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James Robertson <span style=”font-size: 7.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>The full Newsletter can also be viewed at <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> CONTENTS Editorial 1. Growing Support For Monetary Reform 2. A Possible Tipping Point From Scotland 3. Growing Inequality – Thomas Piketty’s Book 4. Practical Achievement And Far-Sighted Analysis 5. Liberation Of Work, Not Full Employment 6. A Culture of Greed 7. Political Futures – Two of Many Possibilities 8. Molly Scott Cato 9. Some Coming Events 10. A Closing Thought from Barbara Panvel and her Indian Colleagues <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> EDITORIAL This newsletter is about the need to shake off the groupthink about the future from which many people in the world now suffer<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>, and how we should set about it. It raises questions about the relation between understanding and action, and between knowledge and ethics. Item 1 is about the recent publication of conclusions by researchers<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> in the IMF (International Monetary Fund) and the Bank of England, and an article by a leading economics columnist in the Financial Times. They all support the need for a radical reform of the way the public money supply is created and managed. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>This proposal for reform is deeply resisted and deliberately ignored by people and organisations that profit from the status quo. Most other people take the status quo for granted. They have no time to question it; and, even if they do, they may not feel able to find the extra time and energy needed to support reform actively. So what can we do to make the reform actually happen<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>? What situation might provide a “tipping point” that would finally defeat the obstacles to the reform, and how might we help to bring it about? (A tipping point is defined by Malcolm Gladwell as “that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire” – see www.gladwell.com/the-tipping- <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>There may be other tipping points that could make implementation of the desired monetary reform irresistible, but Item 2 below identifies one that could arise from the Scottish Independence Referendum later this year. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Item 3 is on another aspect of thinking and doing.
That issue is raised by Thomas Piketty’s book Capital in the Twenty-First Century on the systematically increasing inequality imposed by our present money system. Item 4 instances Hazel Henderson’s work as a combination of practical achievement with far-sighted analysis; Item 5 questions the assumption that work must be paid employment (following Item 2 on the liberation of work in my April newsletter); and in Item 6 Fred Harrison concludes that democracy must be a therapeutic process to escape from a global civilisation based on a culture of greed.
1. GROWING SUPPORT FOR MONETARY REFORM Money: Signs of Progress was discussed at Item 5 in my April newsletter. Here we take that forward. The IMF Research Department published “The Chicago Plan Revisited” – www.imf.org/external/pubs/ft/ It is clear that the IMF’s researchers have fully validated the claims for a fundamental monetary reform proposed by many leading US economists at the height of the Great Depression of the 1930s – the key feature of that proposal being that the economy’s money supply would be created debt-free by the government and no longer by banks through debt. The report concludes that making this reform “could significantly reduce business cycle volatility caused by rapid changes in banks’ attitudes towards credit risk, it would eliminate bank runs, and it would lead to an instantaneous and large reduction in the levels of both government and private debt”. In April this year the Bank of England ‘s researchers published in the Bank’s Quarterly Bulletin (2014 Q1) the fact that the national money supply is now almost entirely created as loans by commercial banks to their customers in the form of debt to the banks themselves – see www.bankofengland.co.uk/ Also see www.youtube.com/watch?v= Another noteworthy development is last month’s column in the Financial Times by Martin Wolf, who is one of the UK’s leading economics commentators. In it he suggested that private banks should be stripped of their power to create money. Unfortunately the online version of the article – www.ft.com/cms/s/0/7f000b18- However the blog posts below give a good summary of Wolf’s article and confirm that there is now a very strong case for stripping the banks of their present privilege to create as debt almost all the money we use, at great cost to us all and great profit to themselves.
