Where does money come from? Printing it yourself, unsurprisingly, is illegal. But in today’s digital society, creating money has less and less to do with the printing of notes or minting of coins, reads the article in Deutsche Welle, 28th November 2014.
Here’s a short extract:
“If you ask people where money comes from, most of them will say it’s made by the government,” says Ben Dyson, founder of the UK organization Positive Money, part of a growing international movement pushing for reform to the current monetary system.”But the reality is that the government is only responsible for creating three percent of the money that we use, and that three percent is the cash: the coins and the paper money.”
Dyson and his counterparts around the world – the International Association for Monetary Reform lists initiatives in 20 countries – are not alone in believing in the need for change. The debate is also taking off among economists and politicians, particularly in the UK, where last week a backbench parliamentary debate took place to discuss the issue took place.
The government could spend a carefully calibrated amount of new, debt-free money into circulation to stimulate demand – for example, by using it to build new low-carbon energy infrastructure or improved rail systems. The new infusion of cash in workers’ pockets would circulate, and as it got into the hands of debtors, it would them a source of fresh funds with which to pay down excessive previously accumulated debt, Turner and others have argued.
Mervyn King, who headed the Bank of England for ten years until 2013, has also called for reform of the monetary system, saying that “of all the many ways of organizing banking, the worst is the one we have today.”
Calls for monetary reform from such prominent figures remains “barely imaginable” in Germany, says Klaus Karwat of the Monetative. “The banking sector plays a much greater role in the UK economy than it does here, so the need for debate is much more pressing there,” he told DW.
The movement’s focus is raising awareness of how the current system of money creation works: surveys conducted by Positive Money and Monetative showed that many MPs in both countries lacked a general understanding of the monetary system.
Read the whole article here.