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The Bank of England has a mission: to promote the good of the people of the United Kingdom

November 21, 2017

Thomas Attwood, political campaigner and Member of Parliament, was the leading figure in the successful public campaign for the Great Reform Act of 1832 strongly resisted by the ‘landed interest’. In Birmingham and London it was estimated that over 100,000 people attended demonstrations in favour of this parliamentary reform.

A parliamentary website focussing on ‘the Birmingham connection’ adds that on 7 May 1832 the Gathering of the Unions, also known as the Meeting of the Unions, was held on Newhall Hill – a giant demonstration involving 200,000 people and 40 Unions.

The act addressed the unequal distribution of seats, extended the votes to the less affluent and abolished ‘rotten boroughs’. It is said (Ziegler, King William IV) that when the Houses of Parliament burnt down in 1834, Queen Adelaide thought it was divine punishment for passing the Great Reform Act

As a British banker and economist, Thomas Attwood argued that Britain should have a paper currency which was not tied to gold – now taken for granted.

His second proposal: that the government should base the supply of money on the productive capacity of the economy and regulate it so as to be sufficient to maintain full employment – is somewhat relevant to MP Caroline Lucas’ Green QE proposal (2016) which Attwood might well have supported.

Caroline Lucas is a member of the Green New Deal Group, convened by Colin Hines. GND wants money funnelled into environmentally beneficial infrastructure projects via “green quantitative easing”, helping to make the country more resilient to flooding, and reduce the threat of climate change by making every building in the country energy-efficient, and creating, she suggested, “huge numbers of jobs in every constituency”.

Attwood also advocated countering economic depressions by increasing the money supply and  Mark Carney, governor of the Bank of England, said in his reply to Ms Lucas’ proposal, that he had done this in 2009, with the quantitative easing programme to bolster the crisis-hit economy, printing £375bn of new money and using it to buy government bonds.

He appeared to agree with both Attwood’s proposals up to a point, in that he said in his letter to Ms Lucas, that the bank could buy new types of assets instead of UK government bonds, if it ever has another round of quantitative easing.



Mark Carney and Sam Woods and Sir Jon Cunliffe, deputy governors at the Bank and ex-Treasury officials were speaking at an event in Liverpool called “Future Forum”, described as part of an initiative by the Bank of England to modernise its approach to communicating with the general public by deliberately trying to avoid complex economic language in order to the make itself more accountable.

They went to local schools and then to the town centre to speak to local people about what it is exactly the bank does. Mr Carney explained that it was founded in 1694, and “its purpose, its original mission, is the same mission as we have today, which is to promote the good of the people of the United Kingdom”. And that mission’s goals are:

  • to keep prices low and stable to avoid Inflation which hurts the poorest the most.
  • to provide tools for children, 11 to 16, to understand the economy and how to make economic decisions.

And no more???





Universal Basic Income

November 7, 2017


With his care for the less economically prosperous, Thomas Attwood might well have approved the work of the basic income movement – though probably, like James Robertsonwould have advocated its implementation as part of a wider coherent set of economic and monetary reforms.

Readers are directed to news from Dylan Matthews (US Occupy website), who wrote in October about a forthcoming (2018)Basic Income pilot involving a ‘random sample of the 300,000 residents of Stockton, California’.

Some of Silicon Valley’s tech entrepreneurs and investors involved see basic income as the way to give support to Americans if artificial intelligence and other automation advances lead to unemployment for vast swathes of the population, redistributing the wealth that Silicon Valley creates to poorer people and localities left behind.

