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The Secret Island


The Secret Island


Copyright 2016 Alan Ecob

Published by Alan Ecob at Shakespir




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The Secret Island

_ Introduction_


Who could think that a small Pacific Island inhabited by only two adult males, Robinson Crusoe V and Man Friday V, could show Western Civilization the way forward from what is becoming a global crisis? As Harvard economist David Kotz in his 2015 The Rise and Fall of Neoliberal Capitalism makes clear, our present system, made possible by the early ’70s deregulation of the world financial sector, with effects impacting from the early ’80s, must, unless it can replace itself, inevitably FALL.


How come? He advances two linked reasons for this:

p<>{color:#000;}. The system requires ever-growing markets for its unending expansion. This in our finite world! Enough said.

p<>{color:#000;}. The astonishing realization that the system’s imperative demand for these ever-growing markets becomes an obstacle to its own further progress. This is where we are now.


To consider this matter further, enjoy the story of The Secret Island:


His voice on the phone was deep and strong. A voice used to commanding. “Abe? Good. I want you down here at Finger Wharf 10 at ten tomorrow morning. Its in Wooloomooloo, opposite the Bell Hotel in Cowper Road. It’s where the big hitters have their home units and moor their cruisers. You’ll recognise my boat. It’s a fifty foot jet cruiser named Zephyr, painted black, with twin jetpipes at the stern. I’ll be on the bridge waiting for you. Bring enough gear for a two-weeks holiday. You’ll be on a tropical island.”

Only as he finished did I regain my senses. “Who are you?”

“Call me Mike.”

“Mike, I have no idea of what you are on about. You must be in the Bell Hotel. Just have another grog – a big one.”

He liked that. His laugh crackled over the ether. “Abe, you don’t understand. I’ve been told to get you – to bring you with me to my client’s Eastern Island. He wants you there, pronto. So You’re going to come, one way or another. If you come freely, he’ll pay you for your time. If we have to come and get you, well, I leave that to your imagination. See you tomorrow at ten.”


There was no mistaking her. As Mike had said, fifty foot long and jet black. The two jetpipes at the rear were as big as downpipes. What power! She was a serious ocean racer. A nearby gangplank enabled me to board her. Inside the glassed in bridge, I could see a figure. The entry door opened and I found myself facing my contact.

“I’m Mike” he said, his mouth opening to a wide grin. “Glad you decided to come.”

I stared at him. Although the irony was obvious, he was not at all embarassed by it. A little shorter than I, he was wide enough to fill the doorway in which he stood. He looked eighteen stone, perhaps more. Not one I would wish to take on in a bar-room brawl. Still, he seemed friendly. As my concerns eased, I responded to his comment:

“From what you said on the phone I didn’t have much choice but to come. But I have taken precautions. If I don’t check in regularly you will have big trouble.”

“Forget it Alan. We have you and you’d better get to like it. But I can tell you a little about what’s happening. The island we are going to is in the Celebes sea, just south of the Philippines. What should interest you is that the man who wants to meet you is Robinson Crusoe V. That’s right, the he’s fifth in line of descent from the original who was wrecked on the Island in the 1800s.”

“Really! I find that hard to believe. Still, how long will it take to get there?”

“Three days. We can cruise at thirty knots, if the smooth conditions continue. Shall we go?”

At my nod, he pressed a button. What sounded like twin diesels began a quiet burble. Freed from gangplank and moorings, we nosed out into the harbour. Approaching the heads, Mike ‘gave it the gun’. The bow lifted and the acceleration pressed me firmly back into my seat.


Surging northwards, our way now smoothed by the hydrofoil action of the boat, we were abreast of Brisbane as evening fell. Mike’s mate, Kiddo, defrosted meals from the fridge then left the two of us together as he took over the bridge. I asked the question. “This Eastern Island, Mike. What’s it all about?”

“Well”, he said, “It’s a tropical island, with palm trees, coral sand beaches and lagoons inside a surrounding reef. Its population comprises two men, Robinson Crusoe and Man Friday, and as I said, they’ve been that way for five generations. They select a wife each from nearby islands, and retain the eldest boy from each line to be their successors. As other children reach the age of twelve, they are returned to the island from which their mother came.”

