Insight and inspiration in turbulent times.
So to the question ‘how will humanity’s collective household pay for Covid-19?’ my answer is neither to squeeze the poor, nor to squeeze the future by closing your eyes and believing in the magic of the money tree. Instead, I’d suggest you look out your old spade and hoe from the back of the garden shed. There’s work to be done.
A nationalized money supply would transform government spending into the monetary creation mechanism and embed justice and sustainability as hallmarks of how we manage our national economy.
There are many ways in which such a nationalization effort could be implemented. It could follow the path adopted during World War II, when Congress enacted laws authorizing federal takeovers. But it could also take other pathways as seen in recent nationalization attempts, including the ones implemented in response to the Great Financial Recession.
An obvious solution to this quandary is to replace electronic private-bank-issued money with something else. Despite a long historical connection between money and private debt, private-debt-free money is eminently possible.
Many of the severest crises we’re facing at present – e.g. climate instability, biodiversity collapse, the depletion of vital resources, and the dangerous compromise of ecosystem health through the spread of waste plastic and other pollution – stem directly from economic expansion hitting against ’hard’ limits in the physical world.
Most people don’t really understand how money is created and what political choices are embedded in that process. As a result, the privatization of money-creation is largely invisible to public view, and the anti-social, anti-ecological effects of privately created, debt-based money go unchallenged.
Local initiatives can lead to modest gains in sustainability, but not the large-scale transformation we need. Meeting that challenge will require, among other critical factors, substantial changes in how we create and use money. As its history demonstrates, money is a social and political construct. It is the privatization of money—and not money itself—that has fueled social exploitation and environmental destruction.
Although it is widely assumed that governments are the source of all new money – through “printing it” – the so-called private sector is the source of most new money put into circulation.
Between Debt and the Devil discusses the long history of proposals to remove the power to create money from banks.
There are many reasons to change the current money system.
