his taxes to the dictatorship, without being under immediate coercion to do so, would have to pay the same amount again, to the revolutionary authorities.

The paper money of the dictatorship is not simply declared invalid but will be accepted at the pay offices of the revolutionaries only at its market value. It will there be retained and replaced by the tax foundation money of the revolutionaries. (Compare: C a & b.)

Goods warrants of shop associations, transport societies etc. as well as foreign currencies will also be accepted in tax payments - but only at their market rate.

Who should receive the tax means thus collected? A central council of worker, soldier and citizen delegates would require at least a few days to constitute itself. At the same time, the means acquired must be spent immediately for the current State expenditures (those which can be somewhat justified for the time being), e.g. for social service payments and to cover the costs of the revolution. The means to be used for civilian purposes should thus be transferred to the local citizen councils, until central parliament is established, if desired

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(and perhaps even afterwards, seeing that this time, perhaps, in accordance with the wishes of the liberated citizens, and as long as any taxes are raised at all, the local citizens rather than the central government should hold the purse strings, hiring only as many central services as they like, and to the extent that they want them). 1

The means collected through the special revolution tax should be directly transferred to the local militia organisation or the revolutionary army. In most cases these taxes will anyhow be collected by the militia organisations themselves.

Naturally, all taxes paid for the time being to the local authorities of the revolutionaries should be taken into account in all future tax collections.

The revolutionary militia army might not collect the revolution tax itself but rather authorise the new civilian authorities to collect this tax for them. This would remove some of the objections of those who do not sympathise with the revolution.

What should happen with the tax foundation paper money of the militia forces and the other new revolutionary authorities, once they received them back in payment of taxes? They should be destroyed. The issuing centres are to be informed about the total amounts concerned and the numbers of the destroyed certificates, likewise, about the amount of the still outstanding taxes, so that they can take these amounts into consideration for further issues.

The destruction of these notes would facilitate the control of their circulation. They have already fulfilled their function when they returned to the tax offices: the revolutionaries received the corresponding values when they issued them. The loss involved in this destruction amounts only to the relatively small printing costs.

All liberty bonds issued secretly by the revolutionaries before the outbreak of the revolution, for preparatory expenditures, should be called up and a gradual repayment plan should be worked out. Some percentage of the current tax income should be set aside for this purpose to allow some immediate repayments.

c 4) Use of Rare Metal Coins

Everywhere, where the population expresses a great distrust towards all paper money, especially in countries with many illiterates or many different languages, known only to a few of the revolutionaries, they should as far as possible utilise silver coins made of fine silver. For this purpose the revolutionaries should have purchased or ordered silver coins before the outbreak, in foreign countries, or should, at the very latest on the day the revolution begins, coin silver coins themselves.

Acceptance of full-weight silver coins of fine silver is rarely ever refused. Silver can today be obtained in sufficient quantities and relatively cheaply. Important for the revolution against the Soviet regime would e.g., be the use of rare metal coins to pay for the weapons of deserted Mongolian soldiers.

c 5 ) Issue of Shop Foundation Money and Clearing Certificates

Using the techniques of monetary freedom, in the area of West Germany alone, according to present (about 1958 ) figures, up to approximately 5,000 million gold marks could have been mobilised for a revolution against the Hitler regime. (If they had been mobilised before he came to power, and deflation and the threat of inflation had thus been removed, then he would not have come to power at all!)

To finance not only the costs of the revolution and those government payments which are being continued for the time being, with paper money that has tax foundation, as suggested above, but also to keep all normal economic exchanges going in spite of a shortage of the old government money, all those who could act as private issuers should proceed to issue their own exchange media.

Ulrich von Beckerath had this to say on this subject, with special reference to the East German uprising of 17.6.1953:

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Some more details of such issues were discussed above. More can be found especially in Peace Plans Nos. 9-11, 40 & 41.

d) The Importance of the Monetary Revolution for the Financing and the Victory of the Revolution

The additional shortage of means of payment caused by the revolution must be abolished or prevented and the previously existing shortage must be ended to avoid an economic collapse. The best way to do this would be through the issue of new means of payment without legal tender, especially those with tax or shop-foundation.

The shop association banks would primarily serve to supply wage payment means and to keep production and distribution going, so that the population remains able to support the revolutionary army by a corresponding goods production.

The tax foundation money, issued by the militia army and the revolutionary authorities, should serve, primarily, to pay the costs of the revolution and the normal government expenditures (which are continued for the time being). For the mediation of all other economic exchanges it is not sufficient. But without this tax foundation money the revolutionaries could not pay for their requirements in cash while at the same time the taxpayers, due to the currency shortage (brought to extremes by the revolution) cannot fulfil their tax obligations.

Without a simultaneous monetary revolution of the kind hinted at above (compare also PEACE PLANS No. 8, pp. 31-37) the dictatorship could easily defeat the revolution, even without military force, simply by refusing the means to pay wages with in all areas of an insurrection. This happened in the uprising in East Germany on 17/6/1953 and led to the following comment by Ulrich van Beckerath:

The logic and ruthlessness with which these communist rulers applied their means of power, including the central bank, is perhaps only comparable with their method of rapidly ending hunger-strikes of their political prisoners. They did not force-feed them - nay, they cut off their water supplies. Consequently, their victims had to submit within a few days.

Alternatively, the dictatorial government could simply declare that all its currency in the insurrectionist areas would be invalid. Then 90% of the citizens could no longer make any legally valid payments. They would thus refuse to accept this money even from the revolutionaries. Wages could no longer be paid, nor pensions etc. For a

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time almost the whole economy in these areas could be thus paralysed. Consequently, the revolution would most likely fail.

Among the necessary countermeasures of the revolutionaries should be:

Issue of their own means of payment and repeal of the decree of the dictatorship, if necessary (for the period of transition), acceptance of the paper money of this regime at tax offices at its nominal value, until the crisis has been overcome.

Even if no other factors were involved: Merely due to the fact that the revolution will interrupt many business transactions and payment transfers and thus the country, at least for the time being, cannot be sufficiently supplied with means of exchange from any centre. In fact, this cannot ever be done, not even during peace times, in spite of all the pretences of the central banks and of the legislation upon they are based.

Thus, especially during revolutionary times, any local means of payment crisis should be overcome through local issuing centres. Central banks do not solve the problem at all when they merely declare that any need for means of payment and credit that is not satisfied by them is "not legitimate".

Moreover, the financing of a revolution with the aid of a central bank, through the over-issue of legal tender paper money, with its inevitable subsequent price increases (reckoned in this inflated money) must be totally avoided. Otherwise, the revolutionaries would turn many citizens against the revolution who would otherwise have been neutral or sympathetic. Moreover, the revolutionaries would then have betrayed their cause: to restore and protect human rights and natural rights of rational beings.

Thus the revolutionaries should demonstratively and publicly destroy the printing plates for the production of the paper money of the dictatorship, both, to show that they do not want to engage in an inflation and to disable the dictator. The same applies to any stocks of so far uncirculated notes.

As soon as well founded private exchange media without legal tender are available in sufficient quantities, the dictatorship could no longer inflate its currency, not even with the worst intentions. (See below under C/b.)

If the dictatorship itself destroyed the note printing press, then only monetary freedom and immediate use of this freedom could help the revolutionaries. The councils of workers, soldiers and citizens formed by the revolutionaries for the transition period should see to it, already during the first hour of the revolution, that nowhere will there occur any currency shortage.

Quite apart from these advantages for the revolutionaries, the realisation of monetary freedom, and the abolition of the danger of unemployment, depressions and inflations which will be the result, will be one of the main aims of this revolution. There is no reason to delay the realisation of this aim in any way.

e) Shortening of Wage Payment Periods

Wage payment periods should be shortened, at least temporarily, immediately after the revolution begins. In West Germany wage payments amount presently to about 3,000 million gold marks and stores in shops to about 5,000 million. In the dictatorships these relationships are likely to be similar. Thus it might happen, under these circumstances, that the wage earners might, immediately after receiving their wages, want to exchange them immediately into food and other consumer items. Thus they could, within a few hours and at least in some stores empty the shelves of most items. This would cast a bad light upon the goods warrants system which is essential for the victory of the revolution. Even today, on special shopping days, either Thursday night, Friday or Saturday morning, and also just after pay days, the turnover is much larger than on the other days. Restocking requires some time.

