XAT is not a project put together by academics, but one created by people who want to share some positive alternatives.

What we want to produce with XAT is an ideas centre that everyone can contribute to, however, the means by which we simply bring everyone's ideas together is proving to be, in practice a very complicated project in itself. As a result we are constantly trying to improve upon our current system and any suggestions you may have to help make the communication among members easier is always going to be greatly appreciated, especially as we are finding an increase in the amount of people contacting us wanting to add their thoughts and/or talk to others of a like mind.

As time goes on XAT relies more and more on contributions received by e-mail and through its Internet Forum and is continually being enriched by these additions. Eventually we envisage XAT being maintained by all its members equally sharing and cooperating with each other. While a self governing system may at first seem a bit of a daydream, there are plenty of good examples now emerging around the world of companies¹ successfully being run by their own workforces, proving that this style of in house management is possible.

The central topic in XAT is money, and though we dislike the fact that money has become a measure of value for almost everything these days, we recognise its benefits, and realise that it is the way we use and perceive our money, and not its actual existence which is the cause of our problems.

To explain our view, we believe that a monetary system simply designed to make the trade in goods, ideas and services easier, is not in itself harmful and does not create massive inequalities in wealth distribution. Instead we believe the problems lie in the economic practices of Usury and Fractional Reserve Banking as these are the harmful triggers. The greediness in which money is being initially created, has the tendency to filter down into the rest of society. The majority, who then find themselves with a fraction of the worlds wealth, and proportionate power and influence, naturally may then find it difficult to see the world as a fair place, and so may choose to survive by the rules that society seems to be run by, rather than by a preferred set of rules which are more caring and thoughtful.

Because it is near impossible to influence those in power who could actually change the monetary structure, we have set up our alternative currency to run alongside, and hopefully, if enough people use it, replace the unfair present set of economics.

It's difficult to know if what we're attempting will be successful, but we think it's worth our small efforts to try. Networking with others who have similar ideals is of course vital for XAT to develop. All those who have already participated by either making suggestions, reading, writing, opening accounts, trading, creating links to the site, telling their friends, etc have definitely brought us much closer to this goal, and we thank you.

We hope you enjoy the ideas presented in this book, and while some of them may be already familiar to you, we are sure you will come across many which are not.


1. Ricardo Semler, Seven-Day Weekend



INTRODUCTION



It connects us through trade and inspires innovation; from the most fantastic to the simply mundane, economics is the life blood of human creativity. However throughout our evolution, economic systems have been developed in ways which primarily serve the needs of the richest and most powerful residents on our planet.

As we increasingly continue to recognise the rights of the individual, this unbalanced arrangement becomes less and less acceptable, making the need for a fairer system more vital with each passing day.

If the changes so far proposed in XAT were to be fully realised they would have profound implications not only for global business, but also for our own personal perceptions as individuals and as a society.

XAT is a non-profit organisation introducing a working economic model with its own interest-free New Global Currency, set up and supported by ecologically sound principals and based upon historically tested methods proven by, among others, the administrations of Benjamin Franklin and Abraham Lincoln.

Alongside this a system of Specialised Direct Democracy is also being suggested, using aspects of the Swiss model in combination with new ideas aimed at addressing the fundamental problems usually faced by this type of democracy.

XAT is a model designed to be demonstrated by participation and eventually offered at referendum to peacefully replace the current system via the democratic process.

Using technologies available today, all of the projects proposed in XAT are easy to implement, with some aspects already up and running and waiting for you to try.

This is no small thing. We spend our next chapter exploring just how important your participation can be.



CAUSE AN EFFECT



In the early sixties meteorologist Edward Lorenz gave us the chaos theory example of a butterfly flapping its wings in Beijing, and how this could set off a chain reaction that would end up with a hurricane in New York.

This magical and potentially inspirational model suggests just how important small actions can be.

We can find obvious examples of this in the many seemingly little things we do in our own day to day lives. Consider the effects of recycling, buying fair trade products, purchasing organic food, or boycotting items tested on animals.

