A tale of three petitions to Parliament

When a petition (“civil initiative“) in Holland achieves 40,000 signatures then it is mandatory for Dutch Parliament to pay attention to it, and formulate an answer.

The right to petition is old. The right to petition is in the Magna Carta of 1215. In Holland, the petition in 1566 by the nobles to Margaret of Parma is still taught in schools as a first step to the 80 year liberation war from Habsburg Spain in 1568-1648.

Famien_Strada_Histoire-Smeekschrift_der_Edelen-ppn087811480_MG_8892-T1p287In 2016, a letter to Parliament might be enough. Perhaps the issue can be resolved when Parliament (existing parties) indeed pay attention. But Parliament might not pay attention as it is too busy with its own petitions to the cabinet. Citizens with an issue might unite in a political party and get a seat in Parliament, but then there might be one-issue parties. Thus, the procedure for such a civil initiative and the criterion of 40,000 signatures make some sense. Dutch wikipedia (a portal no source) has a list of such petitions since 2006.

My scientific endeavour caused me to propose two petitions: (1) to have a Parliamentarian enquiry into unemployment and role of the Central Planning Bureau … and the euro, (2) to have a Parliamentarian enquiry into mathematics education and its research and policy making. Let us momentarily ignore the second one on math ed and its research, and focus on the economy.

There are two other petitions on the economy that require some attention. These have been caused by popular worry on the 2007+ crisis and not by scientific endeavour. Thus, let us discuss these three petitions to Dutch Parliament:

  1. Ons Geld (our money): a petition to have a different system of money and banking, with nationalisation of seigniorage, e.g. 100% fraction reserve banking. Their general website apparently is different, and is here. They want Parliament not just to study but to accept a principle.
  2. Peuro.nl: a petition to have a Parliamentarian enquiry into the creation and policy options for the euro.
  3. My petition to have a Parliamentarian enquiry into unemployment and role of the Central Planning Bureau … and the euro. Dutch readers would benefit from my discussion in 2013 (three pages) of euro 2.0 and a new system of money and banking.

From a position in science, the first 2 petitions are misleading to the people. They don’t focus on the real problem in the crisis and distract from the 3rd petition. They also abuse public worries about the crisis for the hobby horses of the initiators. These initiators found 40,000+ people willing to sign up, but the initiatiors did not give these people full information about the 3rd option. The initiators regard democracy as a beauty contest for the attention of the masses and not as an obligation to first arrive at sound information.

Thus, when Parliament evalutates the law on civil initiatives, it might look into rules how to better deal with information.

  • It would be important to know what individual members and Parliament as a whole accept as information. There is often reference to “science” but scientists have various analyses. A petition for a Parliamentarian enquiry might be superfluous when Parliament can already state what it “knows”. Such an enquiry however is useful for finding new information – e.g. via testimonials by experts.
  • Parliament already has a list of incoming data (with a difference between data and information). People might check these data too, but perhaps there can be a Parliamentarian institution turning these data into information.
  • People who want to embark upon a petition might be assisted in the identification of what isn’t known yet, and should also accept the responsibility of scientists to include information that might be new to them and respond to criticism, so that they don’t impose upon social time needlessly for what it essentially their own process of learning.
Petition 1. Ons Geld: 100% reserve banking and nationalisation of seigniorage

Steps in the petition proceedings were:

  1. Jeroen Dijsselbloem, the Dutch minister of finance, replying to the petition in his letter of Feb 1 2016, rejected a change in the present system of money and banking.
  2. For the Parliamentarian debate there were different motions.
  3. The motion by Wouter Koolmees (D66) was accepted, to make it easier to have a 100% fraction reserve bank. Potentially, deposit insurance premiums might be reduced, but not fully abolished, since bad investments are not excluded (except in my scheme in “Money as gold versus money as water” (2013)).
  4. The motion by Pieter Omtzigt (CDA) to have a deeper study by the Scientific Council for Government Policy (WRR) apparently is still under consideration. However, Jeroen Dijsselbloem apparently accepted the suggestion during the debate, and the WRR now has a weblink about this planned study. At WRR, a key position is by Arnoud Boot, professor of financial markets, at UvA. Boot has been prominent in the Dutch discussion on the 2007+ crisis.
  5. Jeroen Dijsselbloem, in his letter of June 21 2016, reviews current policy. He doesn’t refer to the WRR study like it doesn’t exist or would be relevant.

