Common Sense Economics
Glen T. Martin
Published in Chapter Three, section 7 of World Revolution through World Law
7. Common sense economics under democratic world
The economics of a decent world order under the Earth Federation can be
summarized in seven simple, yet fundamental principles. Once the official
World Parliament is elected, it will have the authority to implement a
global economic policy based on these principles.
7.1. First, extensive lines of credit in Earth Currency and nonexploitative
loans will be made immediately available to individuals, businesses, and
governments for purposes of sustainable development. The great lie of the
present world order is that only those who possess wealth can loan money
or create lines of credit. But real wealth is a product of natural resources,
capital, and human labor. The world government can create immense lines
of credit in Earth Currency to be used for rapid, sustainable economic development
wherever this is needed within the Federation.
7.1.1. With the creation of real wealth from development, these lines of
credit can be repaid for only an additional small accounting fee. There will
be no exploitative interest rates. And the value of Earth Currency will not
be predicated on the global financial institutions that now devalue currencies
of poor countries and manipulate the “convertible currencies” to
continue to enrich themselves.
7.1.2. The first twenty-five nations to ratify the Constitution (comprising
a large portion of the Earth’s population, resources, and collective technological
know-how) will form a substantially autonomous economic unit.
The Federal government will immediately begin extending lines of credit
for development, not merely to the already wealthy elites within these
countries but to the poor or whoever has a sustainable, nonmilitary project
in mind that would create wealth as well as benefit society. Individuals,
businesses, and governments will have ample lines of credit available to
them for only the cost of an accounting fee. Governments could reasonably
focus on rapid development of infrastructure (roads, schools, hospitals,
sanitation, communications), while businesses focused on goods and
7.1.3. Every poor nation knows that it is watched carefully by the imperial
powers to ensure that it does not deviate from its subordinate role
within the global system of domination and exploitation. Every nation
knows that if it ratified the Constitution for the Federation of Earth alone,
it would be economically punished for this by withdrawal of investments,
recall of loans, or economic sanctions. Witness the forty-three years of
suffering that has been imposed on the Cuban people because their government
attempted to take an independent course that cared about its own
poor and dispossessed citizens.
7.1.4. For this reason, a number of governments in the developing world
must coordinate their efforts and plan to simultaneously ratify the Constitution.
World government can easily begin with perhaps twenty-five
nations simultaneously joining together to create the initial Earth Federation.
Immediately such a group of nations ratifying the Constitution would
become a substantially autonomous economic unit, using Earth Currency
and receiving extensive lines of credit for development from the newly
created federal government. Withdrawal of investments, recall of loans,
or threat of sanctions would not matter. The federal government would assume
all international debt of these nations to be paid back in a reasonable
manner at nonexploitative interest rates.
7.1.5. Approximately twenty-five nations would immediately enter into
dynamic cooperation in the use of their resources, technologies, educated
leaders, and development initiatives. Their debts would be removed under
the current world order and they would receive extensive lines of credit for
sustainable development based on the ability of their people to produce real
wealth using finance capital, labor, and natural resources. Corporations or
industries within these nations that refuse to cooperate in the conversion to
Earth Currency would be nationalized or mundialized, whichever is most
appropriate. The simple but liberating economic principles outlined in
this manifesto would immediately take effect. The increase in prosperity,
creative energy, and hope would be immediately evident and contagious.
7.1.6. There is no mystery about how to create prosperity. Place a great
deal of money in the hands of people who wish to develop projects, employ
workers, procure the necessary natural resources, and buy and sell locally
and regionally. Money gets into the hands of ordinary people who then
recirculate it through increased consumption and the purchase of services.
There is no reason to take anything away from the already rich or oppose the policies
of the World Bank or corporations operating outside the initial Federation.
7.1.7. Those who are rich may retain their wealth. What is eliminated is
their ability to exploit others to make themselves richer. The World Bank
may continue to offer its development loans to poor countries of the world.
