In case you missed my webinar and would like to see the presentation, here is the recording that was made. The first part is a specially prepared slide show presentation titled, A World Without Money, Interest, and Debt: A Pathway TowardEconomic Equity, Social Justice, Freedom, andPeace. The webinar concludes with a short video titled, VITA: A worldwide web of exchange, Locally controlled but globally useful, in which I describe my vision of a new decentralized, peer-to-peer, system of exchange. The question and answer portion is not include.
This Wednesday, Nov 24, 2021, I will be presenting one of the most important webinars I’ve ever done. It is being organized by Prof. Lubo Jankovic of the Centre for Future Societies Research at the University of Hertfordshire in the UK.
Here is the description and link. Transcending the present political money system-the urgent need and the way to do it, by Thomas H. Greco, Jr.
Abstract This presentation describes the fundamental role of the global system of money, banking and finance in generating social injustice, economic inequity, environmental despoliation and violent conflict. It outlines the collusive arrangement that exists between finance and politics that has created the global central banking regime to centralize power and concentrate wealth in ever fewer hands and explains how the creation of money by banks as interest-bearing debt causes a growth imperative that is destructive to the environment, democratic government, and the social fabric. But more importantly, it describes the positive developments that are emerging to create a new “butterfly economy” and a civilization in which everyone can live a dignified life.
Thomas H. Greco, Jr. is a preeminent scholar, author, educator, and community economist. He is widely regarded as a leading authority on moneyless exchange systems, community currencies, and financial innovation, and is a sought after speaker internationally. He has conducted workshops and lectured in 15 countries on five continents and has been an advisor to currency and reciprocal exchange projects around the world. He has authored numerous articles and books including, The End of Money and the Future of Civilization (https://beyondmoney.net/the-end-of-money-and-the-future-of-civilization/).
It is clear that governments and banking corporations have long colluded in creating the present system of money, banking and finance that dominates economies around the world, and that they have no interest in making the kinds of changes that would reduce their power or share the wealth more fairly. As I have described it before, the banking cartel has been given the privilege of creating money out of thin air as debt and charging interest for its use, while the central governments get to spend as much as they want for whatever they want without regard to their limited tax revenues or the popular will.
In a recent interview, Prof. Richard Werner confirmed that fact and also explained that banks have been buying the wrong kinds of assets with the money they create, and that is why programs of “quantitative easing” (QE) have failed to achieve the outcomes he intended when he proposed them.
He argues, as I have, that we need more small banks that direct their money creation power toward small enterprises that will use the funds for productive purposes and strengthen their local economies. But the long term trend has been in the opposite direction, toward fewer and bigger banks that direct funds toward big corporations and capital funds that use the money for asset purchases, and toward central governments that use the money to acquire massive amounts of weaponry and conduct military adventures and destructive wars around the world.
But our most pressing need is to eliminate the growth imperative that arises from banks creating and lending money at compound interest. Since interest on money created as debt accrues with the passage of time and causes the debt to grow, the money supply is never sufficient for all loans to be repaid, so additional loans must be made in order to keep the money supply from shrinking and causing recessions or depressions. Since the money supply always lags behind the total amount owed, the economy is stimulated toward artificial and wasteful expansion of economic output. Not all increases in GDP are beneficial, and some are downright destructive. The production and use of weapons of war, for example, add to GDP but provide nothing to satisfy basic human needs or desires, and actually result in the destruction of existing infrastructure and death and misery for the people who happen to be on the receiving end.
If the necessary changes cannot be expected to come from the top of the economic and political pyramid, then they must emerge from the grassroots. Achievement of a steady state, equitable, peaceful and environmentally friendly economy requires deep restructuring of our systems of exchange and finance, and a shift away from debt finance and the increasing size and power of corporations and national governments.
As I’ve argued before in my articles and books, banks are supposed to perform two essential functions, the exchange function and the finance function. In the exchange function they should provide flexible short-term interest-free lines of credit to active buyers and sellers that are ready, willing, and able to provide goods and services to the market immediately or in the near term. This, in effect, monetizes the value of each business’s goods inventories or their capacity to provide valued services in the short run. As an adjunct to providing them with short-term exchange credit, banks should also provide them with credit clearing services in which their purchases are offset by their sales. This is precisely the sort of service that has been provided since 1934 by the Swiss WIR Bank (founded originally as the WIR Economic Circle Cooperative), and by the scores of commercial trade (or “barter”) exchanges that have been operating around the world.
