Wednesday, May 27, 2015

How did the Tories do that? Election May 2015

It was probably the choice of rabbits and one particular rabbit pulled from the electioneering hat that won the May 2015 election for the Tories. 

Lesson for future elections for all parties? Promise carefully attractive goodies for various sectors of the electorate and also spread scare stories about your opponents. The Tories quickly produced rabbit after rabbit: massive discounts for housing association tenants to buy their homes; a special deal for family homes freed from  inheritance tax up to £1m;  an extra £8bn for the NHS; free 30 hours of childcare - all these from the austerity party! Most of these trumped the equivalent Labour rabbits who failed to impact the voters with any unique selling points that could stick with enough people all the way to the polling booth. The Labour refusal to add in a EU referendum given the popularity of UKIP was extraordinary.   

Election rabbits are also the scare stories each party spreads about the others. A Tory one about Labour was the pressure Labour would be under from the more extreme anti-austerity SNP as quasi-coalition partners. Probably the most important anti-Labour rabbits coming from the Tories were:  Things That Show Labour Is Economically Incompetent. The show stopping prize rabbit was the letter written in 2010 by Liam Byrne that he left on a desk in Whitehall in 2010 for his Treasury successor:  'I'm afraid there is no money'. 

Labour never had a good answer for that letter which backed up the Tory message that they were not to be trusted to run the economy again. Instead of seriously rebutting it, Ed Balls claimed it was a joke and was trounced for being flip. But  The Times on 13 April  had Prof Richard Layard making what looks like a sound defence of the earlier Labour handling of finances after the world was overtaken by the 2007/8 financial crisis.  Why was Labour unable to get such reasoning across?  The Prof shows that the Coalition, in insisting on the austerity programme of rapid deficit reduction forced economic growth down:

 ' The IMF has studied 173 cases of budget cuts around the world and found that the consistent outcome is economic contraction. Far from improving things the Conservative plan almost certainly made them worse'.  

But such a message never gained traction from Labour over the 5 years to rebut the need for harsh austerity. The problem is that Labour did have some issues they failed to address. One was Gordon Brown's classic:  'no more boom and bust' repetition made during his Chancellorship giving a display of hubris and lack of common sense that was never resoundingly apologised for by the now-defunct Labour old guard.     

Maybe the Tory strategy is illuminated by a passage in the book The Free Lunch - Fairness with Freedom  (p. 114-5, written in the time before fixed-term parliaments): 

'But UK governments do have a possibility of 'riding the [economic] cycle' as they allow it to work more naturally, with some possibility of timing elections, rather than attempting to manipulate it around fixed electoral dates.'  

I think that Prof Layard's remarks about the Conservatives setting the wrong economic policy in their early coalition years,  shows that they were manipulating the economic cycle for electoral purposes, around the new fixed-term parliament timetable introduced by the Coalition. They chose a short term deficit reduction period (ideological reasons given of course), and its austerity outcome more importantly chimed with their political aims of downgrading Labour's competence. 

Continuously through the Coalition parliament they built up an excessive slur on Labour's reputation for economic management. Cleverly the Conservatives insisted on Labour failings by conflating the reasons for the 2007/8 world financial crisis with whatever errors could be found from Labour's record over the previous decade. Over the Coalition parliament the 'Labour mis-management' narrative took hold with even the austerity outcomes giving them ammunition to shoot at Labour.  As the election approached, by now having managed to bring on the delayed growth to give voters a 'feel-good factor', the refrain:  'You can't trust Labour with the economy'  was accepted truth and the Liam Bryne letter was ready to be produced a few weeks before voting - as a wonderful, scary, Tory rabbit.

Prof Layard says that by 2010, GDP was rising along with Labour's policy of 'a sensible long term plan to reduce the deficit without aborting the recovery'.  David Cameron claimed when speaking on the Byrne letter, that the UK in 2010 was as risky as Greece - implying that austerity was essential. Layard says there was no comparison of the UK with Greece: 'There was no crisis'... 'In 2010 our net debt relative to GDP was lower than the G7 average'. He also explains that the Osborne austerity measures slowed the economy from 1.8% (2010) to 0.8 % (2011) to 0.2% (2012). 

The argument here is that George Osborne's austerity was mainly an anti-Labour policy and not an ideological one. In economic terms it didn't work very well anyway as the deficit reduction deadlines have been stretched and stretched into the future, to 2018 and possibly beyond. Back in 2010 under the less austere Labour programme the economy had started to heal itself and a continuation of that might have aided deficit reduction faster.  But the Tories shot the UK economy in the foot, slowing growth and used this self-induced outcome to dupe electors away from Labour. The UK public suffered three years of unnecessary delayed growth, and the Tories won in 2015. What a triumph!  

Alternatively in 2010 for the Tories to have allowed Labour's plan to run and bring more growth would imply that Labour were competent and the Tories were carrying on their good work. If this had been done, by 2015 the core election issues would have been very different. The new Tory 'One Nation' theme looks hollow against the refusal to recognise reasonable economic management whichever party it comes from.  With George Osborne's continuing failure to meet his own deadlines the time is overripe for some humility from him as well as from Labour maestros.  The UK public deserves more than tiresome election fisticuffs over economic management - why can't we have consensus? 
posted by Charles Bazlinton. Author The Free Lunch - Fairness with Freedom         

Tuesday, May 05, 2015

Election emergency. Why? Russell Brand's view.

Russell Brand [Twitter @the trews] has decided to vote in the general election after all. He wants the Conservatives out of office and thinks that Labour's Ed Miliband will listen to the voters after gaining power, even though he isn't wholly smitten with EM.  His conversion to voting can be seen here.  Caption: Emergency: Vote to start revolution.  

Talking emergencies - a few days ago two pre-teen children were stuck in a lift.  They didn't use the alarm button or emergency phone because: 'We didn't think it was an emergency'. Instead, a bit like Russell Brand pre-conversion, they tired to raise the alarm by calling and shouting for help - for about an hour and a half. Eventually someone heard and the local Fire and Rescue services released them safely.  

Owen Jones of The Big Issue (Apr 27-May 3) - full article buy a Big Election edition - asks Russel B 'Are you basically a big megaphone for people and causes that are otherwise ignored?' Brand says his gifts are to make complicated information accessible and showing off. He wants his understanding of compassion and connection to communities see: Focus E15 (preventing housing evictions) to be leading and not his egotistical nature. It sounds promising - at least.

Better a late conversion to voting than no voting at all. A pity he didn't change his view a few weeks ago when there was time for unregistered voters to take notice. Consequences follow for failing to act - the children trapped in the lift suffered longer by not taking action in the manner expected. 

