Andy Burnham and the way to regional productivity

Andy Burnham  has mentioned land value tax as a specific policy. He is clearly thinking beyond  Mansion Tax which is already planned for 2028 but only applies to dwellings valued £2m value and above.  

This blog supports the idea of a land value tax on the value of all land and for a land tax on residential land it should be allowable against personal income tax paid. This will ease the transition of the  reform as it will take into account the ability of the owner to pay and for most will not be an extra tax burden.  Those unable to pay due to low income should be able to defer some of the tax until a sale. 

Fred Harrison the UK's leading advocate of land value tax has just released a YouTube video:  Why Andy Burnham Will Fail: Fred Harrison on Britain's Last Chance  on which he says that Burnham's idea of spreading prosperity from London and the south-east  will not work unless money goes out from London. Land value taxation of itself will not achieve regional prosperity.  Harrison explains that Ricardo showed that the spare  wealth of a country after the basic costs of survival gravitates towards the centre of highest  productivity and finds its way into land values (also known as economic rent). For the UK, London and the south-east is where it mostly ends up. Fairness dictates that London's wealth  should be spread out.

A very comprehensive way of achieving this is to start issuing  universal basic income (UBI) to every person in the UK  using the tax from the land value as a way of redirecting land wealth. This would channel the land wealth gains direct to individuals and households who would then have the choice of spending  it, rather than a council or a quango having that choice. The poor who rent would be quick gainers with new income but without land value tax to  pay. Regionally local businesses activity and investment would pick up and the prosperity of the regions would grow.  The UBI  would be the same for all and without means testing and its value would be greater away from London as costs and prices are often lower there.  Because UBI would be guaranteed into the future it would encourage people to spend and this would raise economic activity.  

Annie Miller in A Basic Income Pocketbook shows that it is likely that costs of the new UBI measure would exceed current welfare costs  so higher taxes on the wealthier would be needed. This would come from the higher value of the land  their larger and better located houses are built on. 

Increasingly taxing land and not buildings would mean that other taxes could be reduced.  Land values are a product of the whole community's success and it is equitable to share that gain for the common good. Taxes on work and on goods are  a disincentive to work and produce and they should be reduced.

Posted by Charles Bazlinton. Author: The Free Lunch - Fairness with Freedom 

Charles Moore on Tories and Labour

What are the two main parties' core beliefs? Lord Moore in The Spectator  The Spectator 1 June 2024 asks for clarification about:

 '...current confusion in which Tories hint at approval of socialist principles and Labour of capitalist ones,...' 

What clear choices are there for the ordinary voters on polling day July 4th?

Maybe the only clear choice is about competence? The decline in skills in managing public affairs over the long Tory regime after 5 prime ministers in 14 years does not inspire 'More of the same please'. Is there a chance that a fresh lot would do a lot better? Here's hoping... As Moore implies they are really playing a similar song with only slight variations and they don't have  anything very new to envision us with. Are the Lib-Dems any different?

If we are really in a capitalist system does that explain the growing need for food banks? If it is socialist why are the food banks needed at all with taxes the highest for 70 years?   Has socialism failed too?  Why is it becoming more difficult to buy a house on an average salary? Why are housing rents ever increasing? OK, we are in a mixed system - part socialist part capitalist - but are there any alterative tweaks to think about?

There is a system change that would begin to sort the inefficient running of the economy which the food banks and shortfalls of the NHS show up - after all,  technological success is not an issue so the issue is fairness. A new way would focus on where taxes comes from, how welfare is handled and how citizenship should be fairly recognised.

Tax reform is need to source a large input to the public purse from Land Value Tax  instead of from income tax and other taxes. The property market mirrors the speculative aspect of capitalism and brings  untaxed gains to homeowners when they have done nothing to produce the added land value. What such free lunch do renters get like that? Separating the land value from the house value  (about a quarter or a third of the Rightmove or Zoopla price) shows the value that should be taxed on an annual basis. The amount would need to match the average income tax currently paid so that for the period of the tax reform  any income tax paid would be a rebate allowed  against the charge for land value.  

There is an added green and a housing benefit to land value taxation in that it would encourage the development of land. A house could be enlarged to build rent-producing rooms under the same land tax charge. With more homes built to cover land tax charges on vacant land with planning permission, houses would become more affordable.  The failure to build enough homes has been a feature over decades  - land value tax is an incentive to build more - whilst Help to Buy schemes merely inflate prices by adding new money into the existing housing stock. 

Welfare reform should be included in this LVT tax shift by instituting a regular unconditional Universal Basic Income (aka: Citizen's Income). This should eventually replace most of the welfare benefits which are clearly inadequate given the food banks and housing benefit needed. The individual fine tuning of welfare benefits now needed would be  reduced  bringing large admin savings. The UBI would not be conditional on work and it would be provided for citizens only. These changes would make fairness for people a new feature of our socio-economic system, reducing the centralising nature of the state and curbing capitalistic power.  

Banking reform could add to the UBI sources (see this Blog elsewhere). For other banking reforms and how banking works see:  Charles Bazlinton - YouTube  .

posted  by Charles Bazlinton  author: The Free Lunch - Fairness with Freedom The Free Lunch - Fairness with Freedom 

Jubilee - A very suitable word?

Great words get borrowed and highjacked for quite different purposes.  'Jubilee' was originally 'a year of emancipation and restoration'  (OED) in ancient Jewish history when people who had lost their family land through debt and poverty went back to it with all debts wiped out. It was a time of  great rejoicing and was unmistakably introduced by people going through the land blowing ram's horn trumpets announcing 'Proclaim Freedom'. It was the ultimate levelling of wealth from the time of the previous Jubilee after which some people had prospered whilst others fell into poverty. See the Bible: Leviticus 25:8-10. The purpose of Jubilee was to reset the economic  imbalances and was pointedly political. It restored control to the people. 

