by Phil Tyler.
Positive Money is campaigning for a fair, democratic and sustainable money system that works for society, not one that is dividing us.
As citizens of the U.K., our country and our Bank of England creates money on our behalf so that we can trade, share, live and save. Money in circulation belongs to us as a society and should be a positive tool to enable a fair, democratic and sustainable future for us all. We should not continue allowing our money to be used to undermine us and create insecurity.
The Hold on Us By the Money Rich and The Banks
Positive Money sees how the very wealthy and particularly, the banks create and control almost all of our money. They pressurize and manipulate us through private debt, other non-governmental debt, strangled public spending and failing underfunded services in the name of “we should all be grateful”.
When you borrow from a bank, the bank just creates that money out of thin air. None of it comes from other peoples deposits. Most of the electronic money we use has been borrowed by someone. As long as we keep borrowing there will be electronic money to use. This means we have privatised our money and rent it from the banks. If you don’t believe me check out this Bank of England link: https://www.bankofengland.co.uk/knowledgebank/how-is-money-created. You can also watch this Positive Money Video:
Things Need To Change
By using persistent, increasing pressure and working together with many different groups and individuals collectively across society, Positive Money has become recognized as an irritating but notewothy voice. Using this with the backing of our 60,000 supporters nationally and similar organizations around the world, we can bring about a broader understanding of how a government of openness and democracy is a possibility and is a desirable goal. We should be demanding this as our right.
We think there is a broad consensus about the need for increased integrity and honesty in general and that a more responsive and honest government would be a great thing. Sadly, anyone promoting this idea will get side-lined, or ignored or, if they start getting traction, will be unremittingly attacked and demeaned as a person.
Be assured that are growing numbers of people all around the world who are seeing the same issues and look for the changes we want. We are not alone.
Would we be better off without central government?
The 18th-century format that we have now is, to my mind, failing badly unless, of course, you think that increasing authoritarianism is to be welcomed. Democracy is never perfect and is an idea that needs us all to work at it so that it becomes strengthened and effective.
What if fa worldwide crypto currency replaced money?
Would a worldwide currency beyond government interference be an improvement? I think that this can only be supported if you believe that a free market would produce a caring and fair system, no matter people’s situation. Wealth and power would still be concentrated. The cost of energy and limited vast computing power ensures inequality.
It is an outstanding achievement to make up and sell an asset that is worth nothing. Then to promote it, branded as money and maintain strong and growing demand for it over several years. Having demand and a shortage is a great example of how the capitalist system works. Is this capitalism at its most refined?
I think it would be preferable if the pricing of everything could be more closely related to the actual worth or value of the item rather than by sales promotion and artificial shortages—just my view. Perhaps other mechanisms can protect us, but for myself, a properly democratic government of some sort needs to be in place.
Effective Democracy Is The Baseline
Democracy is at the core of the remit of many organizations. We are with all of them. We at Positive Money are particularly interested in how the treasury and the Bank of England operates.
For instance, the Directors of our Bank of England should be elected or at least appointed openly. Dido Harding is vice-chair of the BoD’s Directors and the Chair of the BoE remunerations committee, deciding how they all get paid.
Are equal opportunities working here? What are the qualifications for these jobs?
We are lucky that we own the BoE. It is ours. Should we be interested?
Our government in control, please
Our democratically elected Government should control our money, not the commercial banks and our overblown financial sector that the government and political class diligently serve.
Our government, with our support, should be ensuring that its ability to create money is used for the benefit of our environment and society first and not increasing inequality by its focus on helping big asset holders.
Working Together To Get Change
There are growing numbers of people and groups out to reform our government, culture and our financial system. We do need to all pull together. It is an intrinsic problem with groups of passionate people that they can rally behind details of a prescribed ideology, so diluting the ability to demand the changes that they and most of us want.
This issue appears to me to be a particular problem within economics. People can get worked up about incredible details, the detailed working of a particular account, for instance. It is precious that people are doing this work. It is much appreciated, but we should not at the same time forget the real prize.
Sometimes people viewing things from a different context have very differing views. If you are a financial market trader, you are not seeing what a person with a family oppressed by debt with eviction perhaps days away would feel and see.
