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Making it Happen. Mary Mellor FEASTA April 25 th 2014. What do we want to happen?. An ecologically sustainable, socially just economy based on sufficiency enough An integration of work and life An end to indiscriminate growth - PowerPoint PPT Presentation

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Making it Happen

Making it HappenMary MellorFEASTA April 25th 2014What do we want to happen?An ecologically sustainable, socially just economy based on sufficiency enoughAn integration of work and lifeAn end to indiscriminate growthDemocratic social and/or public debt-free money or a social accounting system of some form that would enable the provisioning of human and planetary nourishing It should have happenedMassive crisis of debt and oversupply of bank created moneyUnpopular financial sectorDemonstrated need for public money (QE) and public rescueImposition of austerity punishing the peopleLong history of alternative money theoryLong history of local money initiativesWhy didnt it happen?Alternatives scattered and small scaleTendency to anarchist rather than public politicsNot taken up by wider social movements/ political partiesHegemonic domination of handbag economics universities to commonsense

Handbag EconomicsAll money and wealth is created in the private sectorThe public sector is entirely dependent on extracting this wealth - State as householdPublic expenditure must be limited to what the private sector can affordIdeal is to balance the booksStates must not create (print) money

Handbag EconomicsStates can only increase expenditure by borrowing from the financial sector which crowds out private investmentBailout money is seen as being borrowed from the banks and money markets it is rescuingLeads to accounting deficit - Austerity

A crisis of moneyThe money supply has been collapsed into the credit supplyMoney systems based on debt are unsustainableDeficit hysteria and the need for deficit in money systemsDeficit hysteria Handbag economics deficit hysteria is totally mistaken. More money must always be issued than is reclaimed otherwise there will be no debt free money to circulateDeficit as the allocation, spending or lending by money creators of more money than is reclaimed (taxation rates were never 100% - banks demand 100%+)Bank deficit occurs as default on loansThe contradiction of debt-based money Money issue through debt is subject to crisis because it demands permanent growth if the money borrowed is to be repaid with interest -continued money supply depends on the capacity to take on more debtDebt issued money means that economic priorities are determined by borrowers speculative finance

MONEY ISSUE AS DEBT: THE CONTRADICTION

The Two Money CircuitsDebt-based bank circuit credit investment/expenditure repayment with interest demands perpetual growthDebt-free public circuit public expenditure or allocation provisioning reclaim partial fees or tax no need for growthTHE PUBLIC MONEY CIRCUITDEBT FREE CREATION - TAX

Why no public money?Myth of barter origin of moneyLimit of precious metal coinage ruler borrowing Ambivalent position of central banks creators and lenders of public moneyConfusion of bank credit with currencyDecline of use of cashMisunderstanding of MoneyCommodity something of use or exchange value in itself precious metal, beads, cattle, barley more correctly barterAbstract Value currency itself has no use/exchange value a fiat credit for the holder a debt on the commonwealthMoney as a social and public constructMoney Public, Social, CommercialSocial convention or trust something accepted that will be honoured in future paymentPublic something respected because of the authority behind it - needed to pay taxCommercial can be exchanged privately for something of use/exchange valueThree stages of Money?Ruler dominated era undermined by the use of precious metal scarcity plus ideology of commodityBourgeois era mainly based on credit instruments - but ideologically identifies with bullion problem of realisation needs constant borrowing or public money to create interest/profitSocialised money economic democracyReclaiming Public MoneyMoney as a public resource a commonsAbility to create new money removed from banksAll new money issued free of debt on the basis of democratic prioritiesMonetary management through taxationPrivate investment should be based on a real transfer of money (as the text books say)Defending Public Money All money is public (public rescue)Debt- free money essential removes the need for growthSocial/public money can create wealth i.e. provisioning of goods and servicesSustainability: money creation and expenditure priorities should be under public democratic control ( a one-step rather than a two-step economy)

Public Money for the People

Peoples Money for SufficiencySufficiency provisioning enough for allA one step economy prioritising needs-led expenditure and shared work Not for profit infrastructure and servicesMulti-level currencies Community/Specialist banksBasic incomeIncome for commons resources and wild nature

Money as Social SolidarityMoney as an expression of trust in the future provision of goods and services is only as sound as the provisioning capacity of society and its social distributionA simple example is the babysitting circle a free issue of tokens (money) enable the exchange of labour (babysitting). The value of the tokens is trust in reciprocation the solidarity of social debt.

Further ReadingMary Mellor (2010) The Future of Money: From financial crisis to public resource (Pluto) Mary Mellor (2010) Could the money system be the basis of a sufficiency economy? real- world economic review 54 www.paecon-net/PAEReview/issue54/Mellor54.pdfLectures on Youtube