Website Newsletter
Books (1971-2012)
Articles, etc (1978-2013)
(The Other Economic Summit
& New Economics Foundation, 1983-2000)
Hard Copy Archive  

Newsletter No. 10 - July 2006

Links to other Newsletters can be found here.


1. Editorial: Gordon Brown has a lot of homework to do

2. "Political Economy, Common Resources and a New Global System"

3. A Sad Betrayal of Trust

4. Book Review: Babylon and Beyond: The Economics of Anti-Capitalist, Anti-Globalist and Radical Green Movements

5. "The Politics of Money and Credit as a Route to Ecological Sustainability and Economic Democracy"

6. David Boyle's Website

7. American Monetary Institute

8. Social Currency: Target 2008

9. The Political Economy of Peer Production

10. New MBA in Social Entrepreneurship


1. EDITORIAL: Gordon Brown has a lot of homework to do

My Scottish grandmother had close family connections with the Church of
Scotland. I remember her values clearly. Gordon Brown, the present UK Chancellor of the Exchequer and Prime Minister-in- waiting, is not only a son of the manse - his father being a minister - but was known in his early years in politics as a committed socialist.

So his background seems doubly at odds with his congratulations to City of London bigwigs in his Mansion House speech on 21st June:

"Financial services are now 7 per cent of our economy. Financial and business services as much as 10 per cent. A larger share of our economy than they are in any other major economy, contributing £19 billion of net exports to our balance of payments. A success all the more remarkable because while New York and Tokyo rely for business on their large domestic base, London’s international ranking is founded on a large and expanding global market.

London now the home and natural location for:

20 per cent of all cross-border lending,

30 per cent of world foreign exchange turnover,

40 per cent of over-the-counter derivatives trades,

70 per cent of the global secondary bond market."

Why is Brown so sure that this is a matter for congratulation? The City of London's activities may bring £19bn into a particular sector of the UK economy; but its activities also have serious economic, social and environmental costs - direct and indirect. He should be asking government departments and the Greater London Authority to study the impact of the City on their fields of responsibility, and to publish estimates of the costs as well as the benefits.

So far as the future is concerned, the world's money system will change as opposition grows in the majority world to the present set-up and as China, India and oil-rich Russia make their financial muscle felt. It may prove unwise for us British to have so many economic eggs in that particular basket.

Almost all the issues covered in this newsletter are related, more or less directly, to that possibility. The man who will probably be our next Prime Minister should become more familiar with them.



That was the title of the paper I gave to the 25th International Conference of the International Union for Land Value Taxation on 4th July 2006 in London. The conference was on "The Economics of Abundance".

A summary of some of the paper's themes is as follows.

"I see the case for Land Value Taxation in a broad national, local and global context. I believe that:

  • A new political philosophy can be based on sharing the values of "common resources", such as land, more fairly than at present.
  • To be meaningful, the new political philosophy must define practical reforms which will share the value of common resources more fairly.
  • Those reforms will involve changing the system of financial rewards and penalties that help to shape people's motivation - in other words, changing how the money system works.
  • In developed economies today, flows of money under the government's direct responsibility represent nearly half the total value of money transactions and economic activity (GDP).
  • Therefore, how the larger money system works is very heavily influenced by how governments handle their three main monetary and financial responsibilities.
  • These involve:
    • the money supply , which everyone uses; this raises questions about who creates new money and who decides how it is spent;
    • collecting public revenue for governments themselves; this raises questions about what is taxed or charged for and how heavily, and what should be taxed or charged for but isn't;
    • public spending programmes ; this raises questions about the necessary objectives of public spending.
  • Big changes in all of these will change economic relationships between the state, the market, and the citizen.
  • In other words, they will create a new "political economy" and raise questions about the practical meanings of "capitalism" and "socialism" in the 21st century."

Click here to download the full text of the paper.

Click here to visit the International Union for Land Value Taxation's website.



How many of us who have enjoyed playing the board game "Monopoly" have questioned the following description by its commercial producers? "The idea of the game is to buy and rent or sell property so profitably that one becomes the wealthiest player and eventually monopolist... The game is one of shrewd and amusing trading and excitement."

