Newsletter No. 40 – March 2013
The full Newsletter can also be viewed at
2. A Leadership Vacuum
3. Understanding The Scale Of The Challenge We Face
4. The Practical Reforms
5. Progress: Money System Reform As A Whole
6. Pressures on Money Supply and Banking Reform
7. Some Coming Events
8. An Addition to my Website
As the urgent need to understand and reconstruct key parts of the world’s money system becomes clearer and clearer, this newsletter summarises where we are and where we must go next.
2. A LEADERSHIP VACUUM
We face a great crisis. The current money system is motivating us to destroy the future for our grandchildren and great grandchildren by compelling us to compete against other people and countries, and encouraging us to destroy the planet’s resources.
The outlines of a solution are now clear. A reformed money system will be one that motivates and enables us to help one another to meet our needs, including the need for justice in our world society and the need to conserve the planet’s resources on which our survival depends.
However moving to that solution, and overcoming doubts and vested interests, is going to require a great deal of energy and courage from us all. It will also require great leadership from our politicians.
Past crises have brought forth great leaders. At the moment, the political leadership that is needed so badly is simply not there.
National leaders – from Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States, together with the European Union – will meet at the G8 meeting in Northern Ireland on Will they live up to the challenge? I fear not.
That is in spite of the fact that the British Prime Minister chairing the meeting has pledged to tackle the “staggering” levels of tax evasion as a key priority of the UK’s presidency of the G8 this year. Seewww.guardian.co.uk/politics/
Protesting NGOs may live up to the challenge somewhat better. Examples include the World Development Movement “shouting out for Justice” (www.wdm.org.uk), and the Progressive Development Forum “telling the truth about aid” (http://
But neither the G8 leaders nor the protesting NGOs are likely to respond with enough understanding of the deeply rooted challengeimposed on the human community by the present money system.
(For some important consequences of that, see the following:
3. UNDERSTANDING THE SCALE OF THE CHALLENGE WE FACE
The behaviour of almost everyone on Earth, with its effects on the lives of other people and the natural world, is now motivated to a great extent by how the money system works. We need to understand:
(1) how that process of motivation happens;
(2) how it is now motivating us to behave in ways that threaten our future;
(3) how to change the way it works; and
(4) what we can do to make sure it is changed that way.
Assuming it is not already too late, radical reform of the wholeworldwide money system is urgently needed, involving:
(1) a restructuring of national money systems, and a reduction of their present centralising power;
(2) further development of the international money system and localmoney systems; and
(3) the purposeful evolution of them all into a global system that serves the various common interests of all the world’s people more effectively, democratically and ecologically than the global system serves us today.
This may well involve a radical structural change in politics. See for example John Bunzl in The Huffington Post on “The Right Mourn Thatcher; The Left, Any Sense of Direction” –http://tinyurl.com/b26dloz.
And it will almost certainly require peaceful revolutionary action by squeezed middle class people, as described by David Boyle in his latest book, Broke: Who Killed the Middle Classes? – www.david-boyle.co.uk/broke which I heartily recommend.
Failing that, we will continue down the road to self-destruction. See for example www.monbiot.com/2013/05/10/
4. THE PRACTICAL REFORMS
Three component reforms will contribute to National Money System Reform. They are:
· monetary reform (changing how the money supply is created );
· public revenue reform (changing what is taxed and not taxed); and
· public spending reform (changing what public revenue is spent on and what not).
Those shifts will transform the present national money system into one that is more intelligently organised. They will mean shifting away from a redistribution of resources that fails to correct the outcomes of a badly organised money system, to a predistribution of resources that provides the basis for a money system better designed to serve the necessary purposes of money today. (For more about predistribution, please see the Introduction to my March 2013 newsletter.)
First, the national money supply.
This will be changed into a truly public service. It will stop the creation of money by commercial banks as profit-making debt. It will make the central bank responsible for creating money debt-free and giving it as public revenue to the elected government to spend into circulation.
Second, public revenue.
Changes in other sources of public revenue will shift taxes off ‘goods’ on to ‘bads’. This will mean:
(a) Abolishing taxes on value added, incomes and profits that penalise useful work and enterprise.
(b) Replacing those taxes with charges on things and activities thatsubtract value from common resources for private benefit. These will include taxes or charges on land values and on the use of other common resources, mainly environmental including the capacity of the environment to absorb pollution and waste.
Third, public spending.
Changes will include a people-centred shift in public spending including:
(a) Introducing a Citizen’s Income – a tax-free income paid to every man, woman and child as a right of citizenship.
(b) Meeting the costs of that by reducing the costs of:
(i) interest on government debt,
(ii) perverse subsidies,
(iii) contracting out public infrastructure and services to commercial and financial businesses, and
(iv) public sector inefficiency and waste.
These national reforms will also provide the international money system with a model designed to meet the challenges of world society today and in the future; and it will provide local money systems with an enabling context for a revival in more self-reliant local economies, instead of their present disabling one.
NB. These practical reforms are more fully explained in Future Money.
5. PROGRESS: MONEY SYSTEM REFORM AS A WHOLE
A simple philosophical principle underlies all three of the reforms at items 2, 3, and 4 above – how the money supply is created, what istaxed and what is not taxed, and what is public money spent on and what not.
The principle is that everyone should pay into public revenue the value of the common resources they use for their own profit, and they should receive from public spending a share in the total value of common resources.
As supporters of those separate reforms recognise that supporters of the others share those principles too, support for the separate reforms and for money system reform as a whole are quickening.
Earlier this month she gave a paper in New York to the annual meeting of the North American Basic Income Guarantee Congress –www.usbig.net/congresses.php.
