28 March 2013

Ecuador Leads the World

I first heard of the exciting developments in the Ecuadorian economy through my investigations of the proposal for a citizens' audit and debt repudiation. Ecuador was the first country to reject the debts that the Correa government inherited from the previous regime it replaced in 2005. But this was just the first step in a process of reorganising the economy so that it serves the interests of the people rather than those of the market and profit.

This was the proposal of Milton Maya, Assessor in the Ministry for the Co-ordination of Political Economy. The very existence of such a ministry suggests the leadership that this small Andean nation of 15 million people is showing global leadership in response to the depredations of the globalised capitalist economy. He considers the task of economic policy to be to construct a more humane and just society to counter neoliberalism. On a global basis he identifies a rapid decline in the output of the productive economy matched by a growth in the speculative financial economy: 'speculation has overtaken production'. This requires a new economic model to prevent the use of finance to extract value from the productive economy, leading to greater inequality and economic crisis. In Ecudaor the objectives of economic policy-making are:

Promote the transition of the popular economy into a solidarity economy;
Encourage the solidarity economy organised through the territorial dynamics of production, distribution, finance, consumption of goods and services, and improving the employment and incomes of the population;
Ensure that the solidarity economy contributes to the consolidation of the system of social support

The co-operative sector is thriving in Ecuador, which has more than 5,422 co-operatives; the whole social economy including associations, foundations etc. comes to 29,193. They are listed on a public register and receive public investment. Between 2009 and 2011 the government invested $27.9m in co-operatives and $51.5m in total in the whole social economy. They are in a range of areas including production, consumer co-ops, housing co-ops, transport and credit. The transport co-operatives run the public transport system. The co-operative law was passed in 1976 but was only used extensively after President Correa came to power.

Maya argued that constructing a more humane and just society to counter neoliberalism is a political duty. He identifies across the world a rapid decline in the output of the productive economy matched by a growth in the speculative financial economy: 'speculation has overtaken production'. In some respects the Ecuadorian economy is still highly production: sales from smallholdings represents 25.7% of GDP and 10% of net total income. The economy is focused on meeting human need not on generating profit and not directed towards the market. This is a social and solidarity economy under the Plan Nacional para el Buen Vivir. Ley Organica de Economia Popular y Solidaria y del Sector Financiero Popular y Solidario (LOEPS). To support this vision the government has invested $27.9m between 2009 and 2011 in co-operatives and $51.5m in total in the whole social economy.

24 March 2013

When is a Tax Haven Not a Tax Haven?

This question began forming itself in my mind last month when I heard a presentation from Lynne Oats, Professor of Taxation and Accounting at Exeter University, describe how difficult it would be to get a legal handle on the problem of corporate tax avoidance. She drew attention to the accelerating race to the bottom between countries in terms of their corporate tax rates. While to my mind this is not enough to constitute a tax haven, and I am not convinced that this is a technically impossible issue, it is interesting to note that UK corporation tax was reduced again in last week's budget.

But surely there is more to being a tax haven than having very low rates of tax? Doesn't it involve aspects such as not asking too many questions, or allowing companies what we might politely call a lack of transparency in their dealings? Here I think the UK might also score rather highly. Why else is Britain opposing the EU's proposal for a Financial Transactions Tax but for the fact that, in order to tax something, you have to measure it first? The rate is not finally determined but at the level of a fraction of a percent it cannot have bankers shivering in their shoes about the loss of asset value. But the advent of transparency is a different matter.

Which brings me to the issue of Cyprus, a country in our midst, in our very own single European market which is suddenly revealed as being a tax haven. This was not mentioned when Nicosia's communist government took over the leadership of the European Union?.It is only since the new government came into power that the big beasts of the Eurozone have decided to throw Cyprus to the wolves. Yet its problems started because of the Troika policy of fudging rather than solving Greece's bankruptcy. Given the close ties between Greece and Cyprus the haircuts led to massive losses for Cypriot banks. The cover stories about Russian billionnaires being funded by German taxpayers arise from the problems faced by Merkel in the forthcoming elections rather than any serious attempting at analysis or policy-making.

The bloggers as Naked Capitalism make a brave attempt to explain why Cyprus is not a tax haven, but for my money they are not making a very convincing job of it. So given that George Osborne has made it central to his policy to attract foreign investment and to keep the financial sector happy, and that he is deliberately and successively reducing our rates of corporation tax, how long will it be before we will be thinking of the UK as a tax haven?