So for those who are registered to vote and will only vote if they can be convinced we are in an emergency - an emergency for fairness - consider these:

1. Is it an emergency for fairness that 8 years after the banking crisis and a taxpayer bailout of the banks, huge salaries and bonuses are still paid to bankers? Find a party that wants to reform the banking and money supply system, that promises regional or local banks. And Vote. 

2. Is it an emergency for fairness that in many parts of the country, young people will become old people before they can save enough for a deposit to start to buy a house? Find a party that aims to introduce land value tax in place of income tax and other taxes so that fairness for new home owners and renters is considered. Mansion tax is a start.  And Vote.   

3. Is it an emergency for fairness that whilst low income housing tenants are penalised  for having a spare bedroom and thereby suffer a housing benefit cut, that the Conservatives are considering raising the nil inheritance tax threshold to houses worth £1m ?  Find a party that is not so blatantly partisan in favour of wealthy property owners. And Vote.    

Russell B, says vote Miliband to evict the Conservatives but vote Green in Brighton. Few say it like Brand says it, but many of us do it - vote to achieve the least worst option. Maybe there is a need to look at a proportional voting system again?

By the way, if you are in a lift that won't move, your are in an emergency. Press the red button and/or  use the phone - they are usually down near the floor. Instruct your children. And never, never, try to climb out of a stuck lift if the doors are open between floors. 

And when you get out: Vote. 
Posted by Charles Bazlinton.  Author The Free Lunch - Fairness with Freedom 

Saturday, April 18, 2015

Tearfund: land value tax, money reform and basic income

This week the Bishop of London Richard Chartres called for a 'passionate concern for the common good and a fuller life for everyone' (The Times, letter 16 April 2015).  He was launching a discussion paper by the charity Tearfund  The Restorative Economy .

This is a highly significant paper in its scope and insights; with its suggestions for transformational policies; and from where it comes - a prominent Christian-based charity. As seen in the earlier blog the  'Bishop's letter: Postscript coming?'  issued by Church of England bishops, disappointed by the somewhat bland recommendations. But this Tearfund paper is seminal. It suggests using the restorative principles of the biblical jubilee as an 'instruction manual' and theologically argues that the mission of Jesus was a re-uniting and restorative one. Tearfund sees its work as an 'integral mission' covering lifestyles including such things as economics. This is highly unusual! As seen in the 'Bishop's letter', the official church does not usually challenge the status quo and vested interests with awkward recommendations.

Tearfund (not a church-based charity) has clearly moved beyond its original brief of famine relief.  It acknowledges success in recent years in reducing disease, poverty, and increasing life expectancy, but although it sees promise in our future, there are obvious threats ahead, with inequality rising and economic insecurity for millions.

Thus it wants measures:
' to share the proceeds of that natural wealth fairly, just as jubilees reset land ownership on an equal per capita basis.'

and:
' through stronger and fairer taxation of property (via a land value tax) ...
a strong moral case for using some of the income from land for the benefit of society as a whole, and for preventing wealth from becoming increasingly concentrated over time....by employing taxes on land/property and on wealth transfers to fund services such as education and healthcare.'

it explains land value tax:
'A land value tax. At present, business rates in the UK apply to the rental value of commercial property – in effect, taxing buildings rather than the land underneath them. The problem with this approach is that it creates perverse incentives, which can (for example) skew our economy away from industries that use expensive buildings – such as manufacturing....'
'...The Mirrlees Review therefore calls instead for a land value tax, arguing that ‘this is such a powerful idea, and one that has been so comprehensively ignored by governments.'

and even extends to the reform of money and banking:
'a hard look at the implications of the framework within which money is created in our economy. Would it be worth considering, for example, requiring banks to keep a high level of reserves against deposits (setting a level of, for example, 50 per cent – half what has been suggested by the Financial Times’ Martin Wolf and IMF researchers)?'

and wants the provision of a basic income:
'Allow poor people everywhere to meet their basic needs by introducing a global social protection floor, including healthcare, education, nutrition and basic income security.' 

It calls for political action across disciplines 'joining the dots' :
'Looking back at key moments in history, it’s clear that the tides often turn because of the emergence of a movement for change. Right now, we need such a movement, one that follows in the footsteps of the anti-slavery campaigners, the US civil rights movement and all the other examples of ordinary heroes – Christians, people of all faiths, people of none – who together achieved the impossible. These movements faced almost insurmountable odds, but they overcame.'

posted by Charles Bazlinon, author of The Free Lunch - Fairness with Freedom which prefigures much in the Tearfund paper.  



Monday, March 23, 2015

George 'Two Nations Toryism' Osborne

What is the Conservative Party for? Benjamin Disraeli is credited with forging a One Nation vision for it and a decade ago David Cameron was spoken about as having taken on Disraeli's mantle see: Daily Telegraph from 2006 . Remember the Big Society of the last election?

So what, at the bedrock, does Conservative policy look like as seen through the March 2015 Budget? Is Toryism about One Nation any more?

The most telling measure is the new Help to Buy ISA for aspiring first time home owners. For every £200 you save the government will add £50 up to a limit of £3k for £12k saved.
Says Jonathan Eley in the Financial Times 21 March: 

'Housebuilders, existing homeowners and estate agents... feared a tax raid in the form of capital gains tax on the sale of high-value primary residences. Instead they got a shiny new subsidy from taxpayers... they can scarcely believe their luck. This is irresponsible policy making.'  

So the Chancellor is keen to boost the housing market at the bottom end but this will add to house price inflation and make homes less affordable for those who cannot meet the criteria for the new HTB ISA. The 2013 Budget introduced an earlier Help to Buy shared equity scheme. That was handled through housing associations, which tempers the price effect of the subsidy on the general housing market; but this HTB ISA is a direct action into the housing market and is likely to boost prices. By this measure this Tory Chancellor is further forcing apart a divided nation, separated by the way they have to provide for their housing needs: The Renters and the Owners.

Paul Johnson of the Institute for Fiscal Studies, commenting on the Budget in The Times March 21, 2015  'Both parties need to come clean on cuts'  - has it that there will be a £10bn gap in government financing which will involve more cuts than specified now. He reports that the Chancellor says he will cut 'welfare' to achieve this. Johnson says that this is likely to mean a reduction in support for housing benefit as housing rents have soared due to demand and the housing benefit bill is stretched. He thinks that the support link to actual rents may be broken so affecting social housing tenants as well as private renters. So with welfare cuts proposed the nation is to be further spilt, and probably again through housing costs.

So the Conservatives are a long way from a modern version of Disraeli's One Nation in these policies. Look at this report in the New Statesman 24 September 2014  about Mansion Tax:

'When Miliband first adopted the idea in 2013, the Tories responded by writing to their wealthy donors soliciting funds to campaign against a 'homes tax' '  .

