Ben Dyson talks about the progress made by Positive Money in sparking the debate about monetary reform over the past four years
The last six months have been full of breakthroughs for the movement to democratise money. Since 2010 we’ve been working to raise awareness of the fact that the same banks that caused the financial crisis currently create 97% of the money in our economy and decide where that money goes.
One of the early challenges was simply getting people to believe that banks create money. Even the UK Treasury would reply to letters from members of the public with the line: “Banks have no authority to create money, digital or otherwise.” But this argument was settled in March 2014 when the Bank of England released the paper Money Creation in the Modern Economy, in which they explained that “the majority of money in the modern economy is created by commercial banks making loans.” This confirmation from the Bank of England has already led some university lecturers to update their teaching on money and banking, and means that the debate can move on to the crucial issue of who should be allowed to create money.
The Positive Money movement continues to grow online and offline, with more than 30,000 followers on Facebook and 30 local groups around the UK (15 new groups have been set up this year alone). These local groups host film screenings, reading groups and run stalls at festivals. In addition, our members have been contacting MPs, local councillors, like-minded grassroots societies and the media to raise awareness of the fundamental problems with money. Internationally, there are now groups in 21 different countries, with Swiss group MoMo launching a petition that aims to get 100,000 signatures calling for a referendum on monetary reform.
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All of this work is pushing the debate about money reform into the mainstream. Martin Wolf, the chief economics commentator at the Financial Times, wrote that we should “strip banks of their power to create money,” referring to the reforms advocated in our book Modernising Money. This prompted a much wider debate amongst economists and bloggers about whether we should leave the power to create money in the hands of banks. And the former head of the Financial Services Authority, Lord Turner, has been sounding alarm bells over the rising levels of private debt, arguing that some money creation by the Bank of England may be necessary as an alternative to relying exclusively on banks to create money when people go into debt.
With the general election in 2015, the next steps are to get MPs to understand how money is created and why there’s an urgent need for reform of our debt-based monetary system. We’ve launched a petition calling for money to be created only in the public interest, and for the law that prevents anyone from creating paper money to be updated to apply to the electronic money currently created by banks. Positive Money members around the country will be speaking to their MPs to help them understand this crucial issue. We don’t expect an overnight solution, but the progress of the last four years has been quicker than anyone expected, so we’re optimistic about what can be achieved.
Watch a short video explaining more and sign the petition at www.positivemoney.org