In contrast to the exchange function, the finance function requires long-term credit instead of short-term credit. In performing the finance function banks should not create new money but should reallocate the temporary surplus funds of savers to entrepreneurs who will use it for productive purposes like capital improvements that increase their capacity to produce and distribute needed goods and services, and not for speculative and non-productive asset purchases. Further, they should provide these funds, not as interest-bearing loans, but as temporary equity that, unlike debt, causes the providers of funds to share both the risks as well as the rewards of business enterprise, and does not cause the growth imperative. If the equity stake of the bank is temporary instead of permanent, that will prevent the endless accumulation of vast pools of capital and will make capital a servant to productive enterprise rather than its master. Such equity shares that banks would administer on behalf of their depositors (savers) should expire after the original funds have been repaid to the savers along with a reasonable share of the profits that have been earned during the period of the agreement.
By making these simple changes in the kinds of banks we have, and way money and banks work, we can eliminate the endless expansion of debt, the inequitable distribution of power and wealth, the erosion of democratic government and the despoliation of the environment, and usher in a new more peaceful civilization.
If existing banks are unwilling to make these changes, or if existing banking regulations do not permit them, they can be implemented by other organizations that are entirely outside the banking system. The commercial trade exchanges mentioned earlier have, for more than 40 years, been facilitating the exchange function by providing credit clearing services to small and medium sized businesses, and are classified by the US government as “third party record keepers” that are not subject to banking regulations. By making some minor improvements in their operations and by networking them together, trade exchanges can evolve the exchange function in ways that can provide a worldwide web of exchange in which interest-free credit is locally controlled but globally useful.
Likewise, the finance function can be, and is, increasingly provided by small investors directly to entrepreneurs without involving banks by using innovative mechanisms like crowdfunding, community investment funds, and direct public offerings. By providing investment funds to SMEs and cooperatives in the form of equity shares, interest-free loans, or revenue shares, they can help rebuild local economies in ways that make communities more resilient and self-reliant, and most of this can be achieved by private enterprise without the need to enact any new laws or regulations.
In Ellen’s October 10 podcast, on which I was the featured guest, I argue that our best hope for escaping the tyranny of the global banking cartel lies in creating a decentralized network of exchange in which credit is locally controlled and allocated based on personal relationships and the productive capacity of community economies (starting at 27:25). This episode begins with a report by David Jette of the California Public Banking Alliance on the landmark public banking legislation that was recently passed into law in California. David describes what this act enables and the long and arduous process of getting it passed.
Can we afford health care for all, free education for all, housing for the homeless, food for the hungry, a decent and efficient national system of transportation, a clean and healthy environment, a fair and equitable distribution of our collective production, and a true democracy in which people decide their own fate and how their money is to be spent? Politicians of all stripes tell us we cannot. “Where will the money come from?” is their plaint whenever such measures are proposed.
But other countries have many of those things. There is a vast number of countries that have free or almost free universal health care, as can be seen in this list. And here is a list of 11 countries that have BOTH free universal health care AND free college. The list includes not only affluent countries like Sweden, Norway, Denmark and Finland, but relatively poor countries such as Greece, Argentina and Brazil.
Anyone who has traveled in western Europe knows that Amtrak is a bad joke compared to the extensive and efficient rail systems in Germany, Austria, Switzerland and elsewhere. China too has much better trains than the U.S. and has been rapidly expanding its transport infrastructure. According to Wikipedia, China already has “the world’s longest high speed rail network” which is “also the most extensively used, with 1.713 billion trips delivered in 2017 bringing the total cumulative number of trips to 7 billion.”
Way back in 2005 I rode from downtown Shanghai to the airport at Pudong on the maglev train that reached speeds up to 431 kmph (268 mph).
Yet, when President Trump calls for an almost $80 billion increase to the military budget, hardly anyone asks, “where’s the money going to come from?” and the measure easily gains Congressional approval.
Here are the things we cannot afford:
We cannot afford continuation of the Empire with its deployment of military forces around the world and endless overt and covert warfare.
