An End to Monopoly Money
Imagining a Multi-Layer Currency World
Molly Scott Cato
Professor of Strategy and Sustainability
University of Roehampton
Only a crisis—actual or perceived—produces
real change. When that crisis occurs, the
actions that are taken depend on the ideas
that are lying around. That, I believe, is our
basic function: to develop alternatives to
existing policies, to keep them alive and
available until the politically impossible
becomes the politically inevitable.
Milton Friedman
Euro as a Political Project
• Compare Polanyi’s
critique of the gold
standard
• For countries who
control their national
curencies the decision
not to pay is a political
one
No Action on UK banks
• Project Merlin: targets
missed
• Funding for Lending: risk
transfers to taxpayer
• We hold controlling
stakes in two banks
• Why £1bn. From
taxpayers?—for highrisk securitised loans?
What Really Happened?
What Really Happened
The Background to Calamity
• Banks had resisted
separation of retail from
merchant banking
• Abolition of exchange
controls in 1979: when
Thatcher came to power
you could only take £500
out of the country at one
time
• Big Bang in 1986
What Mervyn King Said . . .
• ‘Of all the many ways of organising banking, the
worst is the one we have today.’

‘Unemployment is up,
businesses have closed, and the
direct and indirect costs to the
taxpayer have resulted in fiscal
deficits in several countries of
over 10% of GDP – the largest
peacetime deficits ever.’
Our Next Bank Governor?



Has called for the gilts held
inside the Bank of England as a
result of the quantitative easing
programme to be cancelled.
Chairman of the Financial
Services Authority during the
crisis
Strong supporter of Britain’s
membership of the Euro
Local Money
• Complementary or
Alternative currencies?
• Not a new idea
• Can be designed to meet
local need
• Counter-cyclical
• Struggle to compete with
dominant global currencies
US Depression Era Scrip Issue
• Up to $1bn worth of
these local currencies
• In 1933 up to 1 million
people involved
• ‘it is clear that some sort of scrip was issued by
several hundred municipalities, business
associations, companies, banking organizations,
barter and self-help cooperatives, and production
units of the unemployed’ Loren Gatch
Bristol Pound
•
•
•
•
•
Heavy involvement with local council
Partnership with credit union
Good support from businesses
Powerful media coverage
Can it compete with the pound sterling?
Greek TEM
• TEM: an acronym
from the initials of
the Greek phrase
'local alternative
unit')
• Circulates widely in
the Greek town of
Volos
• Run entirely
electronically
Loss of Currency Sovereignty
• Euro required
abnegation of this
power
• Many countries have
abdicated in favour of
private banks
• The power of seignorage
• The ability to eradicate
debts, viz. recent IMF
report on the Chicago
Plan
A Solution for Greece
• The Greek state should reclaim the power to
make money
• The Greek government would initiate a new
currency for the purposes of running its
national economy
• Greece could issue the currency to pay the
salaries of public-sector workers, and accept
the same for payment of taxes
Euro as Common Currency not
Single Currency
• Greeks would still be able to
spend Euros, and the tourism
industry, for example, might
continue to accept them
• Traders would prefer to have
Euros
• Euros would limit imports
and exports but the national
economy could function on
its own currency
And a Global Currency?
Bretton Woods
Conference
Negotiations during the
first three weeks of July
1944
Dominated by the US
and UK negotiations:
Harry Dexter White and
John Maynard Keynes
Bretton Woods
Dollar domination
Domination
Dollar
The Conference established the World Bank, set the
Gold Standard at $35,000 an ounce and chose the
American Dollar as the backbone of international
exchange.
•Keynes had argued for a neutral
global currency: the Ebcu
•The domination of the dollar has
resulted from its role as a global
reserve currency
•Its abandonment of this power
should be made the condition for
its imminent default
Find out more
www.greeneconomist.org
gaianeconomics.blogspot.com
www.greenhousethinktank.org
Green Economics (Earthscan,
2009)
Environment and Economy
(Routledge, 2011)
The Bioregional Economy
(Earthscan, 2012)