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/
Though Swiss voters rejected the proposal to introduce a guaranteed basic income for all, this issue is alive and actively considered in several countries.
The French Senate has decided to form a parliamentary commission aiming at investigating the idea. The City Council of Washington D.C. has approved an amendment that “calls on the city’s Office of the Chief Financial Officer to study the possibility of providing a basic income in D.C.” The Economic Commission for Latin America and the Caribbean (ECLAC), an official body of the Secretariat of the United Nations, has acknowledged the need for its member states to investigate basic income. Read more here.
Jeremy Heighway, who currently lives and works in Leipzig, was an active participant at the degrowth conference in 2014 and attended May’s conference on Universal Basic Income Network in Germany.
Looking at the aims of the conference page, it says very clearly: “A basic income is therefore a route to a degrowth society, however, a basic income does not necessarily start the ecological transformation that is so urgently needed,” and continues, “… addressing this … needs to be thoroughly incorporated into any implementation of a basic income and its accompanying measures.”
The tracks appear to go cold right there, however, as a shift is made towards four other areas of discussion, none of which intrinsically address ecological transformation. It is perfectly possible for a supporter of a basic income to ignore ecological transformation; to some extent it is even possible to be in favour of increased consumption.
The degrowth movement is a mindset; the basic income is a mechanism. This provides a possible clash from the outset, based on the question of what you hope to achieve and how.
On the societal side I think there is quite a good overlap and it is a great idea to get the movements working together. But opportunities can be missed if two groups do not also look hard at what is not automatically going to be addressed if you work together.
One huge area is, as stated above, ecological transformation. My proposal looks at eco-taxation and suggests that all increased revenue be returned to everyone evenly in the form of a basic income. However, I do not believe it would be able to help finance the true basic living-cost foundation much. It is certainly much more of an easy attachment to a basic income than a direct source of finance. Strangely, it is almost something which degrowth supporters need to be vigorous about from an environmental benefit perspective and argue for with basic income supporters.
The semi-sideline nature is maybe one reason why basic income supporters have not been very supportive of this idea so far: if it doesn’t do much to actually finance the true basic income, why complicate matters and potentially alienate people along the way with an unpopular taxation device?
Now it’s your time dear degrowth supporters: why do environmental concerns need to be considered again? And, dear basic income supporters, you can actually gain some firm supporters and new friends if you take up this idea – “… addressing this … needs to be thoroughly incorporated into any implementation of a basic income and its accompanying measures”, remember these stated aims of the conference?