What we choose to buy or not to buy has a huge impact on Global business. Producers and suppliers rely totally on willing consumers to survive and have to regularly change to keep up with consumer approval. In this sense the consumer really is King! But what good is a King who rules by chance, with no thought for the consequences of his actions?

To encourage further the promotion and trade in positive goods XAT, as part of its plan, has provided members with an Alternative Classified Ads. Uniquely, all items can be paid for (in part or in full) using the XAT fair trade global currency, which we shall explain in greater detail further on.

When we talk about demonstrating positive alternatives, we mean exactly that.
"Experience is the only teacher we can really trust."
Leonardo da Vinci

We all do what we think is best for us from our experience. From our thoughts originate all our actions. If anything is to ever change in our world, then the way we think will have to change first.



POPULAR PERCEPTIONS



Because we can't weigh thoughts, and we don't need heavy transport to move them, it's easy to mistake our thoughts for being something flimsy, unimportant and almost unreal, yet some of the most powerful things on our planet are the thought systems we all subscribe to.

We interact with each other along the tracks of thought we have inherited. Our politics, economics, how we manage the environment, our education, social perceptions, our moral values, diets, and how we treat our friends or strangers in the street are all expressions of the thought systems we have adopted as our own.

Most of our thought systems are obviously necessary and beneficial, and may be applied well at any time within our world; others however are only useful during specific periods and when these ideas are enforced and promoted beyond their sell-by date, real problems can occur.

All of the world's power structures depend on people's co-operation to stand. We all together make them possible. While it remains true that we support injustice by not objecting to it,¹ surely this implies we could withdraw our support at any time.

Sounds easy and sensible to drop outdated thought systems. But when we have been taught to adopt and serve these very ideas since we were born (and the majority of the respectable accomplished people we have learned to look up to have their social positions anchored in these antiquated patterns of thought), it's not so easy.

In XAT, some of the systems we will be suggesting to alter may at first seem too well-established and powerful for the average person to have any real affect on, that is why it may be helpful throughout this book to bear in mind the example of the butterfly because ultimately, it's impossible for us to know what big effects can come from our apparently small actions.


1. Martin Luther King



NATURE'S EXAMPLE



Our creativeness has led us towards trying to conquer nature and to isolate ourselves from its less desirable effects. While there is nothing wrong with building shelter from the cold, this attitude of us against nature has led us away from what nature can teach us. Nature is successful because it is not centrally controlled. There is no tree in Brussels or Washington that dictates how other trees must grow.

Each organism, plant, animal or cell is responsible for its own space, and appears to naturally understand how to fulfil its function, whilst at the same time being part of a complex web of co-operation and sharing.^1,2

It seems only right then, that we would benefit from adopting natures highly-evolved system of organisation to fulfil the needs of our human society. The obvious success of Nature's system surrounds us. If it wasn't successful, life on earth would not exist.

XAT has been developed with these things in mind. As a result, all of the improvements and changes being proposed here are, in essence, a move into a more holistic approach to the organisation of our various modern-day systems.

Our structure of commerce is the first we shall be looking at.


1. Fritjof Capra, The Web of Life
2. James Lovelock, Gaia, 'The Practical Science of Planetary Medicine'



MONEY



Economics has an intrinsic connection with most of the things on our planet. It is the driving force behind the bulk of human activity and holds so much power and influence over us that most people aren't even aware of the harmful effects that bad economics is causing.

Our current system of exchange was created with a profit motive aimed at capitalising on people's need for currency. The Central Banking System (which produces the actual currency and loans it to governments at interest and sells it to high street banks at face value) was set up as a network of private businesses with official-sounding names, engineered to make a profit for their shareholders. These include the Bank of England,¹ The Federal Reserve,² and all the other Central Banks throughout the world. Not one of them is democratic! All of them are masters of disguise. Even nationalisation has not stopped Bank of England stock holders from receiving their dividends, nor stopped the bank from keeping 75% of its profit, while writing off the 25% it pays to the Treasury as corporation tax. ³

The use of money allows the necessary exchange of goods and services within our world, much the way blood cells aid the distribution of oxygen through our bodies. It would be right and good if this exchange medium was provided freely according to need; but instead, the production of money has been turned into a profit-centre. If our own bodies were to work on this basis they would not function in a healthy way for long.

