Transcript Yes, but what do you want?

Politics for the 1%
The 1% are well resourced- have capital and can raise more through
partnerships or loans through their contacts, or get state financial support
Well connected – in elite clubs, schools, personal contacts, knowledge of
politicians –its not what you know but who you know
Well informed – get insider information, can buy research, hire people in the
know
Well represented – get the best lawyers, lobbyists
Well presented – own the electronic media, papers, hire PR agencies to
organise their propoganda campaigns behind the scenes setting the public
agenda, fund universities and think tanks
Well hidden – in tax havens and secrecy jurisdictions
Well protected – the police and armed forces are there to protect and
advance their interests first and foremost
The Money System as a Problem
• Money as a means of
exchange
• The money system at
the service of society
• Newly created money
devoted to public and
collective purposes
• Money as the goal of
exchange
• A money system run by
‘money junkies’ to
whom everything else
takes second place to
getting their next fix
• “The love of money is
the root of all evil”
What is the current financial system for
now and what should it be there for?
• Now
• What we need
• Speculation,
• Raising resources to
transform the energy,
• gambling on real estate
transport and
prices,
cultivation system
• lending money to
• Investment in industries
governments that they
that meet the ordinary
could create themselves
needs of people
via central banks...
And the bankers do control the
money of a country
• 97% of the money in circulation is created by the
banks when they lend
• The money is backed by debt – a contract to repay,
with interest and to forfeit collateral if the debtor
cannot repay – which puts all the risk of ventures on
debtors
• It is not surprising that there is too much debt – for
the money supply to increase people and companies
have to go into debt....
• This system is inevitably creates too much debt..
Personal Financial Debts
• Britain's households owe £1.451 trillion in mortgages, overdrafts, loans
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and credit cards - a little more than the country’s annual output.
The collateral underpinning this debt are mostly people’s houses whose
prices have fallen over 20% since the bubble burst
The average Britain now owes £29,500, about 123 per cent of average
earnings – just over £4,000 is for consumer loans, the rest mortgages
According to the Office of Budget Responsibility, UK personal debt will
grow by nearly 50 per cent between now and the end of this parliament.
Come 2015, it is forecast to reach £2.12 trillion pounds
Research by Morrisons, the supermarket group, estimates that three in
ten of its customers run out of cash at the end of every month. For some
of these, borrowing on credit cards (average interest rate: 18.5 per cent)
offers a quick but unsustainable fix.
So do the banks use the power to create
money (as debt) wisely and carefully?
• It is claimed and enshrined in the Treaty of
Maastricht that governments must not create
money for public purposes – they must tax or
borrow from the finance sector.
• Supposedly only banks can be trusted to
create money otherwise states would create
too much money and that would lead to
inflation.
Yet when banks create money...
• In booms they create too much, lending recklessly and often
in an orgy of speculation creating inflations in asset prices(eg
house and land prices)
• In slumps when money needs to be put into circulation to
stimulate economic activity and use spare capacity banks
will not lend and people don’t want to borrow.
• They create too much money in a boom and not enough in a
slump
• Only 8% lent to businesses for productive investment
The “euphoric economy”
• The manic craze for personal
gain, spurred on by the bonus
economy creates an orgy of
reckless criminality in the
finance sector
• William K Black estimate 0.5
million financial crimes in the US
real estate and finance boom
prior to the 2007 crash.
• A similar reckless drive
overexpanding lending to earn
bonuses characterised UK banks
like HBOS and RBS
Money is a collective institution
• Money creation could and should be managed
collectively in the interests of everyone
• How much is created could and should be
decided according to the needs of the
economy
• What new money is spent on could and
should be a democratic issue
Would this not create inflation?
• If too much money is created and chases too
few goods it does create inflation
• However not when there are unemployed
resources in the economy – more money
demand is needed to get the unemployed
resources used
• If inflation happens it should be cured by
taxation – taxation of the rich
This is the cure for inflation – taking
money out of the economy
The problem is that the City of London makes its money
through being part of a network of tax and regulation evasion
• At the end of the British empire the City
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had to re-invent itself.
The euro-dollar market enabled London
to offer the evasion of Federal Reserve
Regulation on dollars held here instead of
the USA
This idea of London as a place to evade
financial regulation was then extended by
a network of tax havens and secrecy
jurisdictions in the remaining network of
colonies – like the Channel Island, Isle of
Man – and above all the Cayman Islands
The British elite sold its services to
kleptocrats the world over – that is how
London remains a major centre
My interim conclusion
• We are governed by an elite who kept a world
role after the collapse of empire by providing
a network of “bolt holes” for the tax evaders
and dubious practices of the super rich the
world over.... and this makes it rather difficult
to imagine the British state and finance
system being used to help resolve the even
bigger problems facing humanity.
What are these bigger problems?
The Limits to Growth Crisis
The ecological crisis
Ecological Debt
Crossing Planetary Boundraries
Example Water Crises
• Between 2000-2011 Syria
experienced four severe
droughts, which the UN
estimate left 2-3 million
people in extreme poverty,
and wiped out 80-85% of
herders livestock.
