An End to Monopoly Money Imagining a Multi-Layer Currency World Molly Scott Cato Professor of Strategy and Sustainability University of Roehampton

Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable. Milton Friedman

Euro as a Political Project Compare Polanyi’s critique of the gold standard For countries who control their national curencies the decision not to pay is a political one

No Action on UK banks Project Merlin: targets missed Funding for Lending: risk transfers to taxpayer We hold controlling stakes in two banks Why £1bn. From taxpayers?—for high- risk securitised loans?

What Really Happened?

What Really Happened

Banks had resisted separation of retail from merchant banking Abolition of exchange controls in 1979: when Thatcher came to power you could only take £500 out of the country at one time Big Bang in 1986 The Background to Calamity

What Mervyn King Said...  ‘Unemployment is up, businesses have closed, and the direct and indirect costs to the taxpayer have resulted in fiscal deficits in several countries of over 10% of GDP – the largest peacetime deficits ever.’ ‘Of all the many ways of organising banking, the worst is the one we have today.’

Our Next Bank Governor?  Has called for the gilts held inside the Bank of England as a result of the quantitative easing programme to be cancelled.  Chairman of the Financial Services Authority during the crisis  Strong supporter of Britain’s membership of the Euro

Local Money Complementary or Alternative currencies? Not a new idea Can be designed to meet local need Counter-cyclical Struggle to compete with dominant global currencies

US Depression Era Scrip Issue Up to $1bn worth of these local currencies In 1933 up to 1 million people involved ‘it is clear that some sort of scrip was issued by several hundred municipalities, business associations, companies, banking organizations, barter and self-help cooperatives, and production units of the unemployed’ Loren Gatch

Bristol Pound Heavy involvement with local council Partnership with credit union Good support from businesses Powerful media coverage Can it compete with the pound sterling?

Greek TEM TEM: an acronym from the initials of the Greek phrase 'local alternative unit') Circulates widely in the Greek town of Volos Run entirely electronically

Loss of Currency Sovereignty Euro required abnegation of this power Many countries have abdicated in favour of private banks The power of seignorage The ability to eradicate debts, viz. recent IMF report on the Chicago Plan

The Greek state should reclaim the power to make money The Greek government would initiate a new currency for the purposes of running its national economy Greece could issue the currency to pay the salaries of public-sector workers, and accept the same for payment of taxes A Solution for Greece

Greeks would still be able to spend Euros, and the tourism industry, for example, might continue to accept them Traders would prefer to have Euros Euros would limit imports and exports but the national economy could function on its own currency Euro as Common Currency not Single Currency

Bretton Woods Conference Negotiations during the first three weeks of July 1944 Dominated by the US and UK negotiations: Harry Dexter White and John Maynard Keynes And a Global Currency?

Bretton Woods

Keynes had argued for a neutral global currency: the Ebcu The domination of the dollar has resulted from its role as a global reserve currency Its abandonment of this power should be made the condition for its imminent default Dollar domination The Conference established the World Bank, set the Gold Standard at $35,000 an ounce and chose the American Dollar as the backbone of international exchange. Dollar Domination

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