A very odd arrangement, I commented.

“Sure”, he responded, “ But that’s the way the first two settled their differences, and each subsequent generation has followed suit. The Crusoes own the Island and its capital improvements because Robinson One reached it first. And as the two originals agreed on the beach, rather than fight to the death, they’d work equal hours and share their consumer product equally”.

“Well, to each his own. And you tell me they’ve kept at it without change of any kind for five generations. So what do the men produce?”

“Corn, only corn. It’s their staple product.” Mike was about to continue, but I interrupted with an exclamation.

“Corn – only corn!” He looked at me in astonishment as I spoke further. “Mike, this is incredible. It now comes back to me. You’re talking about an academic REPORT that an economist named Bill X gave me in ’83 to refute a proposition I had submitted to him about the non-viability of Western Capitalism.”

Mike responded. “I see. Well, he was the one who upset Robinson’s applecart later in that year. Rob had commissioned him to help them to go commercial, provided that there’d be no physical or social changes in the first year. However, a month after he started work, Bill advised that this course was impossible. Rob said this was ridiculous. They’d been doing precisely the same thing for more than a century, so obviously a further year could not be a problem. But Bill insisted, saying that an accounting problem had been posed in relation to his REPORT. Rob was infuriated, told Bill what he could do with his economics, and left the whole idea on hold. But now he’s taken it up again. He’s tracked you down as being the accountant who posed the problem and wants you to fix it. Come to think of it, I have a copy of the REPORT here. Working from Rob’s ideas, I can’t see any sort of problem with it. But, here it is”:


REPORT by Mr. Bill X. University of N.S.W. August ’83.

Let me present a simple model:

i) this economy is comprised of two breadwinners, Robinson Crusoe and Man Friday, of absolutely equivalent skills, abilities and needs;

ii) this economy produces only one good, corn, which can be consumed or invested to reproduce itself;

iii) R.C. and M.F. each require 45 tons of corn per year to maintain their physical capacity to work and support their families;

iv) the nature of the production process is that 1 week of work (of 40 man hours) plus 0.1 tons of corn seed is required to produce 1 ton of corn;

v) the wage is one ton of corn per week; and

vi) there is no technological change in the production of corn.

In equilibrium, therefore, R.C. and M.F. will each provide 50 weeks of work per year and combine this labour with 10 tons of seed corn in order to produce 100 tons of corn. This output will then be allocated between consumption (90 tons) and investment (10 tons of corn seed).

The National Production account is:-


Wages 100t Consumption 90t

Profits 0t Investment 10t

100t Gross Domestic Product100t


Clearly this economy, barring death or natural disaster, can go on reproducing itself year after year. It is experiencing equilibrium growth with a zero growth rate. (An example involving a positive rate of growth could easily be elaborated.)


I scanned it quickly. Yes, it was the same REPORT. It was the original work of the senior economics lecturer I’ve called X.


We’d reached the island. The cruiser lazed on the slowly heaving surface of the ocean. Little wavelets, scudding over the surface before the steady breeze, lapped against the hull. It was a delightful sound, reminiscent of long lunches aboard a cruiser moored in a secluded inlet back in Sydney Harbour. But this was no inlet. It was the open ocean, extending to the unbroken horizon in every direction except for the island ahead of us with its jagged, green-clad peak and a surrounding reef. Did it bar our way? The water beneath us was ominously dark, almost menacing. I turned to Mike. “How do we get to the Island?”

“Simple, Alan. We just go straight ahead. This swell that’s now lifting us is going to take us over the bar.”

“Bar? I don’t see a bar. You mean there’s one in that reef ahead?”

“That’s right Alan. See where the surf’s not breaking so high? It’s about twenty feet wide. Fifteen feet of that is crossable at this tide.”

“Mike, you must be kidding! There’s no way this tiny swell will have us surfing over that bar. I know this is a jetboat, so you don’t have to worry about propellers. But you’d be crazy to attempt it.”

“Abe, the tide is falling. The longer we wait, the less will be the clearance over the bar. We’ll take the next swell. So, hang on.”

