Media picks up on need to reform money

Updates from Positive Money on efforts to reform the money system

Five years after the financial crisis started, the mainstream media are starting to wake up to the need to reform the monetary system.

It started with an article in The Economist in June about the explosion in the money supply before the crisis, which was a result of the huge rise in lending by the banks – since each new loan created by a bank actually creates brand new money, in the form of the numbers in your bank account.

Positive Money is often labelled as ‘radical’ for arguing the power to create money should be removed from the banks that caused the crisis.

Yet on 28 June, we spotted Martin Wolf, economics editor of the Financial Times, agreeing: “It is the normal monetary system, in which the ‘printing’ of money is delegated to commercial banks, that needs defending. This delegates a core public function – the creation of money – to a private and often irresponsible commercial oligopoly.”

This was closely followed by articles the The Independent and the Guardian. Both explained that the 1844 law that made it illegal for anyone other than the state to create paper money, has never been updated to take account of the fact that 97% of money is now just electronic numbers in the computer systems of banks. As a result, the state has effectively handed the power to create money to the private banking sector, and we all know how that ended.

People from London’s financial sector are also starting to take an interest. James Featherby, a retired partner at a major law firm and author of the book Of Markets and Men, has been writing on the need to reform our debt-based monetary system in order to reduce the huge level of indebtedness that is currently causing problems for people across the country.

Beyond the mainstream media, word has also been spreading. The new documentary 97% Owned – available free online – has been watched more than 160,000 times on YouTube and screened at a number of events around the country.

To help spread the word as much as possible, we’re currently producing a range of short animated videos that explain how our monetary system works, and why changing it is the key to tackling issues like poverty, inequality, debt, instability and the environmental crisis.