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Why we need to know what money is!

October 11, 2016

This does not seem like a “post” but I suppose any format that works will do. I have become a campaigner – hence the following talk – that grew out of realization that I did not know what money is, is just thought that I did, because I knew a bit about how to use it. [You can use and share, note it is Creative Commons Licensed].

This is a power point file: moneycreation (I don’t think the Positive Money short videos I inserted work with this upload, their URLs are below at Slide 3 and Slide 13, if you download and re-insert.)

This is a link to Slide Share: where the videos do work, but you have to be online while presenting.

This is more or less the verbal accompaniment to the slides – anyone using them should use their own story, mine belongs to me!

Notes on Money Creation

Slide 1

About four or five years ago I had retired, I took up some sporadic editing work for a Pakistani Women’s NGO [KK, or Khwendo Kor, means Sisters Home, they work to improve education, health, independence of women, prevent violence against women, and work for men too]. My job could be done online, someone had translated annual reports and case studies from Urdu into English, to help dissemination of their work, my job was make it English speaker English. Easy, do it now and again, when I had the time. Feel-good too.

A piece about independence referred to “micro-finance” and Islamic Banking. It was confused as written, but I knew nothing about either. I couldn’t see what was wanted nor the correct way to rewrite. So I started a quick surf – google and wikipedia – how lucky we are to have these libraries of information – just there!

And I met Positive Money. And I met questions:

What is Money?

Who creates Money?

What happens when we realize something counter-intuitive? It is not that we were wrong, exactly, it is that the perspective we had, the way we looked, the system we were looking inside, was … not really REAL. We had a story in our heads that seemed to work … most of the time … then one day it didn’t.

I realised I had no idea what money was.

I have not become an economist, nor a historian of how the world arrived at its present system. But I have become a campaigner, because people who have done a lot of work and thinking have let me to see that asking this question matters to almost everything any of us care about.

Slide 2

There is confusion about what money is. We are all familiar with the essential quality of money as something we own, which can be exchanged for other things that are up for sale, or given to us for work we do. Most people are aware that money has ‘been’ different things in different places: gold, silver, beads, stones with holes in them, etc. This lets us realize that it is actually an idea, rather than anything in particular, a something decided upon that people will trust.

Provided there is agreement, anything will do. The agreement is now an unspoken consensus, seldom considered. Money can be used all over the world, currencies exchanged etc. goods bought and sold, according to various methods, some is notes and coins, some is figures in accounts that can be exchanged electronically (it used to be figures written in a book, essentially the same idea). What I found difficult to grasp, is in fact the case: MOST MONEY is CREATED FROM NOTHING. The short video “Is Money at the Root” explains this. []

Slide 3PM video Is Money at the Root of All Our Problems?

Having watched, this is what money is: Money is DEBT – created from nothing as a speculative risk. The risk is not borne solely by the speculator, it is also borne by the borrower whose work or assets must hold their value in order to repay, and also, value has to be gained for payment of interest. In other words, work has to be done, energy expended, something of worth repays the money created. In particular, if the borrower is government, it is the public, the common people, served by government, who hold the risk and repay with worth, their work and skills .

Questions? Comments? Feelings – can’t be true?

Slide 4

[history – not needed – just available for the curios]

The British Parliament passed the Promissory Notes Act 1704, a law that allowed debt to be ‘negotiable’ – something to be freely bought and sold – as if it is a commodity, rather than an agreement or contract between two parties. Once debt is negotiable, value can be created in a variety of different ways. for example, a government borrows, gives the lender a ‘government bond’, equal in value to what it has borrowed. For the lender, a bond is equivalent to money, an asset and the lender loses nothing by lending, BUT the public (government) is put into debt. (The process therefore takes from those who work and gives to those who have had assets already.)

US history includes Alexander Hamilton, Jefferson; later Lincoln offered a different system; Federal Reserve came into being in 1912, the system is institutionalised.

