Money Reformers advocate essentially two things - firstly, that we change from a debt-based to a debt-free economy. That is, to a society where money, or a great deal of it, is supplied into the economy debt-free, meaning it does not require to be paid back. And secondly, Money Reformers advocate that the creation of money should be a public service, under public control for the public good.
SO, WHAT IS MONEY?
Money is simply the medium we use to exchange goods and services. Without it, buying and selling would be impossible except, of course, by direct barter exchange.
Notes and coins are virtually worthless in their own right. They take on value only because people accept them, in exchange for goods and services. All the money in the world is useless in the middle of a barren desert.
To keep trade and economic activity functioning, there has to be enough of this medium of exchange called money in existence to allow economic activity to take place.
Hence the importance of ensuring that there is sufficient money in the economy to facilitate the exchange of goods and services, and hence the crucial importance that the creators of this money are under the direct control of the very people who need it to survive. That's you and me.
WHERE DOES THE MONEY COME FROM?
Someone has to be responsible for making sure that there is enough money in existence. It's not you. It's not me. So who is it?
Each nation has a Central Bank to do this - in Canada, it's the Bank of Canada.
Central Banks act as banker for the commercial banks, and the government - just as individuals and businesses keep accounts at commercial banks, so commercial banks and government keep accounts at the Central Bank - in our case, the Bank of Canada.
If the government wants to spend money on some public project such as a school or hospital then it will collect the money from taxes, but every year the government fails to collect enough money in taxes to pay for all its spending requirements. There is always a shortfall. So what does it do? Where does it go for money?
The government "borrows" the money this way: It prints and sells "gilt edged securities". These are simply pieces of paper which promise an additional return to the buyer, in the future. The securities are auctioned several times a year to meet the shortage of government revenue as it arises. They are bought by individuals, insurance companies, pension funds, trust funds, and banks.
The government takes the money it has raised by these sales, and spends it on its public projects. The sum owed by the government is called "the National Debt". These securities are becoming due regularly. That is, the government has to pay back the amount, with interest.
When the non-banking sector (individuals, insurance, pension and trust funds) buy securities, then saved money is being recycled back into the economy through government spending.
However, when banks buy government securities, then entirely new money - which has been created out of nothing by the banks specifically for these purchases - is spent into the economy by the government. The government has to find the money to repay them in full, with interest, which it does by selling even more securities and raising taxes even further! Now that's just government debt that we're saddled with, and have to pay back in our taxes.
ALMOST ALL MONEY ENTERS SOCIETY AS A DEBT
Money enters in other ways. There is also the money which enters society via our private debts as individuals, which we owe to commercial private banks.
It is a myth that these banks lend money they already have. When was the last time you went to your bank and found there was money missing from your account because it had been lent to someone else! Like the ancient money lenders of old, banks can lend out more than they actually hold!
The fact is that banks create money out of nothing and lend it to you at interest.
There is also commercial company debts owed to commercial banks, and there is international, or what is called "Third World" debt.
The crucial point to realise is that all of these debts - government, private, commercial and international - are debts owed to the banking system in one way or another.
Almost the entire stock of money circulating in every country in the world today represents a debt owed to the banking system. Only the note and coin issue is debt-free.
The entire financial system of all nations today is what we call debt-based; meaning that the process of going into debt is relied upon, almost exclusively, by governments, to create and supply money to their economies.
The world runs on debt. We live in a debt-based society. We cannot get money into society without almost all of it entering, at source, as a debt.
THE POSITIVE VERSUS THE NEGATIVE ECONOMY
Money Reformers make two distinctions when we look at the economic world around us. On one hand we recognise and support the positive economy, which is characterised by mutual trade for mutual benefit, and productive, just, sustainable enterprise.
On the other hand, we have the negative economy, characterised by poverty, cut-throat competition, oppression, exploitation, war, waste, inflation, and starvation.
When we look around ourselves we are often forced to acknowledge that the economy we live in is often not a positive economy of mutual trade for mutual benefit, but rather a dog-eat-dog economy, a cannibal capitalism which has a tendency to eat itself and all those caught in it.
Money Reformers are alone today in recognising that many of the ills of the world are due directly to the twin facts that the economy of the world is based on debt - rather than on debt-free principles - and the power to create the money in the first place, is vested in the hands of a tiny minority. Recognise that the debt-engine drives the world economy in many negative directions.
Moreover, while some people highlight "the redistribution of wealth" as a possible solution, Money Reformers, highlight the fundamental monopoly power of money creation enjoyed by the few to the detriment of the many.
The fact that many of the economic and social ills which beset society and the world today are due to the power to create money being concentrated in the hands of a tiny minority, rather than democratically distributed in the hands of the People.
This democratic imperative can be summed up in the slogans: It's the People's Money and Money for the People, and by the People.
WHAT DOES THIS MEAN FOR DEMOCRACY?
Banks are businesses out to make profits. Since they alone decide to whom they will lend, they effectively decide what is produced, where it is produced and who produces it, and all on the basis of profitability to the bank, rather than what is beneficial to the community.
Our money, instead of being supplied debt-free as a means of exchange, now comes as a debt owed to bankers providing them with vast profits, power and control, as the rest of us struggle with an increasing burden of debt.
By supplying money to those of whom they approve and denying it to those of whom they disapprove, financiers can create boom or bust, and support or undermine individuals, organisations, economies and governments.
We, the people, don't have the power to create the money. The money we require just to survive is only available from the banks. To a large extent, we are at the mercy of the banking system and we are effectively enslaved by them. We cry Freedom from Debt Slavery!
Until the power to create money is taken out of the hands of the banks, and the hands of the private interests who do it for profit and control, then we can never say that we live in a democracy.
The nation's economy is our economy. We create the real wealth through our ingenuity, enterprise and hard work. The current banking system operates as a massive drain on that public wealth as well as concentrating power and control in the hands of a tiny, private minority.
So what do we need to do? Essentially, we need to move towards an economy based upon debt-free principles where much more money than at present comes into society debt-free, and we need to move towards democratic control over the money creation process.
PRINCIPLES OF DEBT-FREE FINANCE
Money must be based on the real wealth of society - that is, on people, skills and materials. If you have the people, skills and materials, then that which is physically possible and socially desirable can be made financially possible.
If the people have something they want to do in their community, and if they have the skills and the materials, then they should not be prevented for "lack of money".
The overall purpose of an economic system is simply to provide goods and services - as, when and where required - in order to satisfy human needs.
Money is simply the means of exchange for the goods and services produced by the people and their skills and resources. It is not a commodity in itself.
In this regard, money should be our servant - not our master. And since money, at source, is created out of nothing, there is no need for it to be scarce.
SO HERE'S THE LEAST WE SHOULD BE DEMANDING
For a start, we can see that we're paying our taxes to enrich a banking system which never had the money in the first place!
We can see that the government is raising money it doesn’t have, by borrowing from banks which don't have the money either, but only the legal authority to create out of nothing.
The government then expects us, through our taxes, to pay back the banks with the real money that we've worked for! The obvious question arises: Why doesn’t the government just create the money itself?
Instead of borrowing the money from the banking system, and forcing us to pay it back in our taxes, the government could simply create the money itself, spend it into society and not need to ask for it back.
And, yes, the government - or a state appointed authority - could do exactly that. Instead it enslaves us all to the banking system … and that's a scandal!