Realize: get out of the box

What happens when we realize something counter-intuitive? It is not that we were wrong, exactly, it is that the perspective we had, the way we looked, the system we were looking inside, was … not really REAL. We had a story in our heads that seemed to work … most of the time … then one day it didn’t.

About four or five years ago I had retired, I took up some sporadic editing work for a Pakistani Women’s NGO [KK, or Khwendo Kor, means Sisters Home, they work to improve education, health, independence of women, prevent violence against women, and work for men too]. My job could be done online, someone had translated annual reports and case studies from Urdu into English, to help dissemination of their work, my job was make it English speaker English. Easy, do it now and again, when I had the time. Feel-good too.

A piece about independence referred to “micro-finance” and Islamic Banking. It was confused as written, but I knew nothing about either. I couldn’t see what was wanted nor the correct way to rewrite. So I started a quick surf – google and wikipedia – how lucky we are to have these libraries of information – just there!

And I met Positive Money.

And I met questions:

What is Money?

Who creates Money? *

Sometimes “realize” is a light-bulb, the moment of click in the mind; sometimes it is an irritation, a niggle that one keeps forgetting until it itches again; sometimes it is like revelation, the ‘truth’ that came from nowhere one can express.

I realized I had no idea what the answers to these questions might be.

The history of science is full of paradigm shifts, the realizations, like Copernicus saying “hey, what if the earth goes round the sun?” [Did everyone say yea what a good idea! They did not.] My favourite is the phrase in Michael Faraday’s Exspacetimeconeperimental Diary “what if space is not empty?” What indeed – I would not be typing these words and sending them across the not-empty space if he had not suddenly wondered if all his previous thoughts were … oops… not … really… right… [Faraday discovered the electromagnetic wave, that Maxwell built upon to find the electromagnetic theory of light, then matter and space became anomalous and Einstein … –>]

Politically, historically, even more shifts in the hegemonies of thought: Once people did believe in the divine right of kings to rule. There was a French Revolution. More recently, the Berlin Wall, just stopped being a political border and became a tourist venue.

Starting to scratch what was at first a niggle, I have discovered that our monetary system was invented and developed between 1688 and 1704 in England by English parliamentary representatives and English bankers and capitalists (capitalist in this context means gosimply means someone who already has money or assets that they can use to back any venture. At that time, these were the ruling classes, the landowners, the parliamentary representatives). The system allowed government to borrow money to do what it thought was needed, as the bank would raise the money. It worked! Or did it? It has since become established all over the world, and is so pervasive that its origins and meanings and effects are ignored while the uses of money, after it has been created, are argued over. Have you played Monopoly? Remember how it starts – Who Holds the Bank? Who gives out the money? And, look at that game, it is a competition, with one winner and a lot of losers!

NOW – I have realized that money is created from nothing, mostly by commercial banks, who are privileged by law to do so.

There is scarcely an evil in the modern world that is not created or exacerbated by banks being privileged to create the money-supply**

We need a reform of our monetary system. Start searching the alternatives***, and begin telling those who have power, become part of the change that will happen, one way or another. We will lose the world or we will find a better way to live in it.

*From Steve Keen, a long article: “Banks create money by issuing a loan to a borrower; webofdebtbookthey record the loan as an asset, and the money they deposit in the borrower’s account as a liability. This, in one way, is no different to the way the Federal Reserve creates money, which Rosenberg rails against as fraud. In reality it is simply the nature of a monetary economy: money is simply a third party’s promise to pay which we accept as full payment in exchange for goods. The two main third parties whose promises we accept are the government and the banks.”

**Michael Rowbotham, Ellen Hodgson Brown, Ben Dyson, many more.

*** Positive Money, American Monetary Institute, International Movement for Money Reform, New Economics Foundation

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4 thoughts on “Realize: get out of the box

  1. Dear Elspeth, thank you for visiting our blog and leaving comments. You asked us if we have any comment regarding this post. We liked your post. Our knowledge regarding Federal Reserve Bank and commercial banks is limited to college-level economics course for engineering disciplines. 🙂 What you explained in your post makes sense to us. I guess, the flow of money was once upon a time controlled by the Federal Bank based on what was reserved. Of course, desperate times call for desperate measures. That is why over-printing of paper-money caused inflations in many countries during wars. Yes, in this modern technology, banks do not even have to print money because of its virtual existence. We understand up to this part. After that we get lost 🙂 because our (educational and professional) background is quite different from macroeconomics. We assumed Federal/Central banks of all countries have some kind of monitoring system to control production of paper bills or virtual funds. Isn’t that so?

    Thank you very much for your post. Have a wonderful evening.

    Like

    1. I am not an economist either. I got into being interested by accident and then because so many things that matter to me are affected, I try to say to other people What do you think? It’s a bit like I don’t have to be a doctor to be interested in what keeps me well- and what is going to be bad for me. Thanks for the long answer, that was good to read.

      Liked by 1 person

    2. Also, federal and central bank does have some responsibility, but their own research papers say that they cannot control the way that commercial banks create money as debt. So,they and politicians who have to make choices about policy, can’t control how money keeps moving towards inequality and environmentally unfriendly projects. Reform is needed!

      Liked by 1 person

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