of the Meeting held on 25th November 2003
- around our basic objective
that more money be publicly issued rather than privately
in 2002 called for using the public credit. EDM 854 in 2003 asks
for an Inquiry into the possible benefits of publicly-created
money. EDM1515 with 24 and EDM 854 with 28 signatures have thus
set signals for understanding the mechanisms of money creation
and supply in a Parliamentary context. Interest on debt constitutes
some 22% of taxpayers' money spent by Government - generally slightly
more than the military budget . Who benefits? And how does the
exponential growth of compounding interest effect the country's
economy and government's budget? Public Services have been suffering
noticeably and the Public Services Forum is an opportunity to
draw the Unions' attention to the devastating effects of our debt-
and interest-based monetary system. After John Courtneidge's article
'New initiatives for Public Finance' was published in "Voice
of the Unions" we hear a report on the latest attempts of
raising awareness among those who suffer most: the workers and
employees - whether personally through health and education, or
collectively through transport and pensions.
Dr John Courtneidge is a chemist, town councillor, Quaker,
Co-operator and socialist. He
co-founded the Campaign for Interest-Free Money in 1997 and has
been an active supporter of monetary reform on many levels. Richard
Murphy is the mastermind behind EDM854: an accomplished accountant
and businessman. Richard Greaves worked as a solicitor
for 15 years before becoming interested in economics and politics,
including the power of banks in money creation.
After the disturbing account at the previous Forum of the intricacies
of international financial exploitation, it was important to turn,
as we did on November 25th, to the nature of our own commitment
to contribute to effective change. We wrestled for two hours with
the imperative of having a strategy and appropriate tactics with
which to alert people and government to the urgency of financial
John Courtneidge (JC) used a mild shock tactic of stripping
off jacket, tie and shirt to reveal an undershirt - proclaiming
silently "Campaign for Interest Free Money". He declared
that his role was to trigger a discussion in which all would want
to partake. He hinted at the long history of desire for justice,
and in particular the 40 year history of the 1962 Dundee report
leading to the branch of the monetary reform movement that finds
expression in the Global Table, in this Forum and in the work
that all its participants now pursue in the cause. We were to
discuss money as value - how it is created - how used - how we
can tackle the achievement of positive change. He set a tone to
the discussion to follow in a context of Quaker, Co-operative
and socialist insights about strategies of non-violence, co-operative
advantage and inclusive justice.
Richard Murphy (RM): spoke as the mastermind behind EDM
854 and as an accomplished accountant and business man. He
both represented and urged the pragmatism necessary to convince
the power holders of the necessity and possibility of change.
Depth of analysis is available, we must fortify our intent to
apply. Disillusioned with economics from early student days, he
reminded us that "profit" and "utility" are
not really defined and that significant alternatives were needed.
He was disappointed in the early alternatives pioneered by TOES
(The Other Economic Summit) and NEF (New Economics Foundation)
- being contained in analysis. NEF concentrated on micro schemes.
We want to see effective change. He was determined to be a campaigning
Chartered Accountant. Action was to be delivered as practical
solutions. Neo-classical economics is profoundly biased towards
the rich. No problem with wealth creation except where wrongly
achieved. Bias to the poor - the message of Jesus - requires our
theological explorations. Capitalism is a return on interest.
Profit is the return to enterprise. We are called to pragmatism
- no dreams - no panacea - but achievable action. The Biblical
record is that usury must be prohibited. Our hermeneutics (the
science of interpretation) must contemporise that significant
affirmation. Psalm 15 "Those who are to rest upon the holy
hill - will be those who don't exploit through usury". 1844
Bank of England Act - declared seigniorage for the government
only, as in the USA at the end of c17 ....and remained there ever
since, expanding rapidly. The present process is an obscenity.