The Central Banks (which charge interest to governments for the money they produce from out of nothing, with no labour or wealth involved) have secured these loans against your future taxes. Without even asking you, a substantial part of your future worth has been put up as collateral.

What Central Banks do in a big way with countries, your local bank will replicate on organisations and individuals, using the same slight of hand to produce the funds they lend out of thin air.


1. Graham Bannoc R.E. Baxter and Evan Davis, 'The Penguin Dictionary of Economics' page 34 also The Economic Organisation of Europe, 'Cambridge Economic History of Europe V' page 352

2. Graham Bannoc R.E. Baxter and Evan Davis, 'The Penguin Dictionary of Economics' page 155

3. Bank of England Act 1946



USURY



What the world financial systems are primarily involved in, is known as Usury, (loaning money at interest), which has been condemned throughout history for moral reasons, legal reasons, and for the detrimental effects this practice has on society.

The major religions of Hinduism, Buddhism, Judaism, Christianity and Islam have all criticised the practice of Usury. So too have many of the worlds greatest thinkers like Plato, ¹Aristotle, ² Seneca,³ and Plutarch.

Many pages, books in fact, have been written explaining why Usury is bad. The main contention is however that it allows the rich to get richer at the expense of the poor getting poorer. You might not begrudge a person making money for providing a product or service to the community. But Usury allows a person to get richer simply because they are rich. As a result whole countries are now in debt to the banking system.

To give an example of just how destructive Usury can be, imagine a situation where a choice exists between two investment projects. One is for the placing of money into a bank at a 5% return, which the bank then unethically invests in a polluting business, the other choice is for a direct investment into a project beneficial to both people and the environment, say a hydroelectric plant, but with returns of only 3%. Financially the more viable project is the one which is most destructive to us and our environment and whilst profit incentives are vital in encouraging progress, the unregulated practice of Usury is highly damaging and can actual hinder progress, if such a direction is deemed to be less profitable to pursue.

"Only after the last tree has been cut down,
only after the last river has been poisoned,
only after the last fish has been caught,
only then will you find that money cannot be eaten."
Cree Indian Prophecy

The practice of Usury allows only the rich to benefit by choosing whether or not to invest and what to invest in, simply on the grounds of how much money it will make for them.

To add insult to injury, there exists a potentially even more harmful aspect of Usury, and that is that projects being invested in needn't even be successful in order for the investors to make money on them!

Because financial institutions more often than not demand collateral to be held against loans, as a guarantee should a venture fail, there is no incentive for them to invest in workable projects above pointless ones. People now are borrowing vast amounts against their homes and lenders encourage this, standing to gain either money from repayment or property from repossessing.

The rewards made possible by Usury can encourage all sorts of irresponsible investments, because from the financiers point of view, it appears sensible, being guaranteed to make them a profit, no matter what the result.

When it doesn't make any difference they don't have to care.

If we are talking about a fair way to share the resources in our world, then this is not it.

The rot starts the moment the currency is produced.


1. Plato, Laws, v. 742

2. Aristotle, Politics, I, x,xi

3. Seneca, De beneficiis, VII, x



FRACTIONAL RESERVE BANKING



Usury however is not the only way in which banks can produce money from nothing. Most of new money creation comes from high street banks giving out private loans for anything from a designer suit to a new car; as well as the interest earned on these loans, they also benefit through the practice known as fractional reserve banking. Depending on risk, a bank needs to keep just 8% to 20% of its capital in reserve, the rest, it is allowed by current regulations to lend.

How does this create money out of thin air?

Imagine an individual goes into a bank and deposits £100 (we'll call them person A); from this £100 deposit only 8% needs to be kept by the bank, the remaining 92% can now be lent out to someone else (we'll call this other someone person B).