In fact, the game was invented in 1903 by a Quaker supporter of Henry George's Land Value Tax proposal. She described its object as "not only to afford amusement to players, but to illustrate to them how, under the present or prevailing system of land tenure, the landlord has an advantage over other enterprisers, and also how the [land value] tax would discourage speculation."

When buying her patent on the game, the commercial producers undertook to tell purchasers what the inventor's purpose for it was. They then ignored their undertaking.

For details click here - and for even more details click here.



Derek Wall, BABYLON AND BEYOND: The Economics of Anti-Capitalist, Anti-Globalist and Radical Green Movements, Pluto Press, 2005, 220pp, £14.99 (paperback).

Derek Wall teaches economics at Goldsmiths College, London. He is associated with the Green Economics Institute (click here to read a review of their journal in my last newsletter).

His book aims "to explain the economics of the anti-capitalist movement and, in doing so, to examine how a fairer and a more ecologically sustainable world can be created".

It comes with commendations from well-known voices, green and red. I too commend it warmly to readers who want to be up-to-date with red/green approaches to the world's problems.

An Outline of the Book
The following summary of chapters is only an outline. It cannot convey the full richness of the subject matter.

1. "Warm Conspiracies and Cold Concepts" sketches the development of the anti-capitalist movement, what's wrong with capitalism, the diversity of anti-capitalisms, and three issues that run through the book:

  • capitalism as conspiracy of the rich or as conceptual error?
  • productivism versus primitivism; can economic growth go on for ever? If not, what then?
  • strategy: reform or sudden, even violent change?

2. "Vaccinating against Anti-capitalism: Stiglitz, Soros and Friends" discusses the Washington consensus and American imperialism, Keynes and Bretton Woods, and Karl Polanyi and other thinkers. It concludes that "by attacking the most obviously repellent features of neo-liberal globalisation, Soros, Stiglitz and friends seek to show how capitalism can be maintained and to channel more radical sentiments into a supposedly 'nicer' form of globalisation".

3. "White Collar Global Crime Syndicate: Korten, Klein and other Anticorporatists" discusses "the rise of the corporate criminal", and opposition to the emergence of "Global Government Inc." as a coalition of transnational corporations, national governments and international bodies like the IMF which makes a mockery of democracy. Wall takes the view, however, that markets have a destructive built-in tendency to grow and grow and that market economies are never fair. The chapter concludes that "there is more to anti-capitalism than hatred of corporations".

4. "Small is Beautiful: Green Localism" describes various forms of green economics and concludes that the green critique at its most radical goes further than anti-corporate anti-capitalism and holds that "economics is a system that tends to dominate and distort human values". But, in Wall's view, it is difficult to accept the argument by green localists such as Colin Hines that, "if the economy were decentralised, democracy and ecological sustainability and justice would automatically follow", or the views of "subsistence anti-capitalists" like Vandana Shiva in favour of pre-industrial societies. Combining the green critique with socialist theory (as in Chapter 8 below) will be more promising.

5. "Planet Earth Money Martyred: Social Credit and Monetary Reform" outlines the case against the World Bank and the IMF, and describes the activities of Attac and the Tobin tax proposal. It then examines the "radical message of monetary reform". Its reference to a "basic economic law" that there is an inverse relationship between people's contributions to society and monetary rewards, doesn't mention the possibility that the present existence of that relationship might be an outcome of the present unreformed system of money. It concludes that monetary reformers who "argue that, if banking were reformed, capitalism would no longer be destructive or perhaps would not exist at all" seem "a little simplistic".

6. "Imperialism Unlimited: Marxisms". The message of this chapter is that "almost all Marxists agree that capitalism is not just corporations or banks, but a system. Capitalism is innately destructive. It cannot be reformed but must be smashed. They agree, however, on little else." A discussion of various Marxist approaches concludes that they have enabled us to perceive the mechanisms of domination; we now need to discover the mechanisms of liberation, and Marxism also needs to be "greened". Fidel Castro is instanced as making some progress there.

