Monopoly Money 2: Don’t Blame The Capitalists

This is the second post in a three part series on money. The first part can be read here. 

The recent Occupy protests have mainly targeted the banking sector. Demonstrators have held signs saying everything from: “Capitalism in cancer,” to “You got bailed out, we got sold out,” to “No bears, no bulls, just pigs,” get it?

Protesters have camped outside Wall St. and the London Stock Exchange etc, where many of the wrongdoers can be found. However, this isn’t where the root of the problem is. The protesters should really be outside the Federal Reserve or the Houses of Parliament and the Bank of England.

The blame for the economic instability and unfairness that people resent is being laid on capitalism, and when people think capitalism, they think banks. Although capitalism does of course create inequalities and embraces greed as a positive driver of prosperity, it is not the enemy. Capitalism creates the wealth and jobs that we all want to see. It is the government’s involvement in the banking system that has entwined banking and politics and sown the seeds for yet another credit driven recession. 

In the first post we talked about how the central bank creates money through ‘quantitative easing’ and the reasons it gives for doing so. We asserted that inflation = people getting poorer, and I stand by this generalisation as being true for the vast majority. 


However, there are some groups of people who stand to benefit from the government’s money creation activity. In this post I talk about who these people are, how the government’s policies are designed to benefit them and hence why we are the 99%. 

Monopoly Money 1: The Predicament

This is the first in a short series of posts about money. Each will contain a little bit of economic theory, but I hope for it all to be comprehendible for those that have not studied economics.

Despite thinking often about our finances, the system of money in our country is not something that most people really stop to think about. You get your wages, spend what you want to spend and save what you want to save. But how exactly did our current system of money come to be? Our entire way of life relies so heavily on its availability and its value, yet the people that control its production, issue and usage are a small number of powerful individuals. In this series I attempt to explain the dire need for our country to democratise the management of our currency and how, when it comes to the future management of our monetary system, the whole world could benefit from a little bit more open-mindedness.

A Historic Opportunity

On October 27th, there will be a historic vote in Parliament about whether or not the British people should be given a referendum on our membership with the European Union. This subject is bigger than me or you, bigger than the prime minister and bigger than any one political party. It is about the future sovereignty of our nation and is an issue about which our generation has never been able to have our say. There are members of all parties that oppose the UK’s membership in its current form and the vote could be very close. Note that the vote in parliament next week has nothing to do with whether or not we should remain in the EU, it is merely to decide whether or not the people should be allowed to have their say on the matter. Quite unquestionably, we should.

The next eight days are crucial. It is an MP’s job to represent their constituents in parliament and they should, theoretically, vote according to the wishes of the people they represent. By writing to your MP (you can find out who she is and send an email here), and piling on the pressure over the coming days, then at the very least they cannot use the claim that their constituents do not care about the issue as an excuse to vote against the motion. Send an email, and urge them, politely, to vote for the motion. The very fact that we must campaign in order to get our say on something so important for the future of our country is, in itself, slightly disheartening. But now is not the time for self pity, it is the time for action! 

Please spread the word.




Link >> Some of the highlights of the debate.

Localism 3: Lessons From The USA

When you hear the word ‘sheriff’ you imagine a typical American local law enforcement officer wearing a brown uniform, a cowboy style hat and a gold badge, right? Well, it’s coming to the UK. In November of next year people in England and Wales will be able to directly elect the local Sheriff to govern the police force in your area. OK, their official title will actually be “police and crime commissioners,” but I’m hoping that the word Sheriff catches on. These new figures will be locally elected officials who are able to appoint and remove chief constables and set budgets and policing priorities. These radical new reforms being implemented by the government are part of their localism agenda to restructure the police force in order to develop the type of ‘more police on the beat’ zero-tolerance policing that the public have long desired. 

Daylight Robbery

The financial crisis of 2007/2008, aka the credit crunch, brought about some shocking events in the world banking industry. As I am sure you know, the housing bubble, inflated with the easy credit and the fashionable casino banking of the 21st century, burst spectacularly in 2007 resulting in plummeting values of real estate securities, a lack of liquidity for financial institutions, widespread evictions and foreclosures in the housing market, the collapse of huge financial institutions and, consequently, global economic recession. But we are still feeling these effects today. The banks still haven’t managed to shake off the bad debt and get back to doing healthy business. Why is that?

Democracy In The 21st Century

Once upon a time in England, the fastest form of communication between different towns was to send a messenger. The king would dispatch a young lad on horseback with a sealed scroll to deliver his mandate to the regions. “Here ye, hear ye, the King demands this that and the rest of it..” In these ancient times bereft of technology, it made sense to have a ruler sitting in his castle in the south, controlling a central location for meetings, discussions and decision making for the country. 

Jumping forward in time to fifty sixty years ago, even when the greatest forms of communication had advanced to the telephone and the fax machine, one could still just about make a case for a system of centralised decision making by the institutions of our central government. After all, democracy can never be perfect; it would simply be unfeasible for everyone to have their say in politics by sending letters or making phone calls. It made sense for each region to send someone to London to speak on our behalf, and then all of the elected representatives of the country would make the laws together.

Well, we are now in the 21st century, where anyone with an interest in the goings-on around them and an internet connection can take part in a worldwide debate. Just as digital cameras and mobile phones give potentially anyone the ability to be a journalist, the blogging culture has turned anyone into a potential writer capable of publishing and distributing opinion throughout the country. Through the internet, people can easily find the website, chat room or online society that can connect them with the individuals or organisations in the country that think in the same way that they do and that share the same opinions. It is now practically possible for the public to have some form of direct input into politics. We can have online opinion polls and the public consensus can be easily determined. It is simply unacceptable in this day and age for there to be a separation between the opinion of the public and the way in which we are represented in parliament. It no longer makes sense to have a ruling establishment in Whitehall that do not listen to, discuss and execute the exact will of the people. The people are out there right now, on the internet, blogging, debating and congregating, trying to make themselves heard.