Negotiable debt is a very versatile source of ‘created value’. New ways of creating value based on negotiable debt are still being invented: derivatives, CDO’s, CDS’s, repos and ‘shadow’ banking are some fairly recent additions. However, in 1700s and 1800s, negotiable debt, bank-money and government debt, was the foundation of a new form of power, that of FINANCE, an industry where financial assets can be used to bring further assets, or change the value of those already in existence. British international activity, led by the power of this system, forced the adoption of negotiable debt as the way in which money is created and placed into the world economy of goods, services, work and energy. Similar legislation was subsequently adopted by most if not all commercial nations (including USSR where money creation followed the same system during the communist era.)

The system is maintained by governments and capitalists (the assets holders), with commercial banks and central banks acting as intermediaries between them in a way that also enables banks themselves become corporate owners of capital.

Note a speculative risk is taken, but the bank can choose the safest project, not the most necessary, and, can see who will bear the risk, and who the gain – not the same people!

Slide 5, 6, 7 consequences

For me, the impact on humans is that more and more we become divisive and competitive – in order to survive or manage well enough. It forces US and THEM thinking, we care , they don’t. They are thoughtless consumers, we are just needing a holiday, a decent lifestyle, we work hard enough etc.

Slide 8

Change Regulations:

keeps the possibility alive of creating value out of nothing. Splits based upon ideological views, e.g.

Left: The State should be entrusted with providing a money supply: public good – environmental improvements – nationalized goods and services.

Right: Distrusts the power of government. Human freedom produces goods and public services more efficiently. For people with needs – welfare, personal and communal responsibilities

Change fundamental laws

The laws which enable banks to create money also enable governments to create national debt – little or no expense to the lender/bank, great expense to the rest of the population.

The governor of the Bank of England: ‘Of all the many ways of organizing banking, the worst is the one we have today.’

Yet talk of fundamental reform is more-or-less absent from any agenda.

Slide 9

Why no reform – questions suggestions comments

Slide 10

If we think about the changes that have happened…

Monetary System will face crisis…again…this time maybe fundamental.

Power Elites will lose credibility

A justice (economic and political) opening/vacuum will occur.

We must be prepared to move into that opening/fill that vacuum.

Slide 11

When the history of change is recorded, often find that some have just been unaware – that is ignorant, but others who hold power do act to keep it, and act against the common interest. We should look out for these things

Which do you see at present?

Slide 12

There are well researched routes to reform, where to look, e.g. video

Slide 13PM proposals video

Slide 14 where to look

Lobby representatives, Talk/Share, Sign petitions, or create one.

A new Paradigm for a new Monetary System [4]

September 29, 2016

Read Part 1 here, and Part 2 and Part 3.

Based on philosophical and psychological inquiry, part 1 referred to the philosophy of science in order to show the need for a new paradigm approach to a world problem: to think how “money” or a monetary system might be better planned to support life. Part 2, supposed three interlinked relationships within life as the foundation of this holistic approach [transcendent, rights, and exchange]. Then in part 3, a thought experiment began where “exchange” was left out, so that some notions of what “money” might mean without that aspect we are so accustomed to viewing could emerge. This “out of the box” thinking helps the realisation that the current paradigm (a hegemony in thought) allows exchange to dominate. This can be seen again, but each time a little differently, when the exchange aspect of life is paired with each of the others, but all three are not in combination. Leave out “transcendence” and inevitably, the view moves to conflicting aspects of sociology and psychology. The “elephant in the room” is that we talk about cultures, spirituality, the uncertainty of future, as if we were not in the experience. This is OK if we do not forget that there is a wider perspective, but when that perspective is forgotten, it can be observed that thinking tends to become reductionist, about short-term, immediate issues.


Politics tries to balance the needs of economy – seen as market – without which aims (even self-interested aims) for the well-being of all cannot be begun, nor rights advanced. The viewpoints shift from ‘left’ to ‘right’, neither seems to succeed.

If “exchange” is paired with “transcendence”, leaving out “rights”, observation from this view shows another familiar dichotomy, that between simplistic reductionism, and a more utopian idealism. The idea of “rights” gets dragged in to discussion, almost as an afterthought, again linear thinking as if either ‘left’ or ‘right’ had the answer, overwhelms more complex thoughtfulness. People are again in US and THEM mode, one group being thoughtless consumers, the other utopian idealists, depending which sort of US group one happens to be in at the time.