There were not to be kings to accumulate wealth to themselves and their court, and the repetition of cycles of Jubilees would guard against permanent accumulations of land control and enable the poorest to become self-sufficient again. You were not able to purchase land ownership rights, only the harvest rights for limited years. The system guarded against anyone assuming kingly status through wealth which would endanger freedom and the common good. 

Amazing enlightened times! The entire Jubilee year was to be a holiday. Our recent Jubilee celebrations, whilst fairly acknowledging that our Queen as Head of State has been a benign and gracious holder of the office, achieves nothing in the spirit of the original Jubilee for ordinary people. Apart from one day's holiday. 

Maybe news from Ukraine will point the way to a revival  of a people-centred Jubilee ideal? Alexander Rodnyansky, a Cambridge Professor, is now Economic Adviser to  Volodymyr Zelensky, President of Ukraine and The Spectator 4 June 2022 reports: 

    'he says he is interested in establishing  universal basic income throughout Ukraine: a fixed cash payment for residents rather than a network of welfare benefits which leads to inefficiencies in the system...We could be the first.'  

Jubilee years have been celebrated - quite bizarrely given the origin - for some centuries to note anniversaries of rule by monarchs. Why not a people's Jubilee in the spirit  of the common good?  We are not able to re-apportion land ownership in our day but land values are identifiable and could contribute to a universal basic income. See elsewhere on this Blog as to how it could be done. Recapturing the 'Proclaim Freedom' spirit of the original idea with a Peoples' Jubilee by  establishing a Universal Basic Income (also know as Citizen's Income) is needed.  

posted by Charles Bazlinton, 4 June 2022   Author: The Free Lunch - Fairness with Freedom.    

Communitarian conservatives? 1832 Reform Act follow on? Universal Basic Income, obviously.

The Spectator published this letter recently as the groundswell for an universal, unconditional Basic Income grows ever stronger.   Maybe Basic Income a.k.a: Citizen's Income/Citizen's Royalty will be introduced as the Covid-19 economic outcomes  bite really fiercely. When millions of citizens find themselves having fallen outside the safety net of the patchy monetary and fiscal support schemes. It would start to address the contrasts of income, wealth and ways of life that the current crisis  is starkly showing up. 

Letter 2 May 2020:  
Sir
The leading article ( The case for trust,25 April) tells that The Spectator was fighting for the extension of the franchise prior to the 1832 Reform Act. Is it open to a modern battle at an opportune time to empower many more? Universal Basic Income is surely an idea whose time has come. Under Covid-19, the  government on the one hand is pouring patchy financial support into some businesses through a hotchpotch of measures, while Universal Credit has been shown that it is an inadequate personal welfare idea even in high employment time. In certain ways, UBI would address both these issues rather better by giving  financial backstop to every individual in the new unknown post Covid-19 'normal'.

James Forsyth ( The communitarian Conservatives', 18 April) quotes Rishi Sunak : 'the simple idea that we depend on each other'. The Citizen's Income Trust has done much research and has careful proposals to make UBI affordable and workable. In the times of high unemployment likely to be ahead, Conservatives could catch trending communitarianism by helping individuals and families directly. The time is ripe for a new empowering of citizens.
Charles Bazlinton. 

Empowering individuals and families the  way of Basic Income was mooted by labour at the last election. For the Tory- leaning Spectator to publish a letter on the  subject is interesting. Bi-partisan support?

The Basic Income idea is a theme of  the book : The Free Lunch - Fairness with Freedom. But safeguards are needed in its implementation. 
Posted by Charles Bazlinton.
Author The Free Lunch - Fairness with Freedom. Buy the book: £3 post free.    

Another Tory policy? Basic Income (without Government Debt)

Shock! Horror! The Tories have stolen Labour's public spending policies. Chancellor Rishi Sunak has started to undo the austerity that his own party imposed for a decade which, as Headley Stone  wrote (FT letter 15 Feb) 'has brought the UK's public services to its knees' . 

Commenting on the budget in the FT on 11 March,  Martin Wolf wrote: 'It makes sense for the government to borrow to spend, especially on investment. I have been arguing this for a decade. The decision to cut investment right after the financial crisis was a classic bit of Treasury idiocy. Now ...with employment high ...no longer the ideal time....But it is still a risk worth running provided the money is well spent which one has to doubt, given the hurry.' 

What is it about our party politics that had George Osborne, a Tory chancellor imposing harsh measures for a long time to the detriment of the common good and now has a successor from the very same party determined to undo it?  Left-leaning polices have now become the centre ground but have been cleverly captured by the politicians of the old right. At long last, new enabling fiscal policy that for so long has been proscribed, will be relaxed, but if Mr Wolf is right not with the best timing.  Incidentally the investment will benefit bankers and large funds as the money will be borrowed from them. It need not be that way, as sovereign governments can create money debt free.      

The huge impact of Covid-19 on the economy and on households will surely need 'helicopter money' for every citizen and the news is that President Trump is planning to 'send out cheques to every American within two weeks' to achieve a boost. There are people calling for such a measure in the UK. A UK petition is running with an ambitious plan to set a basic income at £1000 per month, sign here: Basic Income .   This: QE for the People  explains how it would work without raising new government debt.  

What may well be started as an emergency measure to plug depleting household budgets by a free handout, needs to become a standard fact of life for every citizen. Everyone needs sheltering from the whirlwind caused by Covid-19 and the usual rollercoaster of flip-flopping politicians who play with our livelihoods through shortsighted policies.     


Posted by Charles Bazlinton author The Free Lunch - Fairness with Freedom £3   

After the long Brexit eve, a brighter post-Brexit dawn for citizen empowerment?