23 March 2013

Why I am Not a Communist

Hell, I am not even a socialist and have never claimed to be. As a Green it is my firm opinion that we are part of a new ideology and one that my Green House colleague Andy Dobson has helpfully labelled 'ecologism'.

Since I am not a great fan of theory you may be wondering why I am setting out in this somewhat defensive way. The answer is that I am responding to an article in this morning's Guardian from the lovely Zoe Williams who has helpfully put the citizens' audit proposal in front of the nation's liberal readership while they enjoy their Saturday morning croissants. Zoe quite rightly suggests that we are in need of revolutionary changes to our economy and especially in the area of finance.

She begins with Ha-Joon Chang, the highly influential economist based in Cambridge, where you are still allowed to work without subscribing to the tents of neoclassicism. To his credit (and according to  Wikipedia) Chang has been an intellectual influence on Ecuador's President Correa, so he should be familiar with the idea of a citizens' audit and the suggestion that some of the debt we are carrying is odious and should not be repaid. But when Zoe put this question to him he responded by expressing concern about ideas that might result in one being labelled as a communist.

I have no such fear, which probably arises from the fact that I have never found communism appealing. My proposals have always included a strong element of private, community, and co-operative ownership that negates and dilutes the centralised ownership of productive capacity in communist regimes. I am still struggling with the reality of the fact that many people seem more highly motivated by individualist financial return than community benefit: have the learned this as children of capitalism, or were they born that way?

But it is the vision of the world as a a dichotomy between capitalism and communism that is most limiting, as though we had so little imagination that we could not think of countless other ways of organising our economic affairs. Not to mention the fact that it would be inaccurate to describe the global economic system of our contemporary world as capitalist. The last time I looked in my economics textbook capitalism was a system where a large number of companies competed in each market, with thrusting and innovative entrepreneurs rapidly entering to keep the competition fierce. The whole rationale for such a system, and the reason it is justified as superior, is to prevent the pattern of concentration of wealth and power in the hands of the few that we see around us.

So Zoe is right: we do need an economic revolution. We need to find the courage to challenge capitalism and replace it with a different vision of economic life. In Green Economics I offered my vision of an economy with social and ecological justice backed up by greater political involvement. With a patchwork of self-reliant and democratic local communities this is far from a communist vision, although it does raise urgent questions about the ownership and control of resources. In The Bioregional Economy I extend that vision to explore how it could help us to deepen our relationship with our local places and how this might offer an attractive substitute for the consumer culture.

It is exactly these sorts of alternative visions that the communist-capitalist dichotomy seeks to outlaw.  So if you really want an economic revolution it is time to emancipate yourself from mental slavery and start working out your own alternative.

20 March 2013

Budget Day: Time for Some Radical Proposals

Today is budget day and the desperate economic crisis suggests the urgent need for some radical policy proposals. Unusually, the BBC has allowed its business correspondent to actually think outside his corporate box and propose some genuinely innovative policies. We have already covered the proposal for negative interest rates on this blog, which might serve to circulate money currently being hoarded by companies and financial institutions.

More interesting is the fact that some ideas to tackle the debt directly, since until this millstone is removed the economy cannot flourish. Under the rather misleading heading of 'Helicopter Money' Lawrence Knight suggests the creation of new money for public investment or to be given to citizens to spend. Although he claims that the process of money creation is 'rather hazy' he seems to accept the proposal for direct money creation along the lines argued for by monetary reformers. Professor Richard Werner's letter to the FT earlier this month is like sunshine on a hazy day in terms of its clarity of presentation. His proposals for direct money creation by the government to fund public infrastructure projects is the sort of advice the Chancellor should pay heed to.

Relying on Steven Keen as cover, Lawrence Knight, BBC business correpondents, then makes a proposal to actually just cancel the debts. The concept of 'odious debt' finds its place for the first time on the BBC's business pages, although the social and political implications of the massive reapportioning of assets that such a debt repudiation would result in are not discussed. As a long-term supporter of the idea of odious debt I am greatly cheered to see the BBC at least reporting this proposal, if not supporting it.

Meanwhile, Green MEP Caroline Lucas has proposed a Private Members' Bill on Land Value Taxation. The bill is summarised as follows:

'A bill to require the Secretary of State to commission a programme of research into the merits of replacing the Council Tax and Non-domestic rates in England with an annual levy on the unimproved value of all land, including transitional arrangements; to report to Parliament within 12 months of completion of the research'.