There is nothing obvious in the Budget to bring house prices down to more affordable levels, such as a annual levy on land values, which would also automatically promote house building. George Osborne has finally killed off any hope of David Cameron's Big Society bringing an equitable housing policy and Disraeli must be turning in his grave.

Posted by Charles Bazlinton: More ideas for a fairer society in The Free Lunch - Fairness with Freedom  



Monday, March 16, 2015

Richard Werner on broadband investment

Promises, promises. Electioneering by George Osborne (The Times, March 16, 2015) has him saying that 'Remote homes will be first on ultrafast broadband'. A new invention, 'G.Fast' will be x4 the speed of the ordinary variety and enable easier access for more consumers.  And the government will be able to concentrate subsidies on the remote areas because of new technological developments by BT.  New subsidies are going to be available for suburban areas too. 

The background assumption of all this is that the government has had to hold back on subsidies (until election time) because of the austerity regime following the financial crisis.    

Prof Richard Werner (Chair of International Banking at the University of Southampton) has it that infrastructure investment which promotes the sustainable economy, can readily be funded with money created by the government. That is: debt-free and interest-free money.
Yes read that slowly:  D E B T - F R E E  AND  I N T E R E S T- F R E E.

In an article about this written in 2010:

It is therefore possible to finance the Broadband Initiative with the creation of government money, without anyone incurring any costs or debts, and without any interest burden.

One day a government, hopefully, will wake up and grasp powers for the common good that are currently controlled by banks. Why don't political parties champion this as they head for the election? Are they so in thrall to banks who would be by-passed for credit creation?
Posted by Charles Bazlinton. 

Monday, March 02, 2015

Bishops' Letter: Postscript coming?

The Bishops' Letter 'Who is my neighbour' is strong on analysis. It looks searchingly at the socio-political scene and pronounces that we are in  dangerous times, evidenced by such as: an adversarial stance in politics - where there are no distinctive political goals, attractive visions or idealism; people are viewed largely as consumers and as mere recipients of narrowly targeted policies; there are grotesque inequalities of wealth and power; we are living through a banking and a housing crisis.


We are becoming a society of strangers. Respect for views other than our own, is disappearing through ignorance, leading to a selfish and competitive mindset which assumes that unfamiliar groups are a threat. The individual is king and autonomy is celebrated, but the support of those in deep need is an undervalued activity, yet therein are revealed the deepest human qualities.  The idea of a common bond between us is fast disappearing. We are moving away from the idea of a 'community of communities'.

Salvation is expected from the market and the state. But the market has damaged the condition for its own flourishing; and the 'anti-messy' bureaucracy of the state, favouring neatness, law and regulation induces a 'chill factor' which stems the flow of common sense and neighbourly help.

So what do the bishops prescribe? They think the solution, rather than to choose between right or left politics or even to split the difference, is to find sources for answers from within them all.  They still like the concepts behind the Big Society. They like mutuality and volunteering (e.g. credit unions and housing associations); subsidiarity (lower levels for decision making); 'intermediate institutions' between family and state (credit unions, housing associations and the churches). They back the idea of the living wage.

But the bishops do not discern any bigger vision for us to hope towards: whilst in 1945 and 1979 there were new visions which 'changed the political weather', they say that 'no such thing is yet on offer in 2015'.  How can it be that their telling analysis has not allowed them to do more than anxiously wring their hands and merely ward brownie points to established remedies for the failures of market and state?  What about examining valid solutions towards recovering the common good and the common bond that they long for? 

1. The living wage liked by the bishops is a voluntary measure and depends on the employer's willingness to pay it. Why did the bishops not champion the work of  The Citizen's Income Trust -  their very own minister Rev. Malcolm Torry? His organisation has painstakingly shown over some years how every person, youngest to oldest could, with economic fiscal prudence, receive a regular income which would not only help unite all citizens in a new basic monetary right, but also eradicate many of the failings of the state welfare and benefits system and so start to address the 'grotesque inequalities of wealth' the bishops deplore. Bishops, have you considered a state-paid, regular citizen's income payment to all?

2. The only suggestion in the letter about the 'banking crisis' is that credit unions are 'an ethical alternative'. What about another ethical alternative - community banks? I declare an interest as a director of Local First CIC - which is helping to form a full-licence independent local bank where profits will be directed to community causes. Such community banks are likely to become transformative common good economic agents in years to come in the UK. Not only will they generate productive lending and provide sound banking, but their surrounding communities will benefit from the banking profits hitherto taken privately. The national effects of the banking crisis we are still living through will start to mend and largely be prevented from recurring bearing in mind the local and small scale nature of these banks. Bishops, have you considered such full-licence community banks?

3. Another solution to the banking crisis unacknowledged by the bishops is that all money should be created by a branch of government under democratic scrutiny with private banks taken out of the creation of money altogether. The money supply monopoly and privilege would then be serving the common good in a powerful new way. Bishops, have you considered monetary reform?

4. To provide homes through housing associations is a reaction to a failed property market and whilst helpful, this is not a permanent solution for the difficulties of home ownership. Those who own a property are in the enviable position of gaining wealth as their property land value rises over time, even as they sleep; but those renters who own no property have no such comfort. That land values are not widely taxed is a national disgrace and a betrayal of the common good. Every citizen - including renters - who add to the success of the economy, thereby raises the common good in wealth terms, much of which is then captured in rising property values, benefiting owners alone. This reform would be accompanied by a balancing cut in income and other taxes.  Bishops, have you considered land value taxation?

5. The early church fathers of the 2nd to 4th centuries: Clement of Alexandria, Ambrose, John Chrysostom and Augustine of Hippo preached and wrote in the context of Roman law and concepts of ownership which are largely the foundation of our own law in the 21st century. (Book: Ownership by Charles Avila). These esteemed church leaders were strong on the contrast between koina - things common for all,  and idia  - private property created by yourself.  Koina being naturally occurring things - that are there for the using. As Chrysostom has it: 
        'God generously gives all things that are much more necessary than money, such as air,   water, fire, the sun, all such things ...That we may live securely,... given to us in common.'  

The problem, they pointed out, is that the law authorised people to take by force or buy up koina as idia , to the diminishing of the common good, then, as now. They also majored on koinonia - community sharing inspired by the common bond of humanity. 