In 2011, a pilot BI project was launched in rural Madhya Pradesh through the Self-Employed Women’s Association (SEWA), in collaboration with UNICEF.

o   Basic living conditions, starting with sanitation, better access to clean drinking water, improvements in cooking and lighting energy sources, improved significantly.

o   There was a major increase in food sufficiency, improved diets, better nutrition and reduction in seasonal illnesses.

o   Better health of children led to higher school attendance and improved performance. The basic income also facilitated spending on school uniforms, books and stationery.

o   The cash transfer facilitated small scale investments such as buying better raw materials and equipment, which resulted in a higher income.

o   There was also a shift, especially in the tribal village, from wage labour and bonded labour to owning farms and to other forms of self-employment.

o   Women’s empowerment was another outcome of the pilot studies: their participation in economic decision making in the household improved.

The basic income also enabled indebted villagers to pay back the money lenders and borrow less from them.

See this excellent video account – well worth twelve minutes of your time.

The blog also gives references to ventures in several other countries and ends with news from Scotland






People’s Quantitative Easing: Richard Murphy and Colin Hines 

October 15, 2017

Accountant Richard Murphy and Green New Deal co-ordinator Colin Hines, anticipate another credit-crunch-induced “crash”, when the only feasible and affordable rescue package will be another form of quantitative easing (QE).

Christopher Thompson, a widely respected journalist, recently wrote (New Statesman paywall) about the asset-rich reaping the benefits of Western governments printing trillions to boost their economies, while the millennials and poor have lost out. An earlier Telegraph article noted:

“A pervasive sense that the financial elites pulled a blinder – while austerity is for little people”. 

QE must generate jobs for the “left behind” and other workers in the entire country rather than today’s beneficiaries – the financiers and the property-and-share-owning rich.

Read on here:





New Zealand the way we want it: Stephnie de Ruyter

September 29, 2017


During this season of promised tax cuts, social spending, and a little piece of organic carrot for every sympathetic voter, it’s easy to be swept along by the messages of hope inherent in the rhetoric. The messages are clear: vote for us and you’ll be better off; you’ll get your hip surgery; or vote for us to save the lesser spotted gecko.

But will anything really change if the reds or the blues and their off-siders hold the treasury benches after September? Throw the greens, the yellows, and the black’n’whites into the mix and a rainbow of choices emerges.

The disappointing truth is that when all these political colours are mixed together a dirty, murky coloured future emerges. It’s the colour of orthodoxy, not innovation. And it’s a tomorrow that’s the same as the recent past, not the promising future we would choose for our children. That’s what happens when political dogma takes precedence over the rights and interests of New Zealanders.

Arguably the last time a government deliberately put the needs of the people above all other considerations was during the time of the First Labour Government when notable social crediters held positions of influence and power.

Using Reserve Bank funding, that government invested directly in a building programme of houses, bridges, roads, schools, hospitals, forests – and dragged New Zealand out of the Great Depression. Their legacy as the nation builders of last century is seldom spoken of today, but they set New Zealand up for decades. The legacy of successive governments since is much less noteworthy.

The New Zealand of today is a land of crises: clean water, mental health, homelessness, youth suicide, struggling businesses, child poverty, and many more. You’ve heard, maybe even asked, the questions: Why is health care underfunded? Why can’t people afford a home? Why poverty? The response is predictably visionless: There’s not enough money. Well, there could be enough money if we stopped buying it from overseas commercial banks and started using our own.

We’re a nation in financial servitude, indebted to overseas financiers to the tune of $130 billion, paying a yearly interest bill of $6 billion on loans which could and should come interest free from our publicly owned Reserve Bank. The legislation is in place. There is only one reason why the blues, the reds, the greens, and the rest don’t use it: they lack the political will and the moral courage to genuinely act in the public good. They’ll do and say whatever is needed to be elected, but they have never and won’t ever step outside their establishment boxes.

The Democrats for Social Credit Party is not an establishment flunky. It has the courage, the conviction, and a bold plan to build a nation underpinned by the principles of justice, sovereignty, and democracy – caring communities in which:

  • no child is left homeless and hungry,
  • where those suffering mental illnesses have all the help and support they need,
  • where the elderly are not left to wither away waiting for surgery,
  • where industry is respected,
  • where investment is in production not frittered away on the financial markets,
  • and where the needs of the people take priority over the greed of global corporations.