One aspect of life has become dominant, so that it is almost impossible to use the word “economics” as meaning life management, it refers primarily to “exchange”, trade, things with technical meaning like “balance of payments”.

In a more holistic view, considering disparate fields of inquiry, every discipline* has proposed a different theory of living that contains some truths. From each particular lens, a version appears, of three, sometimes four, drives, instincts, or needs, differently named, but similar in quality, to the threefold approach being used here. Finding correlations, or links, or even differing semantics, is welcome, a collaboration in understanding from a variety of perspectives. 

The foundation chosen here, although it refers to Beuys, an artist with a deep interest in economics and money, is a re-wording of discovery from the psychoanalysis of groups. Over the many years that psychoanalytic thinking (an experiential observational inquiry) has developed, it has left behind early cultural misapprehensions, it has found affirmation from the newer discipline of neuroscience, as well as from practical results in particular applications (therapy being just one of these). For psychoanalytic thinking, often called psychodynamics, one of the biggest problems now is that of expressing valid and useful findings in ordinary language, so the information can be used by all, rather than using the specific technical language that is just as hard to understand as the languages of physics or literary criticism, or any other depth inquiry.

The next part of this exploration of how to make change in a monetary system will use this basic understanding of human life and its motivations, applying it to economics, the idea of “money”.

return to  Part 1 here, or Part 2 or Part3.

*look up almost any discipline and search for “basic human” …: Cultural anthropology, Sociology, Psychology, Genetics, Evolutionary biology, Economics, Neurology, Philosophy


A new Paradigm for a new Monetary System [3]

September 20, 2016

Read Part 1 here, and Part 2,or go to Part 4

These produced questions, that are counter-intuitive to how we often consider money: First: Could we, creative people, conceive of a money system that is like life? [Life is a gift] Second: What would money as gift look like?

Before damning this as totally unrealistic, playing games, think instead about breaking the paradigm, gostarting from what is in life that is indeed a gift: the sunlight, the seeds that know how to grow, the seasons, and ourselves with myriad capabilities, including those of death and destruction. This post is about real, not a fantasy wish-list.

People created money as we think of it at present, and most of us think about it as something it is not!! It is not concrete stuff, it is an idea, an artifact of mind, that we use to represent necessary relationships.

Look back at the foundation diagram (in part 2), and take it apart from different venn1perspectives, remembering that it is a whole. Or, at least an attempt to represent something holistically.

Leave out the exchange part, that has become so dominant in recent history.

Surprisingly, historical research[i] into money creation suggests that it first emerged as a combination from the Transcendent and the Rights sectors, not using exchange at all! And, it allows me to think about children, dependents generally, as well as those bugbears of power and authority, both inner world perceptions and beliefs as well as the outer world effects. These are so evidently part of the necessary debate about money and its uses and abuses that somehow it feels like a good road to take. [Reflexive thought, inner awareness of feelings plus outer observations, evidence, combination to assess truth or prejudice. Keep going.]


This brings notions about holistic think methods – basically the well-known brainstorm process. Brainstorm “money as gift” or “life as gift” or just “what kind of money do we want”? What do you get? What did I get? Words like money is relationships between people, payment for service or product, trust, risk, not enough, root of all evil, work reward, many things to many people…

I also discovered that brainstorming alone is not a great idea, so looked at the record of an earlier brainstorm process with others, at a recent Positive Money Retreat a brainstorm about good or bad groups, produced the flip-chart below. It seems to me that the “bad” group represents pretty well how our society has sleepwalked its way to the monetary system we have at present, and the good group processes have been pretty much absent when it comes to designing what we want from money, or monetary system.


Using words from the ‘good’ group brainstorm – do they apply to money? Effective, common purpose, synergy, … why not use these alongside the other words that are more commonly used to describe the meaning and use of money.

Also, would the other parts of the diagram reveal interesting aspects of what we really want from “money for life”?

go to Part 4, or return to  Part 1 here, or Part 2.