How might a Land Value Tax help us out of our current predicament? I think it is a novel and creative solution. It identifies clearly the source of all true value within an economy: the land itself. It was forgetting this link that led to the divorcing of real and nominal value and bankruptcy for many economies. Iceland and Cyprus have become demonstrably bankrupt but many of Europe's economies would already have been obliged to call in the receiver had they been corporations.

A Land Value Tax would challenge the government's so-called 'presumption in favour of sustainable development' that is supposed to underpin its approach to planning found in the National Planning Policy Framework. What this policy and its unaccountable but clearly biased National Inspectorate really supports, however, is speculative developments whose value ends up in the pockets of property developers and those who hold land banks. A Land Value Tax could end this at a stroke, since the value of development would be taxes into the public coffers. While this might put put a break on speculative development in the short term, in the medium term it would shift the ownership and value of land, breaking the bottleneck that prevents citizens and communities from developing their local land for social and environmental benefit.

19 March 2013

Dangerous Liaisons with Financial Markets

The results from the Luxembourg jury are in. Thanks to Green MEP Sven Giegold citizens across Europe have been feverishly reading up on the exotic financial products the City Boys have dreamed up over the past decade or two and comparing their toxic effects.

The winner in the category of 'products that harms consumers and investors' is the Credit Default Swap, proposed by financial policy adviser at Oxfam. In proposing this loser for a winner he wrote that:

'The root cause of the Eurozone debt crisis was government borrowing, which wasn't stopped despite an active sovereign Credit Default Swap market. The issue here is that once a government gets in trouble, a CDS market can mean there's no way out. The same applies for emerging market governments too. It's too small a benefit, for too big a risk, and there's a human impact that can't be ignored.'

The results for the category as a whole were:

1) Credit Default Swaps on emerging markets sovereign bonds (46.8 %)
2) Credit cards with extremely high interest rates (22.4 %)
3) Foreign currency loans payable upon final maturity (21.2 %)
4) Reverse convertible bonds (9.6 %)

In the category for products that harm the environment, the global poor and third parties the winner was Food Speculation Funds. This was proposed by German campaign group Geld mit Sinn, which focuses on financial education and enlightenment. Sadly its name does not mean 'Money with sin', which perhaps it should, but 'Money with sense' or 'Money with understanding'. Their nomination read:

'Products based on food speculation are dangerous because they cause price increases of basic food stuff. Hence these products threaten? livelihoods of low-income earners and can even result in the death of
those who cannot afford their food anymore.'

In this country the votes were cast as follows:

1) Food Speculation Funds (71.4 %)
2) Extraction of Oil Sands (13.3 %)
3) Extraction of Uranium (11.7 %)
4) Extraction of Gold & Silver (3.6 %)

Sadly, our votes in this ballot are about as meaningful as in the Eurovision Song Contest. However, on our behalf Sven Giegold will join members of the jury and the authors of the winning proposals to meet the European Securities and Markets Authority (ESMA) in Paris. I am sure we all wish them well in speaking truth to power on our behalf.


18 March 2013

What is Going on in Cyprus?

Why is the banktruptcy of a tiny economy in the Mediterranean making headlines across Europe? The answer is that the Cyprus solution is what every saver across Europe fears might be coming their way soon. The awareness that money is not real and that countries are not good for the amounts of money they have guaranteed has been creeping into people's consciousness over the past five years. I know this because I speak to large groups of people about money and this fear is lurking behind their questions about gold and their decisions to put money into renewable energy schemes or socks under the mattress.

It was this fear that drove Alastair Darling to increase the savings guarantee in Britain at the start of the financial crisis: nothing is worse for a banking system than people feeling that their deposits are not safe and withdrawing their money. And nothing spreads this fear as rapidly as governments taking money out of their citizens' bank accounts as the Cypriot government has threatend to do. When the Argentinian government made a similar move in 2001 it precipitated a massive withdrawl of capital and the collapse of the national economy.

I am pleased to see that, although the levy on Cypriots' bank accounts is a policy made in Germany and to please German tax-payers, the Green Group in the European parliament, alhough it is dominated by German MEPs has made its opposition clear. Greens/EFA co-president Dany Cohn-Bendit is quoted stating that:

'The attack on ordinary depositors in the context of Cyprus' bail-out is outrageous and must be urgently corrected. Small depositors should be last in the line of fire in any bank restructuring. This is the guiding logic behind EU legislation providing for national deposit guarantee schemes, as well as draft legislation currently under consideration on an EU deposit guarantee scheme. While the proposed depositors' levy may be legally consistent with the existing legislation, it is a cynical ploy, which totally defies the spirit of the rules and their raison d'ĂȘtre.'