Person A still has £100 in their account, but person B now has £92 as well. From out of thin air £92 has been created. But the process doesn't have to stop there. If person B wishes to put their £92 into a bank account also, then the money creation cycle will be repeated even further. (This scenario we give is actually generous to the bankers as it doesn't take into account the fact that they can use their own capital, buildings and so on, as reserves, so allowing for an even bigger chunk of deposited cash to be used in their money creating project. The richer the bank gets, the more money they can loan out).

Restricting this practice is paramount if we wish to have more control over the amount of money in circulation. Fractional reserve banking is one of the main reasons for our mounting private debt and this in turn is adding considerably to the economic uncertainties that businesses and individuals are finding themselves at the mercy of.

Remove Usury and fractional reserve banking from the equation and a wide range of alternative economic strategies open up to us, including ones which will free us from the cyclical effects of boom and bust and from the need to collect taxes. From here a more caring economic alternative can be allowed to grow taking in the needs of both people and the environment.



BELIEVE IT OR NOT?



Think of world finance and most people picture some huge establishment over which they have no control. This image is what those running our finances prefer us to see and they go to great lengths to maintain their grandiose illusion.

Impressively they engrave their currency notes with faces of authority and issue them from triumphant buildings supported by glorious pillars often decorated with gold leaf. The marble halls that dwarf the individual and inspire awe are designed to intimidate and remove all doubt about who holds the power.

Yet this intricate frame so cunningly designed has only one purpose: to distract attention away from the one element that is vital to a currencies survival.

That element is actually our collective faith in money's value.

It has been said that faith is the substance of things hoped for and the evidence of things unseen, but in the case of currency, it is even more than that. It is the vital ingredient that transforms paper into gold.

Alternatively if we all stopped believing that our current currency has value, then it would become worthless overnight.

A staggering thought!

We do not accept currency because it features fine works of art or intricately engraved designs or even because it is produced by an official mint. We accept currency because we believe others will accept it from us later, in return for things we might want, and for no other reason.

In simpler terms, if people in general did not believe in the value of money, money would have no real value of itself.

Power to the people is not a futuristic chant, it's a fact, today.

We collectively, almost unconsciously, have the vital ingredient which supports the whole financial system. If enough of us wanted to, we together could shift this support to something more fairer such as the currency XAT is providing.

We have the ability to give this alternative real value, simply by believing in it.



IT'S BEEN DONE BEFORE



The idea of producing money independent of the powerful Usurers, and Fractional Reserve Bankers, is nothing new.

Back in the 1700's the American Colonies were doing rather better than was expected for a backwoods land. No one paid income tax, yet prices remained stable with no inflation. There was not a single unemployed man, no poor and no vagabonds. When Benjamin Franklin was asked how he could account for all this new found prosperity he replied:

"That is simple. In the Colonies we issue our own money. It is called Colonial Script. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers.

In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one."

Breaking all the modern conventions of economics, the Colonies continued to prosper producing their own unbacked interest free money, until the production of Colonial Script was made illegal by the Currency Act of 1764. ¹

This was an act pressed into law by the Bank of England fearing the production of Colonial Script would put them out of business.

This act forced the Colonies to pay taxes in the form of gold and silver to the British Central Bank and, as a result, the Colonies effectively handed back control of their economy to old world interests who, for the most part, would never see the new world as anything more than an entry on a balance sheet.

The effect of losing the Colonial Script on the Colonies was disastrous, bringing a rapid end to their prosperity as economic depression set in.


1. The Currency Act of 1764, British Parliament - 1764



KNOW OR OWE?



There is no risk of a new publicly owned currency not having value. If enough people agreed to support it by accepting it for trade, it would be as real as the current usury and fractional reserve constrained money we now have in existence. XAT has already created a digital currency which is growing in value every day and has the potential, with your participation, to expand into a currency that will make our future economic system fair for all. There are various reasons why such a new currency deserves your support.

1. It's Interest Free

Put simply, our current economic method carries with it a substantial service charge, whereas the Colonial Script was interest free.

The growing mountain of debt which is referred to as 'the national debt' would no longer be growing, which means the money now being siphoned off to pay this debt could be used to provide better public services which would benefit everyone.

