Tag: money

The money-go-round

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Let’s get this straight.

  • Most money is created by banks as debt, i.e. ‘out of thin air’.
  • Banks ensure they keep plenty for themselves, the grandest buildings, the biggest salaries, huge bonuses.
  • Eventually they always lend too much, confidence declines, some bank(s) get(s) into trouble because there is a run on the bank, because the money doesn’t really exist.
  • So a bank or two fails, but is usually bailed out by governments.
  • So governments need to borrow a bit more from… banks.
  • And/or they take it from the people by ‘austerity’, reduced public services or additional taxation.
  • And they say there was too much debt, another way of saying it was the banks wot did it.
  • And the most egregious banking behaviour appears to be but lightly punished – the rewards appear to greatly outweigh the risks.

You couldn’t make it up!

There must be a better system. At least someone’s proposing solutions. See eg Positive Money.

 

The eye of the needle

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The recent issue of Positive News contains an article on ‘The multimillionaire who gave his fortune away’. Daniel Garner was worth hundreds of millions of dollars, but one day he realized that he was obese and unhappy. He gave away his money, moving from the ‘top of the top 1%’ to the ‘bottom 1%’, lost weight became part of a community and environment, and gained contentment. Some of his quotes are worth repeating:

“My life is [now] so much richer in every single way because I’m connected to life itself: to the people and to the environment around me… I’m truly alive.”

“It’s not just dollars that define wealth: it’s also power, linkages and the ability to make much more money. You end up forming a cohort of other extremely wealthy people and become tremendously disconnected from society.”

“When I was incredibly rich, my heart was completely closed to everyone around me. How can you maintain wealth when you see someone who’s starving and eating out of a garbage can…”

Yes there are so many stories we hear of rich and powerful people who exploit others and care little for those around them. Yet also, some extremely rich people find solace and connection through philanthropy that channels their riches to benefit others.

Eye_of_the_Needle_Black_Hills_1987
Eye of the Needle, South Dakota, US

No, I’m not writing this post to knock the rich, just to highlight that large amounts of money do not bring fulfilment, but do bring incredible responsibility for wise use of that money. After all, most of us in the West are rich by the standards of most developing countries. Are we using that richness wisely, and are we truly fulfilled?

Jesus once said “It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.” (Matthew 19:24, King James). He wasn’t joking.

Featured image courtesy Ron Clausen via Wikimedia Commons.

James Robertson

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james-robertsonI was sorry to learn that James Robertson is to no longer produce his regular newsletter or maintain his website, This is a great shame, but one can well understand it at the age of 89.

I first came across James at Schumacher Lectures in Bristol, maybe in the 1980s, and was inspired by his ideas on economics and the money system, which originated in a career at times closely associated with UK governance. This inspiration has continued over the years since then, in his articles, books, talks, seminars and then his regular newsletters – Turning Point 2000 up to the turn of the millennium, and his regular email newsletter since then.

James’s ideas deserve to be more widely known. I won’t try to summarise; the following from the front page of his website gives a good idea. This truly does indicate a necessary component of a New Renaissance, as indeed James said in his Knutsford Lecture in the 1990s.Read More »

Misuse of Power

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These sex and money scandals – it’s all about the misuse of power, with money as its ally and enabler.

The power and will of the undeveloped ego does not move beyond selfish impulses, empathise with others or reflect upon the consequences or morality of his/her actions. Some such persons become capable of  sexual aggression or rape; others take their own wealth to be of supreme importance at the expense of others, some consolidating their position by dictatorial politics or gangster rackets.

Money is the enabler that pays the lawyers and accountants to ensure that their actions are legitimised or not penalised. How often have you heard the words ‘I haven’t done anything illegal’?

It is interesting that the worst corporate offenders in terms of avoiding their obligations to the wider society seem to be the young (and still rapidly growing) IT companies – Apple, Google, Facebook, Amazon etc. – entities still essentially in their adolescence, when a sense of balance and fairness is often not yet achieved by the ego.