Thus, the petition started by non-scientists, and their request has been channeled towards science.

The initiators might have asked Arnoud Boot directly – by phone or email or at a conference or by organising a small conference themselves – whether he would be willing to look into this issue and try to get some WRR backing. There have been plenty of academics and policy researchers who have looked into the notion of 100% reserve banking, see for example the Benes & Kumhof IMF 2012 working paper, that revisits the Chicago Plan of 1936 by Irving Fisher and others. A researcher alerted me to Charles A. E. Goodhart and Meinhard A. Jensen,”A Commentary on Patrizio LainaÌ’s ‘Proposals for Full-Reserve Banking: A Historical Survey from David Ricardo to Martin Wolf´“, Economic Thought Vol 4, No 2, 2015.

The advantage of the petition however might be that now it is the minister of finance who asked WRR. It might be less easy for the minister to neglect the report once it arrives because he himself asked for it. However, such WRR reports tend to cause ministers no real problems.

A key problem would be that seigniorage now is under control of the European Central Bank (ECB) and that the Maastricht Treaty would require amendment which would not be achieved easily. However, the EU is managed by crises by management, and there will be plenty of crises requiring new adaptations.

Irving Fisher (1933) and Arnoud Boot (ca. 2010), Wikimedia Commons (photo Christiaan Krouwels)

Irving Fisher (1933) and Arnoud Boot (ca. 2010), Wikimedia Commons (photo Christiaan Krouwels)

A guarded compliment for Dutch Parliament

Overall, I find the process still is a bit surprising. It was Parliament that created this new law on petitions, and Parliament can be complimented that it dealt with the petition by proper procedure.

Undoubtedly, all political parties already had ideas by themselves about money and banking. They didn’t need this petition to discuss the topic. However, the media reported on the initiative, and it touched a nerve in public worry about the 2007+ crisis, and thus the existing political parties in Parliament were alerted on their role as representatives of the people in general. Apparently, the petition caused a temporary focus on some aspects that they enjoyed discussing.

The end result that there will be a study by WRR could also have been achieved otherwise, but overall the petition allowed Parliament to show how Parliament can work on its better days. Except that it is a pity that Parliament did not discuss my letter that explained what in this petition was misleading.

Why the Ons Geld petition is essentially misleading

The economist in this group is Ad Broere, now independent consultant. It is unclear to me whether he is a general economist or a business economist, but he taught financial management and management accounting. I don’t see when the petition started but I informed Broere in April 2013 about this weblog of mine and about my approach to Euro 2.0, and did not get a reply. I find this problematic. Isn’t Broere interested in fellow economists who look into a similar issue ?

The Ons Geld documentation refers to engineer and non-economist Klaas van Egmond, who supposes a stock of money as large as GDP (= 1 in the model MV = PY) so that 1% growth in the stock of money (seigniorage under full reserve banking) amounts to 6 bn euro’s (page 13 of their document, or p645 in Van Egmond & De Vries ESB 4721, November 5 2015). They also seem to forget that banks use current seigniorage to pay for costs. They sugggest that all seigniorage can be taken by the government without the need for bank to raise transaction fees. Taking seigniorage away from banks might also be seen as the government introducing a tax on banks that they must recuperate in fees. The email exchange with Van Egmond on this is here. Any economist who looks into this proposal should spot these misleading assumption. It is curious that ESB let this paper be published. Any banker can tell these initiators that they tend to neglect the costs of operating a money system. Indeed Wim Boonstra in the same issue of ESB explains about costs.

There is also Dirk Bezemer who is only an advisor to the Ons Geld group, but he claims a position in science, and in fact recently in June 2016 was appointed as economics professor in Groningen which I protest about.

