Newsletter No. 17 - January 2009
Links to other Newsletters can be found here.
1. Editorial- Prospects for 2009.
2. International G20 Meeting
in London in April – as
host government, the UK should put national and international
monetary reform on the agenda. See Evidence
to House of Commons Treasury Select Committee.
3. Sharing the Value
of Common Resources: Citizen's Income in a Wider
Context - see draft of
a paper to be published later this year in the journal "Basic
4. Book Review:
Molly Scott Cato, GREEN ECONOMICS, An Introduction
to Theory, Policy and Practice.
5. STOP PRESS -
Hazel Henderson diagnoses the economic body politic.
1. EDITORIAL: PROSPECTS FOR 2009
(1) Barack Obama's inauguration takes
place tomorrow with high hopes. But we would be wrong
to expect too much from him. He will be subject
to a multitude of conflicting pressures competing
with one another for his attention.
An important question is, How will he balance
his role as world leader with the need
to restore his own country to economic and
political stability and self-esteem?
Having so much of Africa and Asia in his make-up, he
may feel more strongly moved to help the people of
the world through the coming years of global
crisis than his predecessors would have been. On the
other hand, the fear of criticism by his domestic political
opponents on that score could limit his freedom in
negotiations affecting US short-term national interests,
e.g. on global warming and international monetary reform.
(2) The outcome of that conflict is what Donald
Rumsfeld called a known unknown. As he famously
said: "There are known knowns; there are things
we know we know. We also know there are known unknowns;
that is to say we know there are some things we do
not know. But there are also unknown unknowns - the
ones we don't know we don't know".
He didn't mention
that known knowns to some people are unknown
unknowns to others. Not everyone knows,
for example, that the politicians and professionals
responsible for managing and commenting on the present
money crisis have no clue what to do about it, although
that fact is becoming more and more obvious to more
and more of us.
Most readers of this newsletter will know that 2009
will be full of surprises; for us a known unknown is
that we don't know what form the surprises will take.
Here is one that I expect will turn into a known known
in 2009: We are suffering from Cognitive
(3) Cognitive Dissonance (see Item
4) is how psychologists describe the threat to our mental
well-being when we feel compelled to act on contradictory
beliefs at the same time. Many people will come to experience
it in 2009, as we are increasingly pressed to
act in ways that any fool can see are in flat contradiction
to each other - for example, by emergency measures
to persuade us on the one hand to minimise ecological
damage like carbon emissions, and on the other to restore
economic growth to full blast by borrowing and spending
more money - and investing it in unecological, uneconomic
white elephants like a new runway at Heathrow airport.
So we are being asked to ignore the choice of either/or which we face: either preserve
the ability of our planet to continue to provide support
for ourselves and other living creatures or try
to restore and continue with the ways of economic life
and organisation and thought that have landed us in
the present ecological and economic breakdowns.
The need to resolve the cognitive dissonance created
by pressure to do those contradictory things simultaneously
will accelerate the transition from an obsolete
economic paradigm to a new one that meets the needs of
the world in the 21st century. In practice,
this will involve radical changes in how we work, how
we get and use energy, the nature of business and industry,
technologies, local self-reliance, welfare services,
and how the world's systems of money are managed - locally,
nationally, and internationally.
FOR NATIONAL AND INTERNATIONAL MONETARY REFORM: THE G-20
MEETING IN LONDON IN APRIL
(The G-20 is the group of leaders from 19 of the largest
national economies in the world and the European Union.
They are to meet under the chairmanship of Gordon Brown,
the UK Prime Minister. For the members of the G20, click
Members of the House of Commons Parliamentary
Select Committee on the Treasury have now had an opportunity
to study the memorandum of evidence I submitted to them
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
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
and of other economically, socially and environmentally damaging
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 currency.
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.
That the G20 is replacing the smaller G7
and G8 groups is itself a considerable advance
toward more democratic global governance.
It would be very fitting if national and international
monetary reform were on its agenda at President
Obama's first meeting - the first also since Bretton
Woods in 1994 at which world leaders will
seriously discuss a new foundation for the world's
monetary system. Even if it may seem unrealistic to
aim to get them on to the agenda in less than two and
a half months from now, that itself could be a
good target with which to generate active public debate about
I hope readers of this newsletter
who wish to press for national or international monetary
reform or both will use whatever points from the
memorandum of evidence they wish in communicating the
need for them to their national, local or European MPs
and other officials, and to the press and broadcasting
media. It will almost certainly be more effective if
they communicate the points as their own, rather than
attributing them to me. The matter is too important to
fuss about brownie points and academic niceties.
3. CITIZEN'S INCOME AND THE CREDIT CRUNCH -
The draft of my paper on "Sharing The Value Of Common
Resources: Citizen's Income in a Wider Context", which
will be published later this year, can be downloaded
A slightly revised version will appear in a special
issue on "Basic Income, Green Politics and Post-Productivism" of
the journal Basic
The issue will appear in December 2009, guest edited
by Simon Birnbaum and with the following contents :
Introduction: Is there a green case for basic income?