The developed ego strives to continue to grow and move beyond these primitive influences, leading ultimately to ego transcendence and spiritual being. For these people, power and money give responsibility for their wise use, in the situation in which one finds oneself. Exploitation of others and personal aggrandisement are no longer part of the game.

Our challenge today is to raise the level of everyone’s game (ego). The bringing to light, to public awareness, of what was previously hidden, is an encouraging part of that process of change. I salute all involved in this cleaning of the inner stables, particularly those with the amazing courage to speak out the unspeakable things done to them and those journalists whose efforts shine that light.

 

Inequality

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The recent issue of London Review of Books has an interesting review by James C. Scott of the book The Great Leveller: Violence and the History of Inequality from the Stone Age to the 21st Century, by Walter Scheidel. It seems that the increasing inequality exhibited in the recent neoliberal era is not a historical anomaly, but a characteristic of periods of reasonable stability in all societies over thousands of years. Those that have get more and more, at the expense of those that have not. The great levellers are wars, plagues, and their consequences such as revolutions or massive disruptions such as the Great Leap Forward.

It seems that Scheidel’s book is a bit of a counsel of despair, in that he suggests that most of the social advances made in social justice, democracy, education, trade unions, welfare state… have little effect on this underlying trend.

As a counter-example, Scott does point to the example of Scandinavia, which is particularly stable because “They provide even the poorest with the resources necessary to maintain their dignity.” This is surely the measure of a decent society, and sadly one that many free marketeers appear not to believe in.

Of course, it is arguable that if the level of all is rising, then it does not matter, as the situation of even the lowest is improving. The period of austerity since 2008 seems to have reduced any leverage this argument may have had.

I would suggest that it is not beyond the wit of man to come up with more equitable systems that allows all human beings to maintain their dignity. Good places to start include taxation of scarce or undesirable resources – land, wealth, carbon, financial transactions,… progressive taxation, removing tax havens, money reform so that new money benefits society directly, basic income with a reduced minimum wage, provision of adequate ‘social housing’… There is no shortage of good directions, it just needs the will, particularly of the better off.

Featured image shows UK wealth distribution by decile (IFS), but of course hides the extremes and unknowns at the right hand end. And many countries have much worse profiles.

Lost our way?

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A depressing experience the other day. We stopped off at Sedgemoor services, southbound on the M5 motorway, for a break.

This service station has often provided a refreshing break point over the years – pleasant parking interspersed with trees, albeit rather crowded at busy times. The Tesco-style facility buildings were hardly the height of architectural elegance, but didn’t grate.

Now Sedgemoor has been redeveloped, as the signs proudly announced. The new parking area offers excellent spacious parking spaces, and there the plus points end. The new car park is all tarmac with marked spaces. All trees and bushes removed. Not a living thing remains. Maintenance costs presumably reduced to zero, apart of course from the run-off when it rains – in a part of Somerset recently affected by major flooding. What a testament to our society’s ever-increasing disconnection from the natural world. Had it not occurred to the planners that connection with nature provides refreshment on a long drive just as much as loos, food and drink?

And then there are the buildings. A huge Macdonalds ad defaced the side of the old buildings, which appear to be abutted by breeze block boxes. Aesthetics and any consideration of beauty were clearly not part of the brief, which appears to have been ‘cheapest to make and maintain’. Had it not occurred to the planners that beauty provides refreshment on a long drive just as much as loos, food and drink?

Money was invented as a means to an end. The modern form of capitalism appears to have made money an end in itself. If your sole aim is to make money you will do things in the most utilitarian fashion, unless other values are involved. Costs incurred, such as those due to increased water run-off, more accidents due to less rested drivers, increasingly precarious pockets of nature,… are externalised – someone else’s problem.

We see the resulting loss of connection with nature and with beauty everywhere, exemplified by this development of Sedgemoor.

Who makes money?

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You might think the Bank of England makes the money that is used to oil the wheels of the economy. You’d be wrong. The BoE creates only  around 2.8% of the money in circulation. The rest is created out of thin air by commercial banks as debt. Debt is built into the system – so […]