Have all the answers – don’t have all the answers
Positive Money is sometimes viewed as not being prescriptive enough and changing its focus. Our overall goal is to have our money under the control of a democratic system such that money is circulated more than extracted by debt and exploitation. Most of the digital money we use is debt that we bear. But we also understand the no one, including us, have all the answers and that new, and maybe inspiring ideas and our general understanding evolve over time. Thinking is not a crime at Positive Money.
It is thus so important to be as open as possible. It is the new thinking that is giving us the vision of possible different futures. The balance is to keep our overall vision while campaigning for more minor identifiable changes that we can effect now. Please beware of the all-knowing.
The economy is all of us and everything we touch
Generally, I find that people think the government makes all the money and have all the control. Some believe that the system is fundamentally ok and very light reforms are needed. We consider that the economy is a large creature made up of millions of people who live in a culture that sees money accumulation as success way above other concerns. This is not the best way to be. The economy includes and should recognize all of us and is affected by everybody’s influence and effect on everything we touch. We are each other’s keeper. We are all in a different place and have a different vista. We can all learn from each other if we are willing.
Please think hard about the doo-doo we are all standing in if you find it difficult to think beyond the classical economics model you learned at A-Level or Economics 101. You have gained much from your studies, but it may be a very rigid box you are judging everything by. We need open minds and the ability to check out any viable sounding ideas.
The classical economics paradigm constantly works the economy toward equilibrium and so should be navigating us to stability. Instead, our economy is becoming increasingly unbalanced and less stable in many ways. Also, public debt is seen as the real biggy, whereas in reality, private debt is the true dire problem for individuals and to all of society. There are also so many increasingly important externalities to squeeze in…
Continuing money creation primarily to support financial markets and increase asset prices are shifting the cost of things further and further out of the reach of more and more of us.
The encouragement for banks to increase private debt to produce growth has led to increasing poverty, mental and physical health crises. Money creation should be for our country and us.
Our blinkered legacy economic system is holding us back
Fundamental reform of our financial system is required. Our blinkered legacy economic system is holding us back and destroying our future.
We believe that government budgeting is needed and should be framed so that when new money is created, and it is created and used for socially positive, fair and sustainable purposes. Not for the very wealthy and prominent asset holders.
Our legacy system must be changed so that priority is given to us, our communities, groupings, our quality of life and the environment in which we live.
Inequality authoritarian tool
Inequality is getting worse, enabling a blame culture to be encouraged and developed by our leaders. They manage us by enhancing division and reducing trust and belief not only between each other but ironically also justifiably with our leaders themselves. They say not.
Private debt levels are increasing and so deepening misery for many. It may feel good to blame a particular group. I suggest focussing on those that make up the rules.
Our tragic manipulated world
Worldwide we are just at the start of growing disasters, deaths, destitution and migration, a climate emergency, a pollution catastrophe, increasing toxic containing microplastics in our food and our bodies, biodiversity loss, physical and mental health problems and pandemics, and universal health care being undermined by market economics — no end to this list.
Our problems are broad, deeply seated and reinforced by our education system and media. There is powerful messaging that helps to strengthen that uncomfortable feeling about radical change. Anyone looking will see a bewildering torrent of different ideas about what is needed to give us a future.
It can be a relief to adopt a particular set of seductive ideas; perhaps they are counter-intuitive or have a message that strengthens beliefs or prejudices—also, remembering that social media will tend to reinforce your ideas, it makes it so hard to find a context that supports clear and objective thinking.
Some Of Our Present Campaigns
Digital Cash – wrestling the power from the banks
Wrestling the power from the banks is the prime reason we support the BoE introducing a Digital Currency (CBDC). With this, we will each get an account at the Bank of England and make digital transfers and purchases without having to use a commercial bank. Yes they really do have you and with no alternative at present. There is devil-in-the-detail. We need to be vigilant. The present system is not anonymous. Privacy is fragile. The CBDC Digital audit trail will be more straightforward and accountable than corporations.
The question for me is: if it is preferable to have all your financial details held by questionable corporately owned organizations or by the Bank of England, which we own. If we pull together, we can influence the BoE through our politicians and more directly if we want that enough. If we can stop the erosion of democratic values, we can have many things we need.
