With David Bollier, Pat Conaty co-edited a report on how different democratic money and co-op capital systems can be united earlier this year. David worked for years with Ralph Nader in the USA. His summary blog follows and the report may be read in full here. He writes:
One of the more complicated, mostly unresolved issues facing most commons is how to assure the independence of commons when the dominant systems of finance, banking and money are so hostile to commoning. How can commoners meet their needs without replicating (perhaps in only modestly less harmful ways) the structural problems of the dominant money system?
Fortunately, there are a number of fascinating, creative initiatives around the world that can help illuminate answers to this question – from co-operative finance and crowd equity schemes to alternative currencies and the blockchain ledger used in Bitcoin, to reclaiming public control over money-creation to enable “quantitative easing for people” (and not just banks).
To help start a new conversation on these issues, the Commons Strategies Group, working in cooperation with the Heinrich Böll Foundation, co-organized a Deep Dive strategy workshop in Berlin, Germany, last September. We brought together 24 activists and experts on such topics as public money, complementary currencies, community development finance institutions, public banks, social and ethical lending, commons-based virtual banking, and new organizational forms to enable “co-operative accumulation” (the ability of collectives to secure equity ownership and control over assets that matter to them).
I’m happy to report that a report synthesizing the key themes and cross-currents of dialogue at that workshop is now available. The report is called “Democratic Money and Capital for the Commons: Strategies for Transforming Neoliberal Finance Through Commons-Based Alternatives”.
Frances Hutchinson, James Robertson and Joseph Huber posted papers on the Democratic Money Initiative wiki which also includes the report by David Bollier and Pat.
Pat Conaty writes:
“What strikes me about this wonderful paper is how he creatively frames an outline of the new money commons architecture and he approaches this challenge in a multi-level way from global to national to regional. He links insightfully the fossil fuel crisis to the crash in 2008 and also highlights what the late Margrit Kennedy drew attention to, the embedded interest costs in public services and other essential goods.
“What is marvelous about this paper is the way he shows how the work to build resilience through co-operative innovation in community energy, food sovereignty, community land trusts (are implied) and regional currency can be brought together in a synergistic way. He argues for a provisioning system as Mary Mellor and Frances Hutchinson set out so well in the Politics of Money book in 2002. But he also draws attention to the kilowatt hour forms of money and tethering ideas Shann Turnbull has been articulating.”
The Attwood Awards were inaugurated by Sir Adrian Cadbury and economist James Robertson in 2002. They celebrate work done in this country to further any of the three aims of the city’s first MP, Thomas Attwood. Seven of the fourteen recipients came from the West Midlands: brief summaries may be seen here.
Ridhi Kalaria (Ort Gallery) received the 15th award last week at a meeting of the West Midlands New Economics Group in The Warehouse, Digbeth. She has been working in her spare time to set up a local currency. One of several advantages is its potential to enable and encourage local businesses to source locally wherever possible, shortening the supply chain, strengthening local economies and furthering the common good.
To see the video, click here
As Bev Hurley, CBE, CEO of YTKO says: ‘Smaller businesses remain engines for growth, creating 60% of all private sector jobs and £1.6 trillion of revenue . . . The success of a small business doesn’t only impact its owners; it has a ripple effect throughout the local economy. The whole point is if we can make [small business owners] more resilient and grow, and improve their profits and turnover, they will take on new people and create new jobs”.
Many awardees have lived further afield, but recent local recipients include:
2010: Birmingham Energy Savers: https://thomasattwood.wordpress.com/2010/11/09/2010-attwood-awards/the innovative Birmingham Energy Savers scheme
2013: Architect and urban designer Joe Holyoak: https://thomasattwood.wordpress.com/2013/11/04/2013-attwood-award-city-architect-and-urban-designer-joe-holyoak/
2014: Karen Leach, Localise West Midlands: http://ourbirmingham.wordpress.com/2014/10/25/karen-leach-2014-attwood-award-for-working-to-strengthen-the-regions-economy/
2017? Possibly a celebration of WM hydrogen transport pioneers
Bishop David Jenkins, who died on September 4, 2016, Barnard Castle, was interested in the 1997 gathering of the Bromsgrove Group and replied to the following letter from our editor:
If something is Iaunched would you please keep me in touch – with the hope that I could join in.
