James Robertson : "Future Money - Breakdown or Breakthrough?"

I can thoroughly recommend James Robertson's latest book "Future Money - Breakdown or Breakthrough?" Robertson is a true veteran (born 1928!) and has been called "the grandfather of green economics", having written a series of books with titles like "Future Wealth (1990)", "Creating new Money : A monetary reform for the information age (2000)",  and "Monetary Reform : Making it happen (2004)". Several of his works can be downloaded for free from his website.

Robertson argues very cogently that the time has come for a Copernican revolution in human understanding of the money system works and how it ought to work. He demonstrates that we have been blinded into thinking that the current monetary system is somehow fixed and has to be the way it is. This is clearly wrong. Money should be thought of not as a aim in itself, but as a tool that can be designed to allow societies to operate optimally.

In particular, he argues that we need to reform national money systems. He believes that governments should be at the heart of the money system by deciding (a) how the money supply should be created, (b) what is taxed and not taxed, and (c) what public expenditure is spend on and not spent on. 

Concerning the money supply, he argues that the money creation should be transfered

• from commercial banks as a source of private profit for themselves
• to a public agency - the central bank - as a source of debt-free public revenue to be spend into circulation by the government for public purposes.

For taxation, he argues that we should

• take taxes off incomes, profits, value added and other financial rewards for useful work and enterprise
• put taxes on to value subtracted by people and organisations for private profit from common resources (such as land) and from the environment's capacity to absorb pollution and waste (such as carbon emissions); and
• reduce the present opportunities (through tax havens, etc) for rich people and businesses to avoid paying their dues to society.

I think the arguments are really solid, although I was surprised/disappointed to see that the option of using a financial transaction tax as a source of tax revenue doesn't get a mention. I think I will definitely write to him to see if he has any reasons for leaving that option out.

But for me, the central argument is the need to take money creation away from commercial banks - the same idea that has been getting increasing support from movements like Positive Money  in the UK and the Public Banking Initiative in the USA. Looking at James Robertson's publication list, it seems to be clear that he can take credit for being one of the first to push for such ideas.

The more I think about it, the more I am convinced that this is the single most important change that needs to be made. And from that point of view, I didn't get the impression that James Robertson could see an easy way to get there. Effectively, he appears to believe that it should  be enough just to try and educate people - to try and get that Copernican revolution underway. Once that revolution has occured, the reforms will follow naturally. Effectively, citizens need to understand that we do not have to be rotating around a fixed monetary system. Instead, we have the right and the duty to set up the system in a way that benefits all of humanity, and not just the interests of a greedy few.

However, for me, I am very worried that the lobbying power of the vested interests could well be overwhelming, and that we may have great difficulty in getting all governments to agree to change. The banking system has managed to get their people into many of the positions of power - Mario Draghi's appointment as head of the European Central Bank being the most obvious example. But the revolving doors between the White House and Wall Street mean that many of the people with power will be working not in the interests of citizens, but in the interests of their friends in the financial sector.

That is why I believe that our best bet may be the sort of do-it-yourself reforms that I have been proposing recently in my Youtube video on "Debt Annihilation" and my recent post on "How to cancel all government debt in 10 easy stages". I'm still waiting for someone to tell me why my cunning plans won't work.