We cannot afford continuation of the interest-based, debt-money regime that forces unnecessary expansion of economic activity and centralizes power and concentrates wealth in the hands of a super elite.
We cannot afford continuation of the environmental destruction and climate change that is caused by the fossil fuel based economy.
The $727 billion U.S. military budget for 2019 dwarfs all other segments and amounts to 61% of all discretionary spending. To put it in perspective, the U.S. spends many times more on military than any other country. According to the National Priorities Project, the next highest military spender, China, spends only about one third as much on its military.
I have written extensively about the defects inherent in the centrally controlled interest-based, debt-money regime, which is driving the endless expansion of debt that makes economic growth an imperative. See, for example, my article, Money, debt and the end of the growth imperative.
Ultimately, if we do not take appropriate action, nature will decide our fate. See the work of Joseph Tainter and Jared Diamond, starting with this interview of Joseph Tainter by Jim Puplava.
In a future post I will elaborate upon these points, but for now I recommend viewing the recent Jimmy Dore show at https://youtu.be/yHpN7X9iK3o.
This is a question I answered more than a quarter century ago in Part I of my book, Money and Debt: A Solution to the Global Crisis. It is a question that gets scant attention from politicians and economists who are willing to speak only about the need for perpetual economic growth and keeping the government debt at “manageable” levels, never asking why government debt is necessary or how it might be eliminated.
When I first undertook to answer this question, the debt crisis was already well underway and global in scope. Since then the situation has become more critical with debt levels reaching astronomical levels.
What I said in 1990 began with this:
The whole world today seems to be awash in a sea of debt which threatens to drown us all. Many Third World countries, despite their huge increases in production for export, are unable to pay even the interest due on their accumulated indebtedness to Western banks and governments. In the U. S., the levels of both public (government) and private debt are increasing at alarming rates. The Federal budget deficits of recent years far exceed anything thought possible just a decade ago. Why is this happening and why is it a problem? In order to understand that, one must first understand some financial facts of life.
Here are the essential points of my argument:
Almost all of the money in every country is created by commercial banks when they make loans either to the private sector or to governments (by purchasing government bonds, notes, etc.),
Money is extinguished when loan principal is repaid,
The interest that banks charge on these loans causes the amount owed to grow as time passes,
Causing the aggregate amount owed to banks to always exceed the supply of money in circulation,
Requiring that banks make additional loans to keep the supply of money in circulation from falling behind the amounts needed for existing loans to be “serviced” (repayment of part of the principal plus the interest due) in order to avoid a cascade of defaults and economic depression,
And that this “debt imperative” that is built into the global money system is the driver of the economic “growth imperative” that results in superfluous economic output and its attendant depletion of physical resources, despoliation of the environment, increasing disparities in income and wealth distribution, and many other problems that plague modern civilization.
That physical limits to economic output on a finite planet make this money system unsustainable over the long term.
That there are practical limits to the amount of debt that the private sector is able or willing to incur.
That chronic government budget deficits are therefore a political expedient that is necessary to keep this flawed system from collapsing as governments assume the role of “borrower of last resort.”
That politicians are quite willing that governments play this role since it gives them the power to take much more value out of the economy than the revenues available by means of overt taxation.
That bankers, for their part, by monopolizing the allocation of credit in the economy and charging interest on it, are able to enrich themselves and exercise tremendous power over the political process making a sham of democratic government.
The empirical evidence strongly supports my analysis. You only need to look at charts showing the growth of debt over time to see it growing at an accelerating rate (geometrically), a pattern that reflects the compound interest function that is an inherent feature of our global political money system.
Contents. (This edition will be timely but brief).
Back to America
My latest article
Degrowth Conference on Social Equity and Ecological Sustainability
Hi, Well it’s just a matter of hours now before I board my flight that will take me back to the United States. I always find other places and cultures interesting, but four months abroad has been long enough and I’m looking forward to being back in more familiar territory, seeing friends and family, and discovering what the universe has to show me next. To begin with, I’ll be enjoying the relative calm and quiet of the Arizona desert, then looking for a more permanent place to hang my hat.
4th International Degrowth Conference on Social Equity and Ecological Sustainability – Bridging movements and research for the great transformation.