A utopian dream? Maybe, but New Zealand voters need to aim higher and expect more from their representatives. Looking at the social, economic, and environmental problems we face it’s obvious that the parliamentarians who led the country into this mess are not likely to be the ones to lead us out of it.

Stephnie de Ruyter, Leader, Democrats for Social Credit Party

Published: July 2017.






The latest news from Positive Money

September 15, 2017

This week the IPPR Commission on Economic Justice launched their interim report on the British economy. Issues raised include:

  • low productivity
  • low investment
  • the gap in the government’s finances,
  • inequality,
  • regional imbalances and
  • environmental degradation

Robert Macquarie (Positive Money) comments that the report describes how poorly the values of a fair, democratic and sustainable system are served by the current economic framework.

He sees an opportunity to ‘direct the debate towards areas that risk being overlooked’.

A stronger case could have been made for environmental and social issues to be placed at the centre of a reform agenda.

Monetary policy and the money system has played a relatively minor in the Commission’s work so far. Positive Money has submitted research to parliament which shows wider problems with current monetary policy. Quantitative Easing (QE) since 2009, by the Bank of England’s own admission, has pushed up the prices of assets held mostly by the wealthy, with predictable effects on inequality.

QE generating funds for productive investment would be a ‘promising possibility’.

Macquarie then says that in a critique of the economy, the environment must feature as a central pillar, not as an afterthought. He cites an OECD analysis which concludes that a more equal society actually benefits economic growth. The need to develop a ‘wider range of policy instruments’ to reduce our impact on the climate is pointed out – in particular, providing finance for green investment. He ends:

“That’s why at Positive Money we are pushing for precisely the kind of ‘radical change’ the Commission authors want to see. Our proposals for public money creation place it beyond doubt that QE and low interest rates should not be where the debate ends on monetary policy. In particular, a form of ‘green QE’ – on which we are producing a proposal – would see the Bank of England deploy its vast financial resources to turbo-charge the environmental transition”.





A socially and environmentally beneficial bank “efficiently managing the resources of the local community”

August 21, 2017

PLANET LOCAL recently sent news of Ebanka

In 2008, Goran Jeras, was working in The Netherlands, helping big banks and financial institutions improve their risk-assessment methodologies in the midst of the financial crash. He realized how unsustainable the mainstream financial sector is today,  financially, socially and ecologically. Having seen the ethical problems inherent in a system driven entirely by profit — in which the needs of human beings and the planet count for nothing – he returned to his home country of Croatia and, together with friends in the Croatian banking world, founded Ebanka, an “ethical development bank” entirely owned and democratically governed by its own members.

“The purpose of the bank,” he said, “is to efficiently manage the resources of the local community”

He continued:

“Banks themselves, if you look at the value chain, do not add any value. The role of a bank is to be a catalyst, utilizing the resources and the funds of the community, towards those that are creating a new value for their community. To that end, Ebanka functions as a non-profit, for the reason that any money earned would be at the expense of the community — those who are actively creating new added value”.

“Ebanka’s loans to individuals are only given to satisfy basic human needs — like education, health and housing, or to resolve social problems caused by past loans– not to buy unnecessary material goods. So Ebanka functions as a normal bank and should be the only bank its members need to use (that is, as long as they don’t plan on taking out credit to buy lots of things they can’t afford and don’t need)”.

Zagreb, Croatia Jorge Franganillo

Ebanka also does strict due diligence before investing in projects and businesses: loans not only need to be financially viable, but beneficial to society and the environment. Jeras compares their system to crowdfunding, because the loans are given without interest, and investors (co-op members) even have some say about which projects their money goes to. The projects essentially become joint ventures between the borrower and Ebanka’s members, and no one profits except new environmentally and socially conscious businesses and ideas.

