A subject currently very much in my thoughts, as some of you will know...
A little while ago I emailed some questions that had been bugging me to an acquaintance I had met in one of the conferences on CIX. His answer was to recommend a book to me: The Grip Of Death by Michael Rowbotham, fifteen quid from Jon Carpenter Publishing. Not having fifteen quid, I ordered it from the library. It came, and I read it, and it hit me with the force of a religious experience.
The basic thesis of the book goes like this. Money, in the sense of credit, is not and has not for a long time been created by the governments of the world. Instead, it is created by the banks every time someone borrows from them, and along with it is created an equal amount of debt. This is how it works. You borrow a sum of money from the bank. They don't take it out of their assets--they can't; their assets belong to other people. Instead, they magic into existence a credit balance in your account. You spend the money, which goes round and comes back into the banking system: at the same time you are working to get money to pay off the debt you owe. The money the bank created, and the money you have made by working, come back to the bank, get added to the bank's assets, and get used as the basis for more and larger borrowing. Right now there is more money around than there has ever been--but it's almost all debt-based.
Rowbotham goes on to adduce from this fact explanations for just about everything that is "wrong" with society today. Excessive road transport, pollution, the rise in crime, poorer standards of education and health care, all come back to the fact that just about everyone in the world is in debt to some degree, businesses, governments and nations all over their heads in debt to each other, all scrambling to produce more, export more, import less, somehow pay off the debt--and it never happens. The logic is unshakable as far as I can see, the arguments are well-put and comprehensible, and the only thing that struck me as odd was that this book wasn't required reading for all politicians, economists, lawyers and opinionated men in pubs.
He even offers a solution--I'm not going to try to recall the details now, but the basic idea was that the government create a small amount of money each year and, er, give it to people. I think his starting figure worked out at about eleven hundred quid a year. The amount would change based on the various economic factors involved, and would eventually stabilise at something still fairly small, but that small addition to the money supply would be enough to break the spiralling cycle of debt and put us on the way to a credit-based financial system rather than the debt-based one which is wrecking our lives right now. I can see people reeling back in horror, David Weber fans if no-one else ("Horrors, no! Not a Basic Living Stipend! Look what it did to the People's Republic of Haven...") but the point is that this would not be intended to replace income from work--it wouldn't be enough--but simply to relieve the pressure and loosen the stranglehold that the banks have on us. And it wouldn't cost the government anything. They can create money. It used to be one of their jobs.
Ah well. When I first read the book I was filled with missionary zeal, wanting to buy dozens of copies and send them to prominent people all over the country with a note saying "Read this and be ye converted". I thought, well, Tony Blair might be grateful for an idea which would help to save the environment, reduce public sector borrowing, allow radical improvements to the entire socioeconomic infrastructure and make his government the most popular one ever to be elected in the history of parliamentary democracy. I've aged a year since then. Far too many prominent people like things just the way they are, the populace working too hard for too little money, running scared of any improvement in their lives in case it costs too much, tolerating horrific accidents on the railways because safety systems are too expensive, scrambling to buy more and more consumer toys with the purchasing power they don't really have, and paying, paying, paying through the nose for the right simply to continue living. Far too many prominent people run banks, or know somebody who does.
I'll leave you with one of Rowbotham's insights on world trade, just to give you an idea of how far the debt thing pervades and perverts the life of this planet:
1. In order to pay off its debts and progress economically, every nation in the world needs to be a net exporter, i.e. to sell more goods abroad than it buys in.
2. It is not possible for every nation in the world to be a net exporter. (Think about it.)
3. Therefore, under the debt-based financial system, even though every nation in the world may produce valuable goods and sell them with all its might, there will always be nations sinking deeper and deeper into debt to support the ones that are progressing.
It really doesn't have to be that way.
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