Guardian challenges basis of banking

British pounds

The Guardian illustrated its story with notes from the Bank of England

An article in the Guardian last month is doing the rounds because of the implications for the role of governments and the banks.

The article starts with a 1030’s quote from Henry Ford, that it was a good thing that most Americans didn’t know how banking really works, because if they did, “there’d be a revolution before tomorrow morning”.

It goes on to say, “Last week, something remarkable happened. The Bank of England let the cat out of the bag … they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.”

The challenge for us as ordinary citizens and borrowers, however, is exactly what we can do with this new knowledge.

On one level, we can use it to put pressure on governments to stop waving austerity measures as a stick to undermine social welfare programs and further enrich the already wealthy. The value of that approach is limited, though, because without the fiction of a balanced budget as a handbrake governments might speed up the process of robbing the poor to enrich the wealthy. A useful source of practical economic information along these lines is BillMitchell’s BillyBlog

On another level, we could use this evidence of the unreal nature of money to undermine the debt cycle that has most of us trapped as wage slaves. We could simply disengage from the banks. The divestment programs currently underway, take the first step in this direction, depriving the investment community of its lifeblood, cash. This e next question becomes, what do we do with our money now?

The capacity to live well without borrowing is something that we can manage in our communities by returning to the gifting economy and the social values that have served humanity well for about ten millenia before the renaissance invention of double entry book-keeping made economic rationalism possible.

We live in an era that was imagined and created by those far sighted revolutionaries of the enlightenment and our current social and ecological dilemmas prove once and for all that the WORSHIP of money is indeed a malevolence that poisons society.

The fact that the bank of England is now ‘fessing up to the illusions that have propped it up for so long means that something is afoot. There is a change in awareness that may well be the harbinger of real economic change. The reality is, though, this can only take place if we as individuals are prepared to make the real changes in our daily lives that will usher that change into existence.

Search Westender for divestment or feudalism to see some of the articles we have published on this topic. Keep them coming. Creating a new economic roadmap is a critical task for those of us taking responsibility for building the post-carbon world.

Leave a Reply