But who will want these loans when immense lines of credit are available
to individuals, nations, and businesses at the cost of only an accounting
fee? Exploitative interest rates are eliminated and with it the ability of
those already rich to exploit and dominate the poor who need money for
7.2. Second, large scale technology transfer and infusion of fertile ideas
and techniques for sustainable development can be activated through
common sense revisions of current intellectual property rights laws. As
the writings of economists Michael Chossudovsky, David Korton, Vandana
Siva, J.W. Smith and others have shown, one of the ways the wealthy
world retains neo-colonial monopoly control on the global economy is
through intellectual property rights, which have become a fundamental
tenant in WTO regulations. The simple device of allowing any patented
idea to be used for the payment of a reasonable royalty fee would make all
ideas and techniques available to humankind for sustainable development
7.2.1. Through its system of absolute intellectual property rights, the current
world system keeps the developing world in a low tech condition,
forcing them to sell their natural resources to the wealthy world to be
there manufactured and sold back to the developing countries at a profit.
It keeps monopoly control over marketable ideas and innovations, thereby
belying its ideology of “free trade.” Versions of this policy have been
going on since the advent of colonialism. They keep life saving drugs
from reaching the AIDS stricken countries of Africa. They keep seeds and
key agricultural necessities profitably expensive while poor farmers starve
7.2.2. The simple change of allowing any idea to be used if a reasonable
royalty is paid, eradicates these intellectual property rights monopolies
and liberates the poor of the world for efficient, rapid development. This
modified system of intellectual property rights would also activate the regional
economies of the world with a tremendous influx of new techniques
and ideas. Scarcity would be ended and prosperity rapidly created.
7.3. The third simple principle for rapidly creating global equity and
prosperity involves massive programs of education and empowerment of
populations throughout the world through use of airwaves and other forms
of communication for free global education on behalf of rapid sustainable
development. Just as the present world system involves a monopoly on
money creation and lending, and a monopoly on advanced technologies
and techniques, so the present world order involves a monopoly on media
and communications. The governments of the world have given away the
airways and media for communication to private, profit-making interests.
The electromagnetic spectrum from TV to radio to satellite communications
is largely used for commercial purposes, for enrichment of private,
profit making corporations, and for propaganda on behalf of the current
world system. These should be used for sustainable development and
global free education that this requires.
7.3.1. We have seen that a massive worldwide educational effort is essential
to rapid sustainable development and the elimination of poverty
and unsupportable population growth. The technologies and means of
communication are available to achieve this. All that is required is government
that serves the needs and interests of all the world’s citizens and
not government, as in the United States, that serves the needs and interests
of the big corporations.
7.3.2. Use of the available technologies and means of communication
for rapid sustainable development would activate regional and local
economies. People would learn sanitation techniques, family planning
techniques, literacy, foreign languages, water purification techniques,
techniques for generating nonpolluting forms of energy, techniques for
increasing their income and quality of life. This simple change in the use
of the world’s airways and means of communication would serve as a third
major step for creating universal prosperity and sustainable development.
7.4. Fourth, simple legal steps would be taken fostering the empowerment
of regional and local economies where money is retained within the locality
and not siphoned off to foreign banks or corporations. Regions would
produce as many goods and services for themselves as reasonably possible
and economically feasible, and import only what is necessary to complement
the local economies. The amazing waste of energy and resources
that now occurs in transporting goods around the world that could just as
well be produced locally would cease. Regions would employ many at
good wages creating a population capable of buying good and services and
businesses would develop in response to these demands.
7.4.1. In the United States, when a multinational “superstore” moves into
a town, many local businesses begin to fold. They cannot compete with
the ability of the superstore to procure cheap clothing, food, drugs, shoes,
housewares, furniture, sporting goods, hardware and nearly everything
else. The superstore may employ a few people at low wage jobs, but its
profits do not remain in the community. They are sent back to corporate
headquarters and to distant investors. The economy of the local community
begins to die. Small businesses close up and unemployment increases.
7.4.2. This same phenomena also happens on a global scale. A soft drink
or medical drug from a multinational corporation in a developing country
may be able to undersell a domestically produced soft drink or drug.
But the profits from the multinational soft drink or medical drug return to
wealthy first world investors and are not recirculated within the local or
regional economy. Very often, the developing country is even prevented
from producing its own drink or medical drug by intellectual property
rights regulations. These global monopolies strangle regional economies.
