Bill Totten's Weblog

Tuesday, October 19, 2010

Economic Democracy

Fair Shares for All

by Peter Lambie

Prosperity (August 2001)

The essential problem facing Money Reformers is one of communication: explaining the mechanism of the fractional reserve system of banking and convincing people that they are being robbed of the fruits of their labour by a simple scam.

However, as I have discovered it can be infuriatingly difficult to explain without boring people to death. As an ex-NALGO shop steward I know many trade union activists who are dissatisfied with the status quo and who would make valuable recruits to our cause.

My technique is to casually mention monetary reform and offer to send an outline of it in the post. This offer is always accepted.

The letter has to be short or the recipient loses interest. Therefore, when I have to choose between brevity or accuracy I will always choose the former. Should I get lucky and strike a solid response I follow it up with material and conversation.

It is surprising how little the ordinary person knows about money. Most of us assume that money is printed for the government by the Royal Mint for the good and convenience of us all.

Sadly this is not the case because, unknown to most of us, the right to issue the nation's currency was sold in 1694. Today we would say ‘privatised', to help the king finance a foreign war.

The Bank of England acted as the issuing and supervisory authority. The Royal Mint was retained and allowed to issue a token amount of notes and coin to preserve the illusion that nothing fundamental had changed.

Financiers erected a huge pyramid of credit, which could only be obtained as loans lent at interest and from that date, debt became a familiar item on commercial balance sheets. Indeed the National Debt itself began its life at this time.

The situation was akin to giving a stranger your cheque book and credit card and letting him use them as he wished.

Our politicians are quick to tell us that governments have no money of their own but have to rely on taxation to finance public services but they neglect to inform us that Governments have the right and duty to issue their own debt-free money for this purpose.

Common sense tells us that it is easier and cheaper to issue your own money than borrow it at interest from a banker who bought the right to do so in 1694.

I also find that people often confuse wealth and money and it is important to clarify this.

Wealth is the goods and services created by all of us. With ever improving technical innovation and ability, there is hardly any limit to the amount of wealth available to us all.

The main function of money is distribution, ensuring that we all get a fair share of the wealth we have created together.

The system is failing us abysmally in this function. The gap between rich and poor grows ever wider.

Essential services like health and education suffer from chronic under funding, which can only be remedied by the Government reclaiming its ancient right to be the sole issuer of the nation's currency, to be issued for the good of us all.

This is real democracy: economic democracy.

Bill Totten


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