The growing tension in the Eurozone is matched by a total failure by the media to give space for alternative views of how our economic lives, and especially our monetary policy, might be determined. Last night’s Radio 4 debate, hosted by the well-meaning and well-informed Paul Mason, Economics Editor of Newsnight, fell into the trap of setting up a false dichotomy between Keynesian and Hayekians. Three conclusions emerged: the audience was partisan and wholly unrepresentative, the two iconic figures around whom the debate revolved both had some arguments on their side, and none of this has anything to do with how our governments make policy. Plus, of course, the obvious fact that neither Keynes nor Hayek could imagine a world where ecological limits mean that economic growth can no longer happen.
Green Economics grows in strength and confidence: we are growing clearer about the design of our alternative future, and the expanding evidence of the failure of globalised capitalism adds to this confidence. An example is the new work by James Robertson, a book addressing the question of money to be published by Green Books next year. The publisher is allowing us all a sneak preview of Robertson’s proposal for managing the national money supply.
James Robertson has been right about money for years. He has a claim to be one of our leading economists, and yet his work is excluded from the public debate. In this chapter he provides an excellent critique of what is wrong with a money system based on bank debt and, more importantly, cogent proposals for an alternative system.
It is important that we know where we are going, and all those who support a just and sustainable economy should read and understand the Robertson proposal. But it does not help us with the transition. We cannot be naive about the vested interests dedicated to maintain the current system in place, and the courage required to politicians to stand against them.
What would a transitional policy look like? Presumably politicians would have to secretly agree to simultaneously suspend trade in the national debt of all the leading economies, and exchange transactions between their currencies. The moratorium would allow breathing-space for a new international agreement between nations to be drawn up: this would be a democratic agreement based on national control of sovereign debt and currencies exchanges: Bretton Wood with knobs on, as this blog has been arguing for since the beginning of the crisis. The market has no solution: only by taking political action can its destructive consequences be forestalled.