Understanding of the need for this reform is also spreading in countries other than the UK. Stephen Zarlenga’s American Monetary Institute has been making great progress – see www.monetary.org; and so have Joseph Huber and his colleagues in Germany – see www.monetative.de/mission- In the light of these recent developments, it is reasonable to ask Christine Lagarde, Managing Director of the IMF, and Mark Carney, Governor of the Bank of England, to say publicly how they view the conclusions recently published by their Research Departments. How do they advise governments to act on them? At the same time the present Archbishop of Canterbury could be asked to tell the Church of England what he thinks about the following statement made by his predecessor Archbishop William Temple in London on 26 September 1942, 72 years ago:
It is reasonable to ask those people, who are now the leaders of the IMF, the Bank of England and the Church of England, how they respond to these developments. Their support could certainly help the reform to happen. But we should also look elsewhere for a tipping point.
2. A POSSIBLE TIPPING POINT FROM SCOTLAND The Scottish Independence Referendum is on 18th September this year. It already seems to people in Scotland that David Cameron and George Osborne (the UK Prime Minister and the UK Chancellor of the Exchequer – financial minister) are behaving negatively and arrogantly towards the question of a future currency for an independent Scotland in the event of a Yes verdict. An expression of that will be found at www.heraldscotland.com/ At present there is a comparatively high level of support in Sotland for a Yes referendum vote. But in the coming months the prospective danger of expulsion from the UK sterling currency might start a shift of opinion towards a cautious No. If that happens, what rabbit could the Scottish National Party leader, Alex Salmond, and his colleagues pull out of their hat to counteract the shift? It could be monetary reform. Alex Salmond could announce that the present Scottish Government is preparing a feasibility study in the light of the developments at Item 2 above. The study would report on whether, after winning a Yes referendum, an independent Scotland should adopt a democratic currency with a money supply created as a debt-free public service to society as a whole, instead of the present money supply created as debt by commercial banks at great profit to themselves and great cost to society at large. That announcement would be widely publicised; knowledge in the UK as a whole, and in other countries too, that monetary reform was being considered as a serious political possibility would become very widely discussed; and that discussion could provide the tipping point for international monetary reform; and the newly independent Scotland would start its life as a proud world leader. It turns out that preparatory work for the study has already been done. (1) An outstanding example is the book Moving On by Andy Anderson and Ronnie Morrison on the Campaign for a Scottish Currency. For details see www.scottishmonetaryreform. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Click here to read an excerpt from the book. There is a button at the bottom of that page to buy the book. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>3 four and five star reviews of the book can be found at www.amazon.co.uk/product- (2) Mike Edwards <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>has written an important paper on Why Our Monetary System Is Broken and How The Scottish Independence Referendum Creates An Opportunity To Fix It For Scotland which can be found at www.allofusfirst.org/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>He concludes:
(3) Positive Money has published A Scottish Currency? 5 Lessons from the Design Flaws of Pound Sterling (www.positivemoney.org/wp- Positive Money<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> accepts that an independent Scotland may have to abandon the pound and establish its own currency, to regain control over its own monetary policy and economic affairs; and it points out some of the pitfalls that it should avoid if it does so. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>It should limit the creation of a Scottish currency to a Scottish Central Bank, which would be concerned with the long-term health of the Scottish economy rather than the short-term need to chase profits and market share. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>This would give Scotland an economy where: <span style=”font-size: 10.0pt; font-family: Symbol; color: black;”>·<span style=”font: 7.0pt ‘Times New Roman’;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>The amount of money in the economy would be stable regardless of the actions of banks. <span style=”font-size: 10.0pt; font-family: Symbol; color: black;”>·<span style=”font: 7.0pt ‘Times New Roman’;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Households could reduce their debts without inadvertently triggering a recession. <span style=”font-size: 10.0pt; font-family: Symbol; color: black;”>·<span style=”font: 7.0pt ‘Times New Roman’;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>The economy could be stimulated without relying on rising household debt. <span style=”font-size: 10.0pt; font-family: Symbol; color: black;”>·<span style=”font: 7.0pt ‘Times New Roman’;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>The proceeds from creating money would go to the state rather than banks, resulting in a significant saving for taxpayers. <span style=”font-size: 10.0pt; font-family: Symbol; color: black;”>·<span style=”font: 7.0pt ‘Times New Roman’;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Badly-run banks could be allowed to fail without threatening the payments system or the wider economy. These changes would give Scotland a safer banking system and an economy that is more stable and far less dependent on debt<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>. (4)<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> Although the well-known economist John Kay may not have discussed the possibility of monetary reform for an independent Scotland, his recent Financial Times article on English Law Cannot Stop Scots Being Sterling Squatters – see www.johnkay.com/2014/04/09/ Personally<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>, being of mixed Scottish and English blood and having spent much of my young life in Scotland and much of the rest of it in England, I would regret the two countries becoming independent from one another. But if Scotland becomes the first nation in the world with a money system that serves its people fairly, I would feel very proud of it. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Actually, once the present Scottish leaders let it be widely known that they are seriously considering monetary reform as a feature of their possible independence, that by itself could become a tipping point on a wider scale. Public pressure on the UK government and others around the world could then compel them to consider it seriously too. Monetary reform could then spread like wildfire. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> 3. GROWING INEQUALITY – THOMAS PIKETTY’S BOOK Capital in the Twenty-First Century <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>(577 pages) has been greeted as a book that will change the ways we think about society and economics. See Paul Mason’s review at www.theguardian.com/books/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>To summarise boldly, Piketty’s message is that capitalism automatically creates levels of inequality that are unsustainable. The rate of return on capital outstrips the rate of growth, and so wealth is bound to concentrate to levels incompatible with democracy, let alone social justice. The main policy measure he proposes is a comprehensive international agreement to establish a progressive tax on individual wealth, defined to include every kind of asset. He concedes that this is a “utopian idea” but also insists that it is the best possible solution to the problem. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>A storm of professional arguments has now developed, primarily about Piketty’s calculations and what he concludes from them, but also against his policy recommendations. But the expert economists and journalists involved in these arguments don’t seem much concerned about what should actually be done to correct the obvious inequality and injustice of the present real world situation. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>This prompts us to ask: <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>(a) Do the activities of influential economists and journalists lead to the introduction of desirable and efficient democratic reforms that wouldn’t otherwise happen? <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>(b) Or may their activities distract us from making necessary reforms actually happen? <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>The fact is surely obvious that the money system, as it works at present, systematically results in inequality and unfairness. There is no need to spend time and expense establishing that. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>My book Future Money – www.jamesrobertson.com/ a) The public money supply <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>should be created debt-free by a public agency and circulated into the economy via public spending, and commercial banks should lose their hugely profitable privilege of creating it as debt to themselves and at huge cost to the public. b) People and organisations should be taxed (or charged) <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>on the profit they enjoy from private use or private control of common resources. These will include taxes or charges on land-rent values and on the use or right to use other common (e.g. environmental) resources and the capacity of the environment to absorb pollution and waste. c) Taxes should not penalise useful work and enterprise<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>. Taxes on value added, incomes and profits should be reduced and eventually abolished. d) A Citizen’s Income <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>- a tax-free income paid to every man, woman and child – should be introduced as a right of citizenship and their share of the value of common resources. It would be more useful <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>if the financial experts turned their attention to practical proposals on those lines.