The eve of Brexit extends now to two years, but how long yet? Since the referendum we have  been in a state of flummox. The bewildering closeness of the pro-Brexit vote in 2016 is now no more decisive, as a perplexed House of Commons tries to decide on the merits of Mrs May's EU leaving deal. Admittedly such a complex thing as a divorce after 40 years between a largish nation and a larger conglomeration of 27 more is bound to be protracted, and any deal bringing a 'satisfactory' outcome for both sides will get brinkmanship added to the bewilderment. So not much hope for a smooth and speedy deal.

Meanwhile urgent matters outside the all-absorbing black hole that is Brexit are neglected. The Universal Credit rollout continues to falter, and volunteer food banks (e.g.The Trussell Trust) get busier relieving the poverty arising from government failure to think the UC project through. Deaths of street beggars have increased with the average age of death of people in their early forties. These are shocking facts. As Bishop David Walker stated on BBC Radio 4 today  (appx. 3 minutes in): The reason so many are increasingly on the streets is they are 'simply there because they are poor'. They are falling through the holes in the welfare safety net, and clearly UC is not helping. The long eve of Brexit is being characterised to ordinary people by such as a parliament fossilising into a prolonged talking shop on only one subject and steadily rising deaths of beggars on our streets - a symptom of a failing welfare system. If such things happen in a relatively benign economic scenario imagine the challenges when a downturn comes. If over 600 MPs and their staff cannot sort out such fundamentally vital human problems is not our democratic system under question? A government with a large majority can choose what it will do, our government has no majority so why can't MP's combine cross-party on non-Brexit essentials?  

The shelving by government of new drone regulations in early 2018 has brought us this last week to the closure of Gatwick airport apparently through one nuisance drone. This bizarre aggravation just adds another notch to the failure tally of a government refusing to, or incapable of, focus on anything outside Brexit. UK people are being extraordinarily patient.

David Walker: The reason so many are increasingly on the streets is they 
are 'simply there because they are poor' 

The Conservative government is running scared of Labour waiting in the wings to take over and tries to frighten everyone of the possibility. Mrs May, having declared her, albeit deferred, resignation as party leader is now a self-wounded warrior leaving no obvious candidate to lead into the next election whatever Brexit deal triumph she may be able to surprise us with.

It seems Labour is aligning with issues the public feel need sorting:

• affordable housing to bring a lost generation of renters into home ownership 
• re-nationalisation of railways and water to stop the gravy train of top management and shareholder rip-offs at the expense of consumers
• the scrapping of universal credit to set in place a fairer system 

Let's hope what they are planning are long-term solutions. Look no further than this blog for:

• monetary policy so as to buy up utilities with fiat money at no interest and debt (this blog Dec 15, 2017)
• the replacement of Universal Credit with non-means-tested Citizen's Income (this blog Jan 30, 2018)
• the funding of Citizen's Income through land value tax, matched with income tax reduction (this blog Jan 30, 2018). 

Will there be a brighter post-Brexit dawn? If Conservatives can't get the vision and leadership for citizen empowerment maybe Labour will. Something must be done. 

The Free Lunch - Fairness with Freedom  UK £3 (post free). 

What John Kay & Citizen's Income Trust agree on about basic income

Professor Kay thinks basic income for all (not means-tested / tax-free / regular) is unaffordable. His article  (Intereconomics 2017/2) carefully analyses several international proposals, but it does not take full account of the work of the UK's leading advocate for basic income the Citizen's Income Trust. CIT is confident that their revenue-neutral scheme would make a positive start on the road to a larger regular income than their initial scheme allows for. As they say in their critique of John Kay's investigation: 'What matters is the direction of travel'. CIT's scheme retains many existing welfare benefits - essential due the the low level of basic income needed to be revenue-neutral, but it is only a start. John Kay seems to assume a full 'living wage' basic income must be affordable immediately or he won't consider it relevant: 'basic income is a distraction from sensible, feasible and necessary reforms'. Both he and CIT acknowledge there could be sources of revenue yet untapped for a full basic income, but whereas Kay shies away from the political difficulties of that, CIT sees the start of an evolutionary reform away from the complexities of current welfare and its disincentives to work.           
One effect of a citizen's income is that some will use it to pay for better housing with rents and house prices likely to be pushed up. It is fairly clear that the incentives given out by recent governments to first-time buyers are a factor in rising house prices. A new source of income from a regular basic income would enable buyers to afford larger mortgages thus adding to the price hike. For every new £100 per month available at 2% interest another £20,000 of mortgage is freed up, driving straight through to rising prices and rents.

This blog has always advocated an holistic approach to citizens income to prevent bad side effects. After all if the housing market is encouraged to let rip even more through a basic income aimed to alleviate poverty, what help is that to the poor?

This is not the state planning for citizens
but citizens planning for themselves, 

empowered through a basic income.

To block that perverse effect of such a benign thing as basic income, what is needed is the levying of land value tax. This to be charged annually on the underlying land value of the building + land plot. It would have a braking effect on house prices as property owners who could not afford the levy would sell. Mortgage providers whilst assessing the added basic income would have to consider the expense of a regular land tax levy and this would reduce the potential of greater credit, which would lead to price restraint, and not, like the government help-to-buy schemes, a price bubble. 

The levying of LVT would raise a fresh source of government revenue concentrated at the higher property value end (see below). It would address the acknowledgement by both John Kay and the CIT that more revenue is needed to make a basic income more effective against poverty. The national pot to run a comprehensive welfare system founded mostly on basic income is currently limited. But the time is approaching when the the huge shift of younger people excluded from property ownership through unaffordability, will translate into a ballot box revolt in their favour. If we are to continue to believe in a fair society, the haves - the larger property owners - sitting on the accumulating nest-egg gains in their land values, will eventually have to release some of these sooner than at their demise through estate duties.

