James Robertson Newsletter No. 34 - December 2011

Newsletter No. 34 - December 2011 Links to previous Newsletters can be found here. To be notified of new Newsletters, click here.    CONTENTS 1. Must tomorrow's world citizens care for themselves? 2. Support for monetary reform is growing in Britain 3. ... and in the USA 4. Money, economics and ethics: Is there a link after all? 5. The co-operative opportunity 1. MUST TOMORROW'S WORLD CITIZENS CARE FOR THEMSELVES? Two seriously backward-looking decisions have been made in the past few weeks by the British government. First, among the 27 leaders of European countries at their recent Brussels meeting, Prime Minister David Cameron alone rejected the proposal to prevent the Eurozone's collapse. His explicit reason for doing so was to "promote and defend" the right of Britain to maintain the City of London's competitive advantage in what is now increasingly recognised as "casino banking" - see Items 2 & 3 below. Second, in this year's "Autumn Statement", the Chancellor of the Exchequer, George Osborne, gave higher priority to money-measured "economic growth" than to policies for conserving the earth's resources on which the future of human civilisation depends. For a critical assessment see www.neweconomics.org/press-releases/autumn-statement-2011-nefs-response. These should be seen in the context of: (1) the Organisation for Economic Co-operation and Development's (OECD) report that "Britain leads the world as the pay gap between the rich and poor widens". This "dispels the assumption that the benefits of economic growth automatically trickle down to the disadvantaged". Those are quotes from The Times (not exactly a radical newspaper!) of 5th December. Does an excessively dominant financial services sector result in a too wide a gap between rich and poor? Yes, of course. (2) relevant research by the New Economics Foundation in 2009 showing that "while collecting salaries of between £500,000 and £10 million, leading City bankers destroy £7 of social value for every pound in value they generate". See A Bit Rich: Calculating the real value to society of different professions - www.neweconomics.org/publications/bit-rich. (3) the recent disclosure that over 50% of the total £12.18 million donations to the Conservative Party now comes from the banking and financial services sector. For details see www.thebureauinvestigates.com/ 2011/09/30/hedge-funds-financiers-and-private-equity-tycoons-make-up-27-of-tory-funding. But, getting back to the Brussels meeting, its consequences for the Eurozone - and for our globalised world economy as a whole - will probably not matter much one way or the other. Unless we stop giving commercial banks the privilege of creating almost all our money as debt, we are bound to face increasing debt, deepening economic recession, and worse social hardship and public disorder in every country concerned. Apart from the Eurozone countries and others in the European Union, those most directly affected will be their major trading partners in Britain and the United States - but few others will remain unaffected in our interconnected globalised world. The impacts on domestic politics in Britain will become clearer in the next few days and weeks. They could include: a split between Liberal Democrats who stay in the coalition government with the Conservatives, and those who withdraw into political independence; a sharper perception of Conservative politicians as "self-confessed backward-looking people in the pay of greedy bankers"; continuing doubt about the relevance of the Labour Party; widening awareness of the profitable privilege now given to commercial banks to create almost all our money as debt; and growing pressures largely generated outside mainstream politics to take that privilege away from the banks. Meanwhile, in Durban, South Africa, the 2011 Summit meeting on Climate Change seemed to have reached agreement on minimal progress at the last minute. China and the USA, the world's two biggest emitters of carbon, and India agreed to join in a plan led by Europe to reach a global agreement in 2015 to restrict emissions of greenhouse gases linked to climate change in 2020. However, as soon as the Canadian representatives got home, Canada withdrew from the Kyoto climate agreement, leaving everything in limbo. Both these sets of activities - concerning the future of money and the human impact on the planet's resources - demonstrate the inability of the leaders of our species today to create decent prospects for the children and grandchildren of adults already living now, let alone for their children and grand-children in the more distant future. Can today's young people around the world take it on themselves to act with one another - intelligently, constructively and co-operatively - to create a better future for themselves and their children? Meanwhile, UK Chancellor Osborne is expected to announce today that banking reforms will be legislated for by 2015 and enacted by 2019.They will need very costly and complicated new regulations. The simpler, commonsense way of creating the public money supply as at Items 2 and 3 immediately following will probably have been recognised well before 2019. I hope so. 2. SUPPORT FOR MONETARY REFORM IS GROWING IN BRITAIN (1) POSITIVE MONEY goes from strength to strength in its campaign for monetary reform. For what Ben Dyson and his colleagues have achieved see www.positivemoney.org.uk/about/our-achievements . If you don't already know them, look further at www.positivemoney.org.uk. "The proposed Bank of England Act" for implementing monetary reform is