I give a more detailed explanation in
the memorandum of evidence I submitted to Members of
the House of Commons Parliamentary Select Committee on
the Treasury on 2nd January, on National
And International Financial Architecture: Two Proposals.
The Committee has now given me permission to circulate
it more widely. It can be downloaded from www.jamesrobertson.com/article/nationalandinternationalfinancial
architecture.pdf. The Executive Summary includes
the following points.
a) The money used by national and
international monetary and financial systems provides
the foundation for their architecture. Who creates
and issues the money supply, and in what form, affects
how those systems work and therefore how they should
b) The ways money is now created, both for
national and for international economies, combines
conflicting functions. That is a cause of recurrent
financial crises, and of other economically,
socially and environmentally damaging outcomes.
c) The first proposal is for genuine nationalisation
of the national money supply, making it
unnecessary to nationalise commercial banks.
d) The second proposal is for genuine internationalisation
of the international money supply. In other
words, the UK government should be asked to consider
promoting the introduction of a genuinely international
e) As host government to the G20 meeting in
London on 2nd April 2009, the UK government
should put the two proposals on the agenda.
f) In the past two centuries distinguished
leaders have supported the first proposal, for a
genuinely nationalised national money supply.
The second proposal, to introduce a new genuinely
international currency alongside national ones, shares
the underlying principle of Keynes' proposal at the
Bretton Woods Conference in 1944, and the principles
put forward by the Independent UN International Commission
on Global Governance in 1995. It has recent support
from the BRICs Group of countries.
g) Some experts in the complexities of existing financial
architecture may dismiss these proposals as too radical
and simple. But measures unthinkable a few
months ago have now been taken in response to the present
crisis. So I hope these commonsense
proposals will not be dismissed out of hand.
They are in tune with the UK's historic record of financial
evolution in response to changing needs. Treating them
seriously could increase the credibility of those responsible
for public finance, at a time when people are looking
for new solutions to the problems of the new financial
world of today and tomorrow.
You can also find links to more articles about the money
and financial systems here.