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Professor Scott Cato’s blog: accountant Andrew Waldie, another voice calling for reform

September 26, 2013

Molly Roehampton3Molly publishes Andrew Waldie’s (approved) party conference proposal in her blog. Like Thomas Attwood, Mr Waldie seeks nothing less than a transformation of our society. He advocates removing from banks their power to create money and restoring the supply of our national currency to democratic and public control.

Most of his proposal is reproduced below:

‘Through their lending, banks create 97% of the money we use in the form of credit. This gives them enormous power to direct the economy and shape our society – without any form of democratic accountability.

‘Our banking system is also unstable. History shows that debt-fuelled booms and speculative bubbles inevitably turn to bust. Governments bail out banks that have become “too big to fail” – and the price of these bail outs are savage cuts in public services. The burden of servicing the debt on which our money is based also increases inequality and drives unsustainable growth. These are issues which are of fundamental concern to the Green Party.

‘Simply bringing the banking system under “Social Control” is not enough – more radical reform is required. Leading green economists have advocated reform based on the principles set out in this motion. The motion avoids the fundamental conflict of interest that has corrupted the current banking system. It separates the power to create money from the power to decide how that money is first used. A National Monetary Authority – NMA – appointed by Parliament, would manage the supply of national currency. Its decisions would be protected by law from influence by financial or other special interests.

‘Elected governments would decide how currency created by the NMA is first spent. This currency would then circulate freely at all levels of society. Saving and borrowing would continue. Local currencies could circulate alongside the national currency. The major benefit of the system we propose is that people would no longer need to go into debt to keep money circulating in the economy.

‘Over a transition period of 20 years, the NMA would convert the stock of debt-based money by issuing the same amount of national currency to the Government as additional revenue. The value from transferring the endowment of our currency to public control has been estimated at £50 billion per year – that’s enough to fund the construction of 300,000 new homes – for each year of the transition period.

‘Restoring the supply of our currency to public control would deliver a huge prize that could finance the transformation of our society . . .’

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