(submitted to the Coalition for Economic Justice - 19th March 2013)
Somewhere in our history we took a wrong turn and today we are reaping the consequences. If we don’t step back to evaluate the root causes of the rolling economic crises, our civilisation is in danger of collapse. The orthodox economic framework within which we operate has blinded us to the inbuilt systemic drivers of inequality and instability, while offering no durable remedy to the problems we face.
While the brief for this paper is to make recommendations to address the flaws in the banking and monetary system, it cannot be considered in isolation. The banking system was established on top of the appropriation of land for private benefit allowing bankers (wealthy merchants) to capture their share of the rents. Rising rents are collected by landlords without enterprise or labour on their part while interest is levied by banks on (debt) money created from nothing. Both are manifestations of parasitical behaviour of minority interests at the expense of society.
Analysis of the banking, monetary and economic system reveals structural flaws which were established centuries ago.
The private enclosure of land and resources commenced with the Norman Conquest but really took hold under the reign of Henry VIII some 500 years ago since when the proportion of bounty from the land available for the public good has reduced from around 100% to less than 4% by the early 19th Century (See Fred Harrison's The Traumatised Society). This private capture of the rents was exacerbated by the banking system formalised with the establishment of the privately owned Bank of England in 1694. Wealthy merchants (early bankers) sought to capture a share of the rents through mortgage lending.
Fractional reserve lending allows banks to create money from nothing to satisfy credit demand while interest on money drives inequality and underpins an economic system which demands exponential growth. (See Margrit Kennedy's Interest and Inflation Free Money).
Critical Thinking is developing a blueprint for a New Economy, the foundations of which are:
- Sharing the surplus (free) bounty of land and resources
- Abolishing interest
- Citizens income
The work we're planning in the Critical Thinking
Critical Thinking needs to expand its reach, to bring in more people from around the world, to develop models for co-operation on a global scale - that is the challenge for 2015. The following interview explains Critical Thinking's origins, analysis and objectives for the future.