New approach of the TET

Written by Carlos Bondone

The “synthesis of economic time” , given by the Theory of Economic Time (TET), allows us to introduce this new and simple approach on what we should understand by economic cycles – especially the ones derived from currency-financial crises – and from there be able to avoid historical mistakes like Bretton Woods, as it is being proposed.

Origin of currency and banking credit (in the TET) 

According to the TET, we know that currency paper (CP) and “bank note” (BN) – emerged from the fractionary system – are credits that the State and the banking system of the market receive respectively since it is the latter which brings the present economic goods for both credits to take shape. It is important to highlight the huge difference with the approach of the current theories which support the origin of credit in the State (CP) and the fractionary system (BN). From this theoretical misfortune, such institutions are mistakenly assigned “the faculty of expanding or contracting” credit as well as “fixing the interest rate”, etc.

Factors of production (in the TET)

The TET presents a synthesis of the economic thought which is born in the “classic” questionings; which are the factors of production and how are they remunerated? The answer that the TET offers is the following: Work (salary) – Capital (income) – Economic Time (interest). Theory of economic cycles (in the TET)

We can say that the economic cycles of an economy mean “expansion” and “contraction” of the production of economic goods. This concept includes both the case of a company (micro) and the set of them (macro), reaching a country or set of them up to referring to the world economy. The greater and/or better use of factors of production derives in what is called “economic expansion” and, the other way about, the lower and/or worse use of the same implies “economic contraction”. This simple synthesis of economic thought that the TET presents, allows us to understand in an easier way the historic processes of economic expansion and contraction of the different centers of “wealth and poverty” as well as the origin and decadence of powers throughout history.

What happened until this crisis?

According to what we have just mentioned, the TET tell us that the economic growth of some countries (developed) over others (under developed) is the consequence of greater/better use of production factors. Everybody knows that the best use of work and capital was on the side of the countries which adopted what is called capitalism, that is to say the pre-eminence of the individual over the State, which encouraged the competence to get more qualified work and capital.
But the third factor, the economic time, also had influence in the growth of developed countries. These countries expanded its CP and BN over the entire planet which allowed them to have a growing flux of credit. In other words, the developed world saw the “expansion” of the use of economic time, via credit received when exchanging that CP and BN issued by them, for present economic goods of the market.
In this way the TET gives us a simple explanation about the foundations which explain the greater development reached by rich countries that is nothing more than the better use of the three factors of production from which the current theories have explained the first two and have not developed a sustainable theory for the third factor of production, the economic time, since it was not even identified as such – it was confusedly treated “within” the entities economic good or price as well as lacking of some of these two entities, or participating of both.

What is it going to happen from this crisis onwards?

According to this new approach of economic cycles – which emerges from the synthesis of economic thought that the TET proposes – theses courses of action are suggested before the present crisis:

• Developed countries:

1) They do not have to count on the third factor of production (economic time, via credit obtained because the market accepted its CP and BN) to be so determining as it has been so far.
2) They should deepen capitalism instead of abandoning it under the “wrong” theory that supports that capitalism is the cause of the current crises and instead of assigning it to the totalitarian financial-currency system that the TET denounces.
3) They should regularize in a simultaneous way their financial-currency systems, as “Capitalism and Currency” suggests, simultaneously establishing – on a “financial freedom day” (FFD): regular currencies; refinancing the debts of the Sate; and that the financial system do the same with the indebtedness it has with the market, without any kind of intervention, every bank with its clients.
A suggestion in few words
to get rid of totalitarian (irregular) financial-currency systems and deepen the essence of capitalism, freedom. If they achieve this double challenge, they will be ready to overcome the inevitable way to a marginal productivity-profitability “relatively” inferior to the one of the countries that start to implement capitalism, moreover if these latter opt for regular currency-financial systems.

• Underdeveloped countries:

1) If they opt for the capitalist system, they will be ready to benefit from a marginal productivity-profitability relatively “superior” to the one of the already developed countries, moreover if these latter do not opt for regular currency-financial systems.
2) Now they will be able to think of using the third factor of production, the economic time, via the credit they will receive, since their currency-financial systems have less development, that is to say, they did not have credit in the market.
3) A suggestion in few words: 
avoid to “copy in a correct way” the bad things (irregular currency-financial systems) of developed countries, and “copy in a wrong way” the good things (“pure” capitalism).

• General suggestion:

It arises as a simple synthesis that the most appropriate way is to adopt capitalism and regular currency-financial systems, different from the totalitarian ones that obstruct a real capitalism – valid recipe for developed and underdeveloped countries.
We can see again that the current currency-financial system, emerged in the light of the current theories, is an icon of “anti-capitalism”, not of capitalism as it is mistakenly presented.


It seems that according to the way the current currency-financial crises develop, it is every time more certain the sort of “questioning-prophesy” we presented in chapter VII of the book “Capitalism and Currency” about the unavoidable destiny of the international currency-financial system. From this book it is convenient to highlight two reflections:

  1. The path to economic uncertainty IS NOT GOING TO STOP (as we have repeatedly showed since many years ago) as far as totalitarian (irregular) currency-financial systems persist. This derives from its incompatibility with the foundations of capitalism (freedom).
  2. In the book above mentioned, we suggested not thinking of recipes arisen from current theories, such as Bretton Woods, but to redirect the efforts in pursuit of an international regular currency-financial system which would allow the adequate combination of the three factors of production: work, capital and economic time, forming an adequate capitalist frame with regular currency-financial system.

CONCEPTUAL SYNTHESIS: the incompatible mix of capitalism with totalitarian (irregular) currency-financial systems guaranty economic uncertainty (cycles) and social conflicts; capitalism and regular currency-financial system guarantees development and social peace: and anti-capitalism guarantees poverty.

Buenos Aires, December 2010.