Growing support for monetary reform

While migration is one issue leading to feelings of insecurity and alienation in receiving countries, precarity and rising living costs are another. Indeed, the French yellow vest movement, the participants to which continue to gather throughout France every Saturday, have quite an explicit economic agenda, including a section on monetary reform. Their claims in respect of banks, for example, are ‘to make them smaller in order to protect themselves from crisis, break monopolies, separate the speculative deposit, and prohibit public bailout’. The 2008 crisis seems to have led to an acute awareness among the general public that, among the many flaws of the current system, their money is not secure with commercial banks. Contemporary capitalism and neoliberalism is increasingly under attack and socialism is even gaining popularity in the US. In Italy an essay by philosopher Alessandro Baricco went viral in which he takes the side of ‘the people’ who, in his view, are rightly revolting against traditional elites.

It is therefore not surprising that the discussion on the revision of the monetary system is gaining momentum. The Swedish central bank is experimenting with a Central Bank Digital Currency (CBDC) in the form of an e-krona, which would give the general public access to a digital complement to cash and with the Swedish State guaranteeing the value of the money. Last year a referendum was held in Switzerland (the Vollgeld initiative) on the question whether the current systems under which commercial banks create money should be changed in favour of a system under which the power to create money is given solely to a public entity.

While this proposal was voted down in the referendum, it seems the genie is out of the bottle. The Dutch organisation “Ons Geld”, the Dutch participant in the International Movement for Monetary Reform (IMMR) which has members on all continents, collected a sufficient number of signatures from the Dutch citizenry to trigger an official investigation of the matter. Thus, the Dutch government commissioned a study from the Dutch Scientific Council for government policy, which after three years of research issued a 300-page report earlier this year on exactly the question who should be in charge of money creation. An English translation should become available this year, but the Council’s findings have been summarized by the IMMR.

There is also news about the universal basic income, which we previously speculated may become a right of citizenship. Providing everyone with a basic income regardless of their personal situation is seen by some as a solution to the problem of people losing their jobs due to automation. Finland finished a two-year experiment with a basic income on 31 December 2018. While the experiment is not considered a success because the participants did not do better or worse than the control group in finding a job, the Finnish government explains that there were nonetheless many positive effects because the participants suffered less from stress and other health concerns. Rutger Bregman, whose participation in a Davos panel and subsequent interview with a Fox news anchor went viral last month, is also not discontent with the Finnish attempt. Being one of the world’s most outspoken advocates of a basic income, he emphasizes that the Finnish experiment was not ideal and that the effects of a basic income can only be measured if it is implemented nationally, so that the expected increase in negotiating power of low income groups can materialise.

Author: Dr. Olivier Vonk