Newsletter No. 32 - January 2011
Links to other Newsletters can be found here.
CONTENTS
1. A Happy New Year!
2. Monetary Reform and Banking Reform
3. Books
(1) Alanna Hartzok, THE EARTH BELONGS
TO EVERYONE
(2) Ellen LaConte, LIFE RULES:
Why so much is going wrong everywhere at once and
how Life teaches us to fix it
(3) Frances Hutchinson, UNDERSTANDING THE FINANCIAL
SYSTEM: Social Credit Rediscovered
(4) Bruce Nixon, A BETTER WORLD IS POSSIBLE:
What needs to be done and and how we can make it happen
(5) Anne B. Ryan, ENOUGH IS PLENTY: Public
and Private Policies for the 21st Century
1. A HAPPY NEW YEAR!
Best wishes to all for 2011, and a few thoughts
about happiness.
At the request of Prime Minister David Cameron, government
statisticians in the UK will be developing a Happiness
Index this year - www.bbc.co.uk/news/uk-11833241.
I hope they will remember the
wisdom concealed in
the old couplet:
"Regard the happy moron. He
doesn't give a damn.
I wish I were a moron. My god!
Perhaps I am."
They will find more serious wisdom at www.neweconomics.org/programmes/well-being.
It's difficult to construct happiness or wellbeing
indexes based on different people's very different subjective
experiences and opinions. It may be more practical for
government policy-makers to approach the problem from
the other end - minimising misery as
an alternative to (or a contribution to) maximising
wellbeing. (A genuinely useful Misery
Index would have to cover much wider ground
than the combination of unemployment and inflation used
by economists to grade the performance of American presidents.)
2. MONETARY REFORM AND BANKING REFORM
Many people will not be expecting a happy year. The
international financial breakdown that began in 2007
is now entering a new stage. Tough remedial measures
are beginning to take effect to reduce "sovereign
debt" - the excessive debts incurred by governments
to relieve the excessive debts of commercial banks. 2011
could see widespread economic hardship, threats
to public order, and a possible break-up
of the Eurozone, as well as sensible changes
in the balance of power in the international currency
system in favour of China, India, Brazil, etc.
The good news is that in 2010 understanding spread
that the
root cause of this financial breakdown and
others like it has been governments' unnecessary dependence
on commercial banks to provide our national money supplies
as profit-making debt. The challenge in 2011 is
to persuade governments to look favourably at the necessary
monetary reform - transferring the function of creating
and managing national money supplies to public agencies
that serve the public interest.
As an immediate emergency measure, that
reform could help to minimise economic damage and social
disruption resulting from unnecessarily harsh responses
to the present crisis. As a longer-term remedy,
it would help to prevent the continuing recurrence of
similar crises. In the even larger scheme of
things, it
would help to change the money system from one that motivates
us to destroy human civilisation and life on earth, into
one that motivates us to save them. But I won't pursue
these points here.
Recent signs of progress in
the UK include:
(1) An Independent Commission on Banking set
up by the UK Coalition Government in June 2010 - http://bankingcommission.independent.gov.uk/bankingcommission.
Unfortunately its terms of reference don't specifically
include the root question: who should create
the national money supply?
However, that point has been taken up in the important
paper, "Towards
a Twenty First Century Banking and Monetary System", submitted
jointly to the Commission in November by Positive
Money, the New
Economics Foundation and Prof
Richard Werner, Director of Banking, Finance
and Sustainable Development at Southampton University.
It was very good to see the New Economics Foundation
supporting the monetary reform proposal they
published ten years ago in "Creating
New Money" by Joseph Huber and myself
with an enthusiastic foreword by their then director,
Ed Mayo.
For another recent nef contribution (14 November ) see
Josh Ryan-Collins' blog post on the "beginning
of a monetary revolution".
(2) In a speech on “Banking:
From Bagehot to Basel, and Back Again” on 25
October 2010 in New York, the Governor of the
Bank of England, Mervyn King, drew attention
to the possibility of "eliminating fractional reserve
banking" in
recognition that "the pretence that risk-free deposits
can be supported by risky assets is alchemy", and
said that "of all the many ways of organising
banking, the worst
is the one we have today".
Recent signs of progress
in the US include:
(1) A Bill introduced in Congress on 17 December "to end
the current practice of fractional reserve lending" has
been enthusiastically
welcomed by the American
Monetary Institute as "a crucial
and heroic step to resolve
our growing financial crisis and achieve a just and
sustainable money system for our nation".
The proposed Act will be called the "National
Emergency Employment Defense Act of 2010".
In many ways it and its purposes resemble those of
the Proposed
Bank of England Act, 2010.
(2) At the American Monetary Institute's recent Annual
Conference, Prof Kaoru Yamaguchi of
the Doshisha Business School in Kyoto, Japan, gave a
paper titled "On
the Liquidation of Government Debt under A Debt-Free
Money System – Modeling
the American
Monetary Act".
It "demonstrates how the government debt
could be liquidated without cost under an alternative
macroeconomic system of debt-free money that
is proposed by the American Monetary Act. Finally,
it is posed that a debt-free macroeconomic system is
far superior to the debt-burdened current macroeconomic
system in a sense that it can not only liquidate
government debt but also attain higher economic growth".
(To UK readers: Please communicate
this to Members of Parliament. Their constituents
are going to be unnecessarily hurt by the Government's
present policies for dealing with the public debt crisis.)
3. BOOKS
I hope these short reviews will give readers enough
information to decide to find out more about the books
reviewed. It would require more space to do full justice
to them.