The importance of the occasion is that it expressed co-operation between supporters of two of the three main component reforms in total money system reform – land value taxation and basic income. She is now looking forward to future big meetings at which supporters of all three reforms – money supply, land value taxation and basic income (Citizen’s Income) – will come together.
I greatly appreciate that Alanna’s paper was A Tribute to the New Economics of James Robertson. Its abstract was as follows:
“James Robertson, co-founder of The New Economics Foundation and The Other Economic Summit, has been called “that most subversive of men, the eminently reasonable revolutionary”. His vision for a new economics for the 21st century is multi-dimensional and local-to-global.
Robertson advocates for a universal basic income in combination with socialization of resource rent, land value taxation, green taxes, widespread ownership ofproductive capital and fundamental monetary policy reform. He foresees a multi-polar world that is both decentralized for local self-reliance and a revived household economy as well as global rules for international trade and finance.
His perspective on “the real economy” involves a reorientation of work, technology, energy, agriculture, transport, health, education, leisure, science, philosophy and religion. Robertson is a new economics renaissance man. This session will be a tribute to his work and writings.”
(The full presentation can be downloaded here for any readers who are interested to see it.)
Alanna gave another paper in April to the World Bank’s Land and Poverty 2013 conference in Washington on “Socializing Land Rent, Untaxing Production” – see www.earthrights.net/docs/2013-
The IU Conference 2013 on “Economics for Conscious Evolution” will be held in London on www.theiu.org/conference-2013-
(2) Another prominent example of a supporter of all three reforms isMichael Kumhof. He is well known for the IMF Research Report –www.imf.org/external/pubs/ft/
It supports arguments for transferring the creation of the money supply to a public agency. But he also suggests taxing incomes gained from land values, etc – see www.theiu.org/news/imf-speaks-
(3) The Coalition for Economic Justice – www.c4ej.com includes twelve think-tanks, charities and pressure groups, joining in response to the current economic situation. It is concentrating at present on the introduction of a Land Value Tax.
But its members are also concerned with reducing Tax Poverty, thereform of the Money Supply,and the introduction of a Citizen’s Income (Basic Income). A good example is the Systemic Fiscal Reform Group – see www.systemicfiscalreform.org.
(4) I hope George Monbiot will complete the picture he gives in his important recent Guardian article “Communism, welfare state – what’s the next big idea?” – www.guardian.co.uk/
He mentioned land value taxation and a basic income as inspiring, transfiguring ideas – offering an alternative to war on Britain’s poor. If he had added reforming how the money supply is created, he would have hit on a truly inspiring big idea.
As he concluded, “These ideas require courage: the courage to confront the government, the opposition, the plutocrats, the media, the suspicions of a wary electorate. But without proposals on this scale, progressive politics is dead. They strike that precious spark, so seldom kindled in this age of triangulation and timidity – the spark of hope”.
(5) This report came in yesterday from Stephen Zarlenga –
It shows that, at a recent event in New York arranged by the American Monetary Institute, three of the eight speakers were Georgist supporters of Land Value Taxation in discussion with supporters of reforming the Money Supply (monetary reform).
It is another example of the co-operation starting to grow between supporters of the three main components of overall money system reform.
6. PRESSURES on MONEY SUPPLY and BANKING REFORM
(a) A conspiracy of silence? A bitingly penetrating critique by James Bruges at http://political-cleanup.org/?
(b) How central banks undermine the market economy. Central banking expert and author of The Money Trap, Robert Pringle (whose new book I discussed in the March 2013 newsletter) deplores “the systematic exploitation of savers by reckless borrowers, including governments and big banks propped up with state money”.
” … governments get their budget deficits financed courtesy of central banks, central banks’ balance sheets replace markets, too-big-fail-bankers get their bonuses financed by state subsidies, corporations hoard cash, while workers, consumers and savers are screwed. Thank you very much”.
(c) Sir Mervyn King will retire at the end of June. Mark Carney from Canada will succeed him as Governor of the Bank of England.
During the coming month will King aim to give the impression that he leaves things in good shape and will Carney let it be known that he faces a formidable challenge? It will be interesting to see. They are both human after all.
In any case I hope someone will tell Carney that he has a chance to make history as a great leader by starting to fill the “leadership vacuum” described at 2 above.
(d) In “Global Research” ( May 1), Ellen Brown explains why she says “Depositors Beware: Theft is Legal for Big Banks, and Your Money Will Never Be Safe “. See www.globalresearch.ca/
[Note: Support continues to grow for Land Value Taxation and a Citizen’s (Basic) Income. I will be reporting their future progress in a later newsletter.]
7. SOME UPCOMING EVENTS
, central Dublin: The Money Mess : Consequences & Alternatives, organised by Feasta and Sensible Money. Great programme. Details at http://themoneymess.
, central London: Land Value Taxation and the Covenant with God, organised by the Christian Council for Monetary Justiceand Land Research Trust. Details at www.eventbrite.com/event/
, San Rafael, California: Public Banking Conference 2013,Funding the New Economy. Details at www.publicbankinginamerica.org
, London: The Spark – A week of workshops and events to strengthen the movement for economic justice in the run-up to the G8 meeting on www.jubileedebtcampaign.org.
, Bristol’s Big Green Week and Schumacher Lectures 2013. Details at www.schumacher.org.uk.
, London: IU (International Union for Land Value Taxation)Conference 2013 – Economics for Conscious Evolution. Details atwww.theiu.org/conference-2013-
, University Center, Chicago: 9th Annual AMI Monetary Reform Conference. Main theme: Implementing Monetary Reform now! Details at www.monetary.org/2013-
8. AN ADDITION TO MY WEBSITE
If you look at www.jamesrobertson.com/
With the passing of time I feel that the website should provide some archival, historical information about “alternatives”, as well as suggesting how alternative policies should be supported today.