for WORKSHOPS for CHURCH OFFICERS
- September 2003
CCMJ aspires to renew the witness of
Christians, in co-operation with adherents of other faiths, to
social, economic and ecological justice, through radical reform
of the world's money.
If these aspirations are to become reality, there has to be a
practical understanding of the way in which the material world
organises itself. At the centre of that organisation are beliefs,
conceptions, misconceptions and practices concerning wealth and,
in particular, money.
The particular insight of CCMJ is that certain misconceptions
about money - the way in which it comes into being; the way it
is controlled; and the purposes for which it is, and is not, used
- are easily correctable. And not just easily correctable - if
they are so corrected, CCMJ's aspirations can become reality.
The main misconception is about the way money comes into existence
- people think that when they borrow money, the bank is lending
its own money or the money of other depositors in the bank. But
that is not so. The money which is lent is a new creation, created
out of nothing by the pressing of computer buttons. The bank then
requires that the lenhht money be repaid together with a recurring
imposition called "interest". Today in the UK an amazing
95% or more of the new money supply is created in this way by
the banking system (the remaining 5% of the money supply is coins
and notes created by the government).
Even more amazingly, a government wishing to borrow millions of
pounds to pay for its own capital expenditure - for hospitals,
roads, bridges, sewers, schools etc. - has to borrow from the
banking system and pay fantastic amounts of interest!! Indeed,
such capital expenditure typically involves a payback of two,
three, even four times the original sum.
Thus if £100m is borrowed, up to £400m has to repaid
and that happens in circumstances where the administrative cost
is tiny. Recognising the misconception and the easily correctable
nature of present practice, CCMJ then proposes a step-by-step,
incremental change which implements an increasing use of interest-free,
instead of interest-bearing, money for certain specific purposes.
Those purposes include social and economic justice but, just as
importantly, allow for deep religious and moral objection to the
practice of interest (in Islam, riba) and for appropriate amounts
of cheap "green" capital investment.
Freedom, liberation, salvation: these are the buzz words of
the modern world. They are also key words of scripture.
Peter Selby concluded his 1997 book Grace and Mortgage
with these words "the work of redemption, of unmortgaging
the future, is work of ultimate significance, of importance beyond
measure..." Mortgage means death-grip. The UK churches have
yet to put any meaningful effort into loosening this death-grip
on the British people.
Archbishop William Temple in 1942 and Pope Puis XI in Quadragesimo
Anno in 1931 had censured the dominance of the credit/money system,
and its impoverishment of the people, but no "meaningful
resources" followed that criticism of the death-grip of debt.
Some brave prophetic voices spoke out in the 1930s, but there
was no collective assault on "the powers that be".
American economic historian Prof. Michael Hudson over the last
thirty years has shown how debt destroyed ancient empires. The
unrestricted private acquisition of land, wealth and property
leads to debt, slavery and social collapse. By exploring Babylonian
records he has also shown that debt remission was practised from
2700 BC in order to maintain society's well-being. The usury ban
and Jubilee laws of debt has shown cancellation are a later manifestation
of the same idea, but given divine sanction in the OT. Not for
long, though, as he says in his Lost Tradition of Debt Cancellation
(p.15) "Only in the modern era have these (Biblical) stories
been decoupled from the laws concerning debt, land tenure, and
freedom from debt bondage that they were originally designed to
wrap, and their social kernel thrown away."
By any standards this is dangerous neglect, as Peter Selby has
shown, and there are now urgent prophetic voices warning of the
danger, as shown by current financial indicators. Yet there are
also many voices offering alternative ways to deal with public
money/credit problems that prevent work being done.
First the problem of interest-bearing debt must be faced.
In this cause CCMJ promotes monetary justice and advances specific
CCMJ believes monetary justice has ancient and contemporary
theological resonance. Monetary justice is an integral element
of three fundamental ingredients of a just economy; namely,
- MONEY (our challenge is to show real wealth means universal
- LAND (seeking to show how and why lifestyles must become
- PARTICIPATIVE DEMOCRACY (making effective the need of
all communities to have power and influence) .
IN RELATION TO MONEY CCMJ advocates that
a) Money for industry and commerce should be issued by an elected
national, and possibly in some instances local, governmental agency
only, in amount appropriate to facilitating the production and
distribution of values for life that the goods and productive
capacity which it represents.
b) The method of issue for such money should be interest-free
to the society it serves, but for genuine cost of administration,
and repayable when the wealth creation is under way.
c) Private banks should be deposit institutions, and not banks
of issue, limited to the loaning of moneys deposited with them,
that is, the actual assets held by the banks [i.e. the present
practise of banks' lending' at ten times their holdings should
d) Existing money created by past bank issuance shall be converted
to government issued money as per Irvine Fisherâs 100% reserve
e) The computerised 'Global Money Markets' and Exchanges have
an obligation to demonstrate that their activities are not damagingto
the poorer nations that they appear to be exploiting on our behalf,
or immediately cease such activities.
Archbishop William Temple said :
"In the case of money, we are dealing
with something which is handled in our generation by methods that
are extremely different from those in vogue a century or half
century ago. When there was a multitude of private banks, the
system by which credit was issued may have perhaps been appropriate,
but with the amalgamation of the banks we have now reached a stage
where something universally needed - namely money, or credit which
does duty for money - has become in effect a monopoly· The
private issue of new credit should be regarded in the modern world
in just the same way in which the private minting of money was
regarded in earlier times. The banks should be limited in their
lending power to the amount deposited by their clients, while
the issue of newer credit should be the function of public authority. This
is not in any way to censure the banks or bankers. They have administered
the system entrusted to them with singular uprightness and ability
and public spirit. But the system has become anomalous, and, as
so often happens when anomaly has persisted through a long period
of time, the result is to make into the master what ought to be
William Temple, Archbishop of Canterbury, September 26, 1942
In his Grace and Mortgage - The Language of Faith and the
Debt of the World, Peter Selby said "My
contention is that it is not an accident that we have lost touch
with the roots of one of the most important metaphors that have
been used about the person and work of Christ. For by seeing our
debt to God and Christâs repayment of that debt as spiritual
truth ( by which we easily mean, strangely for Christian believers,
a truth that is not based in the material world ) we are allowed
to leave the financial world to look after itself and go its own
way. We have made it possible for ourselves to worship God ( religiously
) and Mammon (economically ) by simply allowing ourselves two
separate kinds of language and not letting them interact in any
way that would confront our dependence on the economy of credit".