Positive Money has done excellent work in providing information and resources for economics students (and teachers) about how money and banking actually work. As we know the contemporary reality is very different from the routinely taught neo-classical account of money, banking and debt. Now that the Bank of England has confirmed, if not all then certainly substantial parts of the account given by monetary reformers, then even the most die-hard acolyte of the neo-classical church will find it that bit harder to cling to their position.
But what about the relevance of money and debt to the teaching of subjects other than economics? I’m a professional sociologist and as a non-economist academic I would urge university teachers to think more about how the monetary system relates to their own subject.
To encourage some reflection on this I can relate the way in which I have been able to point some of my students in the direction of the monetary system and its influence. My primary interest is in the sociology of childhood, which I have taught for many years (previously at the University of Warwick and now at the University of Leeds). One topic very important to the living conditions and social life of children is child poverty. This is a complex phenomenon and there are some real difficulties in defining and measuring it. So, for example, the UK figures are actually estimates derived from data on household income then extrapolated to suggest how many children are likely to be living in poor households.
Nevertheless, some things are clear. Child poverty is found to vary between countries, even those with developed economies. The explanation of this variation is complicated and is often found in quite detailed differences in taxation and income transfer systems. Nevertheless, the general trend is growing inequalities between children. For example, an analysis of OECD data for the quarter of a century leading up to 2001 shows that the proportion of children growing up in families with less than 50 percent of the median income rose in 11 of the 20 countries studied (Oxley et al, 2001).
Given that this period coincides with the gradual introduction of the contemporary credit-money system, it is entirely reasonable to ask whether there is a link between growing child /household inequalities and the monetary system. Consequently, in the last few years I have started suggesting to my students that there may be a link and I have pointed them to materials such as Chapter 5 of Modernising Money (Social and environmental impacts of the current monetary system) and resources such as the various Positive Money videos explaining how the banking system works and what its effects are. In particular I point out how the monetary system benefits the already wealthy and has contributed to the opening up of huge inequalities.
I argue that whilst some inequality is acceptable (and probably productive), the gross disparities we have seen develop over the past decades are socially corrosive and morally repugnant. I explain how the monetary system, whilst not the sole cause of inequality, contributes to this trend by being more accessible to and disproportionally benefiting the already wealthy.
To be clear, I am not in any way suggesting that university courses be used as a vehicle for Positive Money propaganda. That would be wrong in itself, as well as most likely counterproductive. But raising arguments about the social and economic effects of the current money system, critically evaluating them and holding them open for debate and discussion – well that is what universities are supposed to do. (Isn’t it?)
My experience is that students find information about how the banking system actually operates and the case for monetary reform extremely interesting. Entirely on their own initiative one group of students formed a Positive Money group. This was made up of students from different disciplinary backgrounds and it met several times to learn about and debate the arguments. The group also attracted economics students who then began to challenge neo-classical dismissal of money as merely a veil for barter. They said their classes started to get much more interesting!
But my point is that the legitimate occasions for drawing attention to the effects of the monetary system exceed those presented simply by economics courses – crucial though that arena is. The challenge, I think, is to academics in subjects other than economics to identify the topics in their discipline that will benefit from being related to the monetary system. The fundamental rationale for this is that in doing so students may achieve a better and more complete understanding of their subject. Taking this approach opens the door to academics and students in many disciplines – sociologists, social policy analysts, historians and geographers to name just a few – to consider and debate the relevance of the monetary system to the disciplinary problems they analyse and teach.
Alan Prout is writing in a personal capacity.