4. PRACTICAL ACHIEVEMENT AND FAR-SIGHTED ANALYSIS <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>A very good recent example of their successful combination comes from Hazel Henderson. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Her global Green Transition Scoreboard® (Gts) tracks the private financial system for all sectors involved with green markets, showing the progress of ethical wealth building for planet, people and profits as the world makes the transition towards the Solar Age. By March 31, 2014 it had reached $5.3 Trillion. See www.ethicalmarkets.com/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Meanwhile, her latest book is Mapping the Global Transition – From ‘economism’ to earth systems science (56 pages). It was launched by ICAEW ( The Institute of Chartered Accountants in England and Wales) in association with <span class=”aBn” tabindex=”0″ data-term=”goog_10925189″><span class=”aQJ”>Tomorrow’s Company at an event in London on <span class=”aBn” tabindex=”0″ data-term=”goog_10925190″><span class=”aQJ”>11 February this year. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>The chapter headings are as follows:
<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>It can be downloaded free from www.ethicalmarkets.com/wp- <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>I recommend it wholeheartedly<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>5. LIBERATION OF WORK, NOT FULL EMPLOYMENT <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Following up Item 2 in Newsletter No.46, here are two relevant aspects. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>(1) Juliet Schor<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>, Professor of Sociology at Boston College:
<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>See www.yesmagazine.org/issues/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>(2) <span style=”font-family: ‘Verdana’,’sans-serif’;”>Adam Lent, writing recently on the <span style=”font-family: ‘Verdana’,’sans-serif’;”>RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) blog, said “The evidence proves self-employment is great. Celebrate it!”:
<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>See www.rsablogs.org.uk/2014/adam-
<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>6. A CULTURE OF GREED
<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>I warmly recommend <span style=”font-family: ‘Verdana’,’sans-serif’;”>Fred Harrison’s powerful series of <span style=”font-family: ‘Verdana’,’sans-serif’;”>10 theses under the title of <span style=”font-family: ‘Verdana’,’sans-serif’;”>Share The Rents. See www.sharetherents.org/thesis/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>It concludes that “<span style=”font-family: ‘Verdana’,’sans-serif’;”>Democracy must be reconceived as a therapeutic process, empowering people to escape the trauma inflicted when their ancestors were ruptured from authentic cultures and natural habitats”. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>7. POLITICAL FUTURES – TWO OF MANY POSSIBILITIES <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>In <span style=”font-family: ‘Verdana’,’sans-serif’;”>Unstoppable: The Emerging Left-Right Alliance To Dismantle The Corporate State, <span style=”font-family: ‘Verdana’,’sans-serif’;”>Ralph Nader has an impassioned and potentially game-changing message for American citizens: You are not powerless. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>See www.nader.org/2014/04/28/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>European Elections<span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>: 9 Scariest Far Right Parties Now in the European Parliament. See www.huffingtonpost.co.uk/2014/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>8. MOLLY SCOTT CATO <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Congratulations and good wishes <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>for Molly’s political future in Europe – www. neweranetwork.info/2014/05/26/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>9. SOME COMING EVENTS <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>(1) <span class=”aBn” tabindex=”0″ data-term=”goog_10925191″><span class=”aQJ”>6-8 June, Boston, MA. Common Bound Toward a New Economy – <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>www.commonbound.org. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>(2) <span class=”aBn” tabindex=”0″ data-term=”goog_10925192″><span class=”aQJ”>21 June, Bristol, <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>as part of the Big Green Week. <span style=”font-family: ‘Verdana’,’sans-serif’;”>Schumacher Society, <span style=”font-family: ‘Verdana’,’sans-serif’;”>Journey of the Universe. The 2014 Annual Schumacher Lectures will be on 13/14 September in Bristol – www.schumacher.org.uk. (3) 9-11 July, Oxford , 9th Annual Green Economics Institute Conference – <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>www.greeneconomics.org.uk/ <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> 10. A CLOSING THOUGHT FROM BARBARA PANVEL AND HER INDIAN COLLEAGUES INDRANET There is an ancient Indian story <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>(Are we a vital net? 2,465 people in about 90 countries now get these newsletters.) <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> James Robertson <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”><span class=”aBn” tabindex=”0″ data-term=”goog_10925194″><span class=”aQJ”>29 May 2014 <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> PS. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>Please remember that, if you want to change your email address, you can do this by clicking the ‘change your contact details’ link at the bottom of this email. <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>[email protected] <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”>www.jamesrobertson.com <span style=”font-size: 8.0pt; font-family: ‘Verdana’,’sans-serif’; color: black;”> |