As a result of shortening these payment periods, the shops would also gain more regular sales. Moreover, if the revolution suffers some setbacks in some areas, with subsequent confiscation of the there circulating exchange media, the losses would not be as large.

f) Financing of Larger Resistance Groups before the Outbreak of the General Revolution

Resistance fighters fighting for human rights and the natural rights of rational beings should attempt to raise voluntary contributions or taxes within their area of operations. They should insist that these taxes are only paid in certificates issued by them.

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Often, even with the best of will, the population could not supply them with e.g., sufficient Rubles because in the East there are, as mentioned above, severe regulations on the handing in of "excess" cash.

Then, based on this tax foundation, these resistance members could issue their own tax foundation money and pay with it most of their purchases in cash. Naturally, these notes must not be legal tender or they would soon lose support.

Whenever this kind of issue is not feasible, then they could issue bonds, in small denominations, with a gold clause to preserve their value. These should have a text like the following:

a) This loan certificate will be redeemed from the x-th. month after the beginning of the revolution, by being accepted by the revolutionary governments in the payment of all taxes.

b) Its redemption in cash will take place only if and to the extent that these governments have conventional cash available for this purpose.

c) The repayment of this loan will take place at the latest within 10 years after the beginning of the revolution.

d) The interest rate is 6% p.a. and also reckoned in gold weight values.

e) Loan certificates or bonds handed in before the above date will only be accepted at their market rate.

Most likely such bonds would circulate for a few years and then be gradually redeemed by acceptance at the government pay offices or by exchanging them into shares of some public assets which are being denationalised. (On the latter compare Peace Plans No.19 C.)

If resistance fighters finance themselves in this way, then their resistance is much more likely to turn into a general revolution and the debt contracted by them will not become too large.

If it should also be too difficult to issue such loan certificates then the resistance fighters should at least try to issue some kinds of warrants, tokens or tickets or scrip, on a gold reckoning basis, which the holder could utilise in future to buy with them gold loan certificates or assets of formerly nationalised enterprises. The black market is very well developed in Soviet Russia and will have some use for such certificates.

Some Russians taking the long view, perhaps some high Soviet officials and officers, who have some spare cash available, will consider the purchase of these warrants, bonds or tax certificates as a good business and also, at the same time, as a premium towards their life insurance. Such pieces, when presented to revolutionaries on D day, could indeed save them their lives.

Many of these certificates will flow into foreign countries. Tourists will be offered this kind of money when they sell some of their property to these people starved for foreign goods, and they will sell this money here - or even keep it. The many friends, which a free Russia has in the West, will obtain these notes and certificates through underground channels and invest in them, often with the intention never to present them for redemption. (If the latter is the case, then they should notify by broadcasts - through the few channels available for this - or the many which ought to be opened up - the numbers of these certificates which they have invalidated or destroyed. Then correspondingly more could be issued without depressing their market rate further.

Such acceptors will see to it that the rate for such loan certificates will never fall too low. Naturally, the lower their rate falls, the greater becomes the speculative incentive to purchase them. For instance, a tourist selling some item for 20 Rubles in Soviet Government paper money could, if these underground loan certificates had fallen to 10%, reckoned in government paper money, purchase with these 20 Rubles a loan certificate nominally worth 200 Rubles, which finally promises redemption in accordance with a certain gold weight value. This kind of thing might be a tempting deal for many.

Public meetings in the West, in which subscriptions are asked for to such loans, would not remain altogether ineffective. Western governments might be prevailed upon not to tax such investments.

The issuers should number the certificates and keep lists on the issued certificates so that forged certificates can be recognized later on. Naturally, such records should rather be buried in some reasonably safe places than kept at home. For the some reason, the certificates should be printed on greased papers soaked with pesticides - and carry corresponding warnings.

a) Tax Strike

The aim of a tax strike organized by the revolutionaries must be to render the dictatorship as far as possible unable to pay, i.e. make impossible the payment of the salaries of its secret police, soldiers, officers and public servants, its armament costs and its campaign against the revolutionary militia or to make it as difficult as possible. In the long run even the most loyal soldier or public servant will disobey when he is not paid and his supply with weapons or food is insufficient.

At the same time, it cannot be the aim of the revolutionaries to simply break off all those payments which have some justification and which were so far covered out of general tax revenues. The revolutionaries should e.g. in organising a tax strike, avoid a situation where old age pensioners and other social service recipients would suddenly be exposed to starvation. Fire brigades, railways, post offices, courts, prisons etc. must go on being financed, if necessary out of tax funds, until they are finally reorganised and able to finance themselves.

Thus the tax strike to be organized by libertarian revolutionaries should not be complete with regard to the total tax sum to be paid but only, as far as possible, with regard to the previous recipients and distributors of these funds, the dictatorship and its administrative bodies.

For this purpose, the revolutionaries might have to establish in some areas some tax offices of their own and might have to appeal to the present tax officials to secede and join them.

The revolutionaries should then declare that from now on they would take over the payment of the salaries and wages of all present State servants - who have joined the revolutionaries or who will join them shortly and that for the time being, until a free market has solved most of the existing economic problems, they would even continue with the payment of some subsidies, whose immediate repeal would definitely cause some hardship.

Some of the costs of the revolution could, naturally, be covered with the means saved by cutting out certain subsidies immediately, e.g. those direct grants to producers for not producing.

Custom officers might, temporarily, be permitted to deduct as much in custom duties as is required to support them for the time being. Naturally, as far as possible, they should rather be reorganised into militia units which would assure the safe passage of supplies coming in from foreign countries, against further raids by units which are still loyal to the dictatorship.

Generally, it will be the task of the revolutionary militia to protect tax strikers from penal measures imposed by the old regime. Without this backing of last resort tax strikes could not be organized to any large extent in most instances.

There should also be a change in the payment procedures for payments to old age pensioners and social service recipients. They should be paid directly from the pay offices of enterprises in their district. A number of pensioners and social service recipients, corresponding to the tax contributions of enterprises, should be directly assigned to these enterprises and they should be free to deduct these expenditures from the taxes they would otherwise have to pay. This would make it easier to pay these claims in local goods warrants and avoid the transfer difficulties over long distances which might also be large during periods of this revolution.

Since most taxes are now indirect taxes or withheld taxes, only relatively few citizens will have to engage in the tax strike of this type. The other citizens must protect these few as far as is possible. Naturally, precautions must also be taken to prevent such tax collectors from using some of these funds for their own purposes. Anyone who would act like this should be treated as a genuine enemy of the revolution. The local militia units should have controlling powers and the authority to check the accounts at any time.

If taxation were still continued for a considerable period, then the all too wrong and complicated present tax system should be reformed and simplified. For instance, all taxes so far levied might be replaced by a single and direct tax on incomes, either a per-head tax or an equal percentage or flat rate tax. By wiping all present tax exemptions and also abolishing all present tax progression and by cutting out immediately some of the more obviously unjustified State subsidies, I would expect that this flat rate could soon be set at 20 % or under. (Certain systematic steps could be taken to lower this rate more and more, until taxes, as we know them now, have been abolished. A variety of proposals of this type has been made. They will not be discussed here.

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To levy this simple tax would be relatively easy. There would be less attempts to avoid it. Instead of discouraging extra efforts it would encourage them.

Public servants, soldiers, teachers etc. should, to the extent that their income comes from taxes, be freed of all tax levies. To tax such people amounts only to a useless and laborious shuffling of public funds, at least to internal clearing labour which causes unnecessary costs.

This flat rate taxation would also have the advantage to encourage further rationalisation and automation as enterprises would have less of a tax burden the less people they employ. (Here is not the place to answer the prejudices and myths of those afraid of computers and other lower level machines. They, by themselves, cannot cause unemployment but at most a shift of labour from some types of jobs to others.)

If it appeared certain that the revolution would win within a short time, then one might not bother with undertaking the tax reform suggested above, or any other, and could simply leave it to the newly established exterritorial and autonomous communities of volunteers to introduce for themselves whatever financial reform they desire.

As soon and to the extent that these groupings take the place of the old type of territorial States, all their tax payments, even if formally compulsory, amount only to voluntary contributions or taxes - seeing that their membership is voluntary.

The tax collecting agencies of the revolutionaries should declare that they would accept tax payments in all kinds of means of payment, even in foreign exchange and goods warrants, but always only at their current market rate, and that they are prepared to engage in any kind of clearing transaction that appears possible. They should point out that there are only two kinds of means of payment which they would always accept at their nominal value: their own and those of the revolutionary militia army.

