Here is a synopsis of the Hexham debateThe “privatisation” of money?
Mary Mellor, who is Emeritus Professor at the University of Northumbria and author of “The Future of Money”, spoke on “Money, Equality and Social Justice” in the Hexham Debates to a packedhall. She described how current economic mechanisms are so strong that change for the better is impossible. However, she argued, the dominance of global finance must be challenged. In this world, 95% of currency transactions bear no relation to real goods and services and 40% of all global trade is within transnational monopolies, where prices are manipulable. She described a world of illegal money in the form of tax evaision, money laundering and crime, where the controllers of money control economic power.
Professor Mellor posed the questions, “Where does the money come from? What is it?” and went on to explain how the main origin of money is social – a promise, implying trust in your society to honour its currency, which might be in practically any form, for example, hieroglyph records, clay, shells, paper, or the Bristol pound. Throughout history, we heard, money had mainly originated from a public source – a temple, a palace, the Royal Mint. The circulation of this money, having been spent, is ensured by taxation, which inhibits inflation.
At present, however, Prof Mellor explained, we are in hock to commercial money, now the sole source of money. The commercial sector creates and lends money which is always based on debt. Bank-issued debt is the new money. The public sourcing of money was phased out in the 1970s and has now been replaced by electronic transactions. 97% of all money in circulation has been brought into existence as commercial money, as debt. Iceland had allowed its debt money to become 11 times its GDP. The banks bailout has cost more than World War ll and even after the crunch the banks are still borrowing and still issuing money to themselves. UK debt in the financial sector is 6 times our GDP. Prof Mellor said that we were being told lies about “austerity”. Money given to the banks (quantitative easing) could have been used to revitalise the public sector. This explains why we cannot tackle social and economic problems. Money has in effect been privatised; global money and trade is largely private; the financial market is conducted in complex transactions (derivatives, credit default swaps, hedge funds) and these mechanisms exceed global trade by 10 times. States have lost control over financial movement of their currencies. There is a danger that this will lead to conflict. It is already causing instability.
In conclusion, Prof Mellor stated that we need to educate ourselves about what money is and how it works, and we need public control of the money supply, enabling its democratisation. All new money should be issued on the basis of democratically agreed priorities, based on ecological sustainability and furthering equality. Some states were now giving people money, in particular poor families, children, pensioners. Their economies then start to rebuild. It has been seen that money issued to such people does not create dependency, rather the reverse.
Prof Mellor is not alone in her analysis of money supply. “The New Economics Foundation” and “Positive Money” are organisations which people might care to follow up and several of her lectures clarifying this complex subject can be found on Youtube.
The next Hexham Debate will take place at 11.00 am on Saturday 16th March at them St Mary’s
Centre, Hencotes, Hexham, NE46 2EB, when Nick Ritchie, Lecturer in International Security at York
University, will speak on “Trident, the prospects for change”
The interesting point at the meeting for me was a QEHS student who was so impressed that he is going to try to arrange for Mary to speak at the school.