atwww.positivemoney.org.uk/draft-legislation. (2) As an original founder of the New Economics Foundation in the 1980s and the co-author (with Joseph Huber) of Creating New Money, which was published by nef in 2000 - www.jamesrobertson.com/books.htm#creating - it has been good to see nef working on monetary reform together with Positive Money. For nef's new work on relevant topics, seewww.neweconomics.org/publications/feather-bedding-financial-services. (3) Since 1997 the annual October Prosperity Conferences at Bromsgrove have kept the flag flying for monetary reform. They have been convened and inspired by James Gibb Stuart - http://prosperityuk.com/bromsgrove-conference/about-james-gibb-stuart-the-convener-of-bromsgrove/ - and organised by Prosperity's publisher, Alistair McConnachie -http://prosperityuk.com . The 2009 Conference was the first to be sponsored by the James Gibb Stuart Trust. The Report on it conveys the participants' commitment to the progress being made and then in the two following years -http://prosperityuk.com/bromsgrove-conference/bromsgrove-2009/. Simon Dixon - www.SimonDixon.org - is one of speakers reported there whose work should be noticed and supported. Closely associated with these Bromsgrove Conferences is a website -http://thomasattwood.wordpress.com/ - dedicated to the memory of the 19th century money reformer, Thomas Attwood. He was the first Birmingham Member of Parliament following The Great Reform Act of 1832 for which he successfully campaigned. I much appreciate the Attwood Award presented in October. Readers will find many interesting items on the Attwood website. Personally, I greatly valued the historical perspective resulting from research for the Attwood Memorial Lecture in 2002 – http://thomasattwood.wordpress.com/the-attwood-events-awards-2002-%E2%80%93-2009/6-james-robertson-2002. 3. SUPPORT FOR MONETARY REFORM IS GROWING IN THE USA (1) Congressman Dennis Kucinich introduced a historic Bill in Congress on 21 September - the National Emergency Employment Defense (NEED) Act of 2011, HR 2990. See: http://kucinich.house.gov/news/email/ show.aspx?ID=LPQL6Q4TCBYKM3PLGJY3DAE2MA. Its aim is described as: to create a full employment economy as a matter of national economic defense; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilize the Social Security retirement system; to restore the monetary system of the United States; and for other public purposes. As Stephen Zarlenga points out - www.monetary.org - although this Act is formally about employment, it proposes a historic money reform containing all the monetary provisions of the American Monetary Act - including the end of “fractional reserve” banking. (2) "How to Liberate America from Wall Street Rule" - a July 2011 Report from the New Economy Working Group, Primary Author: David Korten- www.yesmagazine.org/pdf/liberateamericadownload.pdf. If you are not already familiar with this report, it makes an important contribution to understanding how the money system should be reformed - although it is not as simple as the basic monetary reform proposal to stop the present creation of money by commercial banks as profit-making debt and having it created debt-free by a public agency in the public interest. The report's Appendix on "Navigating The Transition To A New Economy" suggests that it is not easy to map out in detail in advance a clear answer to the following question: How will the opposition be overcome from: all the people who positively benefit from today's unjust economic system and will defend it aggressively, the many more people who will fear that revolutionary attempts to reform it could turn out to make things worse, and the many more people than that who will continue to be governed by simple inertia? But of course that is only realistic. It's not a reason to give up the task. 4. MONEY, ECONOMICS AND ETHICS: Are They Linked After All? The following letter was published in The Times of 8th March 2011, prompted by the news that the London School of Economics (LSE) had accepted big sums of money from the Libyan government. "Sir, Around 1991 I offered the London School of Economics a grant of £1 million to set up a Chair in Business Ethics. John Ashworth, at that time the Director of the LSE, encouraged the idea but he had to write to me to say, regretfully, that the faculty had rejected the offer as it saw no correlation between ethics and economics. Quite." Lord Kalms, House of Lords In the 1990s most other academic economists too, especially those financed by big banks and other big businesses, were teaching their students: "Don't confuse economics with ethics". Early in 2011, public scandal broke out over the LSE's acceptance of large sums of money from the Libyan Government, after Muammar Gadaffi's son had been a student there. The LSE director Sir Howard Davies resigned and former Lord Chief Justice Lord Woolf was asked to conduct an enquiry on what went wrong. His "highly critical" report has now made 15 recommendations. The acting Director says that they will all be implemented and that the LSE "will create an ethics code to cover the entire institution" (The Times, 1st December 2011). A sign of progress? 5. THE CO-OPERATIVE OPPORTUNITY: How To Reboot A Sustainable Economy Meeting in Central London - Details: http://on.coop/15february2012 Summary: Date: Wednesday 15 February Place: Queen Elizabeth II Conference Centre, Westminster, SW1P 3EE The event: 6pm for 6.30pm start Short speeches - Jonathon Porritt, Noreena Hertz, and others 9pm finish. RSVP: TheCo-operative@co-operative.coop With Seasonal Greetings and Best Wishes for 2012, James Robertson 19 December 2011