The dictatorship's detailed lists of expenditures, to the extent that they are available, should be closely studied in advance to determine which items could easily be altogether eliminated. But if the revolution is likely to last a considerable period, then even that percentage of all taxes which so far served to finance the arms race and the repressive machinery of the dictatorship, should be furthermore collected for the time being, to cover the expenditures of the revolution and, perhaps, the house building programme described below.

b) Refusal to Accept the Paper Money of the Dictator

To supplement the above hinted at tax strike (somewhat more detailed in PEACE PLANS No. 13, pp. 71- 81) the revolutionaries and all those who sympathise with them should, as far as possible, refuse to accept the paper money of the dictatorship. Through this measure the dictatorship becomes still less able to pay and is largely prevented from making up for tax deficits with the aid of the note printing press. Salary recipients who are still loyal to the dictatorial regime, like some soldiers, officers and other public servants, could thus be put almost into the same position as if they had not received any pay.

Naturally, the dictatorship would proclaim severe penalties in case of such refusals. It would attempt to furthermore uphold the legal tender of its paper currency and would in this not even refrain from imposing death penalties, as history has taught. Many shop owners will for instance be literally forced to accept the paper money of the dictatorship by its armed soldiers or policemen. But their hatred of the regime would certainly not be lessened in this way. - They would find it very hard to pass on this kind of "money" and would therefore, rightly, feel robbed.

The refusal to accept this kind of money need not be comprehensive or very widely spread in order to make soldiers and other public servants of the regime hesitate themselves in accepting it in their pay. There will no longer be certainty that they can use these notes as means of payment.

The revolutionaries should not simply declare the paper money of the dictatorship to be invalid from now on. By such a measure they would wrongly expropriate all those citizens who have acquired it by honest (although exploited) labour. Thus, at least for a limited period, the revolutionaries should continue to accept this paper money at their tax offices.

Should this acceptance happen at the nominal value of these notes? How would such an acceptance fit with the revolutionary method of refusing to accept payment with these means from the dictatorship or altogether?

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The revolutionaries have not issued this paper money. Thus it is not their responsibility to see to it that its value is maintained. They are only obliged to leave it whatever value it will still have on a free market (a value that is, naturally, also influenced by their refusal to accept it in general payments or in payments from the regime). Those, who will consequently suffer a loss by this fall in the exchange rate of this formerly exclusive currency, will then be in the same position which share holders find themselves in now when they suffer a loss through the fall in the price of their shares after having trusted them too much for all too long. Moreover, for revolutionaries who issue their own means of payment, the paper money of the dictatorship is simply a foreign means of exchange like any other foreign currency. In the same way as they would have to accept foreign currency only at its market value so they would, most likely, accept that of the dictatorship only at this rate. (This rate might, by the way, be quite a good indicator of the progress of the revolution and thus should be publicised widely.)

It might also be advisable to publicly declare that for a certain and limited period they would still accept this currency, at its market rate, to avoid expropriating the holders.

(Naturally, they would accept it only from victims, not from victimizers! - J.Z., 12.12.02.)

Accepting the old regime's currency only at its market rate (then destroying it and replacing it by the own sound currency) would prevent the dictatorship from gaining too much through inflation and would prevent too great losses for the revolutionaries from the withdrawal of these notes.

(Seeing that, with their own tax foundation money, they can really anticipate future tax income, they will not really suffer by accepting the old regime's currency at its market rate and then destroying it: They could immediately issue an equivalent value in their own currency.)

If, instead, they were to accept the paper money of the dictatorship at its nominal value, then the dictator could lustily keep on printing his notes and obtain with them, due to this tax foundation provided by the revolutionaries, values for them while the coffers of the revolutionaries would be filled with these depreciated notes, even advance payments of taxes might be made with them and the tax assets, which they had established and wanted to mobilise with their own issues, would thus be paid off in the dictator's paper. Tax increases to make further issues of their own notes possible, would certainly not be welcomed.

Whenever there is a danger that their own currency might suffer a persistent discount, then they should for a while accept only their own currency in payments - and other currencies only at a considerable discount, on top of the discount involved in their market rate.

It is evident that e.g. wage recipients can in most cases afford to refuse to accept the regime's paper currency only in case other and sound means of exchange are in sufficient supply or when there are at least some citizens around who know how to supply themselves with sound private means of exchange by establishing new issue and clearing centres within a few hours.

Without the chance or immediate opportunity to receive instead other and sound means of exchange, only few people would be ready to altogether refuse the paper currency of the dictatorial government.

There is not even any need to proclaim the refusal to accept the paper currency of the dictatorship as a special revolutionary measure. It would suffice to proclaim the new economic rights (see appendix I) and to declare legal tender and the note issue monopoly repealed. Then, wherever a free or a partly free market exists, a discount will develop for the regimes paper currency. Any means of payment that has a considerable discount, especially when other and sound means of exchange are avail-able, will no longer be able to circulate in general trading - because it would be widely refused for this reason alone. Thus the repeal of legal tender does already bring about a wide-spread refusal to accept the regime's paper. No special sacrifices or commitments are required to achieve that much.

The tax revenues of the dictatorship will at the same time be reduced due to the simultaneous tax strike (towards this regime) and because of whatever progress the revolutionaries have already made (in inroads on the regime's tax zones ). Consequently, the much smaller tax base of the dictatorship is unlikely to keep the notes it issues at par with their nominal value.

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c) Protection of Property

The revolutionaries must resolve already during the first revolutionary meeting:

All means of production, factories, forms, dwellings and stores are, immediately, under the protection of the workers', soldiers' and citizens' councils. These councils direct an appeal to the militia and to every worker to arrest looters, arsonists and similar criminals. The militia should, furthermore, arrange for regular patrols to prevent such crimes.

d) Preservation and Use of Transport Facilities

Railway stations, trains and other transport means are to be protected by the militia and immediately to be freed from all of the old regime's restrictions regarding their use. No passports, permits or licences should be required, just the proper tickets.

e) Repeal of all Legal Monopolies and Economic Restrictions

The first revolutionary assemblies and finally the central revolutionary council, should declare that they do not recognize any authority of a government to hinder in any way the free use of one's labour and the free exchange of one's products. All legal monopolies and other economic restrictions are therefore repealed, effective immediately.

(Including the monopoly for the establishment of any central council or federation. A coordinating and advisory body or a federation of local militias for the protection of individual rights would be quite another matter. - J.Z., 12.12.02.)

f) Repeal of all Quotas

What threatens the liberty under dictatorial regimes most of all - in the opinion of the people involved? These restrictions are often the daily experienced various quotas, especially the minimum work quotas imposed and the compulsory minimum deliveries to the State.

It must therefore be one of the first measures to repeal this kind of serfdom. The imposition of any quota in economic relations contradicts the human rights and natural rights of rational beings. No one has the right to impose a quota upon anyone else. Will (even from the point of view of the government) more be achieved by such impositions? Without a quota the farmers in West Germany produce more than the West Germans can consume. The general complaint of all those food producers, who are free, is not that there are too many eaters but rather, that there are not enough mouths for them to fill.

Once the quotas are abolished, the people will be much less inclined to put up with any other restriction for any long time. Thus one of the first proclamations of the revolutionary councils will run as follows:

• Ulrich von Beckerath.

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g) Repeal of Price Control

Fixed prices do not correspond to the just prices which a free market forms by continuous voting between sellers and buyers. Maximum prices do obviously reduce the supply and production and harm thereby lastly even those who have a short run advantage from them.

h) Free Trade in Agricultural Products

A special appeal should be directed to farmers and agricultural labourers whose production is usually, under dictatorial regimes, more regulated than most other productive activities. This appeal should especially point out that from now on grain and all other agricultural products can be freely traded anywhere and in any way.

On the introduction of open agricultural cooperatives see under open cooperatives above and below.

i) Free Choice of Professions, Training Opportunities and Jobs

Although the corresponding individual rights should be self-evident, nevertheless, even in the West and especially in the totalitarian States they are restricted in numerous ways. Thus these liberties should be especially proclaimed and protected by these revolutionaries.

j) Transformation of all National Enterprises into Ordinary or Open Cooperatives

The numerous government- or bureaucracy-owned and controlled enterprises, wrongly called "the peoples' property", should really be turned into enterprises owned by the people, with immediate effect, i.e. within an hour at the most. The resolutions required for this purpose should also be made during the first revolutionary meeting of workers.

