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Fran Boait: Britain can afford higher levels of public spending

April 1, 2019

Fran Boait, Executive director of Positive Money (right), has written in the Financial Times:

Martin Wolf is right to suggest that Britain can afford higher levels of public spending (“ How to finance the rising burden of public spending”, January 11). 

After a lost decade of austerity, the UK economy is crying out for investment in infrastructure, public services and action to save cash-strapped families from the clutches of high-cost credit.

Though there is room to raise more tax revenue from wealth and capital, taxation is not the only means of financing increased public spending. As Mr Wolf himself well explained nearly six years ago, monetary financing can be a legitimate and advantageous means of increasing public spending:

“When expanding private credit and spending is so hard, if not downright dangerous, the case for using the state’s power to create credit and money in support of public spending is strong.”

With an economy already burdened by high levels of both private and public debt, monetary financing, as used by Canada, Japan and New Zealand to quickly recover from the Great Depression in the 1930s, must be an option on the table in the event of the next downturn and when the scope for tax rises are limited.







MP: Green Quantitative Easing can apply to the Bank of England as well as the EU’s European Investment Bank

March 18, 2019

Thomas Attwood with his lifelong concern to promote measures which would lead to full employment, peace and prosperity, would have commended the proposals made by MP Caroline Lucasexpressed recently in the Financial Times. She wrote:

Your editorial’s call for the EU’s European Investment Bank to print bonds that the European Central Bank could then buy to fund green energy and infrastructure is equally applicable to the Bank of England (“The ECB is attempting to step ahead of events”).

The UK Green New Deal group has been calling for just such a green quantitative easing programme for some years, and BoE governor Mark Carney, in response to a letter, stated that if the government agreed then it could expand the range of assets it purchases.

The BoE could then purchase new debt issued in the form of green bonds by a national investment bank to fund energy efficiency in all buildings, renewables and local transport systems.

This UK Green New Deal would provide jobs in every constituency, invest in precisely those communities that have been hollowed out by years of deindustrialisation and austerity, and — crucially — provide an example of how to dramatically reduce carbon emissions for a world increasingly waking up to the urgent imperative to tackle the accelerating climate crisis.






The Costa Rican Reconomy Pilot using Creditos – a community currency

February 5, 2019


Ben Parkinson of CYEN draws attention to a Costa Rican pilot project outlined on The Reconomy Global Cooperatives Facebook page.

Once in place, Kevin Parcell writes, the Costa Rican Reconomy Pilot will be an education centre where individuals can train in person and online to gain the skills needed to build a permaculture marketplace in their own community.

Creditos, money that stays in the community, will be used in these marketplaces, so the skill to be developed will be that of creating and using the community currency to. engage local people in the sustainable development of human and natural resources with a focus on development of marketable commodities sold for creditos, establishing self-funding, self-managing, self-scaling virtuous cycles of production and consumption.

The ideal outcome would be the Costa Rican government’s authorization of creditos for every community, which would encourage everyone in their communities to accept community creditos to be used for tax payments, with credito tax revenue from each community returned to the community organization that sponsors their own local marketplace.

Local government and European Union support for community currencies

 In the 90s about 20 local councils were involved in local currency schemes (LETS). Calderdale Council in Halifax, rather than local authority grant aid, did the postage, photocopying and printing effectively for local currency schemes. Employees had the option of being paid partly in LETS and groups hiring council premises for meetings could pay in LETS.

In New Political Economy Gill Seyfang recorded the European Commission’s award of £55,000 to Bradford City Council to develop LETS in the city. It was an integral part of the EC’s Regional Policy and featured in their URBAN initiative for regenerating deprived urban areas.

There are now several community currencies in English cities, including Totnes, Brixton, Stroud, Exeter and Bristol.







The “financialisation” of the economy: Professor Yeomin Yoon

December 12, 2018


Professor Yeomin Yoon, who shares Thomas Attwood’s concern for the ‘real economy’,  has commented on an earlier article in the Financial Times which, with the benefit of hindsight, described the proximate causes of the 2008 financial crisis and discussed some relevant measures to prevent another calamity. He points out that it did not address a fundamental cause of the crisis: “financialisation” of the economy.

Financialisation is the phenomenon by which finance and its way of thinking have come to dominate every corner of business) and the damage inflicted on the entire economic system.

A few months earlier he said – also in the Financial Times – “the fundamental flaw in economics being taught at universities is the disappearance of morality from economics, which was originally a branch of moral science”. He continued:

“The national economy comprises two sectors: the real sector and the financial sector. To use a metaphor, the former is the body of a dog and the latter its tail.”

The ‘real’ sector, or economy is defined by the FT as being ‘concerned with actually producing goods and services, as opposed to the part of the economy that is concerned with buying and selling on the financial markets’. Yoon continues:

“In a healthy economy, the financial sector should serve the real sector as the lubricator of economic activities (production, distribution, consumption) by maintaining a well-functioning payment system, acting as custodian of the assets of the people and providing financial risk management tools”.