I already discussed this Ons Geld petition when observing that Dirk Bezemer disinformed Dutch Parliament in 2015. Before that, he disinformed Sweden in 2012, and after that he disinformed Radar TV in 2016.

A strange interaction between Van Egmond and Bezemer

Klaas van Egmond in both ESB and his presentation for Parliament refers to the article by Bezemer 2009 “No one saw this coming“. Apparently, Van Egmond has not read this article since he misrepresents its message.

The crisis of 2008 was not or hardly forseeable: “no one saw this coming” (Bezemer, 2009).” or in Dutch: “De crisis van 2008 was niet of nauwelijks te voorzien (…)

However, Bezemer really stated (VoxEU column):

“One result from such reflection would be that in fact, many had predicted this course of events for years. In a recent study (Bezemer 2009), I document the economists who did “see it coming”. At least a dozen serious analysts issued fairly detailed, well reasoned, and public warnings of imminent finance-induced recession.

They were apparently ignored by Stevens and other central bankers who then, as Alan Greenspan professed in his October 2008 testimony, watched with “shocked disbelief” as their “whole intellectual edifice collapse in the summer [of 2007]”. The official models they relied on missed the crisis not because the conditions were so unusual, as we are often told. They missed it by design.”

More on Dirk Bezemer 1

Bezemer’s background is in agricultural economics (thesis 2001). This need not be a problem. Jeroen Dijsselbloem is an agricultural economist, and there it is a problem. John Kenneth Galbraith started as an agricultural economist too, and I am much in favour of Galbraith, so this background itself should not prevent Bezemer from studying other issues too. It might actually be beneficial to have more background than only a focus on money as often happens with monetary economists. Bezemer came to money and banking via the notion of risk, the collapse of the Albanian economy due to a Ponzi scheme, and the crisis of 2007+.

Scientists should reply to criticism by fellow scientists. If Bezemer doesn’t reply to criticism and proceeds in disinforming others then his claim on being a scientist is up for grabs.

Bezemer had the bad luck that his paper “No one saw this coming” of 2009 got the fancy of readers who worried about the economic crisis. He got a subsidy from INET. Apparently he doesn’t want this success to be tainted by having to reply to criticism.

  • Just to be sure: I am very specific w.r.t. my criticism of 2009  w.r.t. Bezemer’s paper of 2009. If he would provide an answer perhaps this criticism might be resolved.
  • In 2016 there however are the additional questions:
    • why it takes so long to answer to criticism of 2009,
    • why he misleads people by not responding to criticism, including now his co-authors or own PhD students Kristiana Rozite, Joeri Schasfoort, Maria Grydaki, Anna Samarina and Lu Zhang, or his contacts in the Bank of England (BoE),
    • why he didn’t spot Klaas van Egmond’s errors: (a) on the stock of money, (b) on bank costs, (c) on misquoting his own paper,
    • why he doesn’t support my protest against censorship of science since 1990 in Holland. Like we had “Albanian (Ponzi) economics” and “Greek statistics” we also have “Dutch economic science” and one would expect scientists to protest about this.
More on Dirk Bezemer 2

In a google for this weblog text I also found an interview in English with both Lex Hoogduin and Dirk Bezemer in 2014 about the “pluralist” course in money and finance that they teach at the university of Groningen (also my alma mater).

Apparently, this “pluralist” approach still excludes reference to my work (DRGTPE and CSBH). It is also awkward to read such such interviews. I warned about developments before the crisis but neither Hoogduin nor Bezemer warned about the crisis but make a living of explaining it after the fact. Hoogduin was personal advisor of Wim Duisenberg and thus would be a prime witness for the peuro.nl Parliamentarian enquiry discussed below.