These enterprises are to be transformed into ordinary cooperatives or, if they exploit some natural monopoly of social significance, as e.g. agricultural enterprises and mines do, into open cooperatives as described above. This transformation would also require the election of new executives and sales organizations but these details can usually be postponed for a few days.

The open cooperatives, as well as the ordinary cooperatives which willingly transform themselves into open cooperatives, would not have to repay the capital invested in their enterprises by the taxpayers because they are, in a genuine way, "socialised" enterprises from which no one can derive any special profits going beyond those of his labour and capital contributions. But the ordinary cooperatives formed out of the former national enterprises would have to purchase the capital values of these enterprises on instalments, within 5-25 years and would have to pay interest on this capital. In other words, for the time being they would pay a special "tax". All other taxes of the new communities arising out of this revolution could be correspondingly lowered. (An alternative was described in Peace Plans No. 19C.)

k) Establishment of Free Trade Relations with Foreign Countries

The revolutionaries should immediately initiate friendly relations with foreign countries. This would, self-evidently, require friendly relations with all foreign subjects within the revolutionary areas and full recognition of all their human and natural rights. Moreover, as far as possible immediately, the borders should be opened and completely free trade should be proclaimed.

Trade connections should already besought before the outbreak of the revolution, so that a goods exchange with foreign countries can already begin on the first day of the revolution. If necessary, they should introduce free trade one-sidedly, regardless of the restrictions a foreign country may continue to impose. For this purpose, they should also repeal all related restrictions of trade, among them those on insurance activities, communications, and postal services (the postal monopoly).

They expressly declare that in their sphere of influence clearing centres could be freely established and run and that any kind of exchange or exchange medium and value standard would be freely permitted without requiring any licence or permit, that even dealings in futures would be completely free - as long as withdrawal premiums (or their equivalents) are agreed upon in case the fulfilment of such contracts becomes impossible.

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l) Unrestricted Sales of the State's Food Stores to the Population

The food stores in dictatorial States, reserved for the armed forces and other privileged groups, are usually considerable, no matter how short the population may be of food. They are, as mentioned above, to be occupied immediately. The militia army should initially cover its requirements from them and should also receive the receipts from the sale of these stocks to the general population.

m) Provision of Work for all those Rendered Unemployed through the Revolution

A political, peace-promoting, social and economic revolution, e.g. in the Soviet Union and in Red China, will make whole sections of the population unemployed, e.g. custom duty officers, professional soldiers and most bureaucrats. In order to gain or keep these people on the side of the revolutionaries, there should be some declarations indicating how these people could support themselves for the time being and in the future.

The customs officers, for instance, might be permitted to levy, for a transition period, just enough duties to pay their salaries and pensions. Subsequently, many of them could find jobs e.g. in the new issue centres of the shop associations. The unemployed soldiers and officers, who did not want to join the militia could form pioneer units and build comfortable, though only temporary, accommodation for refugees.

To make some declarations to this effect - which are honest and also practicable - would be almost more important than carrying them fully into effect - because the monetary and other economic freedom introduced by these revolutionaries would rapidly overcome any degree of unemployment wherever they are applied.

n) Abolition of the Housing Shortage

After the revolution has been militarily won, an attempt should be made to rapidly overcome the housing shortage. The present condition, in which the living space for people is often smaller per head than that enjoyed by convicts in Western prisons, should not be tolerated for long. This does not only require the repeal of building and zoning restrictions and of trade union monopolies, rent and interest rate controls, price controls, value preserving clauses, like e.g., gold clause mortgages, a plentiful supply of exchange media, a freeing of long term credit options, free imports of prefabricated houses, new technologies, building and loan associations, freedom for foreign investment to attract refuge capital but the abolition of all the artificial and imposed bottlenecks in this sphere. (Even in a supposedly "free" economy like Australia, a friend once listed ca. 150 such restrictions in a chart. An official chart came only to 50. - J.Z., 12.12.02.) Rapid training schemes for building labourers are possible.: A West Australian firm offered some time ago to train proficient enough brick layers within only 3 weeks. They would be good enough to build brick-houses under the supervision of an experienced bricklayers. Their work was guaranteed by the firm, a brick manufacturer, who had found that labour was a bottleneck for his sales.

Many other measures would be required or might be advisable: Repeal of restrictions on caravans and caravan parking places. Reorganisation of members of the dissolved militia army into a kind of building army of volunteers to overcome the housing shortage within 2 years, through the mass production of prefabricated housing. All zoning and minimum block requirements should be repealed. Financing could be facilitated by utilising for a while the equivalent to armament expenditures from the temporarily continued taxes exclusively as loans for the purpose of house building. All raw materials, transport, tools & machines of the former armed forces, which could be utilised for this purpose, should be released for this. Private persons and the new communities should also be free to ask for loan subscriptions and issue corresponding loan certificates in order to raise capital, to be invested in home building and freed from all taxes for 20 years. (If the libertarian revolution is quite successful not only for 20 years but forever! - J.Z., 12.12.02.)

It also seems quite feasible that all caravan and other prefabricated housing producers of the West, if working at full capacity and selling their products to the newly liberated countries on instalment payment plans, could, within a relatively short time, overcome the housing shortage there.

o) Establishment of Guaranty Associations

The militia should also promote the establishment of guaranty associations to facilitate the taking up of credits from foreign countries and to assure the fulfilment of contracts and obligations towards foreign countries.

p) Recognition of Indemnification Claims only in a Few Extreme Cases

Seeing that almost everyone had become in one way or the other a victim of the old regime and could, therefore, raise indemnification claims, and that the number of people who profited from the regime enough to accumulate

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considerable capital assets, which could be confiscated, is relatively small and quite out of proportion to the claims which could be raised, a ruling should perhaps be resolved upon, during the first revolutionary meetings, that only a few indemnification claims, in quite extreme cases, will be accepted and that these are to be satisfied only out of the confiscated private possessions of former high functionaries of the old regime.

Everyone will anyhow derive a great benefit merely from the fact that in future he can freely use his working power and will receive the full market value of his labour, seeing that all monopolies are abolished. Whatever claims go beyond this will in most cases not be very urgent. Most of the exterritorial and autonomous communities of volunteers will probably guarantee the subsistence minimum to their unfortunate members who are no longer able to support themselves by their own labour. Moreover, if the finance plan suggested in PEACE PLANS No. 19C is, correspondingly, applied by revolutionaries, then all citizens will be able to start their new life in possession and control of some considerable capital assets: their shares in the formerly nationalised enterprises and other national assets. In many instances these would allow them a much higher income than they derive now, e.g. in old age pensions, from the existing regime.

All claims for indemnification throw up numerous questions:

It is the responsibility of those who want to arrange a share of the burdens to formulate their claims quite clearly and to make proposals for the kind of taxes which would be required to satisfy such claims - all this in a form that afterwards a referendum could be organized on this question." - Ulrich von Beckerath.

Different exterritorial and autonomous communities of volunteers are likely to settle this kind of questions in different ways. Those dissatisfied with the settlement arrived at in their community could secede from it. I believe that all such claims could best be settled once and for all with the scheme described in detail in Peace Plans No. 19c.

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10/1 The Social Reforms which Are to Be Realized in the Dictatorial States in a Revolutionary Way,

Are, first of all, to Be Realized in a Peaceful Way in the Relatively Free Countries

One of the preconditions for the successful realisation of the revolution proposed here is that all the necessary constitutional reforms are realized peacefully wherever this is possible. Only thus could the danger of nuclear, bacteriological and chemical warfare be banned. Only thus would the social reform programme of the revolutionaries appear believable and realistic. Only thus would the supposed danger of an imperialistic and aggressive war of the West against the East be completely abolished - even in the opinion of the Russian and Chinese nationalists. Thus the Western countries should first of all:

1. Abolish unemployment, inflation and housing shortages - especially through the introduction of monetary

freedom (free note issue, repeal of legal tender and the monopoly of the central bank, free choice of value

standards, introduction of a free gold market and a gold clearing currency standard, and freedom for all kinds of

value preserving clauses in contracts),

2. establish or facilitate the establishment of productive cooperatives,

3. transform all significant natural monopolies into open cooperative enterprises,

4. permit the establishment of exterritorial and autonomous communities of volunteers,

based on individual secessions,

5. establish everywhere local volunteer militias for the protection of human rights.