We need to open up democracy. We need to get it on the internet, in a controlled way so that everyone can have their say in the issues that matter to them.

Now by this I don’t mean getting rid of representation. We can’t give decision making totally to the people. Most of the population don’t have an interest in politics and are not bothered about voting for everything. We can at least, however, open up the system of representation. We need to put it online, on a public website where you can log on and see the representative for your constituency, see what his or her policies and priorities are, and open up wider debates about them. This way, the person that represents us will be exactly the person who shares the views of the people and vows to uphold them in parliament. If he or she did not prioritise our views, or if she voted against the views of the constituency, we would be able to discuss why in online forums and vote to depose her. We could even have online candidacy for MPs, so that anyone who better suits the role of representing the people in a given constituency can challenge the current incumbent for the job.

This may seem radical, and indeed it is relative to our archaic system of democracy that fails to deliver on so many of the current issues of today. But the sooner we start thinking in the 21st century and revolutionise our democracy, the better it will be for everyone.


Read On >>>>>> Democracy in the 21st century: Part 2 

Localism 2: What Is A Quango?

Where does the power lie in Britain? Long gone are the days of the autocratic reign of the monarch. So too have the days of the Prime Minister and his inner circle of ‘chaps,’ sitting on a sofa in Downing Street running the country, right? 


Well we certainly have a functioning democracy now, but it is far from perfect. Our legislation is still read and amended by the unelected House of Lords, composed of hereditary peers born into power, chosen lobbyists and trade unionists and archbishops etc. The prime minister still possesses unprecedented powers through the ‘Crown Prerogative’ to appoint ministers and even take us to war without consulting the people. 


Additionally and most importantly, the role of parliament has slowly been eroded to the point where vast amounts of legislation no longer come from elected representatives but instead from a network of government organisations, a web of state bodies that exercise power outside of the democratic system.

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Quasi-autonomous non-Governmental Organisations (Quangos) have been an integral part of the UK public sector for many decades. There are lots of them. You probably know of a few by the acronyms, the FSA, the FCO etc. Most of them are worthwhile organisations that fulfill a necessary function. Many of them however, perform a function with no real need or duplicate functions that could be performed by other existing quangos. However, the most crucial aspect of the quango is the lack of accountability to the people who are affected by the quango’s decisions. This means that they have little incentive to do their job especially well.

Many governments have promised a quango cull and so far this government has at least made a start. As part of the deficit reduction plan, and as part of their broader localism agenda, the current government has pledged ‘a bonfire of the quangos’ to cut spending and abolish many of these unessential organisations, while simultaneously giving power back to local people and local authority figures. For example, RDAs (regional development agencies) promote economic development by enhancing business competitiveness and skills application. There are currently eight of them, for different regions of England excluding London which has its own development organisations. The government plans to reduce spending by dismantling these regional agencies and encouraging the formation of Local Enterprise Partnerships (LEPs) to carry out some of the functions currently carried out by RDAs.

The QCDA, Qualifications and Curriculum Development Authority, that once monitored the national curriculum, and the GTCE, General Teaching Council for England, that once regulated the state school system, will too both be consigned to history. The government plans to reinstall their functions and responsibility with school headmasters and directors, giving them the power to set curriculums and regulate their own testing procedures. The idea is that the people responsible for the decision making should be in direct contact with the people affected by the decisions. This way when a headmaster is approached by an agitated group of parents demanding something be done about the school curriculum or testing, they can no longer reply with “I’m sorry, nowadays that’s all dealt with by the associate board for whatever, or the national council for whatever.” With power, should come responsibility and accountability to the people.

The quango ‘argument,’ i.e. the question of their usefulness and effectiveness stems from the age old left vs. right debate. Free marketers will proclaim, as demonstrated in history, that in general, government is poor at business; that public sector organisations are slow, wasteful, driven by compliance targets and lacking the fundamental incentive of personal profit that drives efficiency. Advocates of state interventionism will reinforce the necessity for centrally planned regulation and standardisation to ensure fairness and coordinated oversight of public issues. Both arguments have their merits but there is also a deeper underlying democratic issue that needs to be considered.

The delegation of power to these organisations and the growth and reach of their influence has allowed ministers to distance themselves ever further from responsibility and accountability by effectively passing their executive power to the quangos. Even without consideration of the economic benefits of a more competitive landscape for the people and organisations that run our country, one can at least appreciate how the existence of these organisations, and the wide range of responsibilities delegated to their control, separates the voter even further from the source of the decision making, undermining the democratic legitimacy of the regulations passed by these organisations. In other words, the law makers are not accountable to us. They have no obligation to the people. We cannot sack them.

In many ways, for reasons outlined here, the European Union is the biggest quango of them all, if you like, the quango to end all quangos. It proceeds to suck the decision making capabilities from accountable elected parliaments to unaccountable institutions funded by the EU itself.

We cannot let the democracy of the United Kingdom be constantly undermined by unaccountable bodies led by unknown unelected bureaucrats, legislating over the British people from the shadows. We need to transfer power back to elected representatives, those that are accountable to the people. We need to make sure that quangos are only created in cases where they are absolutely necessary, and even then, that their agendas and budgets are monitored and approved by parliament and that their continuation in the future is re-evaluated each year.

But this is just the first step, if you will, in establishing a better functioning democracy. Once the power is back in the hands of the elected representative, there is then the issue of making sure that the elected representative is a true representative of the represented and not a pawn to the many other forces at work.

Here Douglas Carswell makes the case for more direct democracy and more open competition in politics: