Future Money

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* Book: James Robertson. Future Money. Green Books, 2012

URL = http://www.jamesrobertson.com/futuremoney.htm [1]; download


'Future Money explains in plain language and convincing detail how our money system is propelling us toward the self-destruction of our species – and what we should do about it. Our present money system frustrates the well-meaning efforts of active citizens, NGOs and governments to deal with our present ills and problems – including worldwide poverty, environmental destruction, social injustice, economic inefficiency and political unrest and violence within and between nations. Failure to reform the world’s money system urgently and radically – that is, from its roots up – could bring disaster for human civilisation before the end of this century. Future Money shows clearly how our money system operates and how it could be reformed so that it acts for the benefit of people and society rather than the opposite, and describes the obstacles that currently prevent that reform.

The world’s financial experts and leaders in politics, government and business, and most mainstream academic and media commentators, have demonstrated that they are not yet able or willing to diagnose and treat the profound and pervasive problems that are directly caused by the money system. Future Money speaks explicitly to active, independent-minded citizens, including young people, with the hope that it will help them to understand why people committed to careers in almost every important walk of life today find it difficult to recognise the problem and grasp the nettle. It shows why we have to take the initiative now, and urgently, to get the issue on to mainstream agendas worldwide." (http://www.greenbooks.co.uk/Book/414/Future-Money.html)

Summary of Key Points and Contents

James Robertson:

"We may be destroying the ability of the Earth’s resources to support our present way of life and even our survival as a species. Present recognition of that coincides with our having evolved a globalised money system that influences the way of life for almost everyone on Earth.

We need to understand that those two things are closely linked. How the money system works motivates us to live in some ways rather than others; how it now works motivates us to live in ways that not only treat most people unjustly but may also accelerate our suicide as a species; so we clearly need to decide what changes we must make in the ways the money system works.

In other words, we need a revolution of understanding and action:

(1) to achieve a less primitive level of understanding how the money system works, as the Copernican Revolution did for our understanding of the solar system; and then, on the basis of that new understanding,

(2) to identify and carry out practical reforms to change the way the money system works and bring money values more closely into line with human values and purposes in the 21st century.

2. Some lessons from the history of money (Chapter 1)

The unspoken purposes of the money system from its origins to the present time can be seen as being:

(1) to transfer wealth from poorer and weaker to richer and more powerful people and countries, and – as far as possible –

(2) to conceal this in mystery, myth and technical tricks of the trade.

In recent centuries two further purposes have evolved:

(3) to develop the technical, economic and military power of nations in competition with one another; and, in pursuing that aim

(4) to exploit the resources of the planet to the maximum extent.

3. The connection between money and ethics (Chapter 2)

The money system is a human invention. It reflects and embodies particular values and purposes. We must now decide how to change the way it works to embody new values and purposes that match our 21st-century needs.

Bringing it up to date will not only motivate us all to live differently. It will also enable us to use money values as a less misleading measure of achievement than ‘economic growth’ as we calculate it now.

4. The necessary reforms (Chapters 3-6)

Changing how the global money system works will involve reforming and developing how its national, international and local subsystems work. (We look at them in that order, because national money systems are now the most fully developed of the three, and because how they are reformed must give greater freedom to local communities to regenerate their local economies and money systems.)

5. Reform of national money systems (Chapters 3 and 4)

Governments are at the heart of the money system. By deciding

• how the national money supply is created,

• what is taxed and not taxed, and

• what public expenditure is spent on and not spent on, governments largely determine where money goes as it flows through the economy, thereby influencing the impact of our activities on other people and the Earth’s resources.

The proposed reforms can be summarised as follows.

(1) Money supply (Chapter 3):

Transfer the function of creating the national money supply

(a) from commercial banks as a source of private profit to themselves,

(b) to a public agency – the central bank – as a source of debt-free public revenue to be spent into wider circulation by the government for public purposes.

(2) Taxation (Chapter 4):

(a) take taxes off incomes, profits, value added and other financial rewards for useful work and enterprise,

(b) put taxes on to value subtracted by people and organisations for private profit from common resources (such as land) and from the environment’s capacity to absorb pollution and waste (such as carbon emissions); and

(c) reduce the present opportunities (through tax havens, etc) for rich people and businesses to avoid paying their dues to society.