She wrote: “The three days spent at the Community for Reconciliation’s conference centre, exchanging news and views about our monetary system were both pleasant and profitable. A few initiatives have been strengthened and some new proposals were made.
“One of our contacts, James Robertson, was asked to produce a briefing on just and sustainable development for the European Commission. I thought that you might like to see brief extracts from the section on money and finance. The whole briefing will be published next year. (It was: transcript at http://www.jamesrobertson.com/book/neweconomicsofsustainabledevelopment.pdf)
“A good monetary system is a vital component of economic reform. Once achieved, the concerns set out in the recent CCBI report on poverty and unemployment could be effectively addressed and the whole cycle of national and Two-Thirds World indebtedness eliminated.
“To get even a pilot scheme going such people will need the wisdom of the serpent and the gentleness of the dove.
“We look forward to seeing your book published (link) and hope you will offer to share this material with many groups, including the one I’ve described. I leave for India on the 20th, returning in April”.
Other exchanges followed but the correspondence lapsed and a move to smaller accommodation meant that many documents were jettisoned, including these letters.
In 1973 David Jenkins became director of the William Temple Foundation, whose work was valued by several members of the Bromsgrove Group, and continued his work relating the Christian faith to contemporary social issues. The founder, William Temple, wrote:
“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’ve 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 the servant.” The Rt. Rev. William Temple, Archbishop of Canterbury, London, September 26, 1942
David Jenkins’ book Market Whys and Human Wherefores: Thinking Again About Markets, Politics, and People has been described as an extended layman’s critique of economic theory and its application to policy, in which he called himself an ‘anxious idiot’ using the latter term in its original meaning of an ordinary person with no professional expertise.
It diagnosed many of the problems with economic theory and its application to a deregulated economy that would later be seen as prescient in the light of the global economic crisis of 2007 onwards.
Ben Dyson of Positive Money writes:
“We are delighted to send the first newsletter of the International Movement for Monetary Reform and announce the new blog section on our website. As more and more exciting developments are happening across the world, this newsletter will spread the important news to the worldwide community of money reformers.
The consulting group KPMG has published a new report commissioned the prime minister of Iceland. The report outlines the main benefits of a sovereign money system and relates on the various political developments that have been made possible by IMMR members.
The launch in Reykjavik featured a supportive speech from the Financial Times’ chief economics commentator Martin Wolf and drew comments from the Governor of the Central Bank of Iceland
The report was commissioned by the Prime Minister’s office. It provides an overview of the sovereign money proposal, including a summary of the latest political developments and the academic debate. While the report is quite accessible to read, it does not provide any recommendations on whether sovereign money should be implemented or not. Download the full report here.
Már Guðmundsson, the Governor of the Central Bank of Iceland expressed concerns about sovereign money- see http://internationalmoneyreform.org/blog/2016/09/kpmg-iceland-report-sovereign-money/ to which economist Martin Wolf replied. Some points made:
- “There is a very very powerful set of reasons for believing that the status quo is intolerable” he concluded, before emphasizing the merits of sovereign money:
- Reclaim seigniorage (the proceeds of creating money) for the public benefit
- Create a more stable financial system
- Limit the ability of banks to ‘extract rent’ (i.e. extract wealth from the economy rather than generating it)
- Stop pushing up house price bubbles
- Have a much stronger impact on stimulating the economy than current measures like QE.
So who should do it first?
The Governor joked that whilst Iceland could not experiment with a sovereign money system due to its membership of the European Economic Area [although we think this point is incorrect], the UK has just voted to leave the EU and so should be the first to experiment! MP Frosti Sigurjonsso, who authored a first report to the Icelandic PM in 2014, disagreed with the Governor: “We [Iceland] are one of the most democratic nations. We can take initiative, we can change the system.” he claimed.