Land values, as clearly spelt out in The Free Lunch - Fairness with Freedom arise from the efforts of us all and are a common resource to be shared. A good start to implementing LVT would be to make a regular charge on a percentage (say 25% representing the land) of the property's value. For political acceptability the overall charge per household would need to be cost neutral for the bulk of hometypes: thus whatever was paid in LVT would be an allowance against a homeowner's income tax. Those in high priced properties having lower earnings would need to consider selling up which would bring a downward pressure on the market and help alleviate the housing shortage. The net LVT raised would go towards increasing the basic income for all. As well as estate duty, transaction taxes such as Stamp Duty could also be abolished and bring a new liquidity to the housing market to the benefit of those needing larger accommodation but prevented by the existence of many under-occupied homes. The Annual Tax on Enveloped Dwellings owned by companies is legislation that taxes total property value and would need modifying to catch land value only, to adapt it for LVT purposes.   

For the hard case of property-rich / income-poor homeowners with a liability for LVT greater than their income tax liability a deferment scheme should be allowed so that the accumulated  LVT would be a registered charge against the property, payable on the next sale.  

Whilst we must be grateful to John Kay for crunching the numbers, the philosophical and moral case should be addressed. The Free Lunch - Fairness with Freedom  makes the case for putting the citizen at the focus of politics. This implies the acknowledgement of particular rights for people and the expectation of particular responsibilities from them.  A basic income is essential if this concept of  a new 'citizen focus' is to have real meaning. This is not the state planning for citizens but citizens planning for themselves, empowered through a basic income. It is a combination of increased fairness and increased freedom for everyone.

Posted by Charles Bazlinton. Author: The Free Lunch - Fairness with Freedom  

Magnificent words from both Corbyn and May

As half expected, (see the late May blog: 'Election Surprises?' ) we got an eye-opener of a result on June 8th. Teresa May had made an unexpected election decision on 18th April to grasp an apparently unassailable majority given the Tory's stonking poll lead of 17%. It melted away over the campaign to 4%. Her main campaign thrust was to belittle the Labour leader in comparison with the (look at me) - 'strong and stable leadership' mantra. This had the reverse effect and Labour steadily eroded the poll lead with Jeremy Corbyn, the unexpected election star, running a campaign theme: 'For the many, not the few'. Throughout he was refreshingly policy-oriented and non-personal. May actually won - in a very weakened state - and she could remain the leader for some time given the further damage that a self-indulgent Tory leadership challenge could bring to the party.

The 2010 election gave us the Tory/Lib-Dem coalition but an outcome of that alliance was the trashing of the Lib-Dems by the Tories in the 2015 election. A factor is likely to have been their breaking of a pledge not to increase student university fees. The Labour 2017 manifesto included the promise to abolish the fees and is believed to have been one factor in the Labour resurgence. 

It is strange that the Tories who deem themselves to be the UK's natural ruling party have been so deaf as to where political activity is now coming from. The extraordinary Labour party membership rise from 201,000 in 2015 to 517,000 in 2017 is a startling indicator and should have warned. The Lib-Dem's figures rose from 61,000 to 82,000. The last Tory numbers are for 2013 (150,000) and if they are getting better why aren't we told? For a insight of how the Tory's see themselves see Prospect magazine one month prior to the election . Written by Geoffrey Wheatcroft with the expectation that June 8th would bring the Tory party  'its greatest modern triumph', the result is a caution against such hubris. Best leave such comments until after the event.

Austerity is not the only policy

'Austerity' was strangely absent from the election hustings. Perhaps the electorate finally understood that, as this blog has been saying for some years, austerity as preached by George Osborne was mainly a stick to beat Labour with and counterprodutive for the country, as it inhibited investment in infrastructure investment and, anyway did not prevent government debt growing.   As Nicholas Macpherson (FT17 June 2017) has it: 'Osborne's great trick was to talk tough while implementing a pragmatic programme'. The lost time for productive investment means that the UK is lagging in economic performance. Paying for the expenditure could be by government borrowing; or, by creating the money without creating debt and without interest as explained in the Bank of England paper issued by George Osborne in 2013 - CM 8588  ,  see paras 3.34 & 3.35.  The Coalition Government knew that this beneficial monetary tool was available and didn't use it. What sort of blindness is that?

Student fees - one solution

Paul Johnson in The Times (10 July 2017) A birthday present that could solve the university tuition fees dilemma suggests that every young person reaching age 21 receives a gift of £10,000 which would help anyone, student or not. There is sharp divide in opportunities and wealth between young and old and this idea would address some of that unfairness. An idea aligned with Free Lunch principles. See this for a similar suggestion from Prof Richard Werner - a lifetime education grant funded by monetary finance.

When Mrs May became Prime Minister she uttered some 'Magnificent Words' (Blog 6 Aug 2016) :

 ...We will make Britain a country that works not for a privileged few but for every one of us'

Jeremy Corbyn's Labour Manifesto for 2017 is titled almost identically:

'For the many, not the few'  

With such an aim in common, we ought to expect plenty of agreement.... 

With electoral opinion finely balanced resulting in a precariously balanced parliament there is a great opportunity for MPs to work cooperatively at the problems of our day. It will improve their image if they look like ordinary, reasonable people. Will they? 

Posted by Charles Bazlinton. Author: The Free Lunch - Fairness with Freedom 

8 June 2017 Election Surprises?

Party manifestos, according to Free Lunch principles, should tackle the monopolistic tendencies arising in society.  The moral basis for this is from common threads found in biblical, enlightenment and liberal values and concern human rights, equality and freedom. As the political parties ply for our votes in June how do they measure up to the implied 'fairness with freedom' ? 

The core aim of The Free Lunch - Fairness with Freedom is the common good. The book suggests ways to move towards a society where each citizen is a beneficiary of the resources of nature and those arising from community-inspired schemes. The book is anti-monopoly and what is termed rent-seeking: meaning the hunt for gain sought by monopolists. Extreme disparities of wealth and poverty are the outcome in a society where control of monopolies is lax. Enlightened politics will reduce rent-seeking outcomes. 