7.4.3. The principle of health for economies, and for sustainable development
of prosperity in developing countries, is to activate regional and local
markets. This includes raising wages, producing locally whatever can
be produced to supply the needs of the population, and creating a healthy
interchange of supply and demand that keeps money circulating within the
7.4.4. The Earth Federation is not opposed in principle to “globalization.”
Converting the world system to democratic federal world government is
maximal globalization. But globalization of economics without the globalization
of democratic world law has simply extended the current system
of chaos and violence worldwide. Without world law, imperial nations
and gigantic corporations exploit and dominate the poor of the world
in their own self-interest. We need global planning for the future, global
monitoring of the environment, and global trade where appropriate for the
benefit of everyone involved. Globalization without democratic planning,
regulation, or concern for the common good will necessarily result in the
viciousness and corruption that we see everywhere in today’s “globalized”
7.4.5. Today, the “anti-globalization movement” is providing vital resistance
to this world system of economic domination and exploitation.
Many of the individuals and organizations that participate in this movement
are committed to democracy, justice, the ending of poverty, environmental
protection, and human rights. They play a vital role in exposing
the terrible legacy of economic globalization with respect to all these
issues. However, the central focus of this movement is that it is against
7.4.6. To be against all “globalization” is to be against planning for the future
of the Earth. It is to be against the universal rule of law on Earth. They
are “anti,” without having a clear vision of how the world can be transformed
into a civilized world order. Vague notions of justice, democracy,
or protecting human rights without a global, democratic, legal mechanism
for achieving these are futile. The Earth Constitution gives humanity the
specific political and economic means to achieve these goals.
7.5. Fifth, the market may be an efficient way of determining prices for
many things, but certainly not for wages. There must be equal pay for
equal work at good wages throughout the Earth Federation. Economist J.
W. Smith points out that the rate of advantage of equally productive but
unequally paid workers doing the same work is exponential, not arithmetical.
Take the example of a worker in the developing world paid one U.S.
dollar an hour for producing an item that is identical to the item produced
by a first world worker making ten dollars per hour. Since the cost of labor
largely determines the prices of these items, the developing world item
sells for one dollar while the first world item for ten dollars. How many of
the developing world items can the first world worker buy after working
ten hours? How many items of the first world worker can the developing
world worker buy after working ten hours? The rate of advantage in this
simple example is 100 to 1 (Smith 2005a, Chapter One).
7.5.1. Under this rate of advantage there is no possibility of the developing
world ever catching up with the first world through activation of its
economies or sale of natural resources. The exponential rate of advantage
ensures what has in fact been the case for decades: billions of dollars in
wealth are transferred annually from the poorest segment of humanity to
the wealthiest segment of humanity. The poor under our current world
order are getting poorer and the rich are getting richer.
7.5.2. Markets have a useful but limited role in human economies. They
are not and cannot be the solution to all problems as the imperial economic
ideology has it. Markets can produce many (not all) goods and services
efficiently. But essential services like water, electricity, and health care
are much better served by good government. Nor can markets ensure just
or equitable distribution of services or wealth. And they cannot ensure
sustainable development that involves conceptions of the common good
and the welfare of future generations.
7.5.3. Markets are blind to all noncommercial values such as community,
human rights, sustainability, equity, justice, and peace. Markets, as we
know so well, will produce weapons of war if there is a profit to be made
from this, or weapons of mass destruction. Markets (like big business)
are morally blind and must be tempered by democratic, non-commercial
values that are necessarily built into good government. Markets are not
based on the moral principle of unity-in-diversity.
7.5.4. The principle of equal pay for equal work at decent, living wages
will place cash in the hands of the poor in the developing counties and
will produce an activated local economy while at the same time increasing
global equity. As we said earlier, there is no need to appropriate the
accumulated wealth of the rich to solve the global crises facing humanity.
All that is necessary is to eliminate the means for the rich to continue to
accumulate more wealth through exploiting those already poor. The exploitative,
monopoly features of the current system listed here perpetuate
both the wealth of the rich and the poverty of the poor and make global
equity and sustainable development an impossibility.
7.6. Sixth, economically stable and equitable laws will be enacted to promote
worldwide land reform so that the land and its wealth can be returned
to the people of Earth. The exploitation of the poor by the few who now
control the quality land and resources of the world will rapidly come to an
end. In general, land and resources will be recognized as belonging to the
people of the Earth and need to be legally protected for the common good.