[i] See Stephen Zarlenga, the New Science of Money

A new Paradigm for a new Monetary System [2]

September 19, 2016

read part [1] here

How do we set about creating a system that would represent life better? Inadequate as it is, the Venn diagram below helps me think about how we can stop seeing money as only a means of transaction between people, helps me start from something more whole in human experience. There are three interlinked relationships within our life, expressed in many different ways and differently divided by other writers[i]. However they are expressed, all agree that without each and without each in combination, the picture of life fails in some important respect. Joseph Beuys[ii] proposed a basic foundation that encompassed what he called the Spiritual Life, the Rights Life and the Economic Life. A little differently, I consider the life of the transcendent, rights, and exchange[iii]. Suppose a foundation could look like this:


If we said the need was for a money idea that covered life needs, human and world in which we live, then it is not utopia to say this is a final objective, but on the way there will be lesser aims, transitional shifts. Whatever these are, they need to be seen to be stages in heading towards a monetary system that might be uncertain but would even so be more genuinely reaching for real requirements than the present pseudo-science that is too frequently taught as economics[iv]. The direction in which proposed change takes us matters.

In brief:

Could we, creative people, conceive of a money system that is like life?

What would money as gift look like?

read Part 3 here, then part 4

or return to Part 1

[i] Interactions: see French, R. B., and P. Simpson. ‘The “Work Group”: Redressing the Balance in Bion’s Experiences in Groups’. Human Relations 63, no. 12 (1 December 2010): 1859–78; The Threefold Social Impulse: see Roesch, Ulrich. We Are the Revolution!: Rudolf Steiner, Joseph Beuys and the Threefold Social Impulse. Forest Row: Temple Lodge Publishing, 2013; add your own knowledge from whatever perspective e.g. ecology, religion, sociology, philosophy, etc.

[ii] Beuys, Joseph, ed. What Is Money?: A Discussion. Forest Row, England: Clairview Books, 2010.

[iii] This is roughly comparable to Wilfred Bion’s unconscious theory of group behaviours, pairing, dependency and fight/flight. see French and Simpson above for development of this idea as basic interactions.

[iv] References, many include:

Rowbotham, Michael. The Grip of Death: A Study of Modern Money, Debt Slavery, and Destructive Economics. Charlbury, Oxfordshire : Concord, MA: Jon Carpenter ; Distributed by Paul and Co, 1998.

Jackson, Andrew, Ben Dyson, and Herman E. Daly. Modernising Money: Why Our Monetary System Is Broken and How It Can Be Fixed. London: Positive Money, 2014.

Ivo Mosley, and Positive Money websites.

A new Paradigm for a new Monetary System [1]

September 17, 2016

Equity, Fairness and Worth

We, or our governments, spend time talking of economics and money, and even more esoteric things like fiscal policies, and when some idea is proposed, there is an instant antoinettequery about “resources” which usually means, “Where is the MONEY?” Our societies and their institutions are made up of people, made by people, they may seem fixed, but are, like our minds, more plastic than we may wish to acknowledge. The word “money” is also not concrete, not fixed, it is in fact an idea rather than a thing, and throughout history has had many forms. However, when the talk is of values, what is valued, it is the future that is envisaged in many different ways, with all its uncertainties, and over and over again, the wishes, for something fair, and something worthwhile, something equitable. “Be the change you want to be” is now a mantra, a useful one. What it may mean is that things will be different, will become different, when we are different in both thought and action, when our minds have changed along with our behaviours. We do now know that body, mind and action are not separable, but interlinked.

Thinking, the process or the way people think, has many forms, patterns if you like. It often seems natural, indeed often is instinctive, to start with parts, and build towards a whole, understanding the organism by seeing what each bit does, and then trying to find relationships. This is classificatory, cognitive, rational, and has often been mistaken for the “scientific process”[i]. However, this is only one aspect of scientific thinking, indeed only a part of any kind of thinking or thoughtfulness. There is another equally important, probably more important aspect to thought. This more inclusive, but more uncertain, way of thinking starts with the “whole”, allowing perception, feeling, intuition, experiment, and allows the parts themselves to show their enfolding into each other, so that understanding follows the actuality of their relationships. A better idea of whole emerges into the thinking mind.[ii] This is creative thought, reflexive, situated in the reality of observation, aware of bias in the self. Reflexive thinking moves mindfully between subjectivity, feeling experience, and logical connections, towards a stronger more enduring objectivity. This fluid thought process properly acknowledges that understanding is a matter of direction and probability, never complete, but what it grasps, is real. The parts, and logical patterns previously observed will fit in somewhere if the idea, so far, so good, matches reality. If parts don’t fit, if the process becomes mired in confusion, complication, anomaly, contradiction, then it does not matter how rational the theory sounds, it is a mess, not fit for purpose. The history of science, and politics and human endeavour is full of paradigm shifts, as theories were seen to fail, rather than succeed. In science, think Copernicus, Galileo, the wave theory of light, and in human interactions, remember the Berlin Wall, the Industrial Revolution, the outlawing of slavery, all the way back to the iron age replacing the stone age. Thought shifts towards the future, based in reality, when something whole is grasped, even if at first it is not at all understood.