• How are the current political parties matching up with the aims of reformers who desire the sharing of monopoly resources via a universal income for all?  
• What do they prescribe to redress the unfairness of the land monopoly: For example what about the land value gains of home owners compared with none for renters?
• What about the resource of further education now being charged for through student fees when it used to be provided free as a common provision from the public purse?
• What about the huge credit-creating monopoly of banking which neglects small business loans as too small and unprofitable to bother with? 
• What about the ability of government to create its own money to fund public expenses for public services, safely and without inflation?
• What about extending the voting franchise to younger people?

It is natural to want monopoly rights. It makes for an easy life. Owners of homes share in the land monopoly through the valuable nest-egg that builds up over the decades associated with the underlying land value of their home.  Fred Harrison points out that:

'... owners of high-value homes are able to recoup what they pay in taxes through rising property prices. ...enjoy tax-free use of schools and hospitals... Low income earners and families that rent their homes...carry the cost of the infrastructure investments and public services that enhance the value of the homes of the rich.' 

How fair is that? What do our political gurus recommend about this particular inequality which creates a constant welfare burden?  

Universal Basic Income (Citizen's Income / Citizen's Royalty)

• The only party wanting to introduce this is the Green Party.  They would create a pilot to test the idea. 

The land monopoly: home owning or renting

• Labour and the Liberal Democrats both mention land value tax as a tax reform measure. This would retrieve the gains accruing to the land values in property prices for the public purse and allow lower taxes on income and goods or as a substitute for council tax.  
• The Greens and Labour would introduce rent controls. This would be a protection for renters as a useful half-way measure until a full land value taxation scheme was implemented payable by landlords.
• The Tory manifesto policy for care in later life was to be paid from a home sale without limit above a £100k house value. The enforced U-turn, in days, shows the political danger of taking land value gains. Whilst not having the universality of land value tax for all land, the idea that property gains should fund the care is a reasonable quid pro quo, but to have to individually account for each care package and each property is probably a bureaucratic path best not travelled, besides introducing a variable charge/cost (aka 'taxation') for every case.      
• Bedroom tax aboliton (now a liablity of council house renters)  is proposed by the Greens, Labour, the Lib-Dems and UKIP.

Student tuition fees  

• The Greens, Labour and UKIP plan to abolish student tuition fees and would introduce maintenance grants (UKIP for poor students). 
• The Lib-Dems, the original champions of the abolition of tuition fees who reneged to their great downfall after being in coalition, propose bursaries for nurses and grants for poor students.
• The Tory proposal is: forgive loan repayments for teachers; provide access to grants for technology students & 'financial support that offers value for money'. This one looks 'interesting' with the news that student debt interest rates will rise from 4.6% to 6.1% this year. Andrew Greenwood (FT letter 19 April) wonders why the Swedish model is not followed with the cost of student loans as per the cost of government borrowing at 0.34%?     

Voting age to 16 

• The Green Party, Labour, the Lib-Dems and UKIP all want this. 

Local Banks 

• Labour will get the Post Office to establish a Post Bank with full banking services in every community. They also propose regional development banks. 
• The Lib-Dems will 'Require the major banks to fund the creation of a local banking sector dedicated to meeting the needs of local SMEs'. 
• The Tories propose British Business Bank branches in several major cities for SME lending needs.

Monetary reform  No parties make any suggestion about using government money creation powers to fund some public expenses. Instead the arguments are about balancing the books for borrowing, taxing and spending. Labour suggests borrowing for extra infrastructure investment because interest rates are so low - it is bound to pay off. But no one makes the case for creating the money as an extension of the QE creation process to pay for such expense without debt or interest to repay to banks. 

Lord Turner is an exponent of this e.g. deficit financing (Book: Between Debt and The Devil) as is Prof Richard Werner e.g. broadband investment.  There is no reason why just as quantitative easing is used to create money to buy back government debt or to buy commercial bonds, that it could not be used to nationalise the water companies (a Labour Party idea but bought through bonds) or to fund general government spending. The Monetary Policy Committee of the Bank of England would need to take note of any money supply implications and outcomes and act as necessary to prevent adverse economic effects - as they do now with QE. Student education could be a modern case for debt free, interest free government money creation. No more student tuition fees.  This would be a monetary reform which only hurt the big banks.  Where are the far sighted politicians to start controlling this monopoly power? 

With the early solid Tory lead appearing to slip the contest may be more open than we ever thought. World wide electors surprise us. Will June 2017 UK be yet another one? 

Posted by Charles Bazlinton author The Free Lunch - Fairness with Freedom. Director of Local First CIC 'Promoting Local Banks' 

Sir Vince Cable: Brexit - causes and outcomes

Sir Vince Cable came to Winchester last week for the Winchester Festival and said we may see him around a bit in that city as he is now involved with local people who are setting up Hampshire Community Bank, a non-profit bank as per the German Sparkassen model.  On Thursday he was in Winchester to promote his book: After the Storm, which is an insider account of his time as minister in the coalition government from 2010 to 2015.

On the recent Brexit vote to leave the EU he referred us back to a paper he wrote on the politics of identity - see this 'revisting' of that 1994 paper  published by Demos in 2005 - as: Multiple Identities - Living with the new Politics of Identity . His writings showed how we are in an era when the traditional 'left/right' political classification is less and less meaningful, with people acknowledging quite different identities for themselves as the old often class-based identities fade. We now have a kaleidoscopic array involving nationality or region of origin, religion (with many sub-divisions within), or based on multiple identities such as Scottish and British and European. He says the term 'multi-cultural community' is unhelpful in describing what is actually often a very complex situation. Such phrases may stereotype and mislead into regarding very varied groups as monolithic 'vote banks' for political purposes. What we need - he quotes Trevor Philips - is a need to create a sense of shared identity called 'Britishness'. 