Land and resources will be seen as the global commons and private property
will be recognized for land use by individuals, governments, and businesses.
That is, property rights will be converted from “absolute rights” to
7.6.1. Land is provided by nature, not built by labor, thus all natural
resources are nature’s heritage for all. Applying Henry George’s concept of
exclusive title to nature’s wealth restructured to conditional title
(society collecting the landrent) instantly collapses those exclusive
(monopoly) values to zero. The price of homes are the cost of building a
house and the price of businesses will be the facilities themselves. Monopoly
values have been converted to use-values owned by true producers.
Just as with land, today’s technology, money, and communications monopolies are
subject to the same efficiency gains. [This paragraph, not submitted at the
7th Session of Parliament, will be expanded and submitted to the 9th Session.]
7.6.2. The effectiveness of careful organic farming, with composting, crop
rotation, and ecologically sound planting and harvesting has been repeatedly
demonstrated. These farming methods produce many times the food per acre now
produced by commercial agribusiness while conserving the soil and eliminating
the pollution cased by chemical fertilizers. They are best done by small farmers
who own and care about their own land and have a stake in its preservation. Even
with the diminished quality farm land in the world today, a global program of
population reduction, effective farming methods, and activated local economies
can easily end hunger and create a world sufficient for all.
7.6.3. Such programs of land reform have been attempted in individual
countries such as Guatemala in the early 1950s, Chile in the early 1970s,
Nicaragua in the 1980s, Cuba in the 1970s, 80s, and 90s, and Venezuela at
the beginning of this century. In every case the United States has destroyed
or attempted to destroy the government promoting the land reform. This
has been a global policy of the imperial center since the Second World
7.6.4. All good examples of economic health and common sense must
be destroyed so that the world believes there is no alternative to global
economic monopolies dominated by multi-billion dollar corporations and
protected by the military might of First World nations. The lethal combination
of the our present world system of sovereign nation-states (dominated
as always by the imperial centers) and ruthless global corporations
cannot but act to enforce a regime of global domination and exploitation.
These consequences are built into these global institutions of the past five
7.6.5. Only democratically legislated law, enacted by a World Parliament
representing all the people and nations of Earth, can formulate and effectively
carry out a planetary policy of land reform. Such reform is badly
needed not only to activate the local and regional economies of the world,
but to end exploitation of the poor by the rich, to conserve the soil while
reducing erosion and pollution, and to increase food production, rapidly
ending hunger on Earth.
7.7. Seventh, the federal world government will engage in large-scale
employment of the unemployed or underemployed millions in developing
counties in a multitude of projects directed toward sustainable development
and the activating of regional and local economies. These projects
will certainly include replanting the depleted forests of the Earth, restoring
the soil and grazing lands to integrity, building schools and health care
centers, creating efficient, low cost sanitation and water systems, converting
military installations and weapons factories to the production of peace-
ful goods and services, and converting the energy sources of the world
to sustainable, non-polluting forms of water, wind, solar, and hydrogen
7.7.1. The condition of the developing world today is similar to that of the
United States during the great depression of the 1930s. There is massive
unemployment and hence no money to circulate within economies. The
U.S. government had the vision to create vast public works projects and put
hungry people back to work.
7.7.2. The Earth Federation will undertake similar initiatives, thereby not
only putting people to work and activating their economies, but creating
the infrastructure necessary to a prosperous sustainable development. The
nexus of global crises are too advanced and the threat to the future of the
world too extreme to sit passively by and hope for private development
efforts alone to succeed. The world needs sanitation and water systems
now. It needs to restore the damaged environment now. It needs to deal
with the crisis of sickness and disease now. It needs to restore soil, grazing
land, fisheries, and forests now. It needs family planning and population
reduction efforts now. It needs education for the masses now. It needs to
employ the unemployed millions now.
7.7.3. As one of the great speeches before the 1992 Rio Environmental
Summit expressed this principle: “tomorrow is too late.” The global crises
outlined here are upon us and action must be taken immediately to create
a decent, prosperous, and equitable world order. We are at the crossroads
of human existence. One road leads to certain disaster. The other to an
equitable, free, just, and peaceful world order.