On this fifth point compare Section VI of this book.

10/2 An Academy for Revolutionaries

Most revolutionaries are unaware of the number and kinds of their predecessors.

If they are aware of them then they remain all too often unaware of their mistakes and are all too likely to repeat them. How serious their mistakes are, in many cases, was discussed above.

Every revolutionary will be confronted, most likely, with the necessity to fight somehow against troops which are trained, led and maintained according to the principles of a rather well developed military science. The revolutionary technique available to him today is only of little value (unless one wants to establish a new totalitarian regime - this science is developed!) and perhaps comparable only to alchemy, astrology and the magical tricks of savages. Under such conditions revolutionaries can, obviously, win only when they have much luck on their side or the leaders on the other side are singularly incapable. Consequently, military and ideological despotisms can continue to rule almost without risk.

One of the major causes for this lack of revolutionary science (science of truly liberating revolutions) is the fact that there are so far no special academies established - or faculties in the existing universities - which are the equivalent to the military academies but teach instead how one can realize liberty in a revolutionary way. Seeing that about 2/3rds of all States today can be classed as dictatorships, the need for such institutions should be obvious.

Moreover, while freedom lovers have so far failed to establish these most important training and research centres, the totalitarians have been active and established many special schools for their type or revolutionaries.

It is very instructive how little one can expect from the politicians and statesmen in the relatively free countries of the West when, with the examples of revolutionary academies of dictatorial States before their eyes, which do effectively teach how one can destroy the remaining liberties in the Western countries in a terrorist- and totalitarian revolutionary way, they have still not perceived the need for the counterpart to these institutions, namely universities which study and teach how successful revolutions against dictatorships ought to be conducted.

If the military men knew their jobs well enough then one would also expect that such revolutionary academies would be established as branches of their military academies seeing that every "free" State today has to expect to be defeated at one stage or the other by a dictatorial regime and that, afterwards, its citizens would be ruled by the military dictatorship of an enemy regime which could be shaken off only by a successful revolution. This sin of omission reminds of that of Napoleon III, who had failed to provide his officers, during the war with Prussia, with

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maps of France, because he could not conceive the possibility that his armies might be beaten and that the war would be conducted on French soil. The confusions resulting from this failure, in troop movements of the French armies, contributed much to the final defeat of Napoleon III.

If the relatively free States of the West - or some of their concerned citizens - established such academies, making available funds which would amount only to a small percentage of the current military budget, perhaps anticipating the values to be liberated, as suggested in Peace Plans No. 19 C, then these academies could soon compile a detailed and practicable revolutionary programme, one which e.g., the oppressed Russian and Chinese people could soon apply successfully against their rulers. Ideas know no borders. The third World War could be avoided in this way.

As not much initiative could be expected from the Western governments in this respect, these institutions should be established by Western volunteer militias, which would be unarmed at first and begin with the establishment of training centres.

These special revolutionary academies could benefit very much from exact historical studies of the revolutions of the past which could compile lists of methods used and methods omitted and their observed effects in every case. By now all such information could even be computerised and the successful measures would thereby be very rapidly revealed. I believe that basically they would just lead to greater details and a refinement of the proposals made above and below in the section on militia warfare.

10/3 The Sketch of a Revolutionary Programme, here Supplied, Must Be further Developed

The further development of the programme for a libertarian revolution that is here described should take place in academies, as suggested above, and also in public discussions and private workshops, wherever they are possible, in all foreign affairs discussions of parties, in the press, in letters to the editor, in taped and broadcasted lectures and discussions etc.

How the exchange of opinions could be generally stimulated and intensified and the steps to be taken to assure that true insights and good ideas have a better chance to be accepted than they have now, will be described in Section VII of this book. All the institutions described there will, in their way, promote the development of a good libertarian revolutionary programme.

10/4 Publication of the Revolutionary Programme in the Countries under Despotic Regimes

Even the best revolutionary programme must be communicated in time to a sufficient number of the oppressed citizens and soldiers. As any dictatorship imposes political censorship, the spread of this programme must be achieved in unusual ways. Tried out avenues are the following: Leaflet drops from balloons, broadcasts and the smuggling in of literature. (Since then have been added the often only typed and never fully suppressed underground journals, especially in the Soviet Union.) Unfortunately, these means were so far never used to spread a rightful and practicable revolutionary programme, perhaps for the simple reason that no one has so far bothered to attempt to compile one.

From balloons, released under suitable wind conditions, millions of leaflets were successfully rained down over East Germany, sometimes even spot-on over areas just then used for exercises by the Red Army. These balloon can easily cover hundreds and sometimes thousands of miles. Some of the Japanese balloons sent to cause forest fires in the USA during WW II, did actually make it across the Pacific!

Already now many radio programmes are beamed over the Iron Curtain and Bamboo Curtain and received in Russia and China, in spite of the hundreds of jamming stations set up to prevent this. The broadcasts of the American radio station RIAS in Berlin are heard by about 80% of the population in East Germany. Long wave transmissions cannot be fully jammed and ultra short wave transmissions not at all.

The number of such stations, their power and their spread over the wave lengths should be increased, and satellites could be used to transmit and discuss the revolutionary programme.

At least some copies of the complete and written down revolutionary programme should be smuggled into the dictatorship. (If smuggling pays properly it can never be fully suppressed.) These copies could then be multiplied by the resistance groups.

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In the radio and television broadcasts all possible objections against the programme should be thoroughly discussed and refuted to offer at least some substitute for the suppression of the free exchange of opinions existing under the dictatorship. Sufficient communists will always be on hand at these Western broadcasting stations to play the "devil's advocate". If not, then they could be extensively quoted.

An attempt should also be made to begin political, economic and social discussions with the about 60,000 HAM operators in the USSR and with tightly beamed broadcasts by small private stations which, at least for local districts and for up to 20 minutes, could overpower for this short time e.g., Radio Moscow or Radio Peking, broadcasting on their wave length, until they are jammed. Their monologues do not deserve protection as "free speech". On the contrary, one should interrupt them by free expressions as often as possible.

Such a guaranty is required to induce e.g. the Russian and Chinese soldiers to have trust and confidence in our promises. They are still largely nationalists in the old sense and willing to protect their countries against all external dangers. That the here explained programme does not constitute a danger to Russia and to China but would rather mean their liberation, they would see and understand. But they will not automatically believe that we will keep to this programme.

That they will not and cannot have confidence in the promises of our politicians does hardly require any proof. We do not believe such promises, either, on many occasions.

One way to disperse these fears and suspicions, which might induce them to further serve the communist regimes and to fight in wars against us, might be the organization of numerous direct democratic meetings, held in the West, covering practically the whole population.

To these meetings as many Russians and Chinese should be invited, refugees, deserters, even officials. In these meetings just war and peace aims and methods should be proclaimed and the assembled citizens should confirm under oath that they would do everything possible to protect the human rights and natural rights of rational beings not only in their own countries but also in e.g. Russia and China. Moreover, that they would rather rise against their own governments or leaders than obey them, whenever these should so deteriorate that, in case of a pro-freedom revolution in Russia and China, they would order an imperialistic and aggressive war against these countries.

The resolutions of these popular assemblies and the opinion exchanges they lead to among ordinary citizens, should be broadcast as widely as possible and in all the languages in oppressed countries.

Almost every Russian and Chinese will come to realize that there is a great difference between the promises of a foreign minister or a president of a foreign country and the same promise when given publicly and freely by every foreign citizen. The latter promise deserves trust and will receive it. (Especially once ideal militia forces have been organized in the West.)

Once this trust is established then patriotism will no longer hinder e.g. Russian and Chinese citizen and prevent them from collaborating with the enemies of their regimes, on the contrary, their patriotism will then induce them to collaborate with all freedom lovers beyond the own national borders in order to overthrow the own tyrannical government as soon as possible.

(Of prime importance here would be close collaboration with various governments-in-exile that are already established in the West for present and future volunteers, i.e., competing governments and free societies already operating in the West and demonstrating how liberation in Russia and China would come to work under conditions where everyone can have the government or non-governmental society of his or her dreams. - J.Z., 12.12.02.)