The good news is that bishops today are speaking the common good talk and the common bond talk of their spiritual ancestors. I wonder when they will write a postscript to their 2015 letter and give us the 'Common Good Recovery Plan'. Attractive vision? Idealism enough, bishops? Just imagine what Chrysostom might have achieved with the benefit of a democratic system like ours... 
Charles Bazlinton. Author: The Free Lunch - Fairness with Freedom

Saturday, February 14, 2015

The Greens get it and are boldly going with it

The Green Party is intellectually well ahead of the other parties in policies for economic justice and fairness. Their preliminary outline policies are designed to promote a more equal and balanced society and include Citizen's Income (Policy EC730-733); Land Value Taxation (EC 791-793); and Monetary Reform and Community Banks (EC 660-679).

The message from Greece and Spain and elsewhere in Europe is that minority parties are catching a mood that is stirring in the political psyche of ordinary people. Even though the banking crisis hit seven years ago, new revelations of strange and dubious banking practices are just coming into the light. And still the 'legal exemption' from taxes by international firms seems an intractable problem. People are getting truly fed up. Not only perhaps by the brazen unfairness of these things but that none of the dinosaur parties intend to tackle the mess at its root. The Occupy movement has a long way to run still and the fact that the Green Party is boldly rooting around at core remedies for unfairness is excellent news and people are taking notice - membership is growing.  

Andrew Neil interviewed the Green Party leader Natalie Bennett, see YouTube 15 Jan 2015 the 'car crash interview'. Does it matter that she was unable to tell Neil exactly how the cost of the  £280bn bill works out for Basic Income - £72 per week for every citizen? Only a bit - at this stage of the election campaign - so she had to refer him to the Green Party website which will be updated in March with figures to show how this is possible.  Anyway when the time comes for actual figures the Citizen's Income Trust are well able to prove the case and have been working on this for years.

Andrew Neil's interview technique is a rather more benign version of Prime Minister's questions in the House of Commons - he actually listens and responds to the specific answer - rather than, as in PMQs, ignoring the point made and indulging in puerile name calling. But perhaps a little enquiry into the proposed different society that the Greens are planning for - more balanced and equal - might actually illuminate Neil's viewers. At least it would be more revealing and uplifting than PMQs.          

Is Labour near advocating Citizen's Income? The Citizen's Income Trust thinks they could be after reading an article by Rachel Reeves in Renewal.  But no official policy like the Greens.

What about Tory Ian Duncan-Smith's Universal Credit?  Is it a move  in the Citizen's Income direction? The Citizens Income Trust comments that it could easily be morphed into it. 

Renewal also highlights monetary reform so there is hope that Labour is at least aware of such society-transforming economic good sense and justice.

The Lib-Dems and Labour are both pushing for Mansion Tax which is a loophole for full land value tax to be levied on all land. But no party is as principled and clear as the Green Party on LVT, Citizen's Income and Monetary Reform - the three essential economic reforms for fairness. The Greens get it and are boldly going with it.

Wednesday, January 28, 2015

The real QE stands up!

Quantitative Easing has come to the EU - or has it?
Was Japanese QE real QE?
Were US Fed QE and UK BoE QE, real QE?
If these were not QE what were they?
So what is true QE?
Click on the link below and watch the 8 minute YouTube interview of Prof Richard Werner by Nicole Bourbaki as he explains QE as a term which he coined in the 1990s and how it differs from the 'QE' that masquerades as the real thing. If you have only 20 seconds, go from 5m 53s to 6m 13s.

The video is readily understandable by non-financial people. Experts may have difficulty in grasping that their view of central bank options and policy over some years may have been somewhat lacking.
QUANTITATIVE EASING is not what you think - Richard Werner    

Explore the-free-lunch.blogspot, for more of Richard Werner's ideas. Also, see his simple explanation of banking which may surprise you in this series of short YouTube videos. 

Wednesday, December 24, 2014

Clarity amidst muddlement. Richard Werner proves credit creation. PLUS - New YouTube documentary: Princes of the Yen

Has you ever done this? Asked your bank manager for a €200,000 loan 'for research purposes'. That is just what Professor Richard Werner did last year to prove a point that has been absorbing eminent economists since the mid-19th century. An academic battle has been raging for well over 150 years about what exactly banks do when they lend money to customers. It has involved economists of high international standing including Macleod, Wicksell, Withers, Marshall, Keynes, Crick, Phillips, Stamp, Mints, Schumpeter, Stiglitz, Samuelson, Tobin, Klein, Gurley and Shaw and many, many more.

Whilst these notables discoursed around the matter of how banks produce a loan, the banks themselves carried on regardless of academically discerned niceties. The trouble is that over that period many financial crises stemming from bad banking practices have taken place with the most recent one possibly the worst and...is it over yet? Clearly whatever goes for economic policy that has flowed from universities to governments since the mid-C19 has not been very effective in controlling banks which regularly create asset bubbles which burst causing financial disruption. 

So we have high confusion. Bankers seems to know just what they are doing, having made between the crises, extraordinarily powerful and profitable businesses. Meanwhile politicians guided by academics have been chasing around trying to understand what the banks are doing in order to prevent the next crisis.

Into this steps Richard Werner wanting to get to the heart of the problem. Having proved to his academic satisfaction that individual banks create credit, he resolved that a good way to convince others of this particular economics conundrum was to observe it happening in an ordinary bank branch. So with some panache he embarked on an experiment to do just that and to find out which of three historical theories stands up to scrutiny. He was assisted by helpful bank officials, a photographer to capture screen shots and BBC reporter Alastair Fee with a cameraman to record it all. Werner's aim was to cut through the 'hypothetico-deductive' method of the economic establishment where ''unproven 'axioms' are 'posed' and unrealistic assumptions added''. He just wanted to see what happens in a bank's internal accounts when it lends money and so hopefully trace the birth of a loan. This was in Germany on 7th August 2013, when the directors and staff of a small bank enabled him to borrow the €200,000, and the next day when he paid the cash into another account at another bank, just to show it was real money.

You can study the theme and the experiment in a new academic paper just published by Elsevier and the International Review of Financial Analysis. In this Werner (with K.Voutsinas and S.Dhanda) gives the history of how banking as a function has been viewed over the last 170 years by the leading economists of their day. Title: Can banks individual create money out of nothing? The theories and the empirical evidence.  Starting with Henry Macleod (1855) Werner explains three theories of what banks do in passing loans to customers, here generally described: 
Theory 1. They do actually create credit out of thin air and lend it on. 
Theory 2. They do not as individual banks create credit themselves, but the whole banking system 'somehow' does create credit utilising the fractional reserve system, according to the ascertained central bank reserves of the individual bank. The mysteriousness of the 'somehow' problem was acknowledged by eminent economist Mints (1945) who said it 'proved to be one of the most baffling for writers on banking theory'. 
Theory 3.  From two pre-existing sources of money - their equity and deposits of various types - banks lend out only from what they already have. The process being known as 'financial intermediation'.