Merkel's decision to crush a tiny and vulnerable economy comes less than a month after the 60th anniversary of the cancellation of Germany's own war debt. By 1953 Germany was still carrying pre-war debts which had been massively increased by the costs of borrowing to fund the war itself. The country was in ruins and was incapable of borrowing to rebuild. Germany's former enemies agreed that for the sake of peace and humanity a significant portion of its huge debts should be written off, sums amounting to a value equivalent to 75% of Germany's exports in 1950. The remaining debt was restructured and interest rates reduced.

The Dublin based Ango: Not Our Debt campaign celebrated the anniversary, which is passing unmentioned in Germany. Its spokesman Andy Storey commented:‘The 53 Accord was signed initially by 22 creditor countries, including by Ireland and Greece.' Anglo: Not Our Debt point out that the amount of debt cancellation received by Germany in 1953 in today’s terms is worth nearly €37bn., similar to the amount of the principal of Anglo debt being paid by people in Ireland over the next 40 years. Indeed, the amount of debt cancellation received by Germany is all the more impressive, as Germany’s economy was far smaller then than today

14 March 2013

Embracing the Yoghurt Culture

I have it on the best authority that Bulgaria is being overrun by migrants. My authority is Maria Nedeva, a sociologist of science at the University of Manchester and author of the authoritative Money Principle blog. Maria has grown understandably tired of having her country and her countryfolk run down by the right-wing press and has put me straight on a few matters.

First, the Bulgarians who are already in this country are a highly skilled bunch. Like Maria herself many are academics, working in universities to enable the sort of global education that prepares young people for a globalised world. Bulgarians also thrive in the world of computer programming, using their skills to clean up as consultants, since they are not yet permitted full freedom to work here. Their skills in this area is unsurprising given that the first electronic computer was invented by the son of recent Bulgarian immigrants to the US, John Atanasoff.

Far from desperate Bulgarians seeking to escape dreary post-Soviet lives and failing public services, they are in fact experiencing a wave of inward migration from those who have grown tired of life in the UK. The Telegraph reports (while simultaneously advertising) the excellent quality of life offered by a rural Bulgarian existence: the article suggests a sort of late-middle-aged Good Life in a country where land is not the preserve of red-coated, red-faced men chasing red-furred wildlife.
A website encouraging elderly Brits to retire to Bulgaria explains how the strength of community and pace of life might remind immigrants of life in their own country BT, i.e. before Thatcher. On another Bulgarian blog, You'll Like it Here, the author welcomes the British government's attempt to make the UK seem unattractive to potential immigrants, a position he is pleased to endorse:

'They do make a valid point however – Great Britain is indeed a grim, dangerous place with glaring economic difficulties. Therefore the only responsible thing we Bulgarians can do as Europeans is to extend a helping hand and invite all Brits who’ve had enough.'

Given their relatively small population of 7.5 million people it would be understandable for the Bulgarians to feel swamped by the high rates of immigration from Britain in recent years. So many British ex-pats now live in Bulgaria that they have their own support website Brits in Bulgaria. And this is really the point, because rather than pulling up the drawbridge and repelling borders the Bulgarians are welcoming economic migrants who would appreciate the splendours of their fertile soils and excellent climate. The hateful xenophobic articles in the Daily Bigot are a strong incentive to make one up sticks and explore the opportunities for a life of skilful self-reliance.

12 March 2013

Vote Now to Counter Dangerous Finance

Following hard on the heels of the bankers' bonus cap the European Green Group are proposing further action to control the damage that the financial sector can do to the European economy. Sven Giegold, a Green MEP from Germany and member of the EU Commitee on Economic and Monetary Affairs has launched a public poll to identify the riskiest financial product, as a preliminary to a campaign to have it banned.

The proposals that have been suggested by citizens from across Europe give a glimpse of the socially destructive nature of modern banking. Many are complex forms of derivative, where the value to the 'investor' depends on one or more highly unpredictable events: such products are nothing more than gambling and should have no place in a properly regulated banking system. Others include vulture funds, where finance companies seek to profit from countries that have had to default on unpayable debts, or payday loans that charge punitive interest rates and force those on low incomes into debt. In the European context some of the most dangerous activities of banks have been to encourage EU citizens to take out mortgages in foreign currencies; as exchange rates have varied they have found the repayments impossible to pay and have lost their homes.

