Summarised by Canon Peter Challen
Canon Peter Challen summarises Mike Rowbotham’s presentation to the Forum for Stable Currencies at the House of Lords, 12 Dec. 2001.
After describing his month’s visit to Australia and New Zealand as guest of Economic Reform Australia and the NZ Democratic Party, Mike Rowbotham gave an overview of his contribution based on his books, The Grip of Death and Goodbye America.
Mike explained that as we press for the Government to take responsibility for the creation of the money supply, we must look at the issues as part of an integrated system, which includes:
a) The shortage of paper currency set against 97% of the money supply being debt;
b) Debt lodged in Property, Commercial and Government areas;
c) Investment by Citizens, Commerce and Government;
d) The profound increase in job dependence and the experience of debt;
e) Price of products include mainly costs unrelated to the items themselves;
f) Pernicious decay of whole economy and the slowness of any recovery that could be devised. Issues of quality and of costly and inefficient centralisation all drain away true community wealth.
He gave vivid examples as he moved through these points. The whole social fabric is affected as the decadent and destructive economic cycle wheels on. Environmental and transaction costs grow exponentially. There is an urgent need to redress the financial conditions that pervades society. He moved on to advocate:
– the money supply must be a Public Service controlled by separation of powers;
– complete cancellation of ‘Third World’ debts unconditionally – their imposition is so appalling a crime, so great a scandal;
– differentiation between financial and physical capital, i.e. people, resources, and land;
– third world governments to be shown how to mobilise their own financial capital;
– mechanisms to ensure debt does not recur;
– international trading currencies to bring a genuine ethical balance of trade whatever the mechanism settled upon;
– aggressive trading should be recognised at the root of most wars
– currencies to be evaluated and adjusted against a basket of commodities (see October Prosperity). This is especially possible now with data available for all commodities – enabling the imputing of common value to all nations.
– local governments to be urged to adopt Jersey/Guernsey model where, given need and the skills and resources, then the debt free money can be issued to effect the wealth creation, and withdrawn in local taxation.
DIFFERENT MONEY REFORM PROPOSALS
He stressed that the many agendas for reform must not deteriorate into conflict, and raised warnings in relation to different proposals:
– Land Value Taxation: Its ideas to raise revenue and its distributive ethic needs graduated applications.
– Interest Free Credit: Has the capacity to subvert the whole movement. A modified system could have 80-85% debt free with 15-20%, only, bearing interest. He pointed out that once there is a low demand for borrowing, then interest drops.
– Currency Demurrage: Only as a component of redressing the balance of trade. It is weak in its insistence on economic activity.
– Credit Unions: The JAK bank (Sweden) and its interest free model is important. The increasing number of projects are to be encouraged, but they still rely on an initial source of bank-derived money.
– LETS: Important exemplars. It represents a living breathing challenge, but it will never crack the nut! It may be soaking up dissent which the whole Money Reform movement badly needs.
– Basic Income: Yes, but it should be tried in a stable economy.
A BATTERY OF IDEAS FOR ECONOMIC DEMOCRACY
He tabled a battery of ideas to challenge the entire neo-classical construct:
1. Government Creation and Supply of Money as a Primary Public Service
This is the greatest socio-political reform for decades. It would resolve a debate which has existed since the Middle Ages.
2. Restriction of Private Banking Mechanism
Its new role being to complement the above. Bank credit would be gradually replaced by a permanent money stock. This is essential to avoid inflation; especially where surplus of supply over demand exists.
3. A Basic Income for all Citizens
A highly significant socio-economic reform. It reconciles socialism and capitalism and ends wage-slavery/dependence. It would not be a contradiction to link long term unconditional basic income with expectation of community service for a period.
4. Total Security of Home Ownership
Maximise home ownership amongst citizens, and their legal status as owners. This can make home and family extremely strong/independent units and strengthen freedom and job sharing.
5. Taxation should be Progressive and Income-Based
Do not tax people on what they do not have. Taxation has two purposes: revenue-raising and socio-economic objectives.
6. Public Services held in Public Ownership
The priority is to serve the public.
7. Private Commercial/Agricultural Enterprises viewed as Elements of Cultural Inheritance>
8. Institute Mechanisms to Maximise Citizens’ Access to Cultural Inheritance; Products and Assets
9. Government to Promote a Just and Sustainable National, Regional and Local Economic Policy
10. Government to Promote a Just and Sustainable Food and Agricultural Policy
INTERNATIONAL ECONOMIC RELATIONS
1- Government to recognise international obligations but to recognise its first obligation is to act in its own citizens’ best interests. No conflict ultimately exists.
2- Ensure multilateral balance of trade between imports and exports.
3- Just currency valuations according to world commodities index
Sound international affairs will emerge from this emphasis on reform and development by nation states. The role of international financial and economic institutions — IMF, OECD, UN, WTO — should be advisory. They should exercise authority not power, and seek to establish commitment by countries to just and sustainable economic practices.
THESE IDEAS FOR REFORM INCLUDE:
Christian elements: Maximising freedom, recognising rights and duties of citizens, the obligation of govt, the role of law.
Democratic elements: Outcome of government stewardship and citizens’ aggregate economic decisions.
Social Credit Elements: Monetary reform, basic income, cultural inheritance.
Socialist Elements: Public service and welfare, progressive taxation, fostering genuine interests of all.
Capitalist Elements: Right to free enterprise, wider access to capital, right to profit, not rentier capitalism.
Environmental Elements: Organic perception of economic processes through citizens’ defence of environment.
The question really is, who is going to take this issue further?
Postscript: Since this article was written, there have been huge advances in the monetary reform movement in the UK, much of it inspired by Mike’s work, including a proposed draft Parliamentary Bill entitled, “The Bank of England (Creation of Currency) Bill”. It can be found here and can be purchased in hard copy at the link directly below.