The 2016 Attwood Award will be given to Ridhi Kalaria for her lively promotion of the Birmingham Pound. Karen Leach of Localise West Midlands once said that Ridhi is “a huge asset to the Birmingham Pound steering group. She thinks strategically and with clarity and insight, is creative and fun to work with, communicates well with very different audiences, and has got a lot done in a short space of time.”
News of this project – and of the Bristol Pound – has been carried for years on several websites and this 2013 account of the Bristol Pound may be read on the Thomas Attwood site. More recent news is that the operating technology which manages the different accounts -the Cyclos system – will be hosted in trail-blazing Bristol.
Bristol Pound director Chris Sunderland explains that “Most of the money spent in a city, leaves almost as soon as it’s spent. It goes up to the financial institutions and gets lost. What people can be sure of with Bristol Pounds is that they’re circulating in the city and that’s where they’ll stay”
A marketing campaign will start to get individuals and businesses to pledge to use the Birmingham Pound “pilot” launch within 6 months in at least two areas, with plans to scale up in due course.
An autumn currencies workshop, to be held in Birmingham, is being planned with the Guild of Independent Currencies, which has been set up by the Bristol Pound in order to help other groups to launch a local currency and to support them through shared knowledge and technology.
The Thomas Attwood seal of approval? Gesell money, public investment and government preference for British manufacturers
In the FT, Robert Skidelsky, Emeritus Professor of Political Economy at the University of Warwick (below right), advocates the issuing of Gesell money to consumers in parallel with the monetary financing of a public investment programme.
He recalls that Silvio Gesell’s idea was to give cash directly to households and to give people an incentive to spend the money and not hoard it – just as much of the cash already issued under QE lies idle.- unspent currency notes would have to be stamped each month by the post office, with a charge to the holder for stamping them.
How can this be done today?
Skidelsky points out that smart cards could be created with £1,000 for each person on the electoral register. The cards could be programmed to reduce the value of the balance automatically each week and this would boost its multiplier effect: “There are 46m voters on the register in the UK. Thus £46bn of new money might be injected into the economy (and) the effect on sales and prices would be widespread”.
John Maynard Keynes advocated a public works programmes which would get money into the pockets of workers who would be guaranteed to spend most of what they received from the jobs created and thus generate further spending. The tax on Gesell money does the same. Skidelski continues:
“The issuing of Gesell money to consumers should, therefore, be done in parallel with the monetary financing of a public investment programme. The government should pay for, say, an investment programme not by issuing debt to the public but by borrowing from the central bank. This will increase the government’s deficit, but not the national debt, since a loan by the central bank to the government is not intended to be repaid. Thus the government acquires an asset but no corresponding liability”.
For example, a £50bn programme of transport, housing, hospital, and school-building would not just restore capacity in the construction industry, it would simultaneously increase demand in the retail sector. If you build a new school or hospital you set up a demand for all the equipment needed for them to work.
However, as the prolonged recession and mediocre recovery has destroyed a great deal of industrial capacity, increased consumer demand ideally means increasing the economy’s capacity to meet that demand.
To limit the leakage of the extra spending power into imports, the government should give preference to British firms. An infrastructure programme financed by borrowing from the Bank of England that gives preference to British manufacturers would give Mrs May the industrial policy she is looking for.
The investment programme and Gesell money initiative together spread over, say, two to three years, would inject a total of £100bn of extra spending power into the economy — £50bn on consumer goods, £50bn on producer goods.
Here is a two-pronged strategy both for fighting the next recession and for rebalancing the British economy. And if it is a step too far for a Treasury still mired in Osbornian austerity thinking, it should be taken up by the Labour party.
See also on the Political Concern site: Shinzo Abe and Jeremy Corbyn advocate increased public investment, lower taxation & a high wage policy: https://politicalcleanup.wordpress.com/2016/08/05/corbyn-abe-increased-public-investment-lower-taxation-a-high-wage-policy/