Most countries are struggling under huge national debts. If you are living in one of them, your welfare is being maintained by what is essentially a bankrupted organisation which has only saved itself from folding by further borrowing.

This really does affect you and every social service you rely upon to live a normal healthy life.

2. It encourages Fair Trade

Publicly owned money would create with it a fairer means of trade for all, and a more responsible economic morality that could be built in as a condition of its use. (more on this in detail later)

At present it's the people who shuffle the money around that are earning the big wages, whilst the producers, especially those in the poor countries are earning a pittance.

Today there are thousands of institutions set up for the exchange and transfer of financial claims, and these are all designed to make money from money. The people and organisations concerned are not interested in efficiency or fairness, but primarily in making a profit for themselves at other peoples expense. The financial system that exists today is systematically corrupt.

In 1991, the amount of foreign exchange transactions were on average US$880 billion a day, this being a figure 60 times that of the total amount of trade in actual goods. In 1991, making money from money accounted for 98.36% of world trade; and the numbers of those involved in these production-less transactions have continued to rise ever since.¹

3. It provides for No Taxes

Another benefit of this new money would be the ability to live tax free.

If legislation is the reins of power, taxation is the bit.

Taking back the power to produce money would, with proper controls, allow us to pay for public services without ever needing to collect taxes. Proper controls would have to insure that needed services are bought at the current price, i.e. the same price you would pay using borrowed or tax collected money.

While the money being produced to fund, for example, a much-needed hospital would not be backed by anything as it was being printed, we could instead consider it backed by the hospital it was produced to purchase.

Instead of having money circulating which is backed by gold or silver as in olden days, we could have our modern currency backed by essential resources instead. All it would take to make this possible and to give this money value would be an agreed willingness on the part of the public to accept this currency as legal tender when it was offered to them.

At present our governments produce a bond and borrow the bills we need against that bond at a considerable cost. Most economic students would confirm that there is no difference between producing a bond and producing a bill. Both are essentially the same.

Inventor Thomas Edison had a keen understanding of this:

"If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way.

It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency.

Both are promises to pay, but one promise fattens the usurers and the other helps the people." ²

Here we have a proclaimed genius telling everyone essentially that tax collection is unnecessary. And what do we do? We proceed to fill out our tax returns by the light of one of his bright inventions.

4. It's Environmentally Caring

Environmentally our current economic system is massively destructive.

As an example, the value of trees and plants is not based on their life giving properties (such as the clean air they give us, the fertile soils they maintain, the medicines that can be gained from them, and the countless other benefits they can provide). No, instead their value is based in terms of money.

The rewards set up by our current economic system encourage resources to be converted into money as soon as possible. Save money and you will get paid interest; save some trees and you get nothing. Take the money you get from selling your trees, invest it at 10%, and with compound interest your money will double in about 9 years. Leave the trees to be harvested in 10 years and you'll make much less. It's definitely more profitable to be less ecologically sound. It's better business to use up resources as quickly as you can so that you can get paid sooner.

The values held within our present system are not just unfair, they are ridiculous. A new economic system is not only desirable but desperately needed. An overall view of cause-and-effect needs to be considered to give value to actions which affect us all, considering real people and the Earth's real needs.

A new framework must be both enabling and conserving. Real value of action has to focus on the end result over any short term gain.

We must first consider how much water will be let in, before we decide to burn the hull of the ship to keep warm.

Conventional economics has no regard for sustaining resources or for its effect on people and the environment. Because at present we place value on how much money a person earns, we devalue all the other good things he or she might do for themselves and others.

We are also being deprived of things to which we have a natural right. No reasonable person would deny you the right to breathe, yet you have no control over those who have a stranglehold on the forests that produce your air.

If you would like to start trading with the XAT Alternative Currency, click on one of the JOIN links below.

If you would like to discover, in greater detail, how this currency works and how it could allow for a true Direct Democracy, click on the NEXT PAGE link below.

Please read on...


1. Bank of International Settlements, 1992.
2. The New York Times, December 6, 1921 issue

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