With the measures that followed the 2007/8 financial crisis the financial system has been kept afloat (like a heart attack victim being kept alive) with artificial injections of  ultra-cheap money, with interest rates set near zero and going lower. They are 'lower than Babylonian times' - we are in an Alice in Wonderland situation. The ongoing result is that economic output has been lost and wages are stagnant. On the other hand another effect is to pump up asset prices (property and shares). If you are a homeowner and live in Winchester or London you are considerably wealthier through this cheap money policy, but if you live in Barrow, Blackpool, Middlesborough or Hull you don't see this. Sir Vince said that the resulting envy and resentment found an outlet in a vote to leave the EU.  He also said that globalisation means that such countries as China became competitive and that many people in western countries are suffering lower living standards thereby. Elsewhere, such as in the US, this resentment  of growing inequality has appealed across the political spectrum where even the old right (Republican) wing headed by Donald Trump is gaining support as well as, to be expected, the socialist Bernie Sanders. In the UK many Labour supporters moved in the UKIP direction in the 2015 election crossing old party lines.  

Post Brexit he sees Mark Carney at the Bank of England as competent and following a predicted policy for pumping cash into the system. The £ exchange rate has dropped - which is 'no bad thing'; property prices have fallen - which is 'no bad thing'. It is likely that net bank lending will fall, but he hopes the British Business Bank will help new lending to firms and head off disaster. The next phase may involve a recession or at least an economic slow down. He is encouraged that his successor in the Business Innovation & Skills Dept. Sanjit Javid is prepared to borrow to invest, in such as housing and the railways. He hopes that a re-orientation of the economy is being planned with a long-term industrial strategy involving such as pharmaceuticals, aerospace, car production and training. 

To general laughter he reminded the audience that the Tories campaigned in May 2015 on the slogan 'Cameron or Chaos'. He did not agree with a legal challenge to the Brexit result, we need to get on with the new situation, although some fellow Lib-Dems think differently. He sees the consequences of Brexit to be massive. He is appalled there was no planning for a possible Brexit vote. The bureaucratic changes needed will involve a huge amount of work and take a very long time.    
Audience Q&A's: 

• He expected City of London employment to drop from 750,000 to 550,000. 
• He said that the country needed to be told to expect problems, anything falsely optimistic would bring later resentment. 
• Aligning with his identity analysis and from his experience in the Coalition for 5 years, would he support the suggestion that prospective MP's (should an early election be called) might stand branded Conservative/Coalition; Labour/Coalition; Lib-Dem Coalition so that voters could be encouraged to vote for national unity? He said that he thought the overall opinion was that the Coalition brought better governance. Someone had likened it to decision-making 'in concrete' rather than 'in jelly' otherwise. He said old loyalties are fading, parties are fragile, but how do you change the dynamic?  He thought there might be a  move to the centre with a resurgent Lib-Dem, a Labour breakaway and the Greens. Given such a scenario the suggestion was a possibility. 
• On the continuation of UKIP as a party, he couldn't say. Maybe the UKIP voters will stop voting, continue to, or move (back?) to other parties? 
•  What were his views on lobbying by big business? He thought that if it is done openly it is fine, as ministers must listen to concerned people. What is to be avoided is behind the scenes influence.  
• How could young people be encouraged to vote? He said that David Willetts in his book 'The Pinch' examined the great change that has happened between the generations recently, with life chances severely curtailed, for example in abandoned hopes of house buying for young people in their 20s and 30s and on quite good salaries.  There has been a breakdown in the contract between the generations and young people are abandoning participation in the system due to cynicism.  Sir Vince gave no solution himself.

Sir Vince's 'multi-identity' analysis gives the ideas in the book The Free Lunch - Fairness with Freedom a fresh boost. The idea is that the citizen should be placed at the centre of political thinking to bring extra basic rights to empower them. Policies would cover the financial redirection of resources, the simplification of welfare and taxation, less intrusive bureaucracy, reduced housing costs and steadier economic growth.  Whatever identities each citizen identifies themselves with would make no difference to their new basic citizens' financial rights. Rather than people opting out through alienation it would encourage their participation through inclusion. We are approaching confused and uncharted waters in political life and peaceful yet radical changes are needed to foster unity and co-operation. 

Posted by Charles Bazlinton. Author, The Free Lunch - Fairness with Freedom       

Charles Bazlinton is a director of Local First CIC which is promoting Hampshire Community Bank

EU Referendum: Fairness & Freedom - that would really make a difference

George Osborne thinks house prices may drop from 10-18% in the two years after a referendum vote to Leave the EU on 23 June. Private Eye (16 May) had Cameron saying:
'There could be a World War'. Osborne: 'Or even worse, house prices might fall!' 

What is fascinating is the importance of soaring house prices to him. For his recent efforts in boosting them with the Help to Buy scheme, see this blog March 6 'The Idolatry of our House Prices' . If his views as to what strikes terror into the hearts of home-owners are politically accurate it says little of voters' feelings for aspiring buyers for whom dropping prices would help. Come on George aren't we 'all in this together'? Raise our sights and help us to think of other's needs!  But meanwhile let's nominate him as High Priest of the religion of house prices. No salvation for the renters - the good times and the 'free lunch' asset gains are not for you. 

Another person trying to scare us into voting Remain is the President of the European Commission Jean Claude Juncker. The Times reports  (May 21) that after a Brexit vote 'the UK...won't be handled gently'. At the same time he urged France to demand deeper EU integration. So in a double revelation he exposed his threatening attitude to Leavers in the UK and his aim for closer union in the EU, which David Cameron allegedly has had an 'opt out' from. Will Mr Juncker suddenly turn very accommodating on this if we vote Remain?

A word doing the rounds in the media describing a political trend is 'populism'. Philip Stephens in the FT 27 May 'The myth of Brussels (mis)rule'  writes a very reasonable account of how (thus far) the UK has run it own affairs in its own sweet way, so pay attention Leavers. And Remainers shouldn't exaggerate about 'war and pestilence' after Brexit. 