10/6 Unlimited Acceptance of Refugees and Deserters

That we will be prepared, during wars and in revolutionary times, to accept millions of refugees and deserters within days and to provide them immediately with good enough accommodation and well paid jobs, that they will neither be forcefully returned, nor treated as enemy aliens or second-class people, nor will have to suffer such deprivations in refugee camps that many of them will be driven back to the countries they fled from, that they do not have to be afraid of deprivations and poverty any longer, once they arrived in our areas, that they will be considered as welcome helpers in our attempts to increase our standard of living further, by an increased division of labour, that, as long as they do not act as our enemies, they will be able to move freely as our guests - or even as our allies - and that no peaceful and productive and creative activity will be blocked for them - all that they will only come to believe (and act accordingly in an emergency) when already now, in peace times, we do act in this way towards all refugees and deserters.

Every Refugee and deserter should thus be welcomed with open arms. They should in no way be disadvantaged by being refugees or deserters. (Language lessons should be facilitated as much as possible.)

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(The few refugees who are fleeing not because they claimed human rights but because they ruthlessly suppressed human rights, while they ruled and who have now suffered a military set-back by the intervention of a less ruthless but still totalitarian other regime, like many of those fleeing now from Cambodia and bringing their arms with them, for further abuses in the future, should be disarmed - and exposed as much as possible to freedom ideas and practices, so that one day they could return, armed, as true liberators.)

Contrary to the presently prevailing practice, the oppressed people in all countries should be appealed to:

Use every opportunity to flee to us. Under no circumstances should anyone be forcefully returned against his will. If they are accused of criminal activities, then they should be given fair trials in our countries. Even if they are only common criminals - they could do less harm to us as such than as soldiers of an enemy regime.

Today's refugee policies and Alien Acts constitute a large step backwards towards barbaric conditions. Already during the Middle Ages and up to the times of Frederic II of Prussia (the Great) the princes of the realm often competed with each other in order to attract as many refugees as possible into their countries. Beyond equal rights with the own citizens, they offered them for this purpose all kinds of attractive concessions, in some instances tax exemption for many years. The Huguenots (French Protestants fleeing from Catholic France) were offered, in the middle of absolutist Prussia, local autonomy, their own jurisdiction and schools, and, naturally, customs and religion. Moreover, they were given some credits and tax exemptions for up to 20 years. They lived largely already in autonomous protective communities of volunteers. To reward additional labourers with commodities was no problem.

Today's economic leaders are too ignorant to use the full potential of economic liberty to properly finance the numerous employment opportunities arising out of the sudden influx of more producers and consumers.

If true "overpopulation" were an obstacle - as numerous "experts" assure us then the people in these countries should rather suffer from overworking themselves than from unemployment.

Whatever country would first introduce the new economic rights described above and listed in the appendix and would thereby be enabled to accept an unlimited number of refugees, would now be likely to receive vast numbers of refugees and could thus make a large leap forward in its economic development.

It would attract still more refugees and develop still faster - if it were also the first country to destroy all its nuclear weapons and nuclear reactors and other nuclear installations and biological and chemical warfare preparations and publicised these facts. Then it would automatically become a refuge for all those who are only all too aware how much their own national government "defenders" threaten them in this way.

10/7 Employment and Accommodation for Refugees and Deserters

The hatred now commonly found against new immigrants would largely disappear with the abolition of unemployment and housing shortage. Nobody would then any longer believe that he would be deprived of employment and housing opportunities by the acceptance of refugees. Thus special legislation and measures against refugees would no longer be very popular. (Exterritorial autonomy for the refugees would also see to it that aspirations for more or less homogeneous self-government of "natives" would not be threatened.)

The militia organizations should secure the accommodation even of large numbers of refugees by the storage of a large number of prefabricated housing units, in sections, ready for immediate and rapid assembly. As these are also to serve in case of wars and revolutions, to accommodate millions of refugees and deserters temporarily, the costs of such preparations should be booked as defence costs. This measure would, obviously, diminish the military strength of dictatorships.

As long as unemployment and housing shortage are guaranteed by numerous absurd laws in the West, we might get a repetition of what happened in the fifties in Western Berlin: the conditions of refugees from the communist regimes in camps in West Berlin were so bad and their chances to become self-supporting outside the camps so small (there were numerous prohibitions against self-help efforts) that 4 among 10 preferred to return to the slavery under the East German regime!

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10/8 Establishment of Exterritorial and Autonomous Communities of Volunteers

in the West and Promotion of such Associations formed by Refugees and Deserters

Revolutionaries as such usually form a minority group. This by itself should, long ago, have induced thoughtful revolutionaries to consider how they, after their victory, would treat minorities in the future so that they would not be inclined to revolt against them.

The best solution would be to permit the establishment of exterritorial and autonomous communities of volunteers to all dissenting minorities. Thus, in the ideal society to be established by the libertarian revolution proposed here, every individual and every group, whether of a national, ideological, religious, cultural or racial type, e.g. Ukrainians, Mongols, Chinese, Jews, Muslims, but also Soviets, "ideal communists", Nazis or Red Chinese, will have the right to secede from the State and from any exterritorial and autonomous community, without having to change their residence, and the right to associate with like-minded people in exterritorial and autonomous communities of volunteers. The only condition imposed on all these individuals and groups will be one that is almost self-evident:

All of them must respect the human rights and natural rights of rational beings, if not among their own members, seeing their particular prejudices, then at least towards the members of other groups.

Only one particular right they must absolutely concede to all their own voluntary members: The right to secede from them. (Even there, they could impose contract fines, if they wanted to, as long as the individuals concerned would have a reasonable chance to pay these.)

With the revolutionary programme: "Exterritorial autonomy for all minorities!", every dictatorship can be much easier overthrown. The various groups of the opposition can thus be induced to cease their continuous infighting and to really unite and coordinate their forces towards the overthrow of the dictatorship. None of them need be any longer afraid of other groups after this revolution has succeeded.

These groups will, naturally, still compete but only a) with words, b) by setting the best possible example in order to gain more members and converts. They will no longer compete for power and domination

In 1814 the various factions in Paris came to a sensible agreement: After the over-throw of Napoleon I, no matter what faction would come to power then, they promised each other, they would not engage in persecutions. Exterritorial autonomy for volunteers offers a still better solution.

Whole armies of the dictatorship are likely to desert, secede and form exterritorial communities, possibly in foreign countries, or they will remain where they are and establish themselves there and then, as allies of all other enemies of the dictatorial regime. Why, with this kind of freedom offered to them, should they go on fighting? A conquest of their country by an external enemy would no longer threaten, would no longer be possible even. They would own no country exclusively (apart from the private property of their members) and could claim to live and work anywhere on Earth.

Once the soldiers have comprehended this freedom alternative, the dictatorship will in vain appeal to their nationalism. True patriotism will, rather, unite them against it.

In order to demonstrate to the revolutionaries that a social order based upon exterritorial and autonomous communities of volunteers is practicable and desirable, to convince them that these communities would not threaten with war, cannot and do not want to produce mass extermination weapons, that they provide even communists with the possibility to live under the system desired by them, in peaceful and tolerant coexistence with other systems, for all this, and more, such communities are to be established first of all in the West.

This would also serve as a proof that the people take the revolutionary aim: exterritorial autonomy for all who are now subjected to dictatorships, so serious that they realized it for themselves, in a peaceful and democratic way (by referendums or individual secessions) in the West first.

That they desire the same freedom for all others, they could also convincingly demonstrate by inviting the refugees and deserters, which they have welcomed from dictatorships, to either join one of their communities or establish some of their own. These new exterritorial and autonomous communities would be much more representative "governments in exile" than the old type of intolerant governments in exiles, which had exclusive territorial claims and were often little better than the dictatorship they opposed.

Obviously, for each existing dictatorship a number of such new communities would most likely be established, each representing one or the other grouping in the oppressed country and, seeing that all of them are autonomous, they would no longer be each other's worst enemies but could easily establish at least a temporary confederation

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against the dictatorship, together with its external other opponents. Once the in-fighting between all these groups ceases - due to this kind of constitutional re-organisation - the strength of these groups will be multiplied and directed exclusively against the dictatorship.

10/9 Teaching the Language Prevailing in Despotically Governed Countries

Revolutionaries must always be able to come to an understanding with the soldiers employed against them - in their language. At least they must have a sufficient number of translators among them. This would also be important in case of a foreign occupation, if e.g. the Soviets would succeed in occupying large or all areas of the Free West - when, in other words, the Soviets, in the West, would have to be overthrown by a revolution.

