Editor’s note: From the Positive Money website: "Positive Money is a movement to democratise money and banking so that it works for society and not against it. Our current financial system has left us with the highest personal debt in history, unaffordable housing, worsening inequality, high unemployment and banks that are subsidised and underwritten with taxpayers’ money. We believe that these problems have a common root: money. When we rely on banks to create most of our money, then the only way of getting more money into the economy – and allowing it to grow – is to encourage people to go further into debt. This is why UK government policy is focused on ‘getting banks lending again’ and encouraging people to borrow more for mortgages. But the financial crisis was caused by a huge build-up in private debt, so allowing that debt to increase even further could lead us into another crisis. What we need right now is to have a way of getting extra money into the economy, but without relying on households borrowing even more. This can happen if the Bank of England creates money and transfers it to the government to be spent into the real economy (rather than the financial or property markets). Our Sovereign Money proposal explains how this could work, how it would lead to a boost in jobs and employment, and how it would make the current debt-fuelled recovery into a sustainable one.
In the Long Term: Ultimately, we think that the economy would be more stable and society better off if we completely remove the power that banks have to create money. These ideas have been around since the 1930s, but we’ve done a lot of work to update them for the modern financial system."
A report from the fourth Positve Money Conference follows.
The first day of March is not only St David’s Day, but it’s also the day in 1946 when the Bank of England was nationalised. It was appropriate therefore, that Positive Money should convene its fourth Conference on Saturday 1st March 2014 at the Conway Hall, London. The event was entitled “Building a Movement” and was specifically targeted at supporters who were keen to get things moving in their local areas.
There were 240 people booked in (not counting all the official helpers in Positive Money T-shirts) – a very positive sign of the energy and desire among people out there to do something to take the movement forward.
There was a real buzz in the hall when Fran Boait, Positive Money’s Executive Director, began event at 10am.
Asking for a show of hands, it was clear that well over two-thirds of people were new and had not been at last year’s event.
Fran told us of her journey towards Positive Money. She had seen how banks were being bailed out by “putting numbers into an account” when the rest of society was struggling, and it struck her as simply wrong. She joined Positive Money in 2012 – after attending a Positive Money Training Seminar in Edinburgh.
She mentioned that in the last year, over 2,000 hard copies of Modernising Money launched at the 2013 Conference have been sold. Prominent economists and commentators had read it, including Lord Adair Turner, Martin Wolf of the Financial Times, and Prof Tim Jackson.
The latest publication Sovereign Money had distilled some of the theory into an immediately do-able policy (which Ben Dyson would speak about in the afternoon).
“Change will happen when expert opinion and public opinion coincide” we were told and the feeling is that expert opinion is shifting gradually. However, these individuals are unlikely to be able to shift public opinion on their own, and that is where Positive Money’s work on the ground comes in.
Positive Money’s online work is reaching more people than ever and the website is being visited by twice the number of people per month than this time last year. There was a call for everyone who is on Facebook and Twitter to really make use of all the videos and resources which are available on the site and to post them to friends and followers. The aim is to grow our numbers: To get more people to visit the website, to sign-up to the regular email newsletter, and to Facebook and Twitter.
However, a movement is about relationships and that’s why it is necessary to have face to face connections. That’s what we are about today.
We then heard from 3 supporters.
A lady from Italy, who has been living in the UK for 17 years, gave a very eloquent explanation of how she had come to the Positive Money message. When the banking crisis hit, she realised that the idea of “greedy bankers” and “profligate politicians” was “completely inadequate to explain the scale and the complexity of the problem.” Like many others, she had discovered the Positive Money website which helped to put it all into its proper context.
A community activist from Lancashire gave a forthright explanation of how he had come to be standing here today. He had tried to answer the question, “Who do we owe this money to?” In that moment, “I realised I couldn’t explain simply what money is, and when you can’t explain something simply you don’t understand it.” He had found Positive Money on the web and was organising meetings because, “When something needs done, I don’t get lost in a labyrinth of hypotheses.” “All these years I’ve been trying to solve problems, now I know where the problem comes from.”
A lady who is setting up a Money Reform organisation in Croatia had come into the field through a concern for the environment. A friend had mentioned Positive Money to her and she started to educate herself by watching their videos on YouTube.
The defining moment was watching the excellent Michael Rowbotham’s speech to COMER in 1999. That was the crucial talk, she said. “He connected everything I cared about to the way we create money.” She could trace so many different issues back to the way money is created. If we could change the circumstances then many of these problems might resolve themselves, she suggested.
WORK IN GROUPS
We then got into groups of 3 and shared our own Money Reform journey. Your reporter was sitting next to one of Positive Money’s first-ever volunteers, Richard Kite, who became convinced to share his financial accounting expertise with the group in the early days. It was after he had found Positive Money’s draft “Bank of England (Creation of Currency) Bill” on the internet
He realised, “If these people know enough, and are serious enough, to have produced an entire legal document on the matter, then they know what they are talking about.”
