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Sovereign Money: Beyond Reserve Banking

January 13, 2017

A new year message from Joseph Huber:

“I am happy to inform you about the publication of my new book, ‘Sovereign Money: Beyond Reserve Banking’. It provides a systemic and historical analysis of money and banking and an up-to-date discussion of the approaches to sovereign money reform”.

The publisher is Palgrave MacMillan. On its website we read:

huber-3-coverIn coming to terms with the still smoldering financial crisis, little attention has been paid to the flaws within our monetary system and how these flaws lie at the root of the crisis.

This book provides an introduction and critical assessment of the current monetary system. It begins with an up to date account of the workings of today’s system of state-backed ‘bankmoney’, illustrating the various forms and issuers of money, and discussing money theory and fallacy past and present.

It also looks at related economic challenges such as inflation and deflation, asset inflation and bubble building that lead to market instability and examines the ineffectual monetary policies and primary credit markets that are failing to reach some sort of self-limiting equilibrium.

In order to fix our financial system, we first need to understand its limitations and the flaws in current monetary and regulatory policy and then correct them. The concluding part of this book is dedicated to the latter, advocating a move towards the sovereign monetary prerogatives of issuing the entire stock of official money and benefitting from the gain thereof (seigniorage).

huber-quoteThe author argues that these functions should be made the sole responsibility of independent and impartial central banks with full control over the stock of money (not the uses of money) on the basis of a legal mandate that would be more detailed than is the case today. This includes a thorough separation of monetary and fiscal powers, and of both from banking and wider financing functions.

This book provides a welcome addition to the banking literature, guiding readers through the inner workings of our monetary and regulatory environments and proposing a new way forward that will better protect our economy from financial instability and crisis.

Professor Joseph Huber is Chair of Economic Sociology Em. at Martin Luther University, Halle-Wittenberg, Germany. Previously he was Associate Professor at the Free University Berlin and has also held guest and interim professorships at Science Centre Berlin, University of Zurich and Technical University Vienna. Professor Huber is a pioneer of what is now known as ‘green ethical banking’ and is one of the founders of ecological modernisation theory. He has written extensively on monetary policy and reform topics, is a longstanding policy advisor on matters of economic and ecological modernisation and is actively involved in the international movement for monetary reform. Read more about this here:



Sovereign Money: Beyond Reserve Banking may be ordered at Palgrave Macmillan: or at Amazon




Three wise men’s advice: refocus quantitative easing

December 10, 2016

thomas-attwood-largerIn the 19th century, Thomas Attwood, a British banker, economist, democrat  and Birmingham’s first MP, argued long and hard that government should counter economic depressions by increasing the money supply and direct this money towards ensuring full employment.

rick-reiderThe FT reported on the 7th December that the European Central Bank’s governing council, meeting to discuss the next stage of its QE programme, is being advised by Rick Rieder of Black Rock, the world’s largest asset manager, to move the focus of quantitative easing away from buying sovereign bonds and put money more directly into the economy, funding a wave of new infrastructure spending across the continent.

‘Move the focus of quantitative easing . . . ‘


The idea of Green Infrastructure Quantitative Easing (GIQE) was voiced earlier by MP Caroline Lucas. This concept, first proposed by the Green New Deal Group, basically means investment in a positive green and socially just future.

On Wednesday, her colleague Colin Hines, co-ordinator of the Green New Deal Group, pursued this proposal in the Guardian – also on December 7th: He wrote:

“In August the Bank of England announced a further £60bn of its quantitative easing programme, taking the total of e-printed money to £435bn, the equivalent of nearly £7,000 for every man, woman and child in the country. Mark Carney is on record as saying that, if the government requested it, then the next round of QE could be used to buy assets other than government debt . . .

“Instead of using this staggering amount of money to prop up the banks and inflate stock markets, property and other assets, the new £60bn of QE should be used to buy bonds from a national investment bank and from local authorities to generate a “jobs in every constituency” programme.

“This would give all people, not just the left behind, a sense of hope about their economic future and should involve decentralised infrastructure projects centred on a decades-long, multi-skilled programme of energy refits of all the nation’s 30 million dwellings, a shift to localised renewable energy, and a rebuilding of local transport, food and flood defence systems . . . and in doing so really tackle the economic insecurity that is pure oxygen for the extreme right”.




Democratic Money and Capital for the Commons

November 30, 2016

pat-conaty-bestWith 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.

New to the writer was a 2011 paper by the late Richard Douthwaite: Degrowth, Money and Energy.

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.”




2016 Attwood Award to Ridhi Kalaria for her work with the Birmingham Pound project

November 4, 2016

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.

ridhi video

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: innovative Birmingham Energy Savers scheme

2013: Architect and urban designer Joe Holyoak:

2014: Karen Leach, Localise West Midlands:

2017?  Possibly a celebration of WM hydrogen transport pioneers




People from these countries visited the site this month

October 19, 2016


A memory of Bishop David Jenkins

October 4, 2016



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

“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.




Iceland’s PM commissions report on alternative monetary systems

September 15, 2016

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 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.