Every member of the cooperative has an equal voice when it comes to voting on big decisions, regardless of the value of their deposit. Ebanka also places great value on transparency: there are no hidden fees or expenses, and information about all important decisions is made publicly available. Because of this democratic structure in which personal relationships matter, Jeras believes membership will need to be capped between 60,000 and 100,000.

To learn more, visit Ebanka’s website and read a neat summary of the advantages offered.





Economic reform proposals; three from colleagues in America, Japan and Britain

July 18, 2017

Which approach would have been supported by Thomas Attwood, who advocated participatory democracy, strengthening of regional economies and economic and monetary reform? An amalgam of all three?

Ellen Brown reminds us, in her latest article, that ancient civilizations celebrated a changing of the guard with widespread debt cancellation:

“It is time for a twenty-first century jubilee from the crippling debts of governments, which could then work on generating some debt relief for their citizens”.

She advocates an alternative to sovereign debt (aka national debt, the amount of money that a country’s government has borrowed). Her model: the Bank of Japan’s quantitative easing programme which has enabled it to buy 40% of its government’s debt, an ongoing process, creating an interest-free debt ‘owed to oneself’ – the accounting equivalent of a debt cancellation. Gross interest payments on Britain’s central government debt are projected to be £48 billion for 2016/17, according to the Treasury. Ellen would approve the government’s repayment of almost a quarter of the debt owned by the Bank of England, which pays the profit back to the Treasury and call for more to be done.

A reader living in Tokyo responded to her article:

“I don’t really agree with her assessment. Basically she says “Look Japan is printing free money and has no inflation that everyone worries about so why shouldn’t everyone do it?” He points out that, as happens in Britain, all the money being printed is going into the hands of a relatively few extremely wealthy people; no inflation is created because these people don’t need to buy more household goods and the money goes into the stock market which has ballooned.

He adds sardonically that the attitude is, “So yes – feel free to print as much money as you like, but only as long as you don’t give it to people who need it”.

 Canadian/American Elon Musk advocates a universal basic income:

And British economists (Finance for the Future) advocate ‘repurchasing debt like Ellen Brown’ in their proposal for ‘green quantitative easing’ set out in this detailed report (right).

MP Caroline Lucas has also been proposing this route to rebuilding our economy, tackling climate change, and providing decent long terms jobs in every city, town and village across the UK. She writes about Green Infrastructure Quantitative Easing (GIQE), a concept first proposed by the Green New Deal Group. This would be an investment in a positive green and socially just future. It could:

  • train and employ a nation-wide ‘carbon army’ which army would make all of the UK’s 30 million buildings energy efficient, and, where feasible, fitted with solar panels, reducing energy bills and fuel poverty, cutting greenhouse gas emission and dependence on imported energy,
  • take steps to make the country more resilient to flooding,
  • finance the construction of affordable highly energy efficient housing, built predominantly on brownfield sites
  • and help to fund improved regional public transport networks to help revitalise local and regional economies.

After detailed costings, Ms Lucas continues: “The actual mechanism is relatively straightforward. The Bank of England would e-print tens of billions of pounds annually, as it did during the last round of QE, and a considerably enlarged publicly owned Green Investment Bank (GIB) would issue investment bonds to be bought by this QE programme. This would effectively leave the money required to fund green investment both debt and interest free, in the hands of the Green Investment Bank (GIB)[iii], to be invested over a realistic time scales and so be non-inflationary”.

Mark Carney, the Governor of the Bank of England, confirmed that the “Green New Deal” is technically possible. In a letter to Caroline Lucas he said that, if the government requested it, the next round of QE could be used to buy assets other than government debt – clearing the way for this sort of green infrastructure programme. And a cautious appraisal of the case for central banks prioritising green assets over regular ones in their purchasing policies was made in May’s Financial Times, by economist Alexander Barkawi, founder-director of the Council on Economic Policies.