The trap in double entry bookkeeping is a fiction because
there is no money, but only entries, which generate less to savers
and disproportionately more for banks. Of the top ten on the FTSE
100 list, five are banks, where the top to bottom ratio is of
100:1. Banks are staggeringly greater than the rest. Why are there
so many selling money so successfully? Because it costs nothing
to make. "Provident Financial" is number 96 in the 100
and charges 176%. A cap will come on interest in the UK probably
at a level that makes business possible. Therefore the next step
is a new Early Day Motion, with Austin Mitchell MP and Alan Simpson
MP, with the tactical step of asking the Treasury to review the
situation. We must walk in the right direction, as Tarek
had said previously.
To understand the potential, let's return to James Robertson
and Joseph Huber's "Creating New Money" - practical
and available on
www.neweconomics.org. Its proposal says: the Government could
borrow from the Bank of England on loan account - the difference
being that it would not be repayable - it will be at zero% as
'free money'. The Bank of England has no requirement to make a
profit. Under the current system we pay c£30 bn a year which
is equal to the deficit this year! But it must be the Bank of
England only - otherwise it would evoke massive resistance from
the City. Bank business is not the same as the general business
of wealth creation. True banking can continue as brokerage - but
won't be able to make money. We affirm the principle that money
in your account belongs to you not to the banks. WHAT IT WOULD
DO : it would create effective pension schemes - it would end
student loans - it would do away with the Lottery that drains
the poor. [Recall John Tomlinson's paper to the Forum - on why
is it necessary to preserve confidence in banks? Because they
have a unique way of accounting that disguises their truth as
Richard Greaves (RG) Described how he worked as a solicitor
for 15 years before becoming interested in economics and politics,
including the power of banks in money creation. Sheffield Education.
Family firm making cabinets for cutlery and hi-fi. His Father's
dictum was: Don't borrow! But he was forced to and by 1981 they
were in receivership. Sold small factory and lost it all in the
interest payments. Then as a solicitor he asked where is all the
money coming from, NOT from savings. The Grip of Death by Mike
Rowbotham opened his mind (but it is 350 pages long!!) So he set
himself the task of getting the essence into eight
pages on money and banks - the truth. We are encouraged to
read and comment. No money is created by the system to pay interest
- so there is always a shortage and we are all formidably competing
for it and cost cutting consumes us.
SCENE SET - DETERMINED DISCUSSION ENSUED
Rodney Shakespeare questioned the proposal on interest-free
issuance unless it was repayable and cancellable, thus countering
the greatest block we all faced - the fear of inflation. RM felt
that there was an argument for fine tuning on what amount was
repayable and what was not repayable.
JC referred to the Budget available in our libraries: £1000
billion is the total money supply. £400billion is the Government's
budget with an annual increase £40 billion. The
Bank of England should be 'ours' - as part of the common wealth.
The Bank of England to provide that £40billion and then
monitor. This will affect whether there is withdrawal or continuing
circulation. There must be a public debate informed by realistic
figures offered to us in a realistic way. Keynes saw this as stated
in his very last essay - then there was no measurement of what
is out there. Post World War Two Econometrics made it possible
to measure, and so opened up new possibilities.
RM: did not really see the need for repayable money, using
inflation to meet the obligation, which is a con. But we need
each generation to build what the next generation will need. We
need steady growth of the money supply for a long time to come.
Monitoring is the key to the effect. Savings: the monetary medium
is being misused - savings should be as dividend instead of interest.
80% don't save and that won't change. We must note the % who are
not capable of saving because they have insufficient money - very
difficult to read. £14000 - £200,000 is a very large
band whilst £80,000 is in top 1%.
It was acknowledged that there is confusion about the nature of
the ownership of the Bank of England. Serious enquiry by the Treasury
or an independent body would need to clarify this publicly. After
one enquiry the Bank of England did name names, but within a week
the relevant we site had been withdrawn. Tax Justice research
shows a ruse that a dormant Company is often a cover for activities
closed to public review. For example. PWGlobal Limited web site
for 150 countries..... is dormant !! 2% inflation is too much
if we want stable currencies, and the real figure for inflation
is not published. Administrative charges in financial services
must be recognised.