This is not simply a poll. Since its establishment in 2011 the European Supervisory Authorities with responsibility for banks, investments and insurance products has the power to prohibit products that threaten the vitality of the European economy or society. This power has already been used to ban naked short-selling but the Greens are now increasing pressure to have the powers used more widely. Once we have chosen the most dangerous product a campaign will begin to lobby for this regulation to be used to protect us from one aspect of financial degradation.

The financial products chosen offer a number of risks. Some threaten the integrity of the financial system by introducing high-level and large-scale risk to the banking sector. Others, such as those facilitating in land and food prices,  destroy the  livelihoods of the poorest people in the world. Use your opportunity to fight back against the socially destructive finance industry by voting in the European Green Group ballot - and learn something about the appalling behaviour of the finance sector along the way. Voting remains open until 14 March

11 March 2013

Planning for Sale

Today's revelation that local councillors are selling their knowledge of the planning process to those who would devastate our countryside will be used as further evidence of the corruption of politics, but really the culprit here is national government, whose planning policy is being written by developers for developers, much as banking regulation has been written by bankers for bankers.

One of the Tory government's first acts when coming to power was to sweep away 64 years' worth of planning policy, carefully made to respect social and ecological needs, and to replace it with the National Policy Planning Framework. The NPPF has been identified by many as a developers' charter. Even the far from radical Friends of the Earth have judged it to adopt a deregulatory approach 'designed to prioritise private business interest in the name of economic growth.' It represents a significant shift in power in favour of development and against the environment.

There are profits to be made here: the ‘communications consultant’ Curtin & Co.  bought up the web address http://www.thelocalismbill.co.uk/ to give their jubilant account of the significance of these proposals:

‘There is no doubt that the local government and planning landscape will change considerably in the next 12 to 18 months. There are still significant holes in the proposed legislation and Curtin & Co will be monitoring the progress of the bill as well as making representations on its community engagement aspects. Curtin&Co’s founder and chief executive is the author of Managing Green Issues (Macmillan, 2001) which advocates many of the aspirations of the Localism Bill and this is embedded in our methodology.’
So much for 'green planning' which, like the green economy itself, is becoming a corrupted concept.

My Green House colleague Jonathan Essex, a civil engineer who works for the sustainability consultant Bioregional, transcribed a recent presentation by Hugh Ellis, Chief Planner for the Town and Country Planning Association given at EcoBuild on 7 March. Mr Ellis outlined how the need for developments to be 'viable', for which read 'profitable' could reduce the ability of local planning authorities to require high environmental standards or address the issue of climate change when giving planning permission. He concluded as follows:

'Ultimately I will leave you with this thought. The climate science has got much worse over the past five years. We planning in this country for the wrong future. We are planning for example on sea level rise for 60-80cm where we know now scientifically we will have at least 2m of sea level rise. I go and talk to Hull and many places on the East coast who do not have a future beyond 2050 if we do not make radical changes to the ways in which we organise ourselves and our economy. Set in that context my challenge to government and all of you is that we need a national plan that can take this nation through the challenge of climate changes and manage that process with social equity and with great outcomes. The national planning policy framework doesn't do that. Why? Because it has no strategic context. We've got rid of regions. We've got rid of the Royal Commission on the Environment and Pollution. I do really wonder whether this framework is the beginning, truly of the Age of Stupid.'

This is a disturbing conclusion: we can no longer use the planning process to save ourselves at the national level. But for me the issue also has a much more personal aspect. I represent Valley ward, and that is no ordinary valley, it is the Slad Valley where Laurie Lee wrote Cider with Rosie and, as I claimed without embarrassment in our local paper, the most beautiful valley in the country. Profit-hungry developer Gladman are using the NPPF to attempt to opportunistically destroy this valley by putting 140 houses onto a green field. This will be an example that will soon become obvious to us in all our precious landscapes that the government we have now is allowing greed and profit to destroy the hopes and homes of the hard-working people of Britain.