Thus such language studies should be especially promoted and Russian and Chinese should be introduced as optional subjects in the school curriculum. With regard to the Soviet regime, Tartaric and Mongolian tongues should also be sufficiently taught and many of the Russian deserters and refugees are to be instructed in these languages, if it should be necessary. One should remember that Lenin and Trotzky used Mongols against the insurrectionist sailors in Kronstadt in 1921 and Mongols were also used by the Soviets against the Hungarian revolutionaries in 1956 - because the Russian soldiers came often to an understanding with these revolutionaries

and many even deserted to them and some fought with them. (The only foreigners who did!) Such translators could help very much in spreading the revolutionary programme and getting it accepted.

It is likely that many of the political refugees will be willing to act as language teachers. School children would often learn Russian easier from a Russian who could report Russian conditions to them from his own experience, than from other teachers. For the boys especially, these lessons will be still more interesting if the ultimate purpose of such lessons is openly stated.

In the countries of East Europe, occupied by Soviet troops, the populations should use every opportunity to learn Russian. Parents should induce their children to follow the Russian lessons with special attention. They should no longer consider it an act of resistance to learn as little Russian as possible. The West should make corresponding appeals to the people in Soviet occupied countries.

To make certain that there will be enough translators available, e.g. for a revolution in East Germany, West Germany should welcome already now as many Russians, Mongols, Chinese and Tartars as possible, give them the chance to live and work there and become acquainted with free democratic institutions and individual human rights and the natural rights of rational beings. Then most would soon be prepared to act as translators for revolutionary East Germans rising against the East German regime which is supported by Soviet troops.

10/10 Preparation of Trade Relations

Large firm of the free West should already now make some offers - and repeat them from time to time - on the conditions and prices for which they would be prepared to deliver food and other goods needed by the revolutionaries already on the first day of the revolution.

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10/11 Storage and Smuggling in of Communication Sets

Among the most important preparations for a successful uprising is the provision of a tight net of private wireless communication sets, Ideally, they should be strong enough to be heard within a radius of 50 km on ordinary radios. The whole sets or parts for them could already now be smuggled into all countries where a libertarian revolution would be necessary. To avoid discovery, they ought not to be used until the revolution begins. They must be easily portable and weatherproofed. The HAM operators existing in these areas should be provided with the necessary accessories - on day one of the revolution.

To attempt, initially, to occupy the government broadcasting stations, which tend to be well guarded, would only cost unnecessary bloodshed and would make the success of the uprising too much dependent upon the occupation of these centres.

The East German uprising of 17/6/1953 failed because, among other things, the insurrectionists had not sufficient contact with each other. The people of two large industrial towns, for instance, both only about 50 km apart, were ready to join the insurrection but both waited for news from the neighbouring town - and in vain because there was no communication between them. Thus neither town joined in. The situation in many other places was probably similar. Thus the rising was not as wide-spread as it could have been and could be suppressed much easier.

To rely on the successful occupation of the governmental broadcasting stations would also expose the revolution to the danger that these stations might be damaged in the fighting or by government saboteurs. Communication should never be dependent upon government media, least of all for a revolution.

10/12 Unilateral Destruction of all Nuclear Weapons

A sufficient disarmament agreement with a government like the Soviet regime should neither be expected nor would it be worth much.

Thus the people in the West, represented by a militia of the kind described in section VI, should one-sidedly destroy all mass extermination weapons on their side:

a) because these devices are, according to their very nature, contrary to human rights,

b) because they threaten primarily the oppressed people and not their oppressors and

c) because the deterrent effect of nuclear devices is not strong enough, under all circumstances, to prevent a nuclear

war.

By these actions they would again prove their peaceful and rightful intentions towards the oppressed people and reduce the danger of the initiation of an atomic war by accident or against the will of most of the ruling people.

For the militia forces in the West it would be senseless to wait first of all for the revolutionary destruction of the Soviet and Red Chinese nuclear destructive devices because, due to their principles, they neither would nor could employ such "weapons". They could not even threaten with their use because anyone could recognize their empty bluff.

The militia men would, furthermore, be aware that their oath to kill anyone as a tyrant who would use a nuclear weapon, would be a much stronger deterrent for those who need to be deterred, namely the dictators and their executives, than a threat with nuclear weapons would be. They have the best shelters and defence preparations made for themselves and if anyone would survive this holocaust then it would be these people, who least deserve it! (It would, most likely, outlaw all those as tyrants who would keep ABC mass murder or anti-people "weapons" "in readiness" At least after referendum decisions against nuclear weapons this would also be applied against elected leaders in democracies who, contrary to the referendum decision, kept such mass murderous devices. - J.Z., 12.12.02.)

The militia of the West would also be aware that, through the initiation of revolutions in the East, they could defend themselves successfully without atomic "weapons" against any of the dictatorships armed with nuclear devices.

One might object: If we one-sidedly destroyed our nuclear devices, couldn't the dictators afterwards simply demand our surrender, threatening us with their devices? Couldn't they, if we were not capitulating, destroy one of our large towns after the other until we would be prepared to give in?

This whole argument is based on the assumption that nuclear destructive devices are still "weapons" and defensive or deterrent ones at that. This overlooks that against an enemy who uses nuclear destructive devices no effective enough defence is possible. So far, as a defence against air raids, the shooting down of a large number of the attacking aircraft was considered a defence. Already the destruction of 25 % of the attacking bombers did as a rule suffice to prevent further attacks on such targets. (Nevertheless, the flattening of most large towns in Germany was not prevented!)

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Against nuclear "weapons" the defence would have to be not only 25% but 100% effective to be sufficient. Even if only one of 100 nuclear bombs or rockets reached its target, a large percentage of the world population would be wiped out, if not all, depending on the latest "over-kill" figures. And a 100% effective defence against such destructive devices is as good as impossible and likely to be so for the future.

Moreover, for every defensive device there are also counter measures. Consequently, the means of war have become more and more deadly and destructive until we arrived at the ultimate absurdity of ABC "weapons" and even, possibly, "doomsday bombs".

When, as is the case, nuclear devices, in ground to air missiles, are used in attempts to shoot down nuclear bombers or rockets, then the radioactive fallout, one of the effects against which our defence is to protect us, is thereby doubled!

The American and the Soviet government have repeatedly declared that they can destroy each other's countries. Thus both would like to see all nuclear devices destroyed and rely in the meantime merely on their deterrent effect. This deterrent effect could be relied upon only if it were 100% and madmen, fanatics, sick and sleepless people in power would see to it that the deterrent effect is not 100% in the long run.

("The experts think the chances of nuclear holocaust in the next five years are about even." - said Henry Schoenheimer, in THE AUSTRALIAN, 26.6.1973! This quote induced my to write, in 1975, my handbook on the prevention of nuclear war through the extension of individual liberty: An ABC Against Nuclear War. published in PP 16-17. So few people have shown a serious interest in this subject that the odds may, actually be worse still for each 5 - 20 year period. And we belong to a supposedly rational race that laughs about the supposed inclination of an ostrich to stick his head into sand when danger threatens!

The ignorant and prejudiced and apathetic optimism and pessimism and short-sightedness involved are too strong for me to describe in mere words.

"In the struggle against such horrors as these. how dare you be neutral?" asked Henry Schoenheimer, in the same article. Well. they "dared" and there are only 4 years to go for 2:1 odds for nuclear war against these estimates. Is our attitude any better than that of the European Jews who failed to see their holocaust coming or to take steps in time to escape it? )

The only possible types of defence consist in my opinion out of preventive measures, deterrent and punitive measures like revolutions and tyrannicide actions (out-lawry combined with certain amnesty provisions) described in this book. (Compare also the entries under disarmament. appendix IV and Peace Plans Nos. 16-17.)

If a dictatorship would anticipate the revolution against it and began an aggressive war against the people in the West. i.e., if even the threat and practice of tyrannicide would not deter it (although attempts of this type are, sooner or later certainly effective, especially since the invention of short-distance guided missiles which could be radio-controlled), then one can only have the satisfaction that a use of nuclear weapons by one side only will be much less extensive than a nuclear exchange between two nuclear powers. Mankind would still have a good chance to survive; only the population in and around some large cities would be wiped out.

What should be done in such cases? We should then "surrender", i.e. sign as fast as possible any peace conditions demanded, in order to avoid still further destruction.