Professor Yoon asserted that the tragedy of many western nations was that their policymakers have forgotten or misunderstood the intrinsic role of finance. They allowed the tail (Wall Street) to wag the dog by letting what Adair Turner, former chairman of Britain’s Financial Services Authority, called “socially useless activities” (rampant financial speculations) ruin the national economy. He added:

“Worryingly, many policymakers still do not see the danger of the ephemeral value-added created by the make-work and make-believe practices of the industry” and ended:

“Politicians should ensure that serving the real economy is the duty and purpose of the financial sector. At a minimum, they should avoid letting financial speculators privatise gains and socialise losses by bailing them out with taxpayers’ money”.

Yeomin Yoon is Professor of Finance and International Business at Seton Hall University, NJ, US






Conference: The Future of Money – 10 Years after Lehman and Nakamoto

November 17, 2018

Joseph Huber draws our attention to the upcoming international conference 

The Future of Money – 10 Years after Lehman and Nakamoto

24th November 2018, Frankfurt, Germany

Venue: the Frankfurt School of Finance and Management Adickesallee 32-34, 60322 Frankfurt am Main.

The conference will be jointly held by the NGO Monetative, the International Movement for Monetary Reform  (IMMR) and the Frankfurt School Blockchain Center

The aim of the conference is to present the current debt-based money system and to debate the pros and cons of two major reforms to this system. This is organised in three sessions.

The conference program includes frontline topics in monetary system development 

presented by renowned speakers and panelists (scroll down that page).







Central bank digital currency coexisting with bankmoney

October 25, 2018

In January, Joseph Huber sent a link to an article on Monetary Reform Light: Sovereign digital currency coexisting with bankmoney.  He now adds that the discussion on central bank digital currency (coexisting with bankmoney rather than replacing it) has made much headway:

“As it turns out, the devil is in the details. Whether the entire approach serves to maintain the bankmoney regime or whether it might really be the first step towards a gradual system change towards a sovereign money system depends on a number of design principles as outlined in my new paper on Digital Currency – Maintaining or Overcoming the Bankmoney Regime? Design principles that make the difference, at or




THE BUILDING OF GOSABA: a legitimate use of money

September 23, 2018


Ken Palmerton is the co-founder of a small ecumenical group (Muslim, Jewish, Christian) called the Institute for Rational Economics, which has been active in several areas, including the promotion of local currency schemes and reform of banking systems. For years he has been trying to find out if there are any traces\memories\further records left of the scheme he describes below.

This project is an example of the legitimate use of money, which should not be treated as a commodity but as a medium enabling the exchange of goods and services in situations where direct barter would have posed difficulties. Used within a sound financial system, ‘honest’ money can serve the community by facilitating trade and above all can ensure the application of the talents and labour of each person to the meeting of his or her community’s needs.

Millions of people in the subcontinent of India, despite its great natural wealth in land and labour, live in poverty. A detailed examination, however, reveals local small-scale patterns of success that hold out hope in a world where hope is at a premium.

One historic example was a co-operative scheme undertaken in Gosaba, a previously uninhabited area of the Ganges delta in West Bengal.

In 1903 a Calcutta businessman, Sir Daniel Hamilton, (left) took out leases on tidal swamp land. During the next thirty years the flood-prone area was drained and turned into productive agricultural land, supporting about 12,000 people.

Schools, dispensaries, small industries, river transport and the means of processing the surplus crops for sale in the city were organised on co-operative lines – and the co-operative movement eventually spread throughout Bengal.

In its twenty-five villages, all disputes were settled locally and there was no alcohol in evidence.

A photograph of his bungalow taken in 2013 by Lokenrc, Creative Commons licence


A radical method of funding made this development possible.

From the first, Sir Daniel had issued notes called ‘hachitta’, in exchange for work done and redeemable at a co-operative store set up to supply the needs of the community.

The official backing for these notes was a deposit of 11,00 rupees, supposedly held at the estate office, but in fact they were simply a medium of exchange as the wording on one side of the notes explained:

Sir Daniel Mackinnon Hamilton promises to pay the bearer on demand, at the Co-operative Bhundar, in exchange for value received, one Rupees worth of rice, cloth, oil, or other goods.

Signed: D.M.Hamilton

On the other side was written: “The value received in exchange for this note may be given in the form of bunds constructed, or tanks excavated, or land reclaimed, or buildings erected, or in medical or educational services. The note may be exchanged for coin, if necessary, at the estate office. This note is made good not by the coin, which makes nothing, but by the assets created, and the services rendered. The note is based upon the living man, not on the dead coin. It costs practically nothing, and yields a dividend of one hundred per cent in land reclaimed, tanks excavated, and houses built, etc. And in a more healthy and abundant life”.



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