Money, Capitalism and Resources
‘Money doesn’t talk, it swears’ -Bob Dylan
Worldwider Bill of Rights 10: all money markets should only invest ethically and not in the production of goods and services that do not have a plan to use closed loop energy systems or become 90% reusable. Private Banks should not be allowed to create new money for private gain, but central banks should create money for world wide wealth creation.
Money, Capitalism and Resources Challenge
Whilst writing this we came across The Money Reform Party (www.moneyreformparty.org.uk) which are quite happy to have their very useful information copied. ‘The vast majority of money in Britain today, and throughout the world exists as bank, building society, credit card and similar accounts. In Britain this ‘broad money’ is reckoned to exceed 97% of the total money supply. This money is not created by the government, it is actually created by the private banking system for private profit …..out of thin air!’
‘The banks of the main industrialised countries make vast profits whilst the rest of the British economy, and the rest of the world, struggles to make ends meet. However, these profits are not spent back into the economy (this would mitigate some of the damage caused by bank created money), instead they are used in the global money markets, not to enable the trade of goods and services, but to buy other currencies or other forms of ‘near money’ and so to gamble in the great casinos of the world money markets’.
If you don’t believe this then read the following extract from a speech to the house of Lords by The Earl of Caithness on 5th March, 1997 (also taken from a Money Reform Party leaflet). ‘The money supply in 1971 was just under £31 billion. At the end of the third quarter of last year, it was about £665 billion. In 25 years it has grown by a staggering 2,145 per cent. Where has the money come from? Interestingly, the Government have only minted a further £20 billion in that time. It is the banks, the building societies and our commercial lenders who have created the balance of £614 billion…..The problem is that it is commercial lending that has boosted the money supply and , as sure as night follows day, inflation follows growth in money supply of this sort’.
Sure enough, 11 years later, the World’s economy is in the midst of a crisis which is being called ‘The Credit Crunch’ because the banks and money brokers will not lend each other money due to a Global scandal called ‘sub prime lending’ as well as gambling on derivatives which will cost several trillion dollars at 2008 estimates. The Money Reform party and the Earl of Caithness knew this was a problem as you cannot run a stable economy based on credit. Major and minor financial institutions have created a global economy largely based on unsupported credit, which has led to rapid house and price inflation in the West and then a collapse when the extortionate credit could not be repaid.
What this means in human terms is that a vicious circle has been created in the West. To be able to afford to buy a home for your family rather than rent it, you have to take out a large mortgage. Houses which were 1 times salary 20 years ago are now 15 times average salary in many areas.
Combined with enormous food subsidies keeping food process artificially high and rising energy costs because we have not followed a sustainable energy policy, most families are trapped in a spiral of credit, debt and more credit. Many families in the World’s largest economy, the USA, are losing their homes because they cannot afford to pay the interest rates on the credit which they were mis-sold.
On the back of this misery, a British bank has just announced a profit of £7 billion pounds (written just before the collapse of the world financial system).
What role do such financial institutions actually play in creating a sustainable society? At the moment all they have introduced is ‘green policies’ which are merely fluff with no real substance or resource behind them.
The new Model needs to build from a strong foundation by taking away the right of private banks to create new money as credit. Central banks would create money and limit the money supply but invest the money wisely to create agreed worldwide wealth targets.
What we need to do is to reinvent a new financial model that does not create a society of the haves and the have nots, because society will become rapidly destabilised if the financial systems hurt people so badly.
Entrepreneurs like Richard Branson have shown what can be achieved with energy, hard work and creativity. I doubt that many of these people would have achieved so much unless they were excited and energised by the prospect of creating wealth and new business ventures.
What if we worked with the World’s entrepreneurs to create a new business model which still created wealth for individuals as well as for society as a whole?
What if we energised those entrepreneurs to realise that they hold the key to the World’s future, they just need to change their outlook, as all of us do. But before we do that we need a new financial basis to the operation of the World’s economy. The credit crunch has shown the World’s leaders that if we don’t do this the current system will eventually collapse (as it did so recently with Fannie May, Freddie Mac and Bear Stearns in the USA and UK banks Northern Rock and Royal Bank of Scotland) which I and 30 million other tax payers have paid to be rescued at our risk), so now is a good time to change, as
political will is on our side.
Lending people credit to buy goods and homes is based on the idea that buying goods leads to increasing production which in turn leads to increased wealth and prosperity for all.
What if we stopped offering people credit, but instead supported them to become more self reliant and switched the subsidies to companies producing sustainable goods so that these people could afford them. These companies could have targets for Worldwider investments in sustainable energies, better neighbourhoods, led in part by Ambassador groups (see Chapter 18) working with entrepreneurs.
The Money Reform party suggest abolishment of the power to create state backed money (sterling) by private individuals or companies for private profit, and the investment of that power in national or local government for the benefit of the public purse. E.F Schumacher in his book ‘Small is Beautiful’ suggested a new business model which combined public and private.
This Worldwider investment would take time to feed through but would lead to decreased crime and illness through better social cohesion and reduced stress, which would cut the huge costs of both on society.
This would still mean that the entrepreneur gets rewarded but the rewards would be also for the whole society. The only fundamental shift would be that shareholders would have to see their input as long term Worldwide wealth creation. Isn’t this better than losing billions as now?
Many entrepreneurs are simply tied by their shareholders and would not be allowed to act in this way so they would have to make a decision to either work with their shareholders to create a new model or accept that they are trapped. It is time for regulation to force this issue.
This isn’t some sort of socialist utopia or capitalist nightmare, neither is it an impossible dream. Many around the World are already trying to do parts of this against powerful odds. With a new financial basis underpinning it, a Worldwider business model could be created, one that dispenses with or adapts the old Western Victorian Model of Company Structure. This would best be done by bringing key entrepreneurs to design it together to create shared ownership of the idea.
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