From the mid-C19 Theory 1 prevailed and now Theory 3 is top. Keynes moved from Theory 1 through 2 to 3.  In very recent years there has been a shift back towards Theory 1. Even the Bank of England acknowledged in March 2014 that individual banks create credit out of nothing.  However as academics seem largely ignorant of this simple fact, Werner wanted through his experiment to prevent a toilsome debate for yet another century about the three theories, with the possibility of reaching no conclusion even then. After all, long ago in 1927 economist Sir Josiah Stamp (Bank of England director) said: 'there is a fair amount of muddlement ...on the apparently simple question : 'Can the banks create credit, and if so, how, and how much?' '.

To Werner's satisfaction the German bank in August 2013 created credit out of nothing which accords with Theory 1. In the paper Werner explains how Theory 2 ( based on pre-existing fractional reserves) and Theory 3 (intermediation of existing money) cannot hold for the loan the bank created for him. He explains that the fractional reserve theory is a half-truth but that the financial intermediation theory now prevalent is quite false.  Werner claims that his experiment  to prove that banks create credit out of nothing is likely to have been the first such in 5000 years of banking history. Its outcome has huge implications as economists and politicians grapple with how to direct this money supply created by banks for productive purposes. 

Over many years holders of the theory of credit creation by banks have been denigrated as 'cranks' and 'agitators' by scoffers who have never bothered to examine it for its scientific veracity. Werner has it that grand economists have brushed aside real truth whilst peddling their own inadequate explanations. Meanwhile banks have done their credit creation work beneath the radar of public gaze, thereby amassing fortunes and leading to the crashing of the financial system from time to time as their bubbles burst. Werner's researches have over many years led him to expect that there is a way to a 'fair, effective, accountable, stable, sustainable and democratic creation and allocation of money' and hopes that 'the awesome power to create money is returned directly to those to whom it belongs: ordinary people, not technocrats.'  Read the paper for his ideas on how. 
        
Werner has also just launched a film version of his 2003 book Princes of the Yen as a full length YouTube video Princes of the Yen: Central Banks and the Transformation of the Economy.  The theme of this 90 minute documentary is about the power of central banks, in particular the Bank of Japan from WW2 and the post war period to date. There is a terse commentary with historic news clips resulting in a documentary of high forensic quality. It illustrates how US-centred institutions influenced events in Japan and the Far East over a long period and 'how crises can be re-engineered to facilitate redistribution of economic ownership and facilitate legal, structural and political changes' with  a suggestion that the Eurozone crisis is similarly being used to centralise power. The film was issued in November and now has over 30,000 hits. The book was reviewed on this blog in 2009.   
Posted by Charles Bazlinton.
http://www.the-free-lunch.com/
            

Tuesday, November 11, 2014

ECOBATE 2014 - 3 Lord Adair Turner: Credit creation and its implications

Lord Turner had a problem as the final keynote speaker at ECOBATE 2014 because his slide show went astray en route to the organisers. But we were favoured instead with a bravura oratorical performance such as is rarely seen and heard in these days by the often inept use of PowerPoint. He strode the stage issuing a fascinating flow of ideas, using judicious arm waving to describe the slope of the missing graphs, as needed. One wished that speakers lost their slides more often - it might prompt better speeches and greater audience attention. But our speaker was on top of his subject, so that was obviously vital too.

He acknowledged his debt to Professor Richard Werner:
          'Richard's writings on monetary policy and the importance of a credit focus are absolutely important, and very important to the evolution of my thinking.'    
He recalled a Financial Policy Committee meeting at the Bank of England in the autumn of 2011, where in a discussion about whether the policies under discussion would stimulate credit or restrict credit, he said 'we had to talk about what the credit is used for' but was told very firmly that: 'it was not the role of a central bank to ask questions about the market allocation of credit'.  However, central banks across the world are now actually doing what he suggested then. For example the Bank of England's subsidised Funding for Lending scheme specifically wants: 'incentives for lending skewed towards SME's' (small and medium enterprises), rather than real estate lending and mortgages.

He warned that there is a general understanding that this new tendency is only an extreme passing phase and that we ought to return to the pre-crisis orthodoxy of inflation targeting as the monetary aim, but he said: 'We cannot, we will not, we should not return to that' . Monetary policy in the future must distinguish between the different purposes to which credit is put.

A diversion into different economics theories followed:
a) Private borrowing in advanced economies has gone from 50% of GDP in the 1950s to 170% in 2007. Without reasonably safe debt for railway funding in the C19 we would not have had the mobilisation of capital that drove the industrial revolution. Thus some see high private sector leverage to be good for economic growth, e.g. India at 10%, needs more.
b) Others suppose that leverage and the details of the entire financial system are not important. Quoting Mervyn King:
         'The dominant new Keynesian model of monetaray economics lacks an account of financial intermediation so that money, credit and banks play no meaningful role.'
Lord T. taking us along with him in our bafflement: Surely if interest rates are the main economic tool doesn't that work through the financial system?  It became clearer that the theory contains its own odd irrationality. He said that interest rate manoeuvering to achieve low and stable inflation 'somehow' operates through the financial system, which is understood by it exponents to be rather like a veil which itself is not impacted by the interest rate.  The theory goes that whatever credit creation and lending happened for whatever interest rate and whatever the credit was allocated towards must be optimal. [All very Humpty Dumptyesque - Alice in Wonderland: 'A word means just what I intend it to mean...']

The whole basis of this comes from Knut Wicksell who promulgated a theory of a 'natural' interest rate which policy makers should aim to target so as to prevent inflation. Trouble is no one can observe what the natural rate is so central banks use the policy interest rate to try and achieve low inflation and assume that credit in the economy is optimal.  This relies on two assumptions that are mistaken. Undergraduate text books often do not contain details of banking and finance but if they do they state that banks take deposits from savers and lend it to entrepreneurs. This is a mythological understanding of how banks and capital markets work. The truth which was fundamental to Hayek and to Schumpeter is the understanding that banks create credit money and purchasing power. They do not lend pre-existing deposits.   If this is not understood we cannot understood the real economy.

Lending can be used for capital investment, for consumption and for buying assets.  He said that over 70% of lending is towards pre-existing real estate and this finances a competition for a scarce, location-specific supply of urban land. The highly misleading text book role of banks: to intermediate household savings into productive business investment is a minor function today.

