Monetary reform

Money is a vital public utility that enables us to account for and exchange goods and services in a complex market economy.  Money is not, however, a ‘neutral’ commodity that arises out of barter as orthodox economics teaches us.  Rather, the production and allocation of money are socially and politically determined.  In modern western societies, such as the UK, public control of money has gradually been whittled away, through deregulation and digitalization, such that around 97% of money in circulation is now issued, as interest bearing debt, and allocated to people and businesses by private companies. We call them ‘banks’.    

The financial crisis demonstrated very clearly the weakness of this arrangement.  Banks, underwritten by the taxpayer and with limited shareholder liability, have little incentive to create and channel funds in to productive activity that creates the kind of social and ecological value required to transition to a low carbon economy.

nef is working to educated policy markers, financiers, economists and the general public as to how the monetary system actually works.  Hence our book, "Where does Money Come From" which explains in non-technical language bank-credit creation.  We are also examining alternatives to our privatized monetary system. These include:

• reforms to the national monetary system, such as public banking, full-reserve banking and shared equity-based investment models.
• Historical and current examples of strategic credit creation and allocation by governments that helped to achieve rapid industrialization and development (e.g. in East Asia)
• Research on complementary currency systems, Peer-2-Peer Finance and commercial barter or ‘trade credit’ schemes to support small and medium sized enterprises.
• A project with the Transition Network to create an online payment infrastructure for complementary currencies: Transition Currency 2.0

For more information on any of the above projects, please contact:

josh.ryan-collinsATneweconomics.org