Positive Money in Context

presenter: Dermot

Our speaker was Dermot Smyth, one of our own group members. Below is a short summary of what he spoke about – for a fuller account, download his speaker notes here 160229 Dermot - Positive Money in Context.doc

1. The wider money context– Dermot spoke of the spectrum which exists from retail banks at one end, supporting the ‘real’ economy, to shadow banking at the other which is pure gambling, divorced from the real economy. Investment banking does not create money, but creates a range of debt-based capital assets and derivatives. He represented this in a useful ‘money map’ here 160229 Dermot's Schematic money map.doc

He suggested that these speculative activities will not subvert or circumvent a transparent, genuinely democratic system of sovereign money. On the contrary, monetary reform is a threat to them, that’s one reason why reform will be so difficult to achieve.

2. Institutional context – Dermot discussed a number of transitional initiatives – things like Public Banks, coops, local currencies etc. These are all good things, which can sit happily alongside a reformed monetary system and are good ‘propaganda’ but are unlikely to ever replace a national currency.

Discussion

We had plenty of time for a good discussion, which teased out many important questions arising from Dermot’s talk. In particular, we discussed many of the obstacles that will need to be overcome to bring about reform. The main points of the discussion are summarised below.

Reaction of “the 1%” - they won’t give up their power easily – does PM have a plan?

• It’s about politics and power, not just about ideas - good ideas don’t change the world. Yes, we need to get across the idea that there is an alternative, but it will be hard work.
• Can we engage more with eg. Labour politicians and Trade Unionists? While that’s a natural alliance for reformers, we also have to engage with the Tories who will be in power for at least the next 4 years. Also UKIP – eg. Douglas Carswell supports reform.
• It’s not about [party] politics! – politics has nothing to do with monetary reform.
• But those who benefit from the system won’t allow it to be reformed – it’ll get nasty if big money is seriously threatened.

Crypto-currencies and other alternatives

• The internet is changing the balance of power; crypto-currencies like Bitcoin will undermine the banks and democratise money.
• Also peer-to-peer lending is cutting out the middle man (“Disintermediation”). In 2015, £2.2bn was lent this way.
• The banks themselves are getting into crypto-currencies, and lending through peer-to-peer, so they must recognise the threat.

EU referendum – what’s the impact on monetary reform?

• Maybe not much
• TTIP [trade deal between the EU and the US] is a big threat, though there is a stronger anti-TTIP protest in Europe than the UK. The UK govt. is pro-TTIP anyway, so we wouldn’t fare any better if we left!
• Many think the EU is undemocratic, though at least the European Parliament is elected by proportional representation.

What is Positive Money about – nationalising the money supply?

• Yes, in a sense. ‘People’s Quantitative Easing’, plus preventing the banks creating (and mis-allocating) money.
• Austerity isn’t working, the national debt is still increasing (albeit more slowly) - we’re heading for a crisis. George Osborne won’t use the name PQE, but once he sees what Sovereign Money can do for the nation’s finances, he will buy into it.

Concluding remarks

• We all have a role - write letters to the papers, and write comments on blogs whenever possible mentioning Positive Money