As the wave reached us and began to lift the stern, Mike moved the throttle from idle to full power. What had been a quiet burble changed to a pulsing roar as two thousand horses from our twin turbo-diesels leaped into action, spewing two massive jets of water and foam behind us. The cruiser surged forward, with Mike juggling the controls to keep us straight and just ahead of the wave’s crest. The reef was approaching at terrifying speed. Higher and higher we rose. My gaze remained locked on the gap. Heavens, if we miss it! But then, with bursts of spray all round us, we were racing straight through the middle. Yippeee!

The turbulence of pitching boat and impacting spray diminished and died. Now coasting serenely across the calm lagoon, the diesels were back to their quiet burble. I eased my grip on the rail. Ahead, at the water’s edge, two figures were standing ready to meet us.


With a slight crunch of sand, Zephyr came to a stop. I rolled my trouser legs and, with sandals in my left hand, jumped down and waded to the beach. The taller of the two figures stepped forward and we shook hands. “I’m Robinson Crusoe V. This is Man Friday V. Welcome to the Eastern Island.”

I shook hands with Man, then the three of us turned and walked towards the two mums and cluster of children gathered beneath a spreading guava tree just above the beach. Rob was speaking good English but with an odd accent. His black hair, blue eyes and pale skin suggested a Spanish provenance and connection with the Philippines. Man’s black skin and curly black hair indicated connection with local islands. Once family introductions had been performed, Man, the mums and children adjourned to a cluster of huts back from the beach, leaving Rob and I sipping juice which a girl had brought to us as we sat under the guava tree.

Rob didn’t waste any time. “Alan, as Mike has told you, back in ’83 I commissioned Bill X, an economist, to help us to go commercial and join the modern world. My idea was to form a company with me as its sole shareholder and director to take over the Island and its capital assets, and price our activities at $10 per hour. No inflation, we’d want consistent values. And we wouldn’t want any changes from our equal work hours and sharing of consumer product. Mike’s given you a copy of Bill X’s REPORT, modelling our established real position. But shortly after commencing, Bill refused to continue because of an accounting problem you had posed. I want you to fix matters. Right?”

“Rob, what first you need to understand is that the problem I have identified is not particular to your island, but is implicit in the system of capitalism as it originated in Italy in the 14th century following the economic stimulus of the Crusades, and is today better known as Neoliberal Capitalism, as practiced throughout the Western world. It cannot continue indefinitely without ever-increasing consumer (including sovereign) debt and/or, the printing of extra money, distributed as ‘helicopter cash’ (as Bernanke’s original suggestion). That’s the problem I’d put to Bill X in January of ’83, and which he thought he’d refuted with the example of his REPORT on your island. Which I then refuted because he’d overlooked depreciation.”

“But, that problem can’t apply to us. We don’t need debt or extra money.”

“Rob, you’re not listening. The necessity of incurring extra debt and/or printing extra money is implicit in the system of Capitalism. THAT IS THE PROBLEM.”

“Alan, that’s ridiculous. Fifty thousand economists can’t be wrong.”

“Rob, I can think of only one way to enable you to understand the problem. You’ve done bookkeeping, haven’t you? Good. Working from the physical facts in Bill’s REPORT, let’s quantify the financial steps that would actualise your plan for your company’s first new Capitalist year:


“Both you and Man will work 40 hours per week for 50 weeks for a total of 2,000 hours each at your specified rate of $10 per hour. Right? Good. So you’ll each be paid $20,000 by the company as wages, for a total of $40,000?.”

“Of course. And we’ll grow 100 tons of corn, using 10 tons of seed corn brought forward from the previous year that had been stored in the planting bin.”

“And you’ll re-fill that bin at the end of the year with 10 tons of corn from the new crop, leaving 90 tons for you two to consume.”

“Exactly. We’ll buy the 90 tons from the company, 45 tons each.”

“Yes. And because the complete crop will have been 100 tons, for which the company will have paid you two $40,000, the market price of corn will, according to your established perspective, be $400 per ton.”

“Right. We’ll each pay the company $18,000 for our corn, for a total of $36,000”.

“Which means that by the end of the year, your company will have paid $40,000 as wages and received income of only $36,000. Where will it get the cash difference of $4,000 from?”

“But it has the 10 tons of new seed corn in its bin valued at $4,000.”

“Sure. But as it already owns it, it can’t sell it to itself. In fact, under the bookkeeping principles of Capitalism, its market value of $4,000 needs to be used to replace the value of the initial stock of seed corn taken from the planting bin at the start of the year. So your company needs an extra $4,000 as cash flow to balance its books. From where can that be obtained?”

”Well, Man and I would each have $2,000 as savings.”

“Yes, but you wouldn’t want to give those to the company. You could loan them to the company. However that would put it into debt to you two, which you don’t want. And the same problem would recur each and every subsequent year for an ever-increasing quantum of debt.”

“Alan, this is bizarre! Physically there’d be no problem. But financially, it seems that each year, adoption of Capitalism would create this funds deficiency of $4,000. I can’t bring myself to believe it.”

Robinson had now become quite flustered. So I said, “Let’s go for a stroll around the village, and resume tomorrow morning.” He agreed, and off we went.


I awoke to a beautiful day. The sun was shining from a clear blue sky, sparkling on the bursts of spray rising above the reef. Rob was seated under the guava tree, so I went and sat beside him. He was figetting and uncomfortable, with his blue eyes shaded by concern.

“I’m sorry Rob that we’ve reached such a problem. There is of course an easy solution for you and Man. It would be to give him an equal capital share and share all financials equally, including future profits.”


“I see. But that’s what Robinson One was prepared to fight to avoid, and I’m damned if I’m prepared to concede it. After all, it is my island. And it could only work for the two of us. What I want is a general solution. Are you saying that my plan is impossible?”

“No, not really. However, although orthodox commercial accounting is an extremely flexible discipline, it cannot in my opinion offer a solution to the fundamental problem. What is needed is a radically new National Accounting approach by consolidation which I offer as a solution. It can be applied to an economy of any size, but must be constructed from the point of view of its citizen body as being the whole equity interest. The reason for this is that natural persons are the ultimate owners of all that has value. Companies, trusts, etc. are merely intermediaries. Governments are merely agents. On this basis, the imposition of practically-perfect competition and a share-of-profits regime rather than income taxes would enable the attainment of a national condition of continuing negative inflation. It would apply to all produced real product, capital as well as consumer.”


“Negative inflation! Really! How possibly could that come to be?”


‘‘As a consequence of human ingenuity and inventiveness, becoming reflected as ever-improving labour and machine productivity, distributed to all by competition through reducing prices. The increasing labour productivity happens naturally, but its benefits are not properly recognised in our present Neocapitalist system.”


Suddenly his attitude of dejection changed. Now sitting upright, his eyes lit up, his voice became suffused with enthusiasm. “That’s great! It sounds just like our sort of thing. Would you work with us Abe to implement it?”


“Sorry Rob, but I’m too old to handle the stresses that would be involved.” As I said this I couldn’t help noticing a previously absent glint in his eye. But it was not until the following morning that I realized what it meant. As I awoke to go to breakfast, I found that I had a youthful minder, armed with a bush knife. A minder, not to protect me, but to ensure that I remained on the Island. I had been made a captive. However, I had taken a precaution. In the bag which I had brought with me was a satellite phone. Following that first evening’s chat with Mike, I had hidden it in Zephyr. I now had it with me. A call from it to the CIA would enable it to know about the matter and track the boat. Later that evening, I rang Mike and explained this to him. The CIA? Oh, no! He spirited me onto Zephyr that night and returned me to Sydney three days later. On the way, I wrote a note for Rob:


Sorry mate to have slipped away. But the whole story is available in my Master’s Thesis; Education as a Solution to the Problems of Western Civilization? It’s in the Rare Books Section (L1) of Fisher Library at Sydney University. All you have to do to access it is to quote the title and my name as author. Chapter 4 provides an account of the operation of negative inflation in a full-scale modern economy. Indeed, they’ll provide a copy of the whole Thesis for only $80. Cheers, Alan Ecob.

The Secret Island

  • Author: Dante2
  • Published: 2016-07-29 03:50:08
  • Words: 3457
The Secret Island The Secret Island