People were then asked to share their thoughts with the audience and Mark from Bristol told us,
“Creating money out of nothing is immoral. It is the basis of this system. Our grandchildren are being born into debt. It must stop.”
A man from Australian spoke about his “debt hangover”. He had believed the myth that house prices were dependent solely upon space, rather than upon the banks inflating the price by creating money out of nothing for their own short-term profits
A lady from Bradford had been watching the sub-prime crisis and waiting for the banks to fail but watched in frustration as they were bailed out with more money created out of nothing. She is hoping to start an alternative economics show on Bradford community radio.
A student from Oxford University was keen to get something happening there, and a lady mentioned how she had found Positive Money through participation in the Bromsgrove Group of Money Reformers.
“BUILDING TEAMS” BREAK-OUT SESSION
The organisers had arranged attendees into 26 different groups based on where we lived and each group had a Facilitator who would lead the group discussion from a set of already-prepared Guidelines. These included introducing ourselves, considering what joining a local group would mean to each of us, and what sort of role we might see ourselves playing.
We also discussed what objectives the group could have, and the different audiences we might appeal to.
We had an hour for lunch to mingle and to enjoy the spread provided in the same building by Hackney Growers Kitchen
Books and T-shirts were for sale and 6 absolutely excellent, A5 high-quality, glossy, double-sided, full-colour flyers were available in bulk for whoever wanted them. These are great for having at meetings and spreading around. They are highly recommended. Contact Positive Money if you want any.
THE CURRENT ECONOMIC SITUATION AND SOVEREIGN MONEY
Ben Dyson, founder of Positive Money, was the next speaker after lunch, and he recapped how the nature of money has changed since the Bank Charter Act of 1844, which outlawed bank creation of paper money. Most money today was electronic. There had yet to be a democratic debate on the consequences of this. Indeed, as he went on to mention, there had hardly been any democratic debate on the consequences of Quantitative Easing (QE).
In terms of where this private bank money went – 40 per cent went into the property market, 37 per cent to financial markets, 10 per cent to credit cards and personal loans and only 13 percent to productive business.
In our system today, “more money means more debt”. If we have a crisis and we want less debt then we have to accept that we will end up with less money circulating, because when the loans are repaid, the money disappears from the economy.
Under the present system, there are two ways to get more money into the economy, he said: The first way is to get the private banks creating new money by creating new debt. That is the situation where “more money equals more debt.” So, interest rates were lowered to 0.5% in the expectation that “lower interest rates will get people to borrow more.” There have also been various “funding for lending” schemes.
The second way is to get the Bank of England to create money. It has initiated QE, whereby it creates money and buys bonds from pension funds and insurance companies.
This money floods into the bond market and some floods into the stock market. It artificially increases bond prices, in the same way that the banks’ privately-created money pushes up mortgage prices.
The idea behind QE is that those who see the value of their bonds go up will then spend more on the High Street. But in reality, it means that the relatively small number of people who have the money in the first place, take their money and put even more of it into the bond market. In short, QE is a scheme which has made the very wealthy much better off, but has done very little to create jobs and get the real economy going.
Incredibly, around £375 billion has been created but there has been very few questions asked in Parliament about the wisdom of this process, about how the money is created and where it is spent. This is remarkable considering the tortured debates in Parliament about the spending of sums which are a mere fraction of this figure!
Ben explained that the alternative is Sovereign Money – as discussed in Positive Money’s new publication.
The idea of Sovereign Money is that instead of the BoE creating money and putting it into the financial markets, it should be put into the real economy, through spending on infrastructure, through tax cuts, or through the simple expedient of giving it to people. This would allow us to escape from the debt trap where, if we need more money then we must have more debt.
He said that for every £10 billion which gets added to the government account and spent into the economy then we would get £6 billion coming back in taxes, and that for every £1 which goes in, we would get £2.80 of spending throughout the economy. He suggested that a Sovereign Money creation of £10 billion would lead to 28 billion spending, up to 284 000 jobs and 5.6 billion tax revenue, and lower personal debt. (These calculations come from CBI figures.)
Furthermore, this is a policy which can be done now. Private banks will still lend, but Sovereign Money will, to an extent, offset the negative effects of debt. Once it can be shown that Sovereign Money works, then we can point to the full solution, outlined in Modernising Money which is stopping banks creating money in the first place.
In short, this is a way to get initially-sceptical governments thinking about the benefits of our Reform. It is a useful precedent for Positive Money’s main Aim.
A question from the floor wondered whether this might be illegal under the Maastricht Treaty. Ben pointed out that because of the way the clause in the Treaty is worded, it does not prohibit a central bank granting money to the state in this fashion. It only prohibits it lending!
