<TITLE>Report 7th May

Creating a Sustainable Society:
Reforming the the Global Economic System

In association with Positive News 7th May 2002 Report by Leonie Humphreys James Robertson, author of 'Transforming Economic Life: A Millennial Challenge' and 'Creating New Money. A monetary reform for the information age'

Michael Rowbotham, author of 'The Grip of Death' and 'Goodbye America'
Prof. Mary Mellor, author of 'The Politics of Money'
Michael Linton, founder of 'Open Money' with over 20 years of experience in community currencies
Chair: Dr. Wendy Olsen, Development Researcher, Lecturer in Socio-Economic Research, Manchester University

Dr. Wendy Olsen introduced the speakers and mentioned a new radio station: Resonance FM (104.4) which will air the event at some time in the future (see website: www.resonancefm.com).

James Robertson began by explaining that in joining the Euro the UK would be undertaking a profoundly undemocratic act. It would reduce control over our economic lives in the UK and in our role in monetary reform. There is however no reason why both the pound and the Euro cannot be used in the UK, as indeed it already is. The majority of people do not understand the effects of such a change in the money supply nor that money can be used to keep people dependent and in that respect represents power. 95% of loans are created from private banks where the interest charges are reflected in the huge profits of the banks. This gives a total ‘free lunch’ to the private banks of around £20 billion per year in the UK. The public income from notes and coins amounts to around £3 million, but if currency was introduced from public sources the income that would be generated would be around £45 billion per year for the public purse. What is required is a debt free money supply which would reduce the levels of private debt and stabilise the economy. Environmental campaigners are now beginning to see the need for monetary reform as part of the process to move towards a genuinely democratic, sustainable world. Indeed money system reform is one of the key challenges facing humanity in the first quarter of the 21st Century. A fair and efficient system is required. LETS and other alternative currencies are useful and pluralistic, but also a genuine global currency is required. A world currency at the global level could be used to prevent national governments such as the US (through seigniorage of the dollar) receiving an annual ‘tribute’ from the rest of the world estimated at $400 billion at least, and provide a fund for public revenue which could be spent on behalf of the world community by the UN or a similar body. Suggestions for individual action included studying the subject, persuading other pressure groups to take the issue seriously, writing to your MP, particularly in support of the EDM 854 (see website: http://edm.ais.co.uk).

Michael Rowbotham spoke of the distinction between money and real wealth (goods and services). He explained the problem of currency devaluation which occurred in South Africa when the Rand fell to 1/3 of its original value. In real terms this meant that 1/3 of the revenue from exports was received and the price of imports was 3 times greater. In order to overcome the problem the country became a mass exporter, but the revenues were still not enough, so the exports continued. This has led to selling of the assets of the county such as land, mineral rights, docks, electricity and water systems in order to meet IMF debt demands. There are many countries in this position now. Corporations can thus ‘pick and choose’ from all these nations which are ‘selling off the family silver’ of their assets. Hence much of the land and natural resources as well as capital investments of many developing countries are now owned by institutions outside the country’s borders. Money should be a ‘register’ of the value of goods and services, but NOT a commodity itself: it should not be traded as such. A register of values of commodities could be used to ensure that a very similar price is received for all specific type goods of similar quality globally in order to prevent producers making products priced to undermine the same quality product from another source. This would help to provide a common value to wealth which is fundamentally democratic: in other words a fair trading system.

Prof. Mary Mellor explained that the issue of money creation is a social and political question, not merely an economic one based on a superficial and facile statement such as the view of many economists that ‘consumer choice is the only mechanism of democracy’. Currently the commercial sector decides how money can be made (and lost! Enron simply lost $40 billion – where did it go?!). The ever increasing debt burden is now being pushed onto the young and the elderly in the form of student loans and equity release. Yet our future cannot be secured in money terms, money is an ‘illusion’, it is not real wealth: it has no real value of itself, it simply provides the possessor with a ‘claim’ to wealth. The cooperative movement is a socially minded trading system which used to be very strong and could be rebuilt, but it has been lost to a great extent to capitalism. We need to re-ground ourselves in the really important aspects of society and re-examine the role of the social and public sectors, and our money systems need to be reformed to reflect these deeper values.

Michael Linton explained the possibility of creating ‘virtual’ local currencies in terms of a ‘multiple money system’: Open Money. Currently as money moves around, it tends to always move away, as a result of the current economic paradigm. Yet in a virtual money system trading with ‘imaginary’ money, the money comes back, it circulates within the ‘community’. People belong to many ‘local’ networks related to their activities and interests such as sports, the arts etc. Each ‘type’ of network can have its own currency and this need not be limited to a geographical area, but can also represent a kind of activity. The system operates as follows:

1. Businesses need to be willing to ‘create’ and then to donate ‘community way’ currency (ie open money) to ‘local’ community service groups such as schools and other local charities and/or services which need funding. The business must then be willing to accept the community way currency in exchange for goods and services, however they are not obliged to take the full price of any particular item in local currency and may have a system whereby say 20% of a transaction value (eg a meal in a restaurant) is paid in open money and the balance in hard cash (ie the normal currency such as pounds sterling) as usual.

2. The community service organisation then ‘spends’ the local currency into circulation. This is done both by exchange for a service or product from other users of the community way currency and also by means of exchanging ‘hard cash’ for the local currency when an individual/organisation donates money to the local charity or service. In this way both parties benefit and those who donate ‘hard cash’ to local services receive in exchange the same amount in the local currency (exchange rate should always remain 1 to 1), which they can then spend in one of the local businesses which created the money.

3. People need to be willing to make exchanges within the local community/network, in the local currency.

4. A Community group is required such as London Open Money, which provides a roster of organisations that need money and manages and administers the ‘local’ Open Money system. An open money card is proved to the users in which the transaction information is stored.

In this way an additional way of exchanging goods and services is created in any type of ‘local community’ in which the ‘money’ always circulates within the system and is thus never ‘lost’ to an ‘absentee’ power structure. The general consensus from the talks and from questions from the floor indicated that the present crisis provides a fairly unique opportunity for reforms since change can occur when the dominant groups lose confidence. But pressure will be required to make the best use of this situation. The main need is to shift the emphasis from the private sector reaping the rewards from money systems, to allowing the public sector to be funded from money supply, which in turn would reduce the need for taxation.

Click here for details of the other events.

Creating a Sustainable Society: Reforming the the Global Economic System

Creating a Sustainable Society:
Reforming the the Global Economic System