1. Fear of capital flight [RM] - the international dimension
is immensely significant but is ignored. Tax Havens, which account
for over ? of all world trade have only 40 academics world-wide
looking at them, despite 5000 accounting academics in the UK alone.
The UN is looking at this and RM is to go to Geneva to give evidence.
Change will come in 5 -10 years KPMG own vast proportion of the
2. Discussion followed on variable rates of interest - how
do we deal with this? Will zone rates prevail? There is some indication
that this discussion is beginning to be a concern in the Treasury.
The library system model from charge at point of use to free at
point of use took 100 years to develop. We all could follow. Capital
flight inwards will follow the first country to issue interest-free
money. In the deeper holistic paradigm we have yet to define and
reach, the key or ordinate issue is money: its creation and its
use. A National Credit Office is one possibility and doesn't have
to make a profit. Banks are effectively nationalised - because
they cannot fail. Person of last resort is the Government - that
is us. Why say others own it? [See German model of equity risk]
In the future, banks should help to enrich the economy which they
don't presently do! The European dimension - nobody can say anything.
The European Central Bank is as much its own master as the Bank
of England. Treaty says no advice from anyone. We have an opportunity.
3. Pro Bono tried the idea of companies creating their
own banks. Is there any mileage in this? Differentiate between
banking services and saving required. There are important extant
examples 1. JAK banks. 2. Shared Interest. 3. Triodos. 4. Co-operative.
5. Mondragon (an equity bank but with interest). Co-op bank in
UK is a shocking black hole - makes surpluses it doesn't know
what to do with - new co-op businesses and gets up to all sorts
of scams. (Note the Chris Cook explorations of the new model available
in Limited Liability Partnerships, of which examples are beginning
to be founded.)
1. There needs to be a radical shift in sense of responsibility.
2. Interpersonal relations must improve.
4. Two issues stand out: 1. The Creation of Money and 2. Should
it bear Interest ? Money creation could not be a completely free
service, but it could be a very different one, having equity in
place of debt, like a sterling LETS scheme with an administrative
charge? There was strong concern expressed that we would not achieve
change in our lifetime unless we start with interest-free repayable
issuance - because the debt-free is not admissible to the present
Monetocracy. That is a first step that cannot be seen as inflationary
- interest-free repayable - counter inflationary is better phrase.
Other steps could follow.
5. The discussion moved to a close around the timely commitment
to table a new Early Day Motion for the parliamentary year that
would open the following day. So we all buzzed privately for a
while and then left, challenged to start where the shoe pinches.
Comments are always welcomed on ways to progress. We share
the realization that free market theology and market worship is
not the way to go; and that a moral outcome is essential. If we
all insisted on full agreement on all points, there is little
possibility that any type of movement could proceed. Then the
bankers, united in their exploitation of humanity would continue
to dominate. They've had plenty of experience with exploiting
divisions and ruling. There are probably real differences that
we will argue over in the future, but if we agree on 70% and more
of general objectives, then I'm for putting those arguments
off till after we have the bankers on the run.
Sabine's comment: I regret that the debate on interest did
NOT make the distinction between
1. interest paid on the National Debt as part of the Government's
2. interest paid for ordinary loans.
Banks charging interest from their customers is different from
the Government being charged interest on its budget when this
represents 40% of the total money supply, since this interest
payment has to be covered by taxes. The Chancellor thinks he can
raise money either from taxation or from borrowing. The truth
is that in BOTH cases, the taxpayer suffers.
In terms of strategic thinking, an All Party Group is our next
Lobbying the Treasury Select Committee is one 'prong'.
Campaigning via 'the network' is the second 'prong'.
Wednesday, January 14th, 2004 .... Citizen's Diplomacy - A joint
effort with the "Simultaneous Policy" Initiative.
PREPARE BY VISITING www.simpol.org.uk
Peter Challen, Minute Secretary, Forum for Stable Currencies
Organiser; Sabine McNeill