TALES OF POSITIVE MONEY FROM AROUND THE UK
We then heard from the experience of supporters. Two people from Nottinghamshire spoke about their efforts to get the message heard politically. They are lobbying their District Council to raise a Motion supporting a Positive Money approach to reform. This would mean that the Council would adopt a set of Principles.
They spoke also of some various negative responses which they had received and which they had helpfully categorised. These included a basic confusion among some people between monetary policy including such things as Money Reform and “monetarism”, and a belief that all we needed to do was just improve “regulation” of the banking system.
Among their helpful recommendations was that Positive Money could film a short video describing the different schools of economic thought in order to distinguish “monetarism” from “monetary policy”; that we want to clarify the implications of the Reform for the lives of real people in quantitative terms; and that we must continue to bring respected economic voices to the forefront and try to attract celebrity endorsement.
For the grassroots campaigners, they recommended re-running the Positive Money Training Programmes; producing a Campaign Pack for local groups, including a FAQ dispelling common misconceptions, and perhaps putting together a Course aimed at secondary school pupils.
Peter Verity from the Sheffield Group of Positive Money supporters was next up. He has possibly the most experience of anyone in running such events.
They held their first meeting in October 2011 and have since had 22 of them! He told us that it is essential to set up a Mailing List and to have a Contact Sheet at every event. He recommends an email system called “YMLP” (Google Groups did not work since it required people to confirm registration and hardly any bothered to do that.) He sends out messages a couple of times a month.
He finds that there is a turnover of people but that this is not necessarily a bad thing if you are constantly reaching new people. You definitely need an Agenda at each meeting otherwise it is difficult to stop people talking. They now have a team of 6 people who work on a rota basis for deciding and organising what is going to happen at each meeting. The talks are loosely related to economics, banking and monetary reform, and this is used as the platform to sell the specific Positive Money reform to the public. They advertise on free web forums and in the local paper. They have a gazebo and have held street stalls in the city centre and also at Festivals.
Importantly he said, “Every little mention of Positive Money can be a trigger for someone to find out more about it.” He had first heard about it when a caller mentioned the name on the radio!
“TAKING ACTION” BREAK-OUT SESSION
After a tea break we came back to our Groups again to concentrate our minds on where and when we might be able to organise an event, what form it would take, who we would be addressing, and what the aim of it would be. We also considered how we would work together and what additional support we might need.
There were also around 35 attendees from outside the UK. Your reporter listened into the various intentions of the international group of supporters which included: Sweden – Meeting with Members of Parliament; Switzerland – developing this concept as a PhD topic; Luxembourg – meeting with a Basic Income group to explain the Positive Money proposals; Germany – making posters on this subject and getting them onto Facebook; France – merging the idea with Citizens’ Income; Belgium – getting an MEP interested in the process; Iceland – introducing the idea to High School teachers; Denmark – try to get funding to do a translation of Modernising Money; translate the Positive Money flyers; and meet with politicians; Croatia – set up a Positive Money campaigning group; Portugal – start a website on the topic; and Spain – push for curriculum reform to take account of these ideas.
There were also attendees from the Netherlands, Austria and the USA; and someone from Guernsey is making a film about its history of money creation.
One of the attendees from Denmark, Associate Professor Ole Bjerg, has written a book on these ideas entitled Gode Penge (Good Money), and has a new book coming out in English in April 2014 entitled Making Money: The Philosophy of Crisis Capitalism.
This was a great way to end the day and everyone was clapped and cheered as they told of the plans, which included: Yorkshire – combine with the Newcastle group and have a street stall; Bristol – meet monthly; Reading – stall at the music festival; South East London – relaunch; Dorset – social gathering of supporters in their area; Scotland – social meet in Edinburgh; Walthamstow – a reading group emulating the Lambeth one; Wales – event in Merthyr; Gloucester and Cheltenham – team up with Birmingham group and offer to speak at Women’s Institutes. They noted that one way of attracting and keeping people was to use food; Oxford – holding their first meeting in 3 weeks and spreading the message in the University; Devon – use the slides from Ben’s presentation today for their first event; Hackney – showing 97% film in May and each member is targeting a specific group with the aim of getting 10 from each group to come along; Cambridge – on 20th June showing 97% film and having a debate on Sovereign Money; and Lambeth – carrying on their already monthly meetings.
TO BE INVOLVED
If you want to be involved, or if you want to set up a group, but you were not at the Conference then that’s great. Simply contact Frank at [email protected] and he’ll put you in touch with the local facilitators or give you the information you need to take your idea forward.
Remember that Positive Money can target, by postcode, all the people in your area who have signed-up to the email Updates, and so will be able to tell them about your meeting whether a social gathering or a more formal presentation – and we will also push the notice out on Facebook and Twitter.
In the meantime, if you are reading this and you have not yet signed-up to our regular Updates, please do so here. That will keep you in touch with everything happening in your area.
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