The emphasis on real estate lending creates a cyclical pattern which is self-feeding. Banks experience few losses as the boom starts and are able to lend more and the rising prices enable them to extend even more credit. Hopeful property owners, fearful of losing out add to the pressure. This is at the core of financial instability and the crises of the last 50 years. Whether in the UK, Japan, Sweden and Norway and elsewhere world wide, real estate credit is the root cause.  Post-peak, borrowers become determined to pay down their over-leveraged debt and withhold investment from elsewhere and the deep recession we are now experiencing endures. 

How do we get out of all this debt? It gets moved around the economy. For every % point of private debt reduction we get a raised % point in public debt because tax revenues are reduced due to recession and welfare has had to rise. All public policy levers are locked off. We worry about how to pay back the public deficit, we try and stimulate the economy by reducing interest rates without the desired response. So why have the low interest rates failed to bring inflation? The answer is the use to which the credit is put. He cited Richard Werner's book (New Paradigm in Macroeconomics) and his studies on the disaggregation theory of credit. The rise in credit for assets and particularly for real estate is a good indicator of future financial crisis but not of inflation in the real economy.  In these circumstances the tool of inflation targeting using interest rates is not usable. To raise interest rates from 5% to 5.5% to dampen property price rises of 10% would be ineffective but to raise them to 10% would cause serious damage to the rest of the economy. He mentioned the failed experiment by the Swedish Riksbank (see this blog) as evidence of a central bank that tried this.  

He wants central banks to set risk weighting far higher for mortgage lending than banks would set for themselves, to take account of the social risk; to use loan-to-value limits; and to introduce a new type of bank with restricted property lending powers but enabling productive lending. He ended on the emphasis that the differentiation of what credit is to be used for 'should be, will be and must be' a permanent part of the financial scene.

In the questions session following I put it that,  frequently in this ECOBATE event the root cause of the crisis was mentioned to be property and real estate lending and speculation. Would the panel comment about the use of land value taxation to restrain the tendency to use credit in the property market and 'remove speculators' asbestos gloves' so that they wouldn't speculate so readily?
Lord Turner acknowledged, as Thomas Piketty has shown (Capital in the 21st Century) that wealth disparities are strongly correlated with increasing urban land values. He thinks tax favouritism such as exempting property gains from capital gains tax is a public policy making the situation worse. But that public policy could 'lean against' the situation by using Henry George's land value tax. He said we should be aware of possible effects from changes in public policy that cause instability in the economy and the need to offset those effects with other changes.
Sir John Gieve said that we should not think that hitting property for tax in place of VAT and income tax is possible, due to the public debt overhang which needs servicing. But yes, property taxation will increase along with other types. In an interesting follow-on point, Richard Werner said, regarding the high government debt and the high taxes needed for servicing it, that this arises from our debt-based monetary system.  He is a well known advocate of  a debt-free monetary system (YouTube) that would reduce much taxation.

POST CONFERENCE news item, Lord Turner 11 Nov 2014 in the Financial Times:  Print Money to fund the deficit  states: 
           'Government deficits should be financed with new money created by the central bank and added permanently to the money supply. ... There are no technical reasons to reject this option, only the fear that once we break the taboo, money financed deficits will be used on too large a scale'.  
He sees such a policy is inevitable, thinking that current QE policies may be even more risky. He thinks the above would bring a return to normal interest rates which would counter highly leveraged financial engineering caused by low interest rates.   

Reported by Charles Bazlinton from the ECOBATE 2014 event in Winchester 8 October 2014.  
     

Friday, October 31, 2014

ECOBATE 2014 - 2. John Kay: Have Banking Lessons been Learned?

Prof Don Nutbeam, Vice-Chancellor of the University of Southampton introduced Prof John Kay whose talk was headed: 'Have Banking Lessons been Learned?'. He can also be seen on a video interview  given to Information Daily at Winchester Ecobate 2014.

He wants structural changes to the banking and financial environment rather than more and more detailed regulations and rules of the type that were in place in 2007/8 when the crisis hit and which failed to stop it. He thinks that another crisis might have to be endured before we put in place what is needed. The total sum of financial derivatives is around £700trn which nonsensically is three times the value of the entire world assets. Only about 3% of the £7trn of all bank balance sheets is used for non-financial i.e. productive, real economy purposes. John Kay proposes that the activities of finance be separated out: a) utility/ useful / payments / and such boring activities; and b) the rest such as buying / selling and casino-like things. The former are serious and relationship based and the latter are buccaneering, speculative and transactional. He spoke of the high speed cable link between Chicago and New York built costing $300m which achieves an advantage in time of 0.7milliseconds to the traders who use it. Such business bears little connection to ordinary life. 

Historically stock exchanges came about when huge capital amounts were needed and savings were widely dispersed, in order to fund such as railways, automobile manufacture and brewery plants. Nowadays large capital amounts are not needed for start-ups. There is a need for finance to cover new business's losses, but when such as Facebook came to public offering and raised $16bn there was some perplexity as to what to do with the money!   The knowledge economy generates its own cash rapidly. 

He sees a particular mix of themes and players in current entrepreneurial activity. Basic research funded by governments, university involvement, previously successful businesses providing capital and local banks for local capital needs. Regulation should be used to help bring about the above - but not of a type with ever more detailed rules of the kind envisaged through Basel 1, 2, 3, etc.
Charles Bazlinton reporting on the 2014 European Conference on Banking and the Economy. Winchester, UK.  8th October 2014     
      

Thursday, October 16, 2014

ECOBATE 2014 -1 Charles Goodhart and global trends


A single conference (2011) might be a one-off. The second (2013) a mere coincidence. But with number three (8 Oct) comes a strong hint that ECOBATE is now established in the sustainable economics and finance world. Prof Richard Werner (University of Southampton), again performed his conference double-act, providing a packed day for finance and economics people with dozens of academic papers and a keynote address from Prof Charles Goodhart; this was followed by an afternoon session to which the general public came too, addressed by eminent speakers such as John Kay, Lord Adair Turner, Sir John Gieve and Ralf Barkey. We are seven years from the near collapse of the financial world. Is the crisis over?  Or only just for now? What did ECOBATE 2014 add to the debate?

Charles Goodhart told us (in his academic session Keynote speech 'Monetary Policy and Long Term Trends') that as a reaction to some of the colleagues he meets who - for the purposes of making money -  'have an attention span  of hours or days', he would give us an overview of decades past and future. He told us to be wary of the view: 'What has happened will happen', for this will be increasingly inappropriate for the next 10 years or longer.

For about the last 30 years the world's labour share of GDP has declined due to a massive increase in the the numbers of workers per head of population. Factors in this include: improved education, decline in the fertility rate, women's rising incomes, longevity increases and the decline in retirement age. The increased supply of labour exerts a downward pressure on real wages so that, e.g. in the US from 1980, wages have been virtually static. Additionally, if production has been able to relocate abroad for reasons of lower labour costs it has done so, again restraining wages back home. A consequence of this is the almost total disappearance of private sector trade unions. Prof Goodhart called the phenomenon a 'demographic sweet spot'. Inequalities between countries is falling but within countries is rising.