We could do this with relatively little risk provided only:

a) all our citizens have come to know a good programme for the overthrow of dictatorships and know how to act in

case of a revolution and

b) they also know how to solve all social. economic and political problems much better than the communists do.

Based upon this knowledge, we would soon have a successful anti-Soviet revolution in West and East, with the assistance of the occupation troops, a revolution against which the communist rulers could not defend themselves.

In all such considerations one should not overlook that not only unilateral nuclear disarmament would bring about such dangers but that these and similar dangers do exist right now and. that the present danger of a general nuclear war is actually much worse.

There is nothing more important than to ponder continuously how all persons who can prepare such a fate for mankind, and who preserve these conditions, can be deprived of their power - and then to act accordingly.

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10/13 Tyrannicide

Already before the beginning of the revolution, the dictators should no longer be able to feel relatively safe. When propagating human rights and natural rights of rational beings, the right and duty of rational beings to kill or otherwise render harmless all who could rightfully be classified as "tyrants" should be especially stressed.

At the same time, they should be granted asylum and amnesty when they flee to us, e.g. from competitors in the power struggle, although they cannot be considered as rational beings and perhaps not even as human beings. Such twofold treatment would help to sow distrust between them. Asylum and amnesty should also always be granted to them in case they destroy or surrender some mass extermination device. But while they are in power and act tyrannically "the sword of Damocles" should always hang over them and its thin threat should be cut as soon as opportunity offers. Moreover, as already Thomas Moore suggested in his Utopia, high prizes should be put on their heads and subscription lists to such prizes should be opened. Naturally, all penal clauses outlawing this kind of "assassination" or even mere advocacy of the assassination of foreign "heads of States" should be repealed. (As if such beasts could be considered as "heads" of whole nations!)

10/14 Appeal to the Oppressed Population to Let themselves Be Trained, Militarily, by the Dictators

The members of the various conscripted and "volunteer" forces in the Communist Empire, and their civilian subjects, should be invited from the West to let themselves be well trained by their communist rulers in the art of war and to select from among themselves already now leaders and officers for the coming revolution against the regime. Revolutionaries cannot possess too much military knowledge and it would be up to the propaganda from the West to suggest the necessary changes and additions required for sensible and rightful revolutionary military actions against dictator-ships.

Most of the following suggestions were taken from Jan Valentin's book: "Tagebuch der Hoelle" (Diary from Hell), Kiepenhauer Verlag, 1957. Many more such suggestions should be systematically collected, discussed, tested against historical experience and incorporated, if found workable, in a good revolutionary programme.

Every resistance fighter should know only a small circle. (Robert Heinlein, in: The Moon Is a Harsh Mistress, suggested a refinement to the "cell-system".)

Extreme precautions should be taken in the acceptance and initiation of new members. No one should keep any incriminating written material at work, in his residence or on him. Lists and addresses are to be learned by heart. But one should, perhaps, always have some harmless letters around.

Accommodation is to be changed as frequently as possible. Always other cover names are to be used.

When body searches are likely then weapons should rather be given to a female present.

All people enquiring after persons outside their own resistance circle should be considered as suspect.

All relationships with former friends are to be restricted and finally cut off.

No love affairs with outsiders! Wives and lovers of those arrested are to be isolated completely as they are prime targets for supervision by the police of dictatorships.

Alcoholic drinks and other narcotic drugs should be avoided as much as possible. Appearance and behaviour should, as a rule, be as inconspicuous as possible. These conspirators should almost always walk without haste.

They should not walk together but at a distance from each other. Signs should be agreed upon: E.g.: Stop! - if the man ahead puts his right hand into the pocket and: "Disappear!" if he puts both hands into his pockets.

Important members should always be followed, at a distance, by at least one member - as a precaution for the others, in case these leaders are arrested.

When walking along the street, one should keep close to the building walls because they give some screening and one is harder to recognize from a passing car filled with agents.

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Before going around corners or entering a house one should, as inconspicuously as possible, check whether one is being followed. The reflection of windows could be used for this.

For all appointments and meetings inconspicuous signals are to be agreed upon.

Extreme punctuality is required. One should never wait for more than one minute. Waiting could attract the attention of passers-by or invisible observers.

Guards standing on their own look suspicious - a seemingly loving couple can fulfil this function much better.

All talks necessary should as far as possible take place in the open air and away from other people. While it is true that one can escape much easier in populated places, in case an arrest is attempted, one can also be much better observed there, without noticing the fact.

Before going to an appointed place, one would often do well to send a sensible boy out as a scout to find out whether the locality is free of people acting in anyway suspiciously.

Secret meetings should never take place several times in the same rooms.

Meeting places should not be entered or left by several at the some time, and, if possible, not by the same doors. There should always be several exits, to be clarified right away.

The first minute should be spent on determining a plausible excuse for the secret meeting in case of sudden arrests.

Members of the resistance groups should never be addressed in the presence of strangers. If no meeting was previously agreed upon, then one should in no way indicate that one knows the other.

Attention of neighbours should never be drawn by burning lights late at night, or using typewriters at unusual hours or by burning papers in summer time. Superfluous and dangerous papers should rather be buried.

When visiting other members one should leave one's flat only after checking the street and nearby windows for observers. Signs should be agreed upon with people one expects for a visit: A flower pot on the window sill could mean: All clear, you may enter. A disorderly drawn curtain could be a warning: Caution! Danger!

When propaganda material is produced in large volume, then each process should be undertaken in a separate locality. One place for the production of the ready-for-printing-manuscript, one for the typewriter, one for the printing or duplicating or copying, one as a storage place for the material. The collaborators of the different places should know as little as possible of each other. For each two places a courier service is to be established. Special care should be taken with paper purchases as many paper dealers collaborate with the police.

When distributing leaflets in high-rise buildings, one should begin at the top.

In public meetings in the open air one reduces the risk by pressing small stacks into the hands of people, for passing on, and walking quickly away. Experience shows that most people presume these handouts to be official ones, are ready to pass them on, keeping only one, before they discover and read what they have got.

Reckless and imprudent offenders against the agreed upon safety rules should be excluded.

Members who are conspicuous in any way, by size for instance, red hair, being crippled etc. should, if possible, never be used as lookouts.

Attaching a small piece of cardboard to one's heels can already change one's usual way of walking - by which many people are recognized.

The repertoire of such tricks may go into the thousands. Handbooks listing and discussing them should be compiled and carefully studied. Small omissions of this type can cost many lives. This is also the kind of activity for which one can get good tips even from totalitarian revolutionaries, terrorists and criminals.

a) Clarification of all doubtful points in the programme for a libertarian revolution spread from the West.

b) Smuggling in and distribution of propaganda literature.

c) Selection of future leaders and other ranks for the insurrection.

d) Training of managers for note-issuing centres e.g. of shop associations and of the revolutionary militia army.

e) Determining where there are stores of food, alcohol and weapons, especially atomic weapons.

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f) Determination of the date for the starting of the revolution - by selecting those who are to give the signal for it as

soon as a sufficient number of soldiers and citizens have been won over and know and understand the

revolutionary programme.

g) Study of the language of soldiers who might be employed against the revolutionaries.

Other such points are mentioned above and below. A complete list of relatively significant actions might comprise hundreds, if not thousands of points. The above is just a reminder that such a check list ought to be compiled from the revolutionary experience of the past.

If your States are as democratic as you pretend they are, if really and not only seemingly or under coercion, 99% of the population vote for you - then you do not have to fear a revolution against you, as here proposed, and can quite safely ignore all such proposals.

But you will reveal, inevitably, your true position and thinking if you assert that these proposals would promote hatreds between nations and would incite people to rebellions and to interventions with the inner affairs of other countries. You provided the seed bed for a libertarian revolution, you provided the cause.

This programme does not corner you. It leaves you a way out - if not an honourable one (this has been made impossible by your actions) but at least a safe and anonymous one.

Remember, further, that any attempt to suppress these ideas is likely to lead only to their further propagation. Ideas, once uttered, can no longer be destroyed.

Your safest way would be to ignore them and to hope that the free people in the West and your subjects will do the same. This kind of treatment can be deadly for many years.

If a spark of idealism should be left in you, consider the opportunities this programme offers you and others to realize these ideas without having first to subjugate the majority in your countries or the peoples of this world.

Germany?" - John Holt, 9/72.

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