He blames demagogues like leading EU Leavers, Donald Trump and Marine Le Pen for using 'Take Back Control' as a 'marketing meme' because: 'it speaks to the populists' contempt for reason' . So Mr Stephens, anyone getting a little edgy that future closer union in the EU might lose UK sovereignty a little too much even with David Cameron's 'opt out', is guilty of 'contempt for reason'?  The extremism he accuses some Leavers of, is at least matched in this 'contempt'. I suppose even the best of us can show fleeting irrationality at times. 

The 'Fairness with Freedom' sought through this blog asks now of the EU debate : Will a vote for Leave or a vote for Remain, better bring fairness and freedom for the the individual, their family and their grouping? A Basic Income (aka: 'Citizen's Royalty') for every  citizen as of right is likely to be the best way to achieve this. The FT 27 May 'Money for nothing'  has a full page spread on the topic and nations looking seriously into it include Finland and Switzerland. Matthew Taylor of the UK's RSA is excited by the idea ('Universal Basic Income') see this report  by Anthony Painter and Chris Thoung. 

Let Leavers and Remainers become populists for Basic Income and maximise their causes for fairness and freedom which is at the heart of it all. Bring it on! 
Posted by Charles Bazlinton. Author THE FREE LUNCH - FAIRNESS WITH FREEDOM. 
.

Income inequality: Matthew Parris agrees with Jeremy Corbyn

Matthew Parris political journalist and ex-Tory MP, is agreeing with concerns expressed by Labour leader Jeremy Corbyn.

Parris' writes (Times 23 Jan 2016):  'We should take seriously Jeremy Corbyn's thoughts on wage differentials'. The context is that Corbyn and almost everything he says, is overwhelmingly rubbished in the UK media. For example Spectator's Fraser Nelson: JC's 'leadership of the Labour Party as an unalloyed disaster' . So to have Tory-leaning Parris thoughtfully argue that he agrees with Corbyn's view that income differentials are bad and growing worse, and that this matters for Parris because it gives capitalism a bad name is somewhat significant.

He cites Oxfam's report on the matter: '62 billionaires own the same wealth as half the world' . He writes: 'When I see reports like this I have to stop myself looking away'. And at Davos last week (World Economic Forum) there was even concern from the world's elite about further inequality expected as robots take work, thus wages, from low-skilled people.

This week the idea of an unconditional Basic Income (aka Citizen's Income) for all, was introduced in the House of Commons as Green MP Caroline Lucas tabled an early day motion on it (Independent report). This measure would start to address the income inequality problem. The article links to a BBC Radio 4 item; support from the RSA; the Finland policy; French interest; and also that Jeremy Corbyn likes the idea.

This gathering of interest in Basic Income is good news indeed. The book The Free Lunch - Fairness with Freedom majors on the topic and provides a reasoned argument for this hopeful idea that is now coming into the mainstream of politics.

Escape ladders for the Osborne labyrinth

George Osborne's Autumn Statement is another twist in his smoke-and-mirrors labyrinth. One month we were going one way and the next 180 degrees back. We are in a Wonderlandesque stupor and seem dulled to the fact that only in May he was scaring us that financial ruin for the UK was imminent unless we kept hold of Nurse Osborne with his essential austerity apparatus. His scare tactics were about Labour's supposed profligacy - this blog May 27 - so it was essential to cut spending budgets and this was enough to turn the election his way, just - with a little help from the Scottish Nationlist surge. Come yesterday's Statement and, Lo! The threatened tax credit cuts are not needed! And the police budget cuts are not needed! And tweaks in the economic modelling show the sun is rising!

Today, respected independent commentator Paul Johnson of the Institute of Fiscal Studies dares himself to say 'Some have even suggested that we have reached the end of austerity.' (FT 26 Nov). As before in this blog I think George Osborne is a master in his long-term power retention ploy through trashing the opposition by inducing fear, largely playing on a single case of jokey foolishness of Liam Byrne - see the May 27 blogpost - as long ago as 2010: 'I'm afraid there is no money'.

If you are lost in a labyrinth you need someone with a ladder who can set it up and from a clear vantage point above the obfuscating high hedges and obscuring smoke clearly point out the direction to more likely success. Frank Field MP may be one such. In a letter to the Times (26 Nov) he said the Chancellor gave him no assurance yesterday that in-work benefit reforms can work with the proposed and much delayed Universal Credit system. Mr Field suggests there should be a Plan B to UC, because it could turn out to be 'nothing more that an expensive fantasy'. An obvious Plan B is Citizen's Income -  payable to all and replacing most benefits; not related to work or absence of work. See Citizens Income Trust . Workable, affordable, effective, simple and quick to introduce.

Unfortunately a politician expected to have a ladder giving a view, has given George Osborne a perfect Liam Byrne moment Mark 2, in plain sight, in the House of Commons. John MacDonnell whilst answering Osborne's Statement gave him Mao's Little Red Book. His backing argument being utterly obliterated as he slid immediately on this self-made banana skin as the Red Book slid across the Commons Table. Too bad that his valid point was that China should not be allowed to buy up important national assets (National Air Traffic Control, Ordnance Survey, Land Registry). But possibly for George Osborne, even all this could be another labyrinthine dead end ploy for the future to divert attention from something else by causing a trumped-up hoo-hah. Then to graciously report:  'I've listened to the concerns. I hear and understand them' and then back off, as he did when he abandoned the tax credit abolition yesterday.  See John MacDonnell's explanation: YouTube

George Osborne did give a hopeful and positive policy in the Autumn Statement for would-be house buyers with the increase in Stamp Duty on the purchase of second homes and buy-to-let properties. This should force down house prices making them more affordable. Duncan Scott of PricedOut  is campaigning for zero house price rises and with an increasing number of people forced to rent through having no chance of buying, this will surely gain increasing voter support. Campaigning for land value tax to achieve this and with Citizen's Income for all, we'd be nearly into open country and leaving the maze.