Anyone attempting to follow modern 21st century economics theory, economics policies, government fiscal and monetary understanding, boom and bust, austerity, debt bonds, scarcity and wealth, the deficit, the borrowing, etc.etc. can see that economic theory, in particular neo-liberal economic theory, is not fit for purpose.

Economics is a study of a very important aspect of life, how people interact to produce the goods they and others need or want, how governments enact policy in particular ways to enable people to interact within markets to get what they want or accomplish certain goals. Or not, sometimes. It purports to study the production and consumption of goods and the transfer of wealth to produce and obtain those goods. Within the theories there will be parts that are in tune with real lives, as they are lived, and parts that are plain wrong. Without a new frame we cannot at the moment tell which is which.

Economics requires a rethink, a different paradigm, emerging from the sense of life. We may seek equity fairness and worth, but they can be put aside, temporarily, while life is observed as it is lived by all, not just some, not just in general, but by particular people each of whom lives their own story, connected to the stories from others. Life is a gift. We forget. How can we remember?

The next posts will look for the forward aspect of economics, that would happily not require too many major shifts in many of the ways we use money and production, as those parts of thinking and practice that do work well, will find a better home, and those that do not become redundant. Much of the detail and analysis, especially the details of economics and its history, owes a lot to Positive Money, to Ivo Mosley and to all those people who by active enabling listening and thoughtfulness have helped me to think. Positive Money ask that anyone who comes to see this need for a new way forward in economics, sign petitions here, asking that quantitative easing be directed towards the productive economy, and here, asking for a money commission.

Read part 2, then parts 3 and 4

[i] This is actually only the justificatory aspect of science, the checking out if the theory works, to see what evidence supports it, see by reasoning and logic if the theory stands up in practice. To create a theory, explore uncertainty, scientists also use a heuristic process, and this is more often than not an emotional and instinctive, highly subjective way of engaging with the world being explored.

[ii] Charles Darwin’s wife reported in the appendix to his autobiography that he had stated “it is fatal to reason whilst observing, though so necessary beforehand and so useful afterwards” Collins Edition, 1958. p.159. To work holistically from the real world of observation and experiment, not being afraid to see contradiction and anomaly, is how real understanding of anything has proceeded – and there is no “total” real understanding, no “certainty” just perspectives from which one can go outside of one’s mind and thought into the world, and find a fit with what is there. [Psychological references from Wilfred Bion, Learning from Experience, Daniel Seigal, Mindfulness, and Bessell van der Kolk, The Body Keeps the Score, and many others.]

Will: what is it?

