For years and years, bright sparks have argued that the house of cards of a leveraged financial system stems from the way in which banks can create money through lending, far in excess of the reserves they hold from the public as depositors. Over time, this has meant that it is not the state that creates most money in the economy but banks – and that they rather than we get the benefit of this. For some critics, this has extended too to a critique of interest itself, as a device for making money out of money – or a suggestion of negative interest and an interest in local and complemetary currencies.
All this counts as ‘monetary reform’ and one of the most articulate and visionary of these dissident thinkers is James Robertson, Britain’s greatest unknown intellectual. James is collecting a campaign and movement around monetary reform worldwide that aims to put pressure on the G20 meeting coming up in Britain in early April.
We are moving into a new financial system as well as a downturn or depression. The radical toolkit deserves a fair hearing. The idea that this was all the fault of Fred Goodwin (who I understand now has two bodyguards) is simply lazy thinking. It was not just individuals. There was a system at work and it is the system that we need to think anew.