Labour-saving innovations also bear down on labour needs, and capital needs too are much lower for firms like Google, Apple and Amazon compared with the old technologies such as steel mills and oil refineries which needed 'massive great chunks of capital'.

Turning to policy implications of all this, weak consumer demand due to the relative lowering of poor consumers' wages helps reduce inflationary pressure. Rich consumers however - running out of the need for yet more consumer goods - pour their spare income into assets which is encouraged by the low interest rates of an easier monetary policy. This real estate wealth does not stimulate the real economy, as people don't spend the increase in their house price. Generally the trickle-down effect to the poor through making the rich richer via monetary policy is pretty limited, as is its effect on business investment. What easing monetary policy does in lowering interest rates, is to raise asset prices, particularly house and land prices - housing finance is most susceptible to it; and, except maybe in the US, house prices have gone up more than wages and incomes: 'shot up compared with the nominal compensation index'.

Unable to afford the credit needed, first time house buyers are left behind, especially if their parents aren't rich enough to help.  He said it was not just a 'London effect' but world-wide. First time buyers are in a dangerous position being only able to afford a relatively small deposit, with the rest as debt and if anything goes wrong, if prices collapse, they are 'really totally screwed'. He cited Mian and Sufi's book House of Debt who say that in those circumstances consumption collapses as people try and keep their households together. This comes from a combination of weak labour and first-time buyers in trouble, all flowing from the lax expansionary monetary policies.

The Bank of International Settlements (BIS) wants the loose monetary policy to end and to regain more normal house prices to incomes. Objections are that practical politics does not allow this through monetary policy means - so what else can you do? What fiscal policies might address the problem?  With pressures due to the increasing numbers of the elderly needing costly care and with high debt levels, possibilities are few - so what might be done?  'Structural reform' is mentioned and often these measures are little more than 'let's hope something turns up', but there are reforms that usually remove the wealth of those who have some monopoly position. As an example is the topical Uber smartphone app which puts potential passengers in touch with car hire drivers and thereby threatens the monopolies that officially registered taxi drivers enjoy which guarantees their income and wealth. He would like the use of a covered bonds system for backing the mortgage market as in Denmark .  Another solution from House of Debt (ch 12): shared responsibility so that borrower and lender would take equity and debt. He recommended that the government enter into such a system to require an equity share by the lender and to provide one. As an example he commented that the government's Help to Buy scheme had just such an equity share arrangement and he is a strong supporter of it an wants it to be continued and increased.

He thinks that the easier monetary scene and associated property problems will continue for a bit but demographic changes will lead to transformations ahead. The Support Ratio (workers per dependant, where the higher the ratio the greater the number of workers per dependent) will generally drop having peaked in about 2010 for most emerging countries. China will experience a reduction of workers and this will have inflationary results. For India however, the ratio will rise to 2030 as will Africa to 2050. Japan had a rising ratio to 1990 and is now falling. Economic growth (see Demographic Dividend) accompanies a rising ratio which occurs due to reductions in child mortality, leading to fewer births. Assuming good governance (as China with its competent administration, good infrastructure, hard working people and education) this enables the new workforce to participate fully - the demographic sweet spot. But there is a rapidly reversing demographic dividend in Japan, Germany and Italy, with a slower decline for the UK, US, Australia and Canada. The reason being that the number of workers is in decline and each worker is having to support elderly parents. Japan has been there for some time, US is projected to be relatively benign but Germany will experience a large drop - all this based on UN data and assumptions about immigration.

The structure of the international monetary system  whereby: 'China, Japan, Germany and the oil producers have been running massive current account surpluses and the US has been running massive great deficits. This isn't going to last that much longer because demography is going to change this dramatically'. During the demographic sweet spot when worker numbers increase rapidly, people save a lot and the savings ratio collapses when those demographics change, e.g. Japan (has done) e.g. China (will do). Current account surpluses will go down as the savings ratio declines. Additionally if the measures to achieve constraints on global warming are successful in bringing cheaper and more efficient renewables, the value of  hydrocarbons will drop, leading to the oil producers' current account surpluses disappearing too.  He predicted that from 5-15 years time there will be a swap whereby China, Germany and oil producers will move from surplus to deficit and the US, due to demography, 'is going to sweep from being the major deficit country to being the major surplus country'.

The demographic changes leading to a world savings decline will reduce investment, but residential housing investment (despite declining population) less so because the income elasticity of demand for housing is very high. Business investment is low because labour is cheap, but with fewer workers in the future labour will become more expensive and capital investment will increase to get more output from an expensive workforce. Tax rates on workers will go up. We can only consume what we produce and production each year depends on workers producing; if there is an increasing army of the old and if society believes that the consumption of the old to consume should be equal to that of the young, something has to be taken away from the workers to cover that. Thus we will have increasingly scarce labour subject to an increasing proportion of tax - all this within about 20 years. Real interest rates will rise as savings decline. We don't know what will happen to growth as productivity and innovation are unknowns. Robert Gordon (TED Talk) thinks the easy innovations are over. Output per worker will remain stable but rate of growth of output and consumption per head will decline.

'The world is going to change in the next 10 years - don't assume it's going to be the same as the last 10. It won't !'
   
In questions: Richard Werner asked if CG thought that as one of the influences on economic matters is credit should we be more careful in future to focus on productive credit rather than financial and asset credit? Designing the banking system in order to help reverse current problems would produce a more equal income distribution, among other things.

CG: 'We need to think very carefully about the structure of our financial system' . It was a great pity the building society system collapsed. If it hadn't happened we would all have been in a much better position. As to banking the old idea was that your assets should not be of a much greater duration than your liabilities - the old Real Bills Doctrine -  as a banker you invest in bills of exchange, lending for short term inventory and don't lend for long term capital purposes such as mortgages. Such traditional banking 'would mean that the banks would play a smaller role - not necessarily a bad thing' . The narrative of the great financial crisis was all wrong, being:  'bad banks, doing naughty things and bailed out by taxpayers'. However: 'the real narrative was that it was a failure of the housing finance nexus, how housing finance works, and we have done virtually nothing to reform that, so we are still in difficulties.'

To a questioner asking for his comments on the Islamic mortgage which involves the lender buying the property and the borrower taking a gradually reducing lease on it, Mr Goodhart said it is very similar to Mian and Sufi's ideas for shared responsibility mortgages.

