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Mutual Guarantee—A Priceless Asset

In addition to the advantages of reducing energy expenditures and transforming the job market, there are several benefits and surpluses that will arise in a mutual guarantee economy.

Housing: With rising foreclosures, falling prices, and risky mortgages, housing has been a problem in several countries, particularly in the U.S... While millions have been evicted, millions of homes stand empty with no buyers in sight. In a society that follows the principle of mutual guarantee, people and banks will lend houses at the cost of overheads out of concern for others, and because such an act will reward them with great social acclaim. In a mutual guarantee society, those who own land and do not need it to live on will use that land to increase the supply for housing and provision of affordable accommodation.

Over-consumption: People consume far more than they need to sustain a reasonable standard of living. If we consider the products that we have and are not using, or that we replace simply because a newer model has been launched, we will see that by redistributing them, we can provide for the needs of the entire population without producing even a single new product. In other words, in most products there is no real lack, but rather unequal distribution due to our competitiveness and self-centered approach. When we establish reciprocal connections of mutual guarantee, we will discover that there is no lack of any product, but rather abundance and surplus.

Food prices and cost-of-living: According to a report by the Food and Agriculture Organization of the United Nations (FAO), “Roughly one third of the food produced in the world for human consumption every year—approximately 1.3 billion tons—gets lost or wasted.” [106] These horrific data, combined with the knowledge that nearly 1 billion people worldwide are undernourished [107], form an irreconcilable social paradox. Any reasonable person will see that establishing a system to preserve and properly distribute surplus food will solve the problem of hunger—and its subsequent illnesses—without any reform whatsoever.

Another paradox is food prices. Many countries are affected by high inflation, which primarily hurts those with lower incomes. In a society that follows the principle of mutual guarantee, such a problem would be resolved immediately. When we realize that humanity is indeed a single family, we will not want to throw away any food knowing that there are members of our family going to bed hungry each night.

The business sector: The education process that will adjust the current systems to one of interdependence will cause the business sector to adopt a different profit function. Instead of striving to maximize profit at the expense of the consumer and to minimize production costs at the expense of the employees, the new paradigm will strive to cover all production costs, and to direct profits toward public benefit. Firms will not be evaluated by the performance of their shares but by their contribution to society.

This process will lower the price of food and basic products and will allow people to enjoy a reasonable standard of living. The rise in the cost of living in the last 20 years has increased social inequality and has driven hundreds of millions to the verge of poverty or beyond [108].

Equitable division of income without government intervention: There is already evidence that beyond a reasonable level of income, happiness does not increase along with the increase in income [109]. Educating people about social solidarity, mutual guarantee, and conditioning appreciation of the social environment on prosocial activities will create among those earning in excess of what is needed for their sustenance a desire to contribute a portion of their income to the public. This will enable those with lower incomes to enjoy a sustainable standard of living. The satisfaction they will derive from the gratitude of society will increase the level of happiness among the givers far more than the fleeting satisfaction of purchasing another gadget, later to be thrown away as useless when the next generation of gadgets arrives a few months later.

A change of heart among tycoons and solving the issue of centralization of power: 1% of the world population controls 40% of global wealth [110]. Such a situation presents complicated economic and social issues, fostering resentment and a sense of injustice in the general population. The change of heart among the few who control such a large portion of the world’s wealth—as society learns to live by the principles of mutual guarantee—will bring them to relinquish most of their wealth in return for social acclaim and lasting financial stability. At the same time, the released funds will secure the well-being of the remaining 99%, defusing the social time bomb of economic inequality and strengthening social cohesion.

Instead of controlling the world’s fortunes, the world’s super-rich will enjoy wall-to-wall appreciation from the public. Naturally, they will retain sufficient funds to provide for their own well-being, but beyond that they will be valued for their contribution to the public and to the environment, rather than for the number of private jets that they own. If they are educated in the value of mutual guarantee, they will donate those funds voluntarily.

Surpluses in state budgets: Currently, government offices struggle against each other, resembling our own behavior against our fellow citizens. Every office, acting as a separate entity, fights to boost its own budget. Studies in public policy, particularly the “Public Choice” theory, argue that a bureaucrat strives to increase his or her office’s budget to gain prestige, money, and status [111]. The result, however, is inefficient distribution of funds. When all government offices feel like parts of a single family, many surpluses in the budget will surface and the public sector will be managed much more efficiently, to the benefit of the public.

A secure future: As explained above, the new norms and values implanted in society will change the perception of profit from maximum personal gain to maximum social benefit. This shift will expose great surpluses that are already available but are hidden. We will be able to provide a reasonable standard of living to every single family.

When considering the immense influence of the environment on a person, we understand that the change described above is both realistic and necessary. The norms and behaviors designed by society will alter our economic conduct and adjust it to the global-integral system. We naturally strive to agree with our social environment, to receive its appreciation. For this reason, a change in the perception of society will change the conduct of individuals and societies, and will allow us to adapt our economic and social systems to a new reality—one that is good for all.

[106] “Cutting food waste to feed the world: Over a billion tonnes squandered each year,” Food and Agriculture Organization of the United Nations (May 11, 2011),

[107] “Global hunger declining, but still unacceptably high,” Food and Agriculture Organization of the United Nations, Economic and Social Development Department (September 2010),

[108] “Poverty Reduction and Equity,” The World Bank,,,contentMDK:23003429~pagePK:148956~piPK:216618~theSitePK:336992,00.html

[109] Kahneman, D.; Krueger, A.; Schkade, D.; Schwarz, N.; Stone, A. (2006). "Would you be happier if you were richer? A focusing illusion". Science 312 (5782): 1908-10.

[110] James Randerson, “World's richest 1% own 40% of all wealth, UN report discovers,” The Guardian (December 6, 2006),,

Joseph Stiglitz (abridged/edited by Henry Makow), “1% Controls 40% of US Wealth,” (April 10, 2011),,

Rachel Ehrenberg, “Financial world dominated by a few deep pockets,” Science News (September 24, 2011),

[111] Niskanen, W. A. (1987). "Bureaucracy" In Charles K. Rowley, ed. Democracy and Public Choice. Oxford: Basil Blackwell.

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