(3) Public expenditure (Chapter 4)

(a) reduce public spending on perverse subsidies, and on some of the dependency-reinforcing services now provided directly by big government or by expensive contracts to big business and big finance, and

(b) transfer that money to the distribution of a Citizen’s Income directly to all citizens, enabling them to decide how more of their rightful share in the value of common resources should be spent.

6. Development of the international money system (Chapter 5)

It should follow broadly the same lines as national money systems.

(1) Create a genuinely international money supply, based on a new International Currency. It should replace the use of national superpower currencies for international trade and other international transactions, and operate in parallel with the continuing use of national currencies for transactions within their own boundaries.

(2) Develop arrangements for international revenue collection by taxing and charging:

(a) for the use of global commons, including ocean fishing, sea-bed mining, sea lanes, flight lanes, outer space and the electromagnetic spectrum, and

(b) for activities that pollute and damage the global environment, or cause hazards beyond national boundaries, such as emissions of CO2 and CFCs, oil spills, and dumping wastes at sea.

(3) Rationalise and develop international public spending (from international revenue):

(a) to meet the costs of the expanding activities of the United Nations and its organisations, including international disaster relief and peacekeeping; and, if enough extra revenue is available,

(b) to distribute it on a per capita basis to every nation.

See also: James Robertson on the Reform of National Systems

7. Local money systems (Chapter 6)

The regeneration of more self-reliant local economies will be essential to the human future in anything like its present form. Responding to local community needs, local governments will have an active part to play. But independent community currencies, local co-operatives, credit unions and development banks should be free to participate actively.

8. Are these reforms achievable? (Conclusion)

They could be achieved. But whether they are will depend on us."


"In your latest book Future Money, "casino-banking" has grown into a huge global enterprise. I would like to start by asking whether, in your opinion, there need to be more financial collapses in order for the depth of the present problems to become fully clear. Or do you see signs that governments have started to understand that large-scale financial and monetary reforms are urgently needed?

James Robertson: My answer to your question about more financial collapses is No. We don't need any more. We must prevent them happening. Their effects would be more likely to accelerate the self-destruction of the human and other species than help to avoid it. We need to compel our governments urgently to bring in reforms on the lines I propose in Future Money. Those will add up to a comprehensive new way of organizing of how the system of money will work fairly and efficiently to meet the needs of people and many other forms of life; to help our human species to survive at least beyond the end of this century.

Those reforms will have a doubly necessary effect: first, in the short term, they will ease the "austerity" now being imposed on most people in the world in response to the financial crisis that began in 2007-2008 and still continues; second, for the longer term the reforms will reduce the risk of frequent future financial crises continuing to happen again and again.

To your question about whether governments understand the need for reforms, the answer is Yes, they are beginning to understand it. Public and governmental outrage is growing throughout the world, accompanied by an understanding that how the money system has been working must be changed. Mervyn King, the governor of the Bank of England, has suggested that the present global financial crisis that started in 2007-2008 could last at least another four years. That prospect of prolonged "austerity" – with its effects on public order and its political consequences – may well force financial professionals to accept more radical changes in the money system than they can now contemplate. Similarly, the continuing failure to resolve the eurozone crisis may force more radical changes on the European money system than conventional politicians and their financial expert advisers can now imagine.

Examples of the kind of reforms needed include:

- Stopping rich people and businesses being able to dodge the taxes they should pay to society.

- Preventing bankers profiting their banks and themselves by falsifying the reported interest rates at which banks lend money to one another – through the Libor (London Interbank Offered Rate) and Euribor (Euro Interbank Offered Rate) systems.

- Obliging banks to pay more attention to their "retail banking" competence than to their present "casino banking", as illustrated by the recent breakdown in the payments services of the Royal Bank of Scotland (owned by the British government) that has left hundreds of thousands of its customers deprived of access to their accounts.

- Stopping the practice, widespread among big British banks, of deliberately cheating small businesses by enforcing risky conditions on loans that they have not told borrowers about or that borrowers have not understood.


AS: In Future Money you claim that "today's professional understanding of how money works is still at a primitive stage". What are the reasons for this ignorance? Is it because alternative thinking in the sphere of economy has been too slow to capture the minds of professional circles? Because the financial policy of largest states and international organizations is based on false assumptions? What can break this vicious cycle?

JR: "Groupthink" is a common fault of most established professional, academic and political communities. It is supported by the pressures of financial interest and career advancement. Many influential people in virtually every country in the world benefit financially from how the money system now works. The status quo is also important to their sense of identity, importance and worth. If you have dedicated your life to work or teaching based on conventional assumptions, you will strongly resist the idea that they have been wrong. That would imply that how you have been working or teaching has been a waste of your life, if not positively damaging to other people.

I go into this in more detail in the Conclusion to Future Money. For example, I quote Machiavelli in The Prince, advising that "he who introduces a new order of things has all those who profit from the old order as enemies, and he has only lukewarm allies in all those who might profit from the new". I also refer to Thomas Kuhn's theory of scientific paradigm shift in The Structure of Scientific Revolutions. People do not normally give up their convictions, even if these have become untenable, because this would be too threatening to what they see as their identity and their professional and economic existence. They combat against the challenge or challengers – as long as they manage to defend their status; or, as time goes by, until they become marginalized and die out. That's what Kuhn called the "biological solution" to competing paradigms and to the struggle between conservative and progressive positions.

AS: For a number of years there has been very little discussion about the relationship between money and values, or money and ethics as you put it in your book. Do you see any positive mental changes acknowledging the bonds between ethics, money and business? If so, are these more than accidental examples? Or is there an improving climate for accepting ethical principles in the monetary sphere?

JR: We are necessarily coming to the end of a period of history during which conventional economic thinking has done its best to separate economics from ethics and instead to turn economics into a factual science. More and more people are coming to see that the survival of our species depends on our becoming more intelligent in that respect; we have to make the money system work in ways that will motivate everyone to "enable and conserve", so that we and other living species survive. Understanding the need to design our money system to achieve that purpose amounts to a "Copernican revolution".

AS: 1989 was crucial in bringing Cold War to an end, in demolishing the communist empire that had held a large part of Europe in its grip for more than half a century. However, in eastern and central Europe as well as in some other areas, the last two decades have been full of controversies over economic and financial policies. Most obvious was the popularity of the notion, advocated by the late Milton Friedman and his adherents, that the market economy needs no regulation. In your opinion, what does eastern Europe need to do to ensure a sounder economic awareness? Or must we wait until a younger generation takes the initiative of reconstructing university courses?

JR: The worldwide human society of today is dominated by what is essentially a single globalized money system. This has developed over the last two hundred years out of the collection of the separate currencies of previous centuries. For example, when Marco Polo returned to Italy from China in the thirteenth century, he reported on the special features of the Chinese money system, which he suggested European traders might learn from. But he had no idea that future worldwide trade would lead to a system of currency exchange that would be more than a necessary service in support of useful trade. Only in recent times has the market for buying and selling currencies become the most important market of all.

What should have been a helpful tail for the dog to wag is no longer a useful appendage. The money system is now the tail that wags the dog. This can be understood as a form of elephantiasis – a horribly disabling and disfiguring disease. The whole of humanity now suffers from it. It threatens the future of us all.

That will seem an extreme view to some people. But it suggests that eastern Europe should not be treated as a special case. If the present money system and the conventional academic support for it remain unreformed, they will destroy the future of humanity as a whole.

AS: In Future Money you argue that the present understanding of the monetary system is comparable to the pre-Copernican mentality in interpreting the solar system. You suggest an alternative understanding of how money works in the world. However, paraphrasing Benjamin Barber, who said that democracy, like a good book, needs time: Can we afford the slow pace it takes for alternative understandings to mature and be disseminated? For many years, economics was separated from ecology; sometimes it seems we are simply running out of time. What can be done to speed up the integration of ideas about monetary reforms into so-called common knowledge?

JR: There is no easy answer. The impetus needed to start unstoppable support for the necessary money system reforms will depend on pressure from growing numbers of intelligent, active citizens around the world who value the human future more highly than the status quo. It is for us to get the bandwagon of change rolling so that other people can see it is in their interest to join it.

I see the challenge we face as being comparable to the one Antonio Gramsci described in his letters and prison notebooks in 1929. It calls for pessimism of the intellect (we must recognize that the obstacles to necessary changes appear overwhelming) combined with optimism of the will (we must nevertheless do what we can to make the changes happen)." (http://www.eurozine.com/articles/2012-08-29-robertson-en.html)

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