Caution and watchfulness about these changes are needed, but an alternative to debt-based money from the banks is coming and is a positive money move we think. Read more here: https://positivemoney.org/2021/06/bank-of-england-cbdc-discussion-paper-positive-money-response/
Greening Our Bank Of England
The BoE should be focussing on providing support and funding for the transition to a carbon-neutral economy. It should be closing all its supporting framework that assists unjustifiable environmental damaging investments.
Also, it should be setting an example in the way it is managed and setting standards in such as equal opportunities in everything it does.
The BoE’s mandate has been changed to include climate change and the BoE now is taking action to recruit more widely. Positive Money has been vigorously campaigning on these issues for a while and so we think that we helped move the debate about these issues. Read more here: https://positivemoney.org/2021/03/sunak-gives-bank-of-england-green-light-to-fight-climate-crisis/
Escaping growth dependency
To protect our wellbeing and avoid ecological disaster, we must abandon GDP (Gross Domestic Product) and GDP Growth, in particular, as the primary goal for our economy.
GDP is diligently constructed by the dedicated workers of the National Statistics Office (NSO). They provide consistency. But the economy is much more than ‘Product’. Just measuring a set of money points weighed by survey results in the end is part judgement by formula and also misses out most of our wealth.
Politician’s see GDP as a kind of macho imperative measure. GDP rise is the prime measure of success. Classical economics believers are amongst those who support this. The popular media and the establishment, in general, promotes this idea. True wealth is much more than just money—another big subject.
Maintaining physical cash (who has access to our financial system?)
Physical cash is dead! Is this what you hear? But the demand for banknotes is increasing. The BoE prints banknotes to meet demand. You may be surprised that demand is not declining. Notes in circulation 2010 were £25 billion and in 2021 was £80 billion (BoE). https://www.bankofengland.co.uk/statistics/banknote
The move to electronic payments means that more and more, we have to rely on private financial institutions to access our money.. The money in your current account exists only as numbers on a computer screen and is legally the property of your bank. When you hold a bank note it is yours.
If you don’t have a bank account or want to avoid using a financial institution, the only choice for most of us at present is physical money.
Our money has largely been privatized as bank debt. Physical cash is issued by the BoE. The banks pay face value for it. They want it gone.
Not imposing more debt
The BoE has shown that it can create and give money directly to individuals with the furlough scheme. Many businesses have been pretty much forced to take out loans to survive. Creating debt is the best thing according to our present system. Giving money directly to people goes against the grain, but furlough shows that it can be done. It must have been painful for any dedicated neoliberal.
The banks are those who get handed the money. They credit each individual’s deposit accounts. With Central Bank Digital Money (CBDC), the money would go directly into the individual’s account at the BoE. No need for the banks to be given it.
The Bank of England and the government could make a recovery less painful for the worst affected by the Covid19 effect by creating a relatively small amount of money and spending it strategically into the real economy to mitigate those worst hit with increased debt and/or homelessness. Inequality has widened, and our Government’s instinct to keep people in debt is at the root of this.
Covid 19 debt
The money created by the Bank of England on response to the Covid 19 pandemic does not need to be paid back. Money is created and destroyed at the Bank of England every day through the, so named, National Loans Fund (NLF) and the Government’s current account, The Consolidated Funds Account (CF). Money going in and out of the NLF is not kept in accounts but disappears or is made new. The CF account is returned to zero at the end of each day by transfer to the NLF. In accounting terms, the money made in this way is a government’s liability but there is no need to pay it back. Note: the finer details of how these accounts operate provoke passionate discussion amongst some. Be careful about being blindsided when technical details are thrown at you. Money goes into the government accounts, and a similar amount, generally more, comes out, mostly government expenditure. The Covid19 furlough scheme has enhanced the more comes out bit. Just for context, the Accumulated payment above Income from 1986 up to 31st March 2020 was £1,731,337 million (U.K. Gov). NLF was introduced 34 years ago as credit controls were relaxed and the newish digital money was becoming dominant.
What we want
All we want is an honest, caring population that demands a government devoted to strengthening democracy. Any such government would want public services owned and properly managed and funded and not run for profit. Most of all as Positive Money we want a money system that is overseen under democratic control. Our government, Our Bank of England. Our Money. If you want it and you know it…
Phil Tyler, Co-ordinator Positive Money Solent
Positive Money on twitter (@PositiveMoneyUK)
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