Bezemer states:

“(…) almost nobody saw it coming. Those who did see it coming, where rather obscure economists working in the Post-Keynesian and Austrian traditions.” (Bezemer, p6, first column, bottom)

  1. This is a misrepresentation of history. There is much more to the explanation of the crisis than what Bezemer makes of it. This is not a trivial issue. The diagnosis is relevant for the treatment. When you only see half of the explanation – since you willfully ignore criticism – then your policy advice will also be biased.
  2. There were more people warning, including me. Let Bezemer reply to my criticism. I am no obscure economist. I am part and parcel of the tradition of Jan Tinbergen and the Dutch Central Planning Bureau. I am an economist who is censored and ignored by deliberation.
  3. Bezemer shifts the meaning of his own analysis. Has he forgotton what he wrote, and is he starting to believe the quote in his title ?
  4. Hyman Minski was no obscure economist. The post-keynesian and Austrian traditions are well-known in economics, i.e. for people who study economics who aren’t of a one-track mind. Much is also in Maynard Keynes, who clearly included the uncertainty of the future into the conceptual model (e.g. “animal spirits”). “Post-Keynesian” might often read as Keynesian as well.
  5. It may well be that central banking economists like Lex Hoogduin forgot about Minski but that doesn’t make Minski obscure but it rather makes Hoogduin less competent. It is not as competent as well how Hoogduin treats my analysis, e.g. in the context of Peter Bofinger‘s visit to Amsterdam in 2012.

Bezemer also states:

“Thanks to research grants, I can put my money where my mouth is.” (Bezemer, p6, second column, bottom)

This is a wrong application of the proverb. Putting your money where your mouth is concerns your own money, not the money of other people received as research grants.

PM. Edin Mujagic and murdering money

I now found this text by Edin Mujagic who argues that the Ons Geld petition is rather superfluous, and that the focus should be not on banks but on Central Banking. I agree with much of this. However, it would be a change in the system of money and banking when economic agents could have accounts at the Central Bank at very low cost, see my paper “Money as gold versus money as water” (2013). The Central Bank doesn’t have to make investments since it can always print money, and also print money to run the system. A transaction fee however makes sense since it involves human activity. Also, it is better to first have an Economic Supreme Court before discussing changes in Central Banking. Mujagic has a recent book on central banking that I haven’t read and likely will not read, since it is better that he first reads my earlier analysis. Mujagic collaborated with Thierry Baudet on the latter’s Forum voor Democratie, about which later on.

Petition 2. Peuro.nl: A Parliamentarian enquiry into the creation and policy options for the euro

The petition was started by doctor of law Thierry Baudet (1983), master of law Jort Kelder (1964) and management accountant Arno Wellens (ca. 1988). Steps in the proceedings have been:

  1. When the petition had 38,000 signatures, there was this useful tv-interview with Kelder by journalist Sven Kockelmann (1969) (March 30 2015).
  2. After the petition got its 40,000+ signatures, there was a meeting of the Parliamentarian committee where the petitioneers presented their case (Video December 14 2015).
  3. Jeroen Dijsselbloem restated the position of the Dutch government, with the main point that the euro had been created in a democratic process (letter July 13 2016).
  4. The Parliamentarian committee will look into this when returning from the Summer vacation.
  5. PM. Political parties are busy with their programmes for the Dutch general elections of March 2017.

In NRC-Handelsblad Baudet, Kelder & Wellens warned “the Dutch elite” that there might be a Nexit if public concern isn’t handled properly. They got a reply by economists Steven Brakman & Harry Garretsen, and there is a short deconstruction by Ron Ritzen. Note that Kelder doesn’t want a Nexit but only wants to leave the euro and only warns about the risk about a Next.

Kelder and Wellens versus Baudet

Kelder and Wellens show much interest in money & wealth and its frauds.This interest might have seduced them to embrace the peuro.nl petition, not hindered by a deeper study of political economy (Dutch “staathuishoudkunde”).

Kelder studied law, became a journalist, was chief editor of Quote magazine (a Dutch version of Forbes) and started his own digital magazine 925.nl (“nine to five”) of which Wellens is chief editor. Kelder is well-connected and counts Dutch prime minister Mark Rutte as one of his friendly contacts from the students days and young liberals JOVD. Mark Rutte studied history, and not economics, and still is an adept of Margaret Thatcher.