March 21, 2016
WILL – a noun, something we have. Dictionary definitions stress the consciousness, and this is a puzzle for those who understand that we are human with our unconscious not the opposite of consciousness but the deeper unknown dynamic states of emotion, impulse and body, from which our separate consciousness arises. So – is ‘WILL’ any of these?
  1. the faculty of conscious and especially of deliberate action; the power of control the mind has over its own actions: the freedom of the will.
  2. power of choosing one’s own actions: to have a strong or a weak will.
  3. the act or process of using or asserting one’s choice; volition: My hands are obedient to my will.
My definition: Will is indeed an outcome of conscious deliberate action, but not any old action, a very particular one, that has effect on all the other subsequent choices we make, consciously and unconsciously determined. We can make a conscious decision to attend to the self and observe what we can of its impulsive reactions.We are being willing to look at and distinguish two processes in our states of mind, that affect both inner and outer world view: the processes which Bion called “truth” and “lie” (the first primarily interested in what is actually there, the second primarily interested in gratification of what is wanted, as if it would be there). This willingness to look increases the probability that unconscious urge and conscious intent are in tune with each other, or indicates when and how they may not be. Then, to me, the notion of deliberate action in other spheres of decision making and choice makes sense. We have WILL because we have been willing in a particular way that is more interested in ‘truth’ than in ‘want’.
I find that this definition addresses problems of unconscious determinism, as though we could not be consciously responsible for our actions, and also addresses the problems of relativism: if everything is in part subjective how can anything be consciously willed?
It is of course an act of being: what is now called “mindful”. I have written about it previously as “use of self” an everyday use of the psychoanalysts’ “transference and counter-transference”.
If one is not mindful, then unconscious force, reactivity to circumstance, takes the place of willed aware intent. “Willy nilly” – what a really good word for this unhappy process. Willy nilly we are in it whatever it is, up to our necks, fooling ourselves that we know what we are doing. This is the state where “the road to hell is paved with good intention” because the mindful intention is not present.
In mindfulness, Will is taking a risk on the future, deliberately trusting interaction with the world. Truth will out, whatever I want. It is a promise. I will.


Ressentiment – unjust suffering

March 17, 2016

Ressentiment is an effect of detriment that is unjustly suffered, by an individual or group, or by labeling a person as ‘group’ (like black, or disabled, or mentally ill) and thus denying their own experience of how they do and do not belong. Anyone who thinks they, and not the sufferer, can decide on the quality of “detriment” is not able to learn the nature of what is suffered. The sufferer, as well as experiencing damage, however tiny that damage may seem, also suffers RESSENTIMENT (coined by Nietzche, no less).

This is cousin to the better known resentment. They are both affects, or feelings, arising from human emotional process. We think we know ‘resentment’ – the angry feeling a person or group has when it feels it has been wronged. This feeling is directed towards the source of the wrong, or the injustice. The sufferer of wrong may not be able to get redress, or revenge, but they do know they deserve better. They can voice something, even if they cannot act, and their sense of self is valid. This happened, I experienced it.

Ressentiment arises when people react to a perceived injustice by repressing their feelings of resentment and revenge. The feelings, the facts, can be inarticulate, the person can be without the verbal capability to own knowledge of what is happening (too young, too shocked, too oppressed, too bullied…). The repression occurs because of the impotence of those not only holding, but also unable to express their feelings openly, out of fear of the powerful, the authority of the oppressor. They remain passive and powerless… an abiding affect … a lasting mental attitude … ressentiment … becomes a pronounced dimension of social suffering  … that is lived experience of domination and repression and the feelings of humiliation, despair, shame and resentment … that are hidden injuries internalised because they cannot be expressed.

Well, quite. What is damaged is the core of the self. Later, even much later after changes in society may have happened, how is such a person (or people within a social suffering group) to know if they can now trust their own feeling or perception of the context that others believe – rightly – has changed? It is a nameless constellation of ??? something feeling ??? not right. NOT RIGHT. Damaged. The self’s capacity to repair has also been damaged (that follows if you can’t trust self feelings).

The politics, the authority, culture and  context change. Thank goodness it sometimes does. Then, if a sufferer is told that ‘it is all right now’ or ‘get over yourself’, insult is added to injury. How can people trust themselves to express the previously nameless and inexpressible?

Try to imagine how you would re-establish a validity in your soul, in yourself. Maybe anger and tilting at any windmill in sight helps, I do not know. I do know one thing that helps:

Acknowledge damage is done.

It is present, in the present, activated by a word or act. Compassion honours this reality.

To imagine how to re-establish validity, first see what people do. Observe, try not to think.

Get curious about what is it that is happening. Are those parts of a person that have been denied, that have had no voice with which to speak finding space? Or are they being shut down …again?

Can parts that have ‘felt they feel what they should not’ and ‘not felt what they feel they should’ reverse their enfolding into experience? (think child abuse, brutalised soldiering, victim of domestic violence, groups experiencing discriminatory treatment, etc.)

First, see what people do. Let yourself see, and be touched by what is then felt.