Jan Otto Andersson: Basic income from an ecological
Paul-Marie Boulanger: Sustainability and basic income:
Are they compatible?
Tony Fitzpatrick: Sustainability, post-productivism
and liberal neutrality
Miriam Kennet: Basic income and world poverty: A green
James Robertson: Sharing the value of common resources
Philippe Van Parijs: Basic income and the autonomous
Mine presents a Citizen's Income
as a component part of a new approach to public money
and finance, based
on sharing the value of common resources. Among the links
it describes is one with monetary reform, as follows.
reform + basic income = financial stability. The recent "credit" boom followed
by the present "credit" famine have been
caused by allowing commercial banks to create the
They created much too much
money in the boom and are
now creating much too little
in the famine. At the time
of writing, there is growing awareness of the
need for "quantitative
easing", financial jargon for getting central
banks to create large sums of money and pump
them into the economy.
The question for today's policy-makers
is how and where are they to be pumped in? If central
banks themselves were accustomed to keeping the
money supply at the right level, and if arrangements
already existed for the regular distribution of a Citizen's
Income, the answer would be easy: vary
the size of the Citizen's Income as required. This would inject
the money into the economy where it would circulate
quickly and would directly benefit those who most
need it in economic downturns."
4. BOOK REVIEW
Molly Scott Cato GREEN
ECONOMICS, An Introduction to Theory, Policy and
Practice, Earthscan, 2009, 224pp, £16.00
Molly Scott Cato - www.gaianeconomics.org/molly.htm -
is a Reader in Green Economics at Cardiff School of Management,
and Economics Speaker for the Green Party. She is also
a member of the core group of Transition Stroud and regularly
addresses the Transition Towns on economic themes.
Her book was launched in Oxford on 14
January. Here is what I said on that occasion.
delighted to have been asked to say a few words at this
launch of Molly's book. I'll start
by thanking her for the appreciative references in
it to my own work. I don't find it easy to ignore
them in order to make an objective assessment of the
So let me just say briefly that I
very much agree with what Caroline Lucas and Richard
Douthwaite say about it on the back cover: it 'explains in clear terms the
economic paradigm for the 21st century' ... it gives
'a vision of a just, sustainable and fulfilling economic
life' ... it's 'an excellent introduction to a rapidly
developing branch of political economics' ... 'the scope
for debate is one of the things that makes this pioneering
book so exciting'.
It organises clearly a very
wide range of subject matter.
The three Parts are on: Theory; Vision for the Future;
Chapter headings include: Work; Money; Green Business;
Globalisation and Trade; Relocalising Economic Relationships;
Green Taxation; Green Welfare; and Land and the Built
Chapter 5 on Money is particularly
an excellent 16-page summary of the background to the
present financial shambles, and what should come after
it. The final Chapter 13 - "Summary and Further Resources" -
helpfully pulls the whole book together.
The book suggests very clearly the "cognitive
dissonance" to which societies like ours are
now exposed. That's the term used by social psychologists
to describe being compelled by circumstances to believe,
and act on, two contradictory beliefs at the same
time. On the one hand our governments say they must
take emergency action to induce us to live more lightly
on the planet. On the other hand they are doing what
they can to stampede us into returning to high consumption
lifestyles in order to save the economy - at the
cost of billions of money borrowed from ourselves
as future taxpayers. This book will, I am sure, help
to accelerate the inevitable
and necessary resolution of this contradiction within the next 10 years or
I will end these few remarks, as I began, on a personal
Molly has dedicated the book
to me as 'the Grandfather of Green Economics'. Not being a grandfather myself,
I decided to consult Google on the grandfather's role.
I learned that:
"Grandfathers have lots of wisdom and life experience
to draw from. They have seen events and changes come
and go. .... As grandchildren grow, they make attempts
to learn about their world, their family, relationships,
and society. A grandfather's perspective, formed
from years of experience, can help guide, inform, and
influence the growth and development of his grandchildren."
Straightforward enough, though quite a challenge in
However, I have settled for being a less conventional
grandfather than most - if only because I have no idea
how many grandchildren there are in this case. The
practical answer to that has to be, of course: 'the
more the merrier'.
So I hope we can help their numbers to grow unstoppably.
Green Economics will
be an invaluable aid for that purpose, as well as for our own understanding.
We must try to make sure it
gets the attention it deserves in places of education, in the press and communications
media, among environmental, social and economic NGOs,
and among the politicians, officials, and other mainstream
professionals who will be responsible for helping
us to shape a greener future."
I hope some readers of this newsletter
will be moved to act on that last sentence, just as I hope they will
press the case for national and international monetary
reform (Item 2 above) wherever they can.
5. STOP PRESS
Hazel Henderson has just put on physician's
white robes, diagnosed the body politic's disease, and
prescribed a cure. A devastating medical analysis, great
Best wishes for 2009. It's going to be a crucial year,
one way or the other.
19 January 2009