• Poor rains could lead to two
of Syria’s arterial rivers, the
Jordan and Euphrates to
lose more than half their
flow adding to the problems
But never mind - there are good profit
opportunities here for the PR industry
“Buy when there is blood on the streets”
Mayer Amschel Rothschild
“Disaster Capitalism”
Anyone tired of lousy news from the markets should talk to
Douglas Lloyd, director of Venture Business Research, a
company that tracks trends in venture capitalism. "I expect
investment activity in this sector to remain buoyant," he said
recently. His bouncy mood was inspired by the money
gushing into private security and defence companies. He
added, "I also see this as a more attractive sector, as many do,
than clean energy."
Got that? If you are looking for a sure bet in a new growth
market, sell solar, buy surveillance; forget wind, buy
weapons.
Naomi Klein
Communities must develop alternatives to ‘disaster
capitalism’ based on collective management of
common resources
• The crisis forces people to change in
more than small increments – this is
often frightening, involving
uncertainty and insecurity, even
disorientation. Change is forced in
many dimensions at the same time
– earning a living, finding new places
to live, new relationships and
developing new skills.
• We need to develop lifeboat
projects to help – offering “packages
of support” – helping each other
with food and energy and living
spaces - with new relationships and
motivations.
A “Solidarity Economy”
• A network where otherwise vulnerable
people can share basic domestic and
provisioning resources, develop new
skills in energy, food and domestic
activities, save resources and find ethical
and supportive relationships.
• For example - community gardens,
community supported agriculture,
community energy projects, community
currency and exchange networks,
community care arrangements,
community transport arrangements like
car pools, resource centres etc
Instead of Political Economy for the 1%
The 1% are well resourced- have capital and can raise more through
partnerships or loans through their contacts, or get state financial support
Well connected – in elite clubs, schools, personal contacts, knowledge of
politicians –its not what you know but who you know
Well informed – get insider information, can buy research, hire people in the
know
Well represented – get the best lawyers, lobbyists
Well presented – own the electronic media, papers, hire PR agencies to
organise their propaganda campaigns behind the scenes setting the public
agenda, fund universities and think tanks
Well hidden – in tax havens and secrecy jurisdictions
Well protected – the police and armed forces are there to protect and
advance their interests first and foremost
We need Political Economy for the 99%
The “99%” need to pool and share their resources
Develop our own “well connectedness” in social economy and community
networks around shared alternative values, resolving conflicts and
realising synergies between projects and groups as appropriate
Develop our own sources of information, research and long term strategic
perspectives
Develop lobbies/advocacy based on shared values and community interests
to take back collective influence over the state, firstly at local level – as a
precondition for radical reform of institutional and policy frameworks
Develop our own media and means of group and mass communication and
seek to develop agendas jointly with radical academics
Work for transparency as a principle and highlight secret agendas of the elite
Develop strategies to defuse dangerous confrontations with the power elite
Debt Jubilee and
reform of the finance sector
• We need growing organisation in the ‘solidarity economy’ also to give us
enough political influence to bring in changes to the rest of the economy –
particularly vis a vis the finance sector which has huge political influence.
• We particularly need to deal with the debt crisis bailing out the banks by
bailing out the people first – then radically reforming the bank and
finance sector.
• In the history of humanity many societies overwhelmed by debts have
cancelled them. In the Ancient World, in Mesopotamia in the era around
2000 BC, debts were written off every 50 years in what was called a
Jubilee.
• We need a modern Jubilee to cancel financial debts.....
• ......and to construct a finance sector that can help us start to “cancel
ecological debts” by financing a transformation of energy, transport and
cultivation.
Debt cancellation pure and simple
cannot be the solution
• The banks and financial institutions to whom the money was
owed would go bust and then there would be no money
available to make day to day financial transactions. Everything
would grind to a halt.
• Nor would that be particularly just – why should people who
have accumulated debts in a consumption orgy be bailed out
and those who did not get nothing?
• Also, what about ‘ecological debts’ – would it be fair to future
generations to simply “press a restart button” on the
economy and start the next consumption boom – how would
this help deal with the limits to economic growth?
The solution (1) Bail out the people in a
way that leaves the banks solvent
• Create central bank money and give....say £25,000....
to everyone equally to pay down any debts to
Financial Services Agency registered lenders
• Where people have no debts require their share of
this central bank money to go to buy a share for
them in an energy bank or a similar eco-focused
investment – this would help to deal with the ecodebt crisis too!
The solution (2) Clip the wings of the
banks -remove their right to create money
• Paid back debts would leave the banks flush with cash but
solvent – if the present system continued they could then use
this as backing for a massive surge of new bank debt money –
which would put us back where we started.
• So “repaid cash” needs to be “sterilised” in a banking reform
that prevents this happening.
• The banks could lend this repaid money on but they could not
“leverage it” as cash backing for more debt money creation
• Henceforth new money would be created and put into
circulation only in community controlled processes
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Private banks would lose the right to create deposit money.
Alternatively we can hitch
ourselves to this kind of process: