The two films describe how around 95% of the money supply is bank credit, or debt money. This money is created by banks in the form of loans and mortgages. The loan isn’t taken from so-called ‘deposit money’ and given to the borrower, but created from nothing by the bank as a promise to pay. This promise to pay is considered to be money and may be exchanged for a house, car or for whatever we took out the loan. The first problem then is that the money supply is overwhelmingly in hands of private banks, generally unaccountable to governments. The second is that if a large proportion of the money supply is created by banks as the principal of loans, there is very little other money available from which to pay interest on these loans — it is almost as if the monetary system is designed to bring all money into the possession of banks and, no matter how diligent borrowers are, some will always default on loan repayments. To keep the economy working there is a demand that new loans are always taken out so that more money is introduced to pay off the interest on old loans. The treadmill never stops, demanding exponential growth and creating constant inflation. Problem number three is that natural resources, and the total global value that is derived from them, are finite, meaning that real economic growth can only occur with the discovery of new resources, greater efficiencies or redirecting the resources from another local economy (that old chestnut: imperialism is theft). Thus, a system that demands exponential growth in order to function is also demanding environmental destruction and the impoverishment of the poorer regions of the world. Continue reading
Today, the Chancellor, Alistair Darling, stood up at the Labour Party conference in Brighton and had a go at the bankers and their bonuses. So far, so populist. Pointing at naughty bankers, who do deserve to be brought down a peg or two, is simple legerdemain, making sure we don’t see that it is the neoliberalism incarnate in Thatcherism and Blairism that has been the driving force behind this chaos in the UK. We got our MPs expenses scandal (no progress is being made by the flimsy legislation that has come in to deal with the issue), but we haven’t been allowed to analyse the Government economic mismanagement scandal.
A long time ago, I read that money is the second most talked about issue in the gospels (after the kingdom of heaven). Christian moralising is so often hung up on sex, it has no energy left to deal with what seems to me to be Jesus’ bigger issue, Mammon. He is the personification of pelf and lucre. Stock markets have become his temples, bankers his priests, economists are his theologians. Their doctrines are ineffable and inscrutable, keeping us in the pews unaware of what they were up to. The more we ask the question ‘what is money?’, the more we realise that it is an abstract social agreement we no longer comprehend. Money actually isn’t any one thing, but a whole set of related ideas; it doesn’t exist in a coin or banknote, but they are just symbols of money. Doesn’t the whole thing sound not a little theological? Continue reading