6 March 2013

Land for People and for Food

Biofuels are back in the news: today MPs will decide on whether to continue to offer subsidies to crops that can be burned in power stations to create electricity. This problem began with what seemed like a simple and natural solution to our energy problems: plants absorb carbon dioxide as they grow which is balanced by its release when burned to create power. This simplistic idea was grasped by an industry that rapidly developed and sadly persuaded the EU to offer subsidies. The later research demonstrated that many of the biofuels crops actually produce more CO2 than they save.

The other side of the biofuels debate is the land grabbing that is gathering pace in countries that have less power in the global trade system and whose politicians are prepared to see their land be used to feed the lust for energy of those in richer and more powerful societies. Campaign group Grain have accounted for 17 million hectares of land that has been grabbed by global agribusiness to produce fuel crops between 2002 and 2012. Much of this land is in some of the poorest countries in the world; it has been diverted from producing subsistence for local people into growing crops to produce energy for the fuel-hungry West.

Grain, the NGO that supports small farmers across the world, identifies the EU subsidy regime as the source of the problem. The latest proposal sets a target of an energy equivalent of 40 Mtonnes of oil to be provided by biofuels as part of the 20% renewables target to be reached by 2020. While the Green Party welcomes the emphasis on renewables it is keen to ensure that this is not achieved at the cost of the destruction of habitats and livelihoods.  Oxfam also express deep concern about this policy, arguing that it will increase global hunger directly, through removing peasants from their land, and indirectly, by increasing the price of staple foods on the global market.

As with so many of the examples of tension between the economy and the environment the problem arises from the scale of operations and the failure of accountability this causes. This is where the proposal for a bioregional economy is so powerful. If regions were aiming to become self-reliant in energy and food production within their boundary, and introduce tariffs for the import of these products, then they could make decisions about balancing the protection of their local environment with their need for energy generation. It is the creation of a global trade in fuel crops and the exploitation of the environments of those for whom we cannot have accountability that is the source of the devastation caused by biofuels.

1 March 2013

Losing Bank Candidates Jostle for Influence

Back in November when the glitzy (by banking standards) Mark Carney was appointed to head up the Bank of England to general acclaim my suspicions were immediately aroused. Although the discussion was all about the radical way he had managed the Bank of Canada the reality is that he is a banker's banker. By contrast several of those who were unsuccessful in the competition have recently proposed some challenging and interesting new measures.

Earlier in the week Paul Tucker, the considerably less glitzy current deputy-governer, floated the idea of introducing negative interest rates to discourage saving and get money out of the banks and into the real economy. The idea is that banks would be charged for holding balances at the Bank of England. If taken up this will be another painful policy as far as pensioners and those who live from savings income are concerned. Interestingly, it tallies with the policy of 'demurrage' suggested by Silvio Gesell in the 1930s and taken up in the design of several local currencies including the Chimegauer. Here, customers are charged for holding the currency, a design feature again intended to encourage circulation rather than hoarding.

Alex Hern at the New Statesman suggests that this might be just an attempt to talk down the value of the pound and therefore be the next move in the currency competition between the world's leading economies. Given the implicit assault on the value of sterling that resulted from the AAA downgrade this seems unnecessary and unlikely, although the suggestion from Tucker that he is open to the idea of further QE, again effectively downgrading the value of UK debt and of sterling, adds weight to the case. The graphic indicates the value accorded to sterling by the markets since the early days of 2007 and makes clear how the currency has suffered as a result of the credit crunch, and relative to other currencies.

Meanwhile Adair Turner, the other leading candidate about whose glitziness or otherwise I refuse to comment, has been putting forward some interesting ideas to the Cass Business School. In a lengthy presentation including some fascinating slides,Turner makes clear that the monetary system is broken and that radical change is necessary. Perhaps the most disturbing slides is that illustrated here, using Bank of England data to plot the percentage change year-on-year in lending. Amongst other policy proposals, Turner considers the possibility of the ending of the fractional reserve system and the requirement of a 100% reserve.

Turner begins his presentation with the following quotation from Milton Friedman (1948):

'Under the proposal, government expenditures would be financed entirely by tax revenues or the creation of money, that is, the issue of non-interest bearing securities... The chief function of the
monetary authority [would be] the creation of money to meet government deficits and the retirement of money when the government has a surplus.'
He also demonstrates how the failure to resolve monetary policy in Japan was the primary cause of the lost decades of economic recession. This brings me to the preferred candidate for the post of bank governor: Richard Werner, whose experience of Japan and invention of the policy of quantitative easing him would have provided him with ample qualifications had it been a fair fight.