Monetary Reform - Making it Happen!

by James Robertson and John Bunzl

Summary

Pressures for a new political economy are becoming stronger as worldwide protest against the present form of globalisation, coupled with anxiety about American 'imperialism', continues to grow. The new political economy will need to combine economic efficiency to enable people to meet their needs with justice between people and sparing use of natural resources ('environmental sustainability'). It will require changes in today's economic and political institutions - particularly those concerned with the workings of money and finance.

These changes will have a vital international dimension. As a practical example of how it might be necessary to handle this, this book explores the possible scope for linking two proposals that have come forward in Britain during the past three years. One is for monetary reform as proposed by Joseph Huber and James Robertson in 2000. The other is for Simultaneous Policy, as proposed by John Bunzl in 2001. Simultaneous Policy is a general strategic approach, aiming to smooth the path to desirable reforms through their simultaneous implementation by enough countries to overcome the objection that a single country implementing them would risk capital flight and damage to its international competitiveness.

The first two chapters on monetary reform are by James Robertson. Although much of the detail in them refers to Britain, the same outline applies broadly to other countries too.

The historical perspective in Chapter 1 brings out some of the parallels between the aims of monetary reform in the 19th century and now, and some of the differences between that time and ours. It suggests that the historical evolution of the monetary system between then and now points to the Huber/Robertson proposal as the next step forward.

It also points out that a key difference between then and now is that monetary reform must be dealt with today in an international context. Another difference is that now public awareness is becoming widespread that big changes in the monetary and financial system are needed. People's aspirations for a greener, juster, more people-centred way of life, a new direction of more peaceful progress, and a new consciousness about our place in the planet, are growing. But recognition is also growing that those aspirations cannot be fulfilled, so long as the perverse incentives and compulsions of the present money system shape how we actually live.

Chapter 2 summarises the proposal for monetary reform published in Creating New Money, and brings out its international as well as its national significance. It notes some of the main obstacles to it that have become apparent and some of the objections that have been made to it, including those based on the risk of damage to a national economy's international competitiveness.

Chapter 3 is written by John Bunzl. It introduces the Simultaneous Policy approach and explains its potential relevance to monetary reform proposals such as Creating New Money, as well as to other reforms advocated by global justice campaigners and non-governmental organisations (NGOs). It outlines in more detail the obstacles to the implementation of monetary reform likely to arise from the reaction of global markets, and it explains how Simultaneous Policy could potentially overcome them. Specific arguments in favour of the Simultaneous Policy approach are discussed as well as its potential disadvantages and responses to them.

Chapter 4 re-emphasises the importance of an international campaign for monetary reform. It will probably be based initially on non-governmental organisations (NGOs) mobilising citizens' interests worldwide, bringing in small businesses and other sectors inadequately served by the present money system, and then spreading to growing numbers of mainstream politicians, political parties, government officials, financial experts and economists.

That chapter and the book conclude with some practical suggestions about what can be done to promote monetary reform by its supporters

· in their own nation,

• co-operating internationally,
• and provisionally adopting the Simultaneous Policy.

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John Bunzl - Director
International Simultaneous Policy Organisation (ISPO)
http://www.simpol.org
Simultaneous Policy: Today it's our process for re-gaining control;
Tomorrow it's our policy for changing the world