Why Don't Economists Understand Money?

[marian farrell]

Awareness about the flaws in our money system is increasing. There has been a great media coverage of the issue again. We have 4 new videos and a new booklet explaining the Positive Money system in plain English. And more…
 

1) New videos - 5th & 6th part of Banking101

Do banks create money or just credit?

You might hear some people say that “Banks don’t create money – they just create credit”. Let us show you why the numbers that banks create are money, and not just ‘credit’.

Watch here

How money gets destroyed

When someone repays the loan, the money is actually destroyed. It effectively disappears from the economy entirely. This point is vitally important, because it means that if we, the public, start reducing our debts by collectively borrowing less and repaying more, the amount of money in the economy will actually start to shrink. 

Watch here
 

2) Mainstream media report about money creation

FT: Hitch-hiker’s guide to monetary infrastructure

The Financial Times published an excellent letter from Prof Richard Werner in which he asserts that the textbook descriptions of “fractional reserve” banking belongs to the world of fiction and explains how the money supply is really "invented into existence".

Read here

Guardian: This money system makes increasing inequality a mathematical certainty

Also Guardian has mentioned us again in an article that explains that most money today is digital and created by private banks, when they issue loans.

Read here

 

 

3) New videos from the conference Modernising Money:

Why don’t economists understand money?

Prof Victoria Chick, Emeritus Professor of Economics, University College London gives some very interesting insights.

"There is something that 'seeps into the veins of academia' rather than people being deliberately 'bought off'. There is also social pressure to conform, 'You are just not part of the gang' if you don’t go along with the dominant ideology."

Watch here
 

How to change the money system?

Positive Money’s Campaign Director Miriam Morris presents the strategy of the campaign.

"Positive Money is a Campaign. We’re not just a debating society, we’re not just a research organisation. We actually want to change something."

Watch here
 

4) The Positive Money system – in Plain English

Now you can read a brief plain English description of Positive Money reform proposals which are outlined in detail in the book MODERNISING MONEY.

It explains how we can prevent commercial banks from being able to create money, and move this power to create money into the hands of a transparent and accountable body. It also deals with some common misconceptions.

Read here
 

 

5) Thank you for your help!

Thanks to your help we've been able to raise extra £531 in monthly donations  and £1345 in one-off donations towards covering the costs of the redesign and maintenance of our website and producing more new videos… Thank you very much! The new website will be launched in May :-)

 

6) Upcoming events:

London, Mon 25th March - What should economists and policymakers learn from the financial cr...
 - tickets can be requested after 10pm on Tuesday 19 March until at least 12noon on Wednesday 20 March.

Philadelphia, USA, Wed 17th April - Fixing the Banking System for Good
 - Conference featuring some big senior figures in the economic, monetary, and financial worlds (A Turner, J Sachs, M Kumhof, L Kotlikoff …)

Brighton, Thu 18th April - Screening of “97% Owned” & Discussion

 

7) More from the blog:

The Cypriot banking shambles would not have occurred under banking ...

The Elephant in the Room: Economic Determinants of Health

Banking Reform – Let’s start at the root

Economists prove that the earth is flat

Positive Money’s Ben Dyson in Iceland

 

Best wishes,
 

Ben, Mira, Drew, Henry, Fran & Miriam

www.positivemoney.org.uk