The next two chapters, on 7. "The Tribe of Moles: Autonomism, Anarchism and Empire", and 8. "Marx on the Seashore: Ecosocialist Alternatives", break newer ground. Topics and ideas include:

  • the anarchic power of grassroots action "with its emphasis on the actions of the multitude rather than that of limited policy change";
  • the developing links between Marxism and the post-modern "rejection of grand narratives";
  • the perception that "both the state and the market distort the realisation of human potential";
  • Joel Kovel's ecosocialist interpretation of capitalist globalisation, not as "a by-product of corporations or the money power, but built into the very DNA of our economic system" - in the form of markets, which embody the contradiction between use values and exchange values;
  • inevitability that a market economy will give ever-increasing priority to exchange values (i.e. to making money) over use values, with results that lead to disasters like the Union Carbide disaster at Bhopal;
  • thus the market kills people and planet and "must be broken"; and
  • the enclosure of the commons is a very important theme for ecosocialists.

However, at the end of Chapter 8 the verdict is that, "while ecosocialism is necessary, it is not sufficient; to transcend capitalist globalisation it is crucial to go further still".

The last chapter, Chapter 9, is on "Life after Capitalism: Alternatives, Structures, Strategies". Once again, it makes an interesting read. Its statement that "maybe the biggest revolution is to realise that [the economic system] is our creation, so it is transformable" isn't controversial. But the book's final suggestion, that to get control of the structures of the economic system "anti-capitalists need to keep making noise", surely isn't enough - any more than the approaches discussed in the previous chapters were.

Some Reservations

I agree with many of the book's themes. A central one is the need for liberation from the systematically dependency-creating nature of the present economic system. That has shaped my own thinking at least since I wrote The Sane Alternative in 1978.

But I don't accept that it is enough simply to oppose the present economic system or that it can or should simply be "smashed"; even if that were possible, it would create utter misery on an unthinkable scale. And I don't see how a complex world society of over 6 billion people could function without some sorts of governmental and market economy processes, albeit redesigned for a democratic 21st-century world.

A characteristic weakness of much radical academic thinking on politics and political economy is failure to appreciate the practical significance of institutions and the need to change them. An example in this book is the question whether the ills of the global economy are a product of conspiracy or the result of abstract economic concepts.

The ills are partly due to both those factors, of course; but they cannot be cured except by also changing a third factor that links the two - the relevant institutions. Those are an important part of present reality. They have been shaped in the past by the interests of rich and powerful people, organisations and nations. We have to understand why those institutions have come to operate so as to produce the outcomes they now do, and to work out how - as a system - they can be transformed.

The most important institutions for the economic system are those which constitute the system of money and shape how it works. Systematically transforming the money system will go much wider than monetary reform narrowly defined (see the paper at Item 2 above, and the references in it). What is needed is a changed scoring system for a better game of economic life.

That will help to achieve constructive aims that "Beyond Babylon" implies. For example,

  • treating the value of common resources as sources of public revenue will be the appropriate 21st-century response to the enclosure of the commons;
  • sharing a good part of that value directly among all citizens as a Citizen's Income will make us less dependent on the market economy and the state for goods and services, and work;
  • which will enable us to resist and even reverse the present pervading compulsion to promote exchange value over use value.

One final point. I believe that focusing on anti-capitalism impedes the working out of what actually needs to be done. The same is true, in my view, of focusing on the necessity of keeping capitalism but reforming it, however fundamentally, as I said in my review of Jonathon Porritt's recent book Capitalism As If The World Matters.

What both books demonstrate clearly is that "capitalism" and "socialism" are now operationally indefinable abstractions. It will be more effective to analyse directly, without reference to them, the practical causes of the systemic injustices and malfunctionings of the existing economic system; and then to work out directly, again without reference to them, the practical changes needed for the radical transformation of the system.



For a Marxist understanding of the role of money in society, and of the issues raised by ecofeminists, greens and ecosocialists in recent years, I highly recommend Mary Mellor's 16-page paper in Capitalism, Nature, Socialism (Vol 16, No 2, June 2005). Mellor is Professor in the School of Arts and Social Sciences at Northumbria University and, like Wall, is associated with the Green Economics Institute.

Ecofeminists have pointed to the gendered dimension of money systems which reward male-dominated and ecologically destructive activities, while much of women’s work and life is marginalised or excluded. Ecological economists have criticised money accounting systems for externalising environmental damage and treating nature as a free good.

Although anti-capitalist critics have long explored the role of finance capital, the message of the paper is that money and credit have played a stronger role in all economic systems, particularly capitalism, than has been previously acknowledged.