In the interview by Kockelmann, Kelder states that he was invited by Baudet. In 2010 I gave Baudet a copy of the book by Hans Hulst and Auke Hulst in collaboration with me, “Werkloosheid en armoede, de oplossing die werkt(1998). Readers of English may be helped by this part of the analysis “Don’t tax sweat“. I asked Kelder & Wellens whether Baudet had informed them about this, and they said “No”. At a Parliamentarian enquiry, Baudet might explain why he invited Kelder without giving full information, and Kelder might explain why he is happy with this.


On the question what news Kelder wants to see, Kelder rather dodges the question.

  1. Duisenberg (1935-2005, age 70) is deceased. A point of him is that people like Lubbers, Kok, Zalm and Bolkestein are still alive, and that there still is the opportunity to record their views. They are no longer in Parliament. However, they already presented their views in Parliament in the past. Their positions have been well documented. Readers and listeners of Dutch can see the video of “Geschiedenis24” of Black Monday of the Maastricht Treaty.
  2. According to Kelder many people accept the euro without studying it. If Parliament would have public hearings then people would start paying attention. This “media circus” however is not the purpose of a Parliamentarian enquiry. The purpose is to collect information for law making. Thus, the law on petitions generates a request to abuse the law on the Parliamentarian enquiry.
  3. Kelder states that there is hardly discussion about the consequences of the euro. There is discussion about millions of euros but not about the trillions of euros involved in the future of the euro, say ESM and so on. His peuro.nl initiative is intended to generate more attention for a public discussion of these issues. However, Kelder ignores that there is a discussion between experts. Public discussion of course is okay in a democracy, but soon issues become complex, and then the lay people and experts have a difficult time in communicating with each other. My suggestion has been the creation of an Economic Supreme Court (ESC), to help bridge the gap. The ESC focuses on government policy, is open to science and the public, and thus would provide a platform to discuss issues on content without political meddling. Kelder ignores this idea too. Thus he is aware that there is a problem in modern democracy with complex issues, but his solution is from 1800 to have a “public debate”. Thus he ignores that there is already discussion (see e.g. my papers and book “Common Sense: Boycott Holland” (CSBH, 2012), and he, as he writes me, actually doesn’t have time for following this discussion, so that he is a bit like the ostrich who wants Parliament to make the monster go away.

Recently, Kelder stated that he wants to quit the euro (Telegraaf, July 2). It is unclear whether he means that Holland must create the guilder again, or whether he e.g. wants a break-up into Northern and Southern coins (and France belonging where ?). Thus Parliament still has something to study for him.

I feel uncomfortable about this Telegraaf interview, since Kelder uses strong language that make him sound annoyed and angry, while he generally tends to present a polite and easy-going image. In the interview, Kelder grows aware himself about this contrast, is amazed about his own bitterness, and clarifies that he isn’t himself when speaking like this. Kelder states these views:

  • He rejects the Southern influence on the euro because of the differences in management cultures (Calvinism versus Catholicism), and sees leaving the euro as the only way to handle such differences,
  • he calls the EU a “religion”,
  • and calls Jean-Claude Juncker a “power junkie” (Dutch “machtswellusteling”, Google Translate “power voluptuary”) who has not been elected democratically (though there have been EU Parliamentarian elections),
  • and warns for a Nexit (NL leaving the EU) when Dutch policy makers do not come to their senses. Kelder would not be in favour of Nexit. He focuses on the eurozone. In this, Kelder seems to ignore the errors in democracy in the Brexit referendum. That is, when there would be a Nexit, he would not fight it as a result of misleading processes (e.g. errors that are propounded by Baudet’s Forum voor Democratie), but would still regard it as proof that people reject current policy making,
  • he doesn’t want to come across as angry, because he states that he isn’t, though he uses language that suggests that he is.
Baudet and Wellens

This weblog entry is already too long. In a sequel I will look at Baudet and Wellens.

PM. Petition 3. Unemployment, CPB … and euro

I suppose that I can give the short conclusion that this petition is the one to sign (by Dutch citizens). See the About page of this weblog.


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