The International Degrowth Conference has reached its fourth venue. Since Paris 2008 the debate on how to move away from a growth-oriented economy towards a more sustainable society has drawn world-wide attention. The fourth international conference will take place in a country that is considered as the European engine of economic growth.
Different traditions of growth critique, such as the concept of a post-growth society stemming from the German-speaking community and the French and Southern European degrowth debate, are invited to a fruitful dialogue. The conference seeks to bring practitioners, activists and scientists together and encompasses various formats for presentations, interaction, workshops, and exchange.
The 4th conference will address following thematic threads (abstracts for short papers can be submitted to any of them):
– Organizing Society (Emancipatory politics, participation, institutions)
– Building a social and ecological economy ((Re-)productivity, commons, society-nature relations)
– Living conviviality (Buen vivir. Open knowledge. Convivial technology)
For my current journey in Southeast Asia, Malaysia (Kuala Lumpur) serves as both my entry point and exit point. Flights to and from KL tend to be cheaper even than Bangkok, and I always enjoy spending some time in Penang, which is only about a 4 ½ hour bus ride from KL Thailand is easily reached from there.
Malaysia is quite a developed country, though it still has some third world charm, as well as annoyances, like the roar of motorbikes zipping around through every available space, making it difficult and dangerous for pedestrians to cross the streets. Sidewalks, if they exist at all are usually obstructed by parked motorbikes, or food stalls, or even workshops that flow out into the public spaces.
One interesting thing about Malaysia is language. Almost everyone speaks some English and signage is usually in both English and Bahasa Melayu, or Malay language, which derives many words from English. Malays have developed what seems to me to be a very reasonable pattern of phonetic spelling.
Here are a few familiar English words with their phonetic Malay spelling, which I think we should adopt.
Tarek El Diwany and Jem Bendell have done a great job in this Al Jazeera interview program explaining the dysfunctional features that are built into the corrupt global system of money and banking. They also cover Islamic banking and mutual credit clearing. This is a “must watch” video.—t.h.g.
The video below (300 Years of FOSSIL FUELS in 300 Seconds),from the Post Carbon Institute, is very well done. It tells the story about the development of industrial civilization based on fossil fuel energy, and the mega-crisis that now confronts us. While it is inaccurate in pointing to fossil fuels as the main driver of economic growth, it is well worth the five minutes it takes to watch it.
As I’ve been saying for a long time, the availability of cheap fossil fuel energy has been the enabler of continuous economic growth, but it is not the driver. The driver of the growth imperative which has been operating for about the past 300 years is the political interest-based debt-money system. It is a system that creates money based on interest bearing “loans.” It is the compound interest that is built into the global money system that requires the continual expansion of debt, which in turn forces the physical expansion of economic output. Now nature is putting on the brakes, telling us it’s time to STOP.
We can make the transition to a regenerative economy consciously and deliberately, or we can try to deal with the developing problems on an ad hoc basis in the midst of inevitable chaos. The end of the industrial era should not be mourned, nor does it need to be painful. We have before us the opportunity to create a happier, more peaceful world, one in which we all have enough to live a dignified and fulfilling life with enough time and energy to restore our communities and our environment. For more about that, see my presentation on The Butterfly Society.—t.h.g.
I was the featured guest on Ellen Brown’s podcast of December 30, 2021. I consider this to be one of my best interviews in which I covered a wide range of the most important questions related to rebuilding our system … Continue reading →
In case you missed my webinar and would like to see the presentation, here is the recording that was made. The first part is a specially prepared slide show presentation titled, A World Without Money, Interest, and Debt: A Pathway … Continue reading →
This Wednesday, Nov 24, 2021, I will be presenting one of the most important webinars I’ve ever done. It is being organized by Prof. Lubo Jankovic of the Centre for Future Societies Research at the University of Hertfordshire in the … Continue reading →
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It is clear that governments and banking corporations have long colluded in creating the present system of money, banking and finance that dominates economies around the world, and that they have no interest in making the kinds of changes that … Continue reading →
Do educational institutions make people stupid? Do medical institutions make people sick? Such questions may at first glance seem preposterous, but they were raised in all seriousness a few decades ago by Ivan Illich, and strongly argued in his books, … Continue reading →