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Dear Members,
20th September,
2001
Welcome to the Monetary Reform
Group!!
Although the thinking
behind the Group has been coalescing for a long time, the decision to set up the
Group was taken only just before the New York/Washington carnage. As
a result things are still being set up and the situation was not helped by my
finding it necessary (or so I claimed) for there to be a complete re-write of
previously submitted text. The staff of the Ohio Employee Ownership Center
(part of Kent University, Ohio, USA), however, are being very patient and we
will get there eventually. This might be an opportunity to also
thank the Ford Foundation which is supporting the very large internet
operation centered on the OEOC.
There is an important matter
to explain -- the ultimate purpose of the Group is to
encourage all groups wanting to improve
society to look beyond themselves, to be For something rather than
Against, and to unite on what they have, or could have, in
common.
At first sight, that might sound
like a lot of waffle. Yet it is not. Group members have
already identified the Four Demands and there are promising signs of their being
widely acceptable. Perhaps the most extraordinary thing about them is that
they are are so specific -- things which occasion widespread agreement are
too often just vague platitudes.
Most extraordinary of all, the
First Demand is only a demand for an obvious fact to be admitted!! Yet,
even if only the First Demand is achieved, a big breach will have been made in
the wall of stale, old thinking and the way will be open for the new thinking
and policy to create a better world.
Nevertheless the Group's
discussions are certainly not confined to the content of the Four Demands.
Rather, anything connected with monetary reform can be discussed. However,
at a time when the world has an immediate need of major new economic policy,
members are asked to first promote the Four Demands with others as a way of
getting the monetary reform debate moving widely across the world.
The Four Demands are set out
below together with a short explanatory text.
Rodney Shakespeare.
Four
Demands
for
a
non-inflationary money system
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That
-
There be open, regular
and public acknowledgement by government, economists and academia that
the present banking system is an unjust monopoly that creates 95% of the money
supply as interest-bearing debt.
-
Interest-free money
(i.e. government-issued repayable money created free of charge beyond
administrative and other necessary cost) be used for capital investment
needed by the public sector thus enabling such investment to be one half, even
one third, of the present cost.
-
Interest-free money
(i.e. government-issued repayable money created free of charge beyond
administrative and other necessary cost including loan insurance) be
used for private capital investment which will create ownership stakes and
property incomes for all income groups, especially the poor.
-
Interest-free money (i.e. government-issued repayable money created free of
charge beyond administrative and other necessary cost including loan
insurance) be used for loans to start-up and small
business.
Explanatory text
At present widespread debate
on monetary reform is not possible because the subject is maginalized, even
suppressed. Nevertheless, as a first objective, the Monetary Reform
Group believes that debate can be opened up if all groups press for open,
regular and public acknowledgement by government, economists and academia of a
fact -- that 95% of new money is created out of nothing by the banking system
which then adds interest (as well as charges for administration).
Once that fact is properly recognised (as opposed to
being ignored, obfuscated or minimalised), the question arises as to why money
should not be issued by government without having
interest attached. For example, interest-free money (defined as "government-issued repayable
money, free of charge except for administrative and other necessary
cost") could enable a public capital project to be one half, even one
third, of the present cost.
Similarly, such
interest-free money could be used for private capital investment if
it turns formerly capitalless people, particularly the poor, into
new owners of capital. Using known techniques developed by binary
economics, Shann Turnbull, Jeff Gates and others, every
individual in a society (in work, out of work, ill, retired, young or carer
etc.) could come to own a big capital stake and have the benefit of a
considerable, independently-earned income.
And if interest-free money can be used for
public capital investment and wide-ownership private capital investment, there
is no reason why it can not be used for start-up and small
businesses.
Therefore,
stemming from acknowledgement of the 95% fact, much new and constructive
thinking becomes possible and it need not be limited to interest-free
money. Given the recent experience of Japan, negative interest
money (i.e. you are paid a percentage rate to take the money) is a
possibility. Other possibilities might be debt-free money
(non-repayable money issued without interest being attached); stamp
scrip money (money which is designed to lose its value unless a paid-for stamp
is put on it, resulting in an incentive to spend the money before it loses
value); and even competing types of money coming from different
bodies.
However,
remembering the need to stimulate debate and for simple, clear, basic policy the
Group has decided to start by proposing
policy which is acceptable to many groups, not open to obvious
attack, and is patently non-inflationary. That policy is encapsulated in
the Four Demands set out as a way of focussing the minds of everybody on
issues and possibility.
Implementation
of the four Demands will create
Healthy economies and
societies in which:--
i) All individuals attain a sturdy independence
becoming economically productive to the extent necessary to satisfy
their reasonable needs.
ii) There is balanced growth which is also a
green growth because
a) individuals involved in practices
destructive of the environment can be given another way to earn,
and
b) the economic efficiency allows for the introduction of
more costly, but greener, processes.
iii) The economic (and hence
social) status of women will be enhanced.
iv) There is a solution to
poverty through a guaranteed income security for all.
v) There is a
foundation for the ending of National and Third World debt and the
stimulation of economies and societies no longer in hock to
outsiders.
vi) Democracy will be deepened because all individuals will
have much greater control over their daily lives.
vii) There is an
economic foundation for the voluntary control of population
levels.
viii) Everywhere exists a practical basis for a new honesty,
optimism and generosity of
spirit.
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