Relieved of Debt

When the decision finally came that the Green Party would be adopting a policy that cuts the link between money creation and the parallel creation of debts it came as a huge relief. Following more than a decade of pondering, discussing, educating and campaigning the party's activists were convinced that they could believe in the possiblity of public credit creation to end the centuries of capitalist privatised money and replace it with money produced for the common good. The motion was passed on Sunday at the annual conference in Brighton by 110 votes to 90.

Key to the change of heart of the Green Party have been two members of Kent Green Party, both of whom might be described as 'outraged of Tonbridge'. Brian Leslie has been a campaigner for monetary reform all his life and he recently recruited to the cause Andrew Waldie, who is a tall, softly-spoken accountant with a Scottish accent - exactly the sort of person you want to be on your side in a debate about money. From this most unlikely centre of radicalism has come what Andrew called the final part of the trinity of radical economics policies, taking its place alongside Land Value Tax and Citizens Income on an economic platform that has the potential to liberate working people from the oppression of wage slavery.

I am reproducing Andrew Waldie's proposal speech in full here: read and rejoice!

'This motion strikes a blow at the heart of financial capitalism by removing from banks their power to create money - and restoring the supply of our national currency to democratic and public control. Through their lending, banks create 97% of the money we use in the form of credit.  This gives them enormous power to direct the economy and shape our society - without any form of democratic accountability.

'Our banking system is also unstable.  History shows that debt-fuelled booms and speculative bubbles inevitably turn to bust.  Governments bail out banks that have become “too big to fail” – and the price of these bail outs are savage cuts in public services. The burden of servicing the debt on which our money is based also increases inequality and drives unsustainable growth.  These are issues which are of fundamental concern to the Green Party.

'Simply bringing the banking system under "Social Control" is not enough - more radical reform is required.  Leading green economists have advocated reform based on the principles set out in this motion. The motion avoids the fundamental conflict of interest that has corrupted the current banking system.  It separates the power to create money from the power to decide how that money is first used.  A National Monetary Authority – NMA - appointed by Parliament, would manage the supply of national currency.  Its decisions would be protected by law from influence by financial or other special interests.

'Elected governments would decide how currency created by the NMA is first spent.  This currency would then circulate freely at all levels of society.  Saving and borrowing would continue.  Local currencies could circulate alongside the national currency.  The major benefit of the system we propose is that people would no longer need to go into debt to keep money circulating in the economy.

'Over a transition period of 20 years, the NMA would convert the stock of debt-based money by issuing the same amount of national currency to the Government as additional revenue.  The value from transferring the endowment of our currency to public control has been estimated at £50 billion per year – that’s enough to fund the construction of 300,000 new homes – for each year of the transition period.

'Restoring the supply of our currency to public control would deliver a huge prize that could finance the transformation of our society.  Today, we have the opportunity to commit our party to seizing this prize by passing this motion.'

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Living Within Our Means

Green Party conference is still in full swing at the Birmingham Conservatoire. I was lucky that the two motions I had an interest in - one on banking and the other on how to put forward a positive view of a sustainable economy in the context of public-spending cuts - were both scheduled for the Saturday. So by 6pm everything was done and dusted and I was able to practise what I preach and have Sunday off.

This post has the same title as one of the motions that I was proposing, and its passage was not entirely comfortable. The Green Party is struggling with an influx of socialists who are understandably disillusioned with the Labour Party. This is a small proportion of Labour Party membership but can become a significant minority of our party, and one which rapidly starts to weight us down towards one side of the left-right continuumn that we really should be transcending. Thus it was that I found myself in the uncomfortable position of being attacked by the left of the party as though I was defending public spending cuts.

Like most people who either work in our use the public services that working people fought so hard for in this country (and isn't that most people who live in this country?), I am delighted that the TUC will spend this week making a range of political and emotional arguments in their defence. I just know that this is not the role for the Green Party. We cannot join the old left in their Keynsian calls for restimulating the growth that is killing the planet. We have a more subtle and forward-looking message and it is our duty as a party to put that forward.

The vote was won and, aside from some personal attacks that are another feature of the Labour Party that we increasingly have to put up with these days, I felt generally well supported and - which was more cheering - well understood. The theme of this motion was taken up by Adrian Ramsay, in his Deputy Leader's speech to the conference where he drew attention to the different ways we interpret the phrase 'living within our means'. I am including the text of the motion here:

Living within Our Means

Synopsis. The unprecedented deficit is an indication that we are living beyond our means in a fiscal sense, which supports the Green Party’s long-held belief that we are living beyond our means in an ecological sense. Our recognition of the link between these two crises constrains the kind of response which the party can make to the current debate about publicspending cuts.

Motion

LWM1 The Green Party restates its commitment to developing an economic policy that is compatible with ecological sustainability and 'recognises the limits of . . . the
natural systems of the planet’(EC100).
LWM2 In this context it is important that we recognise the current fiscal deficit as a consequence of a policy based on monetary inflation without respect to ecological limits; for our policy to be consistent we cannot rely on growing our way out of debt, as many conventional economists propose.
LWM3 The unprecedented level of public deficit means that a significant restructuring of our economy is inevitable. The Green Party would use this opportunity to achieve the managed descent from overconsumption that our commitment to sustainability requires, while simultaneously addressing the rapid rise in inequality that has occurred in the past 30 years. We could consider this to be a domestic equivalent of our global policy for Contraction and Convergence.
LWM4 Conference instructs the policy co-ordinator, the economics policy working group, and the Party’s media team to work together to find ways to exploit the opportunity offered by the fiscal crunch to publicise the Green Party’s unique
commitment to steady-state economics.
LWM5 The policy co-ordinators are instructed to begin a process that will bring to spring conference proposals that will, in the context of the current public spending position, explore the synergies and conflicts between:
The Green New Deal proposals that were passed as a fast-tracked policy motion in Autumn 2008;
The proposals for implementing our economic vision included in the 2010 election manifesto;
The commitment to building an economy within ecological limits included in the first paragraphs of our economic policy. Tweet