Grondvest . . . SDN Henry George <=====> SDN . . . Bellamy . . . GB Institute

There is a need for a correction to the capitalist economic system

Restrictions in the use of energy and the
lawful distribution of the entitlement to consumer goods

Dutch version

K.C. de Boer


There is a need for a correction to the capitalist economic system, based on three interrelated arguments.

  • Uncontrolled competition
    The original theory was that the task of free competition was to make the market price (what the seller was able to ask for a commodity) related to the natural price (what it cost to make the commodity) because the consumer does not want to pay more than ab5olutely necessary.

    Because the producer has started to put emphasis on profit, the market price is no longer related to the natural price (also because of the unrestricted demand of the consumer). In the interest of obtaining maximum profits, this is in fact no longer required. Because the original intention of competition has been abandoned, uncontrolled competition has been the result.

  • Uncontrolled growth of production
    The production of goods supplies the demands of people who are willing to pay for those goods. Because the producers are able to attach priority to the making of profit, these goods are only sold to those people with the greater purchasing power. Because a large, and ever increasing, proportion of these people is able to purchase more and more, and the high interest on their capital is theirs as well, the production of goods increases while they become more expensive. For many people they become out of reach. Because this is contrary to the rules of fairness to all, this can be called uncontrolled production.

  • Uncontrolled use of raw materials.
    Because of the unlimited willingness to purchase of the contemporary consumer and the importance attached to well-being, a fight for the purchase of more, different or new goods result. This is also made possible by the technical ability to extract raw materials from the earth, and results in their removal at an ever-increasing rate. The destruction that is the consequence of this, makes it clear that it is necessary to control production in the interest of conserving the earth as an indispensable source of all that is needed to sustain its life.

Aspects of the required changes it is a task of human society to change the use of raw materials. This cannot be achieved by a forced change in mentality of the individual - not even according to democratic principles - because the mentality (the way of thinking) is based on the experience that everything is possible and therefore permissible.

Distribution of energy from nature will, just like any other distribution, be bound by limits. It will be discovered that a sustainable world means, in the first place, to create a balance between the desire and the technical ability to supply that desire or demand.

    Another aspect is a change in human society, which is a political task.

Individual needs and desires for consumption goods are different for different countries, peoples and areas because of the different material circumstances. Therefore this change has a national aspect because groups of people who live together have developed a suitable means of satisfying their needs and demands. An African solves this in a different way from and Eskimo, or someone from Siberia or Tibet.

When it has been determined that too many raw materials are extracted from the earth too fast because competition does not control prices, and the growth of production causes poverty rather than wealth, it becomes necessary to control the production and consumption of goods on a world-wide basis. This must be done in such a way that the problem of increasing poverty is corrected.

The change of the economic structure will consist of the restriction of the volume of raw material that can be extracted from the earth without causing damage.

The purpose of the "restriction structure" is:

  1. To give every individual on earth the right to an equal proportion of the available energy which can be extracted per time unit without causing damage to the environment.
  2. To give every community of people with a law structure (State) the right to use all or part of its allotted right to energy for projects that benefit the community, in discussion with its members.
  3. To manage nature as a source of all life.

The means to achieve the goal are:

  1. The distribution of the right to energy-units per time-unit to each individual on earth.
  2. The scientific reorganisation of the economy, by dividing it into a raw material economy with energy as the accounting unit (labour does not play a role) and into a market economy with money as the accounting unit (labour does play a role).

The means to achieve this are:
A scientifically guided economy instead of a politically guided economy 3. To make the entitlement to energy units marketable with the use of money or labour (Lithuanian system).

    Lawful basis

The purchase of a new item that has been created from raw materials and labour will be organised by means of the law on a national and international basis and/or as a measure by organised business interests. This will be done in such a way that it is matched by the cancellation to the buyer of the same number of energy units (EU) that it cost to produce and deliver the new item.