The paper concludes that it is vital for socialists to have a clear analysis of how and why money systems operate as they do, and to develop clearly thought out alternatives. "Exposing the vacuous and deeply exploitative reality of money issue and making proposals for putting such a simple yet sophisticated mechanism in the hands of the people would be a revolutionary act".

Although personally I believe that the concepts of "socialism" and "capitalism" have now become obstacles to clear thinking (see Item 4 above), I also believe it's important that people who think of themselves as socialists should take Mary Mellor's advice.

She tells me she would be happy to send the text of the paper to any reader of this newsletter who emails her for it.



I have known David Boyle and worked with him since the 1980s on New Economics Foundation and other matters. He has been justly described by Ed Mayo, former Director of NEF, as "the finest radical voice of his generation".

His wide-ranging and very interesting website covers aspects of his "work around history and future, and although it covers politics, money and business, it is devoted to one broad theme: the importance of human-scale institutions over centralised ones, human imagination over dull rationalism, and the human spirit over technocratic reduction".

His June 2006 Newsletter included items on:

  • Why Prince Charles was right about the National Health Service
  • Modernism
  • Troubadours and trouble
  • Localism
  • Clone Towns



The American Monetary Institute will be holding its 2006 Conference in Chicago on 21-24 September. On the agenda will be discussion of a draft American Monetary Act.

Other recent papers from AMI include:

  • "Is the Federal Reserve System a governmental or a privately controlled organization?" (16 July 2006). It concludes that "The money power vested in Congress by the Constitution has been improperly delegated to private interests without sufficient public interest benefit, if any. Congress must resume the power vested in it".
  • A draft Monetary Transparency Act, attached to the above paper about the Fed, aims to start the process of making the Fed more accountable to Congress.
  • A supporting paper on "The Need for Monetary Reform".

Click here to see details of these and other AMI publications and activities.



In a welcome new website Social Currency: Target 2008, Paul Nollens responds to the call by leaders of the European Union in December last year for proposals for a new system for financing the EU in 2008. He shows that the European Union budget could be more than fully financed by seigniorage, if monetary reform was implemented in the EU.

(Seigniorage is the profit that Eurozone governments would get from the European Central Bank if it issued the bank-account euros required to increase the Eurozone's money supply, instead of continuing to allow commercial banks the privilege of creating them as profit-making loans to their customers.)

National governments in the Eurozone would not only be able to stop paying contributions to the EU budget altogether. They would actually receive from Brussels more than the amounts they are now having to pay.

The EU Commissioner for Taxation, Laszlo Kovacs, has put forward a different idea for financing the EU: "In my view, the most viable path would be to link an EU tax to energy consumption because the tax revenues could also serve a secondary purpose of influencing energy policy so as to support renewable energy resources by lower (tax) rates".

That is a good idea too. Like monetary reform, it is a piece of the bigger picture at Item 2 above.

PS. Item 7 of the BIEN May 2006 Newsletter mentions the proposal in "Social Currency: Target 2008" as possibly relevant to the financing of a basic (Citizen's) income. Item 1 of that newsletter reminds us that J K Galbraith had supported a basic minimum income for all.



In his article "The Political Economy of Peer Production", Michel Bauwens writes "Not since Marx identified the manufacturing plants of Manchester as the blueprint for the new capitalist society has there been a deeper transformation of the fundamentals of our social life. As political, economic, and social systems transform themselves into distributed networks, a new human dynamic is emerging: peer to peer (P2P). As P2P gives rise to the emergence of a third mode of production, a third mode of governance, and a third mode of property, it is poised to overhaul our political economy in unprecedented ways."

In the article, he develops a conceptual framework ('P2P theory') for explaining these new social processes.

See also the website of The Foundation for P2P Alternatives.



In September 2006 the Business School at the University of Wales Institute in Cardiff (UWIC) is launching an MBA in Social Entrepreneurship. This will be in keeping with the strong and thriving social economy in Wales, and will provide " a unique qualification, offering the strategic and management skills, as well as the credential, of an MBA, but with the radical view of the economy found within the fields of social enterprise and mutual activity".

More information from Molly Scott Cato.


James Robertson

24th July 2006


The Old Bakehouse, Cholsey
Oxon OX10 9NU, UK
Tel: +44 (0)1491 652346


Back to top