Prof Goodhart's talk was a grand sweep across generations and national and world economies and was a valuable wide-angle lens view and should be useful to refer to ahead. I puzzled why, having identified the cause of the economic crisis as the working of housing finance, he only commented on solutions that just seem to make normal mortgages slightly safer. No problem with that of course, but what about: a)  land value tax, which would increase the supply of land and housing and reduce price and speculation - an Uber-like measure, see above; or  b) 'window guidance' on credit allocation?   OK, his bit about the Old Bills Doctrine, was a sort of 'subdued yes' to the credit allocation question, but without elaboration - although at that point he did have a flight to catch. So we were left a bit cheated as to his further insights into such solutions.
Posted by Charles Bazlinton. Author The Free Lunch - Fairness with Freedom

Saturday, October 04, 2014

ECOBATE 2014 Conference Programme

The programme for the European Conference on Banking and the Economy (ECOBATE 2014) is to be found on
http://www.southampton.ac.uk/cbfsd/ecobate2014/programme.page?
Click on 'Conference Programme' at top right of page.

At the Guildhall in Winchester, Hampshire, nearly 50 academic papers will be delivered (9.0am to 3.30pm).

At the free public session (3.40pm to 7.40pm) opened by Cllr Roy Perry Leader of Hampshire County Council a Money Question Time panel will be chaired by Prof Neil Marriott, Vice-Chancellor, University of Winchester.
Subject: How would you reform banking?
Panellists: Charlie Haswell (HSBC); Kath Shimmin (Blake Morgan, Solicitors); Fergal McCann (Irish Central Bank) and Wesley Wright (Activist).

From 5.05pm the final plenary will be opened by Prof Don Nutbeam, Vice-Chancellor of University of Southampton and Keynote addresses will be delivered by:

John Kay, Financial Times: Have banking lessons been learned?
Sir John Gieve, former Deputy-Governor Bank of England: Is structural reform of the banking sector needed?
Ralf W Barkey, President Rhine-Westfalian Association of Cooperatives, Germany: People's Banks and Raiffeisenbanks in Germnay - A model for Europe?
Lord Adair Turner, former Chairman FSA, Senior Fellow INET: Whither Monetary and Banking Reform
Prof Richard Werner, Director, University of Southampton CBFSD: Needed policies to Reform the UK Banking Sector

Prof Werner will conclude with: Local Banking - what have we learnt?

Bookings may be made for the academic and the free public sessions on Eventbrite  but you may just turn up on the day and register on arrival.





   

Tuesday, September 30, 2014

ECOBATE 2014 Wed 8th October 2014 - Free

3rd European Conference on Banking and the Economy - Open to the Interested Public

The University of Southampton Centre for Banking, Finance and Sustainable Development would like to invite you to attend the Third European Conference on Banking and the Economy (ECOBATE 2014), on Wednesday, 8 October 2014 in Winchester Guildhall, featuring, among others, Lord Adair Turner (former chairman of the FSA), Sir John Gieve (former deputy-governor of the Bank of England), Prof. John Kay (columnist in the Financial Times), Prof. Charles Goodhart (LSE) and Ralf Barkey, CEO of the Rhineland-Westphalian Association of Cooperatives.

The public part of the event will start at 3.30pm, opened by the Leader of Hampshire County Council, followed by a ‘Money Question Time’. The public part will last until about 7.30pm. Several keynote speakers will start to speak from 5pm in a session chaired by the Vice-Chancellor of the University of Southampton.

Panelists and keynote speakers will discuss what lessons have been learnt from the financial crisis (if any), how our banking and monetary system works, and what needs to be done to ensure that banks support the local communities. For further details please see the attached flyer.


We hope to see you on Wednesday next week.

Prof. Richard A. Werner, D.Phil. (Oxon)

Director, Centre for Banking, Finance and Sustainable Development and the ECOBATE Team

Wednesday, September 24, 2014

Guy Standing and the precariat

Interesting that Guy Standing Professor of Economics at SOAS, University of London is quoted in the FT 19 Sept 2014   in a Big Read feature: Equality. He writes about Basic Income (the grant of an unconditional, unwithdrawable, individual and regular income to all):
    ' We should recognise that our individual wealth is due far more to the collective effort of our forbears than anything we do' 
[see the previous Blog here]

You can see Prof Guy Standing in an impassioned inaugural address at SOAS 19 June 2013 on YouTube which is an outstanding argument for Basic Income much of this being an expose of  the historical slide away from empathy and compassion that motivated early and mid-20th century welfare. He majors on the rise of the 'precariat'  - those increasing numbers of us who are living with chronic uncertainties who find themselves without the floor of welfare safeguards any more. The picture is getting darker in our so called advanced countries but he has carried out trials in South Africa and India which have shown the specific transformative outcomes in peoples' lives through giving them an unconditional regular income - such as child malnutrition, weight gain, schooling, economic productivity and health care.  He quotes a minister of Social Development in India that this:
       ' dispels all doubt that the poor will be irresponsible.'  

Guy Standing champions the end product, The Free Lunch - Fairness with Freedom  brings together how funding might work in more detail than Prof Standing was able to cover in his address. 
Posted by Charles Bazlinton
  

Friday, September 12, 2014

Money for Everyone - Dr Malcolm Torry

Malcolm Torry speaks on the Citizen's Income on a YouTube video .

His Money for Everyone explains. Review to be posted here soon.

My book The Free Lunch - Fairness with Freedom  has a lot on the Citizen's Income - I call it the Citizen's Royalty. That reflects a monetary right earned through citizens working together as a nation  - including our generation - that now enables us all to live beyond mere subsistence. 
posted by Charles Bazlinton  

Tuesday, September 02, 2014

ECOBATE 2014: Profs Charles Goodhart, John Kay & Richard Werner and Lord Adair Turner

The 3rd European Conference on Banking and the Economy (ECOBATE) takes place in Winchester, Hampshire, UK in the Guildhall on Wednesday 8th October 2014.  The format follows the successful pattern of earlier years of an academic conference followed by a free afternoon public session with top rank speakers.

The conference is sponsored by the Bank of England and the theme is Banks as Creators of Money.

For details see the INOMICS website  and for registration to attend go to EVENTBRITE      

This year the Keynote speakers are: 
Professor Charles A. E. Goodhart, CBE, FBA
Professor John Kay, Columnist, Financial Times
Lord Adair Turner, chairman of the FSA 2008-2013
The conference will be led Prof Richard Werner , Founder and Director of The University of Southampton Centre for Banking, Finance and Sustainable Development.

For a series of reports of the 2011 and 2013 ECOBATE conferences start with ECOBATE 2011 and ECOBATE 2013

posted by Charles Bazlinton.