 s
the war in Afghanistan comes to a quick conclusion, a new interim
government is being created in Bonn, Germany. Participants/warring
factions who have been responsible for carrying the war on the ground
to the Taliban forces are now forging ahead with plans to rebuild
a nation that has, for decades, been wracked by war and political
upheaval. Many Western diplomats fear that it won't be long before
the country disintegrates into regional warring factions with the
accompanying death of innocent civilians and destruction of whatever
goods and property are left after the current bombing and fighting
are over. An innovative economic policy is necessary to avoid such
a calamity.
Westerners
have gained a new respect for the Afghan people because of modern
communications technology and the brave reporters who remain in
Afghanistan, not too far from the bombing and fighting. Recently,
one of the major networks took us on a "tour" of Kabul,
the capital of Afghanistan, and pointed out the remnants of freedom
that once characterized an otherwise backward third-world country.
But now that
liberalization has come, there have quickly emerged innovators and
opportunists who profit from providing goods and services to the
people. Beauty parlors and movie theatres are reopening after being
banned under Taliban rule. Women who were, at best, relegated to
third class citizens, are now able to live a less restricted life
style. Female doctors and lawyers can now practice their trades,
adding value to their local communities where before, under Taliban
rule, they were forbidden to work or even go to school past the
equivalent of the eighth grade. And two women have been appointed
to senior positions in the transitional Afghan government.
The revitalization
of a conflict-hardened nation and a suppressed culture is in the
offing. So, how can we make sure that Afghanistan serves as a model
free country that survives and prospers after the blight of terrorism?
The Right Design
At the outset of a new Afghanistan, the interim government appears
to have little to work with except limited economic support from
the outside world. Foreign aid should help minimize short-term economic
crises that befall the people of Afghanistan as the new government
finds its way to rebuilding the country and the economy. Progress
in this regard will also be influenced by the reaction/cooperation
of the various regional tribes that characterize the Afghan nation.
Of course,
there will be a plethora of economic plans offered by various factions
to rebuild the country. Maybe it's time for the new leaders of Afghanistan
to consider an option that probably has the most appealing characteristics
among the competing programs.
The best type
of plan would be one that combines the attributes of a free market
society with the "referee" functions of a central government.
Solutions that appear "right" from successes in developed
nations are probably not right when an economic infrastructure is
nonexistent. What we do know is that most governments act to survive
while individuals generally act in their own self-interest —
when it comes taking care of their families. There must be some
methodology that takes advantage of these two characteristics and
blends them to achieve both the goals of government and individuals.
Past economic
plans have focused on how government spends money and levies taxes
(fiscal policy) or how it creates money and manages credit (monetary
policy). Plan author Warren B. Mosler, however, has centered on
employment as the driving factor in designing a functioning economic
policy — in particular, public service employment.
An integral
part of society is public services. The judicial system, educational
facilities, transportation, water and sewer infrastructure, defense,
and environmental standards characterize any modern economy, and
are critical to establishing a new economic order. The Mosler
Plan presents an institutional framework for implementing a
paid, national service program that will both provide essential
public services and foster private-sector development and growth.
The plan has been designed to be internally stable and it requires
no external finance.
The Mosler
Plan empowers the national government with the means to provide
paid public service jobs to anyone willing and able to work. By
providing a means for the government to employ all available unemployed
labor in the public sector until private-sector demand for labor
increases, public infrastructure is developed and a peaceful and
prosperous environment is promoted. A government that can provide
full employment and prosperity has always commanded the respect
of both its citizens and the world at large.
The Mosler
Plan is built around the idea that residence owners are required
to submit receipts for a minimum number of hours of government employment.
In effect, the government requires that a certain number of receipts
be submitted for hours of qualifying national service. To obtain
the required receipts, the residence owners can either work themselves
or otherwise obtain them from someone else willing to work for the
government. So, a farmer who owns his home, for example, could exchange
his produce for needed receipts with someone who decided to work
for the government and be paid in the receipts that the farmer demands.
The initial
impact of this national service requirement is that residence owners
will need public service receipts. This allows the government to
offer jobs to any and all workers who demand to be paid only with
official receipts for their time.
Once this mechanism
is in place, home/residence owners will either seek government employment
to earn the required receipts or offer real goods and services for
sale which will incentivize others to seek government employment
to earn receipts. Since the government is offering employment to
everyone, all individuals can work and earn the receipts necessary
to both fulfill the quota and transact with each other.
Under this
plan, Afghanistan will no longer have real workers who are unemployed.
In this framework, there is neither government debt nor interest
paid on debt. Instead, the government uses the receipts as a self-funding
mechanism. There is no need for the fledgling Afghan government
to borrow money and pay interest. The receipts gain value as a medium
of exchange and a unit of account. The value of the receipts is
independent of the quantity issued or received by the government,
providing that the government issues the receipts for public-service
labor and does not refuse to hire anyone willing and able to work.
One can see
that, in short order, it is likely that many other goods and services
will be offered by businesses and individuals in exchange for these
receipts. Once introduced into the private sector, the economy will
flourish. Obviously, there are operational considerations and the
usual political problems with such a plan — but the basic idea
makes sense for a new economic order.
There is much
more to the Mosler Plan than mentioned here. These are the basic
tenets of a plan that contains the essential elements of a free
society that values hard work, incentives, and responsible government
policies to improve standards of living. With a financially independent
government able to establish and maintain full employment, Afghanistan
will experience unprecedented economic progress and prestige, while
remaining far removed from financial burdens and instabilities that
most emerging nations experience. More importantly, a sound Afghan
economy will help eliminate the threat of renewed terrorism in the
country. As a blueprint for an emerging economy, Mosler makes a
lot of sense.
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