25 April 2008

Thomas Atwood Award 2008

On Tuesday Austin Mitchell received the 2008 Thomas Atwood Award for his services to monetary reform in putting forward EDMs about public credit. I was able to say a few words in support of the award and reproduce them here.

The ceremony took place at the Palace of Westminster in a committee room. While we waited the Chancellor and other cabinet ministers passed by. We felt right at the heart of power, yet it is astonishing how the ideas we were talking about, which are the key ideas of our age, are marginalised from political debate.

So here is what I had to say:

For those of us who have spent our lives awaiting the collapse of capitalism these are interesting times. I work in a Management School and have lived for many years with the slogan that a threat is also an opportunity—suddenly that banal aphorism has taken on an exciting new life!

Capitalism is an economic system that focuses around money. It is a twisted game where the power to control money allows a minority to extract the energy (usually in the form of work) of the majority and of the planet itself for their own exclusive benefit. If the money system fails the game falls apart. Suddenly we are all equal—we become limited only by our own expectations.

To remake the world along just and equitable lines we need two things: a plan and the courage to execute it. It is because Austin Mitchell has demonstrated the wisdom to choose the right plan and the courage to publicly stand by this choice that he is being given the 2008 Thomas Atwood Award.

Courage is a personal matter—a matter of the heart. If we believe in something better we must overcome censorship, embarrassment and fear and stand up for that belief. But the plan is always changing as we learn more and our ideas develop: open minds are invited to engage. I will spend the rest of these few words discussing the outline of plans to change the way our money system operates at three levels: personal, national and global.

First, at the personal level, what should we do about our need to have a bank account and a credit card? There is an easy solution here, since the Co-operative Bank offers both, and other mutuals such as the Nationwide also provide bank accounts. The same applies to other financial services such as insurance and mortages, which can be switched to CIS and the mutual building societies. It is no coincidence that they are not facing the same instability and are rather having to close their doors to new business because of rising demand. Co-operative businesses do not exist to maximize profits but to provide services, and their financial services are more reliable and more ethical than those of their private-sector competitors.

At the national level, we need to be arguing for the reclaiming of the system of money creation so that it is democratized, rather than left to the vagaries of the market and the profiteering of the private sector. Banking also needs to be decentralized, so that local banks can profit from the creation of money to be invested in their local economies, as they did in Atwood’s day. To build resilience in our local communities governments should encourage the flourishing of local currencies through exempting them from tax—at least in the initial phase. And government should take on the major role for the creation of money, as Austin Mitchell’s various EDMs have argued.

Finally, at the global system, we need to go back to the drawing-board, or rather the Bretton Woods conference table. We need to renegotiate an international financial system that uses a neutral currency, as Keynes argued in 1944, and that links to a balanced international trade system. We can go further than this, and by linking the currency to carbon dioxide emissions, use it as a means to tackle climate change as well as global poverty.

We know that the money system we have is flawed, that it is breaking down. Even in its heyday it created massive inequalities and pressurized the planet; now it is failing even in its own terms. What I am proposing here is a massive, radical change and it is easy to lose heart. But the manifest failings of the existing system should give us the courage to believe that we are right.

I would be happy to work with others—especially those with political power—to discuss and develop these ideas. Together we have to decide on the model for money that we want: they we have to just do it.

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