Creating a New International Economic Order
I watched a video of People's Forum in NYC on a New International Economic Order (NIEO) and was encouraged by the efforts of so many seeing where the problem lies but disappointed at what they missed which I think was a critical omission.
The speakers all rightly identified the global economy as the problem, focusing on the capitalist financing of investments in destructive and extractive business operations world-around.
However, I heard no one mention the macro-economic monetary system, on which all that financing and the entire world economy currently depends. Money is the root operating system of the economy, it empowers "the hidden hand" controlling markets, and understanding how it works will give us a better handle on how to solve the problems.
This democratic economic solution has been in the wings for as long as the problem has existed and has been kept offstage for centuries except for a few significant instances when their system failed so miserably it required such a rescue or made conditions so bad the people revolted and issued money to fund their revolution, such as the US Continentals and the French Assignats. As John Kenneth Galbraith wrote, “The problem of the modern economy is not a failure of a knowledge of economics; it's a failure of a knowledge of history." Of course, the monetary history has been suppressed because the powerful understood that keeping people in the dark about this was to their advantage.
For instance, how many have heard of the Pujo Committee Investigation into what was called at the time, the Money Trust in 1912? What the investigation revealed was that the banks controlled every industry in the nation and that JP Morgan was in the center controlling the banking industry. They even diagramed the network of ownership which is in the Congressional Record. While some anti-trust legislation was implemented in response, it didn't last long.
Despite the demands of the people at the time for a public money system, which was at the top of every progressive political party's platform, a corrupt Congress gave the money power to the Fed, a central bank owned by the big banks. Their investment in and control of the school system, imposed in 1915, was to assure they had compliant workers and soldiers. As the ancient Greeks recognized ten centuries before the Common Era, money issued debt-free by the government was the most vital prerogative of democratic self-governance because a government that does not control the money is controlled by those who do. As Aristotle wrote, "Money exists not by nature but by law."
So, we have a privatized global monetary system that gives awesome power to those who own it. It is highly profitable and allows them to control the entire economic development of the nations as well as to pursue wars for controlling resources and to protect their interests.
The system is headquartered in Basel Switzerland at the Bank of International Settlements which dictates policy to the central banks of each nation and amazingly has obtained official immunity, system wide, from prosecution for financial crimes.
The system is a powerful tool of control for the owners of the system. Who they are, is only an educated guess. All the big banks and most corporations are owned by the two largest asset management firms in the world, BlackRock and Vanguard. BlackRock is by far the largest of the two and is publicly traded while Vanguard is privately and anonymously owned and holds controlling interest in BlackRock. Their system is not without problems, as we all recognize, and it needs to be stopped and transformed.
How the current system works:
When a bank makes a loan, it does not lend existing money, instead it creates money when it types the numbers into your account. As the loan is paid off the numbers in the computer ledger come back down, money extinguished from the system. However, because only the principal of the loan is created in your account the interest part of the debt must come from the principal of another loan. This drives systemic economic growth and predatory competition to pay the interest and avoid defaulting on the loan and losing everything.
Calls for a solution arise when the system crashes, which it does every 10 years or so, when loan payments (money destroyed) exceed loans being made, (money created). What I have described here is capitalism, the conventional definition of which obscures the truth because money is the primary force of production. Capitalism = (capital = money) + (ism = system) = money system. The central feature and source of awesome power for the power elite, the executive arm of the ruling class, is the debt based private global monetary system the world has been made dependent on. Capitalism is a parasite on the back of free enterprise. The two are often and wrongly conflated. Every household, business and government in this world is in debt to and dependent on the banking system. To turn this around the sovereign nations need to reclaim their sovereign right to issue debt-free money and reclaim their resources for the general welfare of their people.
How our system should work:
The government bans the private creation of money and instead creates and issues money debt-free as a permanently circulating asset whose first use is for the general welfare, the common good for the people. It would fully fund public healthcare, housing, education, and efficient mass transportation, provide equitable income support, and land reform getting the farmers back on the land. With democratic control of public policy, we would change the campaign finance laws. This would end the systematic concentration of wealth to the wealthiest, stabilize the economy by eliminating the bank-driven boom/bust cycle, set the economy onto a thriving income basis instead of a debt basis and would empower Congress to serve the people instead of their donors. This would begin to shrink big corporations and eliminate the monopolies who depend on massive lines of credit to operate. The legislation to make these changes was introduced in 2011 by Deninis Kucinch, as the NEED Act, it was not allowed out of committee, and he was promptly primaried out of Congress by the Money. As Dennis said, "We will never get the legislation we need to benefit the people until we change the monetary system." This is the enormous power we are up against.
A political solution:
The major parties have closed the gate to any challenges from 3rd parties by denying ballot access or infiltrating organizations to steer them into ineffectiveness. Their mass media publicly smears and mis-represents the Green Party at every opportunity, blamed for every democrat loss plus dirty tricks on election day to make sure their monopoly remains triumphant. Who wants to deal with such abuse of power?
In just the 5 years from 2009 to 2014 the 200 most politically active companies in the U.S. spent $5.8 billion influencing our government with lobbying and campaign contributions. Those same companies got $4.4 trillion in taxpayer support — earning a return of 750 times their investment. Imagine what those figures look like today!!
What can we do?
We need to continue to expose the crimes of the elite financiers and demand change. At the same time, we need to make people aware that money is not just an exchange medium but an instrument of power so great that it rightfully belongs to all of us. It is an abstract social power embodied in law as an unconditional payment system. Such power must be made a public system dedicated to the general welfare.
There are nascent efforts to educate the people about the money system and organizations seeking to build an international movement with national movements within to transform the private, debt-based global monetary system, into national public systems dedicated to the benefit of their peoples and places, not just the profits of a few. They need your support, help spread the word.
This movement and the legislation that have been proposed, from the Chicago Plan in the 30s to the NEED Act in 2011, require these three things to create a democratic money system:
- Require Congress to be the sole creator of all U.S. money debt-free.
- End the privilege of commercial banks to create money.
- Transfer all remaining operations of the Fed to the U.S. Treasury.
Once that is accomplished there could be an international agreement among nations to create an international exchange currency with a view toward eliminating wasteful and redundant trade. Obviously electing a Congress dedicated to the public interest who would pass such legislation is necessary. It will likely take a large movement to change our government, but the stakes are so high it demands urgent action. Because the dollar is in trouble and may be going down, its prime position as the international exchange currency will go with it and Capital will decide which currency replaces it. With the system in flux, we may have an opportunity for change.
Leveraging our position.
The sound principles of money will work at the local level as well. A local government could utilize underused or idle resources and issue a currency to do local public works and pay local taxes. The principle that it must be a public system is key. Most local currencies are network currencies which require promotion to build the network of those using the currency whereas a local government currency with which you can pay your local taxes is easier to accept. Demonstrating how the principles of public money work successfully will help spread the word even more effectively.
There is more to explain in terms of options and strategy but there is movement. I also watched a video of Yanis Varoufakis' statement on NIEO. Here are some quotes from his statement that I found encouraging.
"Enough of ... the privatization of our commons,"...
"Unless we bring down the global empire of increasingly concentrated capital,...
..."this will remain a dream unless our movement manages to dismantle the global empire of capital."
To end "the tyranny of capital over people" and reclaim "plundered commons on land...
The first priority is to ensure that "corporations belong to the people who work in them on the basis of one person, one share, one vote," said Varoufakis. The second is to deny "banks a monopoly over peoples' transactions."
As Lord Acton put it,
The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.