(1) Alanna Hartzok, THE
EARTH BELONGS TO EVERYONE,
Institute for Democracy
Press,
in cooperation with Earthrights
Institute,
2008, 359pp, $25 from Earthrights Institute. Also see www.amazon.com/Earth-Belongs-Everyone-Alanna-Hartzok/dp/193356704X.
The information on those three websites
is enough to establish the importance of this book. My
endorsement on the book's back cover is that:
"more and more
people are convinced that the only way to a just,
prosperous and ecologically sustainable future is to share
the value of earth's resources more fairly. One
of the many merits of Alanna Hartzok's collection
of writings is to ground that conviction
in practical proposals. She inspires us
to do something about it".
Among her continuing commitments now is to get the
United Nations to establish a Global Resources
Agency - see www.interunion.org.uk/ahffdpaper
10124.htm - a paper which I recommend as
highly as I recommend her book.
(2) Ellen LaConte, LIFE
RULES: Why so much is going wrong everywhere at once
and how Life teaches us to fix it, iUniverse,
2010, 283 pages. For details and ordering, click
here.
"If you read just one book about
the sickness that threatens the Earth, you cannot choose
better than this one. In eminently readable style and
with images, LaConte diagnoses the disease and proposes
promising responses. She finds seeds of hope without
obscuring the imminence of catastrophe. Her
message needs to reach a mass audience".
This endorsement
by John B. Cobb, co-author of For the Common Good with
Herman Daly, is typical of a score of similar endorsements.
Ellen likens the sickness that threatens the Earth
with the HIV that destroys human immune systems. She
explains why the gathering "Critical Mass" of
crises - such as Food and Water Shortages,
Pollution of Water, Earth and Air, and Species Extinction
and Ecosystem Collapse - now calls for a coherent
Critical Mass of understanding and action to
deal not just with all these separate systems separately
but with the causes of the disease underlying them.
The last of the three parts of the book is on "Deep
Green Methods for Surviving the Global Economy".
It includes chapters on "Mimicking Life's
Economics", "Mimicking Life's Politics", and "Overcoming
Obstacles to Deep Green".
There are no easy answers to the present challenge
of overcoming the obstacles to the survival of our species,
but this book offers the wisdom we need to face up to
it.
(3) Frances Hutchinson, UNDERSTANDING THE FINANCIAL
SYSTEM: Social Credit Rediscovered, Jon
Carpenter Publishing, Alder House, Market
Street, Charlbury OX7 3PH (Tel 01608
819117), 2010, 277pp, £15.
There is a useful review of this book on Amazon UK
(click
here). It begins "Excellent book. Top marks",
and ends "We are still being blood-sucked by the
monster vampire that is Big Finance. This is a MUST-READ
book which tells you how we might have escaped from this
-- and why if we fight for it we still might".
This much-needed new academic work
by a leading contemporary expert on Social Credit has
obvious relevance to our economic and political problems
today. But unfortunately the "monster vampire that
is Big Finance" now dictates what is proper for
people pursuing careers in the academic world to study,
just as it dictates what is proper for people making
careers in the media to report and discuss.
The book is a worthy successor to Jon
Carpenter's publication in 1998 of Michael Rowbotham's The
Grip of
Death. I hope it is widely read. It will be important
to introduce it to students whose minds are not yet hidebound
by the limits of conventional economic and financial
studies.
(4) Bruce Nixon, A BETTER WORLD IS POSSIBLE:
What needs to be done and and how we can make it happen. For
full details, click
here.
It will be enough for me to copy here
the first two on the list of 14 endorsements of Bruce
Nixon's book.
“We are in a place we have
never been before. We are facing a series of interconnected
systemic crises that put both humanity and the planet
in serious peril. This book not only clearly describes
the problem but, most importantly, points to the
solution. The ‘rules
of the game’ need to be radically changed
and this will only happen if enough people, speaking
with a clear enough voice, demand such a change.
This book is not, therefore, a ‘worthy’ text
on economics, but a vital handbook for our survival!”
Stewart
Wallis, Executive Director, New Economics Foundation
“Bruce Nixon's book is a powerful call for
a peaceful and constructive mass revolt by the people
of the world. He shows that the present way our lives
are organised threatens the suicide of our own species
and the further destruction of many others. His analysis
points clearly to what we need to do to change it.
I hope the book will be widely read and acted on.”
James
Robertson
(5) Anne B. Ryan, ENOUGH IS PLENTY: Public
and Private Policies for the 21st Century. For
very full details, click
here. This book has a special interest, given Ireland's
present economic and financial problems - and the author's
connection with Feasta.
Here are three of its endorsements.
A most thorough and readable analysis of why enough
is plenty. John Madeley, author of 100
ways to Make Poverty History.
In Enough is Plenty Anne Ryan sets out pathways
to replace the West's idolatrous canonisation of
greed with the dignified sufficiency of enough. It's
a message the world needs urgently, as the non-indigenous
Celtic Tiger leaps up and bites the hand that reared
it on the never-never.
Alastair McIntosh,
author of Rekindling Community, Soil and Soul and
Hell and High Water .
In future, the global economy will shrink rather
than grow. There will be less of everything to go
around. For anyone who wants to think through some
of the changes in systems and values that will be
required to maintain our humanity during this contraction,
'Enough is Plenty' is an excellent start.
Richard Douthwaite.
Founder member, Feasta: the Foundation for the Economics
of Sustainability; author of 'The Growth Illusion',
'Short Circuit' and 'The Ecology of Money'.
Best wishes,
James Robertson
7th January 2011
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