The purchase of raw materials will be coupled with a concession, i.e. the raw material can only be delivered by an authorised individual who has a concession by the Sate in which the quantity and time schedule have been determined. With the purchase, the concession owner receives money from the buyer, while the value of the raw materials will also be measured on the basis of its value in energy units. This will be reported to the Energy Bank.

Private ownership of land makes it impossible to dispose of or keep in reserve the raw materials from that land. Given the fact that it is essential to manage the energy from the soil, the air and the water, all private land ownership must be converted into concessions and the State must be the owner.


A Scientific Institute or office, connected with an Energy Bank, carries out all research and measures all that is necessary to give people the lawful right to energy units (E-units). The institute advises the governments of all States and the organised business community on the effect of the distribution of E-units on the environment, on the market and on the eradication of poverty. Poverty is understood to be the state of someone who has virtually nothing to live on and whose living conditions are not subject to improvement.

The scientific institute ("The Institute") determines how much energy, expressed in E-units (e.g. in joules or gigajoules) can be extracted from the earth without damaging the environment. The environment is here understood to be that part of the earth that can be gainfully used by mankind. The Institute also allocates an equal part of the available energy to all inhabitants of earth as a lawful entitlement,

In every State the government determines, in consultation with the population, what part of the allocation will be used for the construction of roads, schools, water management, i.e. all that is necessary for the common good. It also determines what part will be allocated to individual citizens, depending on their financial abilities and the existence of a relevant market. The population can demand their share not only on political grounds, but now also on lawful grounds.

The Institute organises the administration of the additions to and subtractions from the allocated E-units. This can be compared with the deposit and withdrawal of monetary units from a credit card. In countries where this technique is not present, government can cancel the allocation of E-units and utilise the Units only for works for the common interest. It will have to advise its citizens to sell their EU property to citizens of other countries who have a shortage of rations.

This latter transaction is a consequence of the marketability of E-units in the entire world. This marketability has two aspects:

  1. The poor who cannot buy many goods and for second hand goods do not need any E-units, can sell their allocated units to rich people in their own or another country who have a shortage of rations. Because of that sale their buying power increases.
  2. When countries with many poor people sell large quantities of E-units to rich countries, the buying power of those countries will] become so large that the market will become interested and expand in that direction.

    Effect of distribution

The speed with which goods can be produced is reduced by the distribution of E-units that are being released per unit of time in accordance with the speed with which raw materials can be extracted from the environment. In this case, the production process tends to concentrate on quality, which means that the supply of raw materials can be slowed down compared with a production process that concentrates on mass production and exclusivity.

Competition will tend to match the market prices with the natural price because the production of many and exclusive goods will be reduced because the buyer wants to spend as few EU as possible and at the same time as little money as possible. In this way, the distribution of energy will also result in a longer life and therefore higher quality of products.


By maintenance of private initiative and the acceptance of the State as the distributor of concessions for the exploitation of land, the people and the environment will be protected by the necessary management of the production flow, from poverty and destruction of nature.

The difference between the current purely financial economy and the proposed restriction system is, that in the first system the free (wild) formation of prices of raw materials and goods are where possible kept within reasonable bounds by political laws and directions. In the second system the quantities of raw materials and goods are managed by a scientific construction with a responsibility towards the State as the manager of raw materials. This responsibility concerns the maintenance of the environment and the population. Its task is the measured distribution of extracted energy to all human individuals without damage to the environment.

The role of the financial and economic system is to satisfy the demands of the consumer. This role changes under influence of the restriction system from a political struggle of interests of different groups with the consumer as medium on a market with the highest purchasing power into an internationally and lawfully managed production system. This is adjusted to suit the capacity of the environment and the satisfaction of the demands of each individual, independent from differences in purchasing power.

This fits in with the current opinion that "the State must manage the necessities of life and the market would have to function where this is possible".


It is usual to suspect a drastic plan of an arrogant background and to attack it simply because of that. 1 hope, however, that the value of this plan will be carefully considered.

Velp (Gld), The Netherlands, 1999