QE: easy for the rich. Kaletsky's QE: easier for the poor. Corbynomics? Bank of England independence.

Last week's blog had Natalie Bennett at Making Money Work, asking: Could monetary policy do anything about inequality? Steve Keen said that dealing with private debt would address inequality and it was his suggestion that one-off payments to everyone could tackle this, on the condition that debts be repaid first. Lord Turner didn't think there is a 'magic...costless way' of addressing inequality - the way to do this is progressive taxation.

Philip Aldrick (The Times 19 Sept) QE spared Britain a recession...  is particularly clear that monetary policy increased inequality by creating asset price bubbles such as in gilts, bonds and house prices. Inflation is rocketing in these assets, leading, for example, to fading hopes for first-time homeowners.  Low interest rate funding and high demand from UK and non-UK owners buying to let inflates this bubble. [ Private Eye has a searchable map of such overseas owned properties using Land Registry data. Check your area! Whole streets in London are foreign owned].

Clearly monetary policy as carried out since QE in 2009 has increased inequality in housing. But Anatole Kaletsky in Prospect Magazine: How Corbynomics could work  has a neat solution. Instead of QE's £375bn spent to prop up financial markets ('making the rich richer') he proposes that this could have been spent by being given via a weekly £20 payment, to every 'man, woman and child in the UK' until UK growth returned to pre-crisis levels. He proposed this back in 2012. The Free Lunch Blog mentions it here.

So monetary policy could reduce inequality - since equal payments to all inevitably raises living standards proportionally more for the less well off. As long as conditions are strictly adhered to as to the eventual termination of the payment no harm would be done.

That would be a temporary remedy for a sluggish economy. (NB: temporary QE has lasted 6 years so far). But politicians would be wary of the dangers of launching such a citizen-based policy because it would be difficult to stop politically when the monetary need was over. What would be needed to take over would be a similar payment to all but funded by reform of the welfare/tax balanced budget. Such a Citizen's Dividend / Basic Income would need to be established by the end of the monetary booster to avoid the pressure on politicians to extend the  monetary policy dangerously beyond its period of monetary need. Basic Income UK and Citizen's Income Trust have the details of an unconditional non-withdrawable payment to all, as of right.and it is broadly affordable within current budgets. That is the policy that would establish a new citizen's right, like voting, education and a health service.

Another use of monetary policy to promote sustainable growth is suggested by Prof Richard Werner: that credit creating institutions could provide monetary incentives for education purposes '$100,000 for each child born...such a policy would not be inflationary: among all inputs into the production function, human resources are by far the most important.' (New Paradigm in Macroeconomics p340).
To ensure good education for all must be among the most effective ways of poverty reduction and thereby inequality.

Inequality reduction by monetary means would not be magic - merely an effective policy against poverty and as a means of growing the economy.

But QE is magic - for wealthy people. From early 2009 when QE started the UK FTSE 100 share index to date has gained over 60% & UK house prices have risen 67%.

Strange how central bankers and governments fail to take easy steps to help the poor but so easily open doors for the rich to garner greater riches. The Monetary Policy Committee at the Bank of England has met dozens of times since QE started and resolved every time to keep interest rates at 0.5%. Their learned deliberations have now blown up another asset price bubble. Is the BoE really so partisan that it cannot think beyond top layer wealth creation as the sole answer to the crisis? Is it really there for the good of all - as might expected in a democracy? Presumably our government in meekly acquiescing to a measure that has achieved so little for so long, wholly agrees with it.

Bank of England independence is strongly defended. The question to be put is: How dependent on central bank policies ought the government to be?        

Making Money Work: Lord Turner, Steve Keen, Chris Giles & Richard Spencer on Corbynonmics and money creation.

Lord Adair Turner has learnt a bit on the practicalities of speechmaking since we last reported (see ECOBATE 2014, 11 Nov 2014). In Winchester his PowerPoint slides were lost en route and but he did a brilliant job improvising. At the Positive Money event Making Money Work at Central Hall, Westminster on Monday 7th Sept he safely had 2 paper copies of his slides for each of the 200 or so attendees. His talk developed his ECOBATE 2014 theme and gave much detail as to how he thinks government economic and monetary policy technically could, and politically should, develop. 

He said that he did not agree with the extreme radical Positive Money view for the abolition of fractional reserve banking and its replacement with 100% reserve banking. But the 2008 crisis and slow recovery since cannot be understood without a clear understanding of the nature of debt, money and credit. Pre-crisis and for many decades we were far too relaxed about the private credit creation by banks. Post-crisis we are too terrified of the potential of what he termed 'overt money finance' (OMF) of government deficits -another name for this is 'helicopter money'. 

Lord T said there is no reason whatsoever against helicopter money, it was all a question of how much you do. A small amount will stimulate a little with no excessive inflation. He thought it would however be excessive to fund 10% of the fiscal deficit this way as it would bring hyperinflation and destroy the economy. 

In discussion  - Chair: Fran Boait (Positive Money) ; Prof Steve Keen (Univ of Kingston) & Chris Giles (Financial Times) - the matter of the doubtful effectiveness of Quantitative Easing (QE) so far was discussed in contrast to OMF. Chris Giles thought that whilst he would never rule any new idea out (e.g. Jeremy Corbyn's 'Peoples QE') he was sceptical that it is seen as a sort of magic solution which has no cost. He was cautious of using OMF as a monetary tool.  If it was used simply to put new money in everyone's bank account, good, but to use it to spend on infrastructure was fraught with problems - you might have to halt the construction of the HS2 railway unfinished, due to monetary rules.  Money is not the only driver of the economy, in addition there is housing and planning policy and new macroeconomic tools as to how banks should lend; however in the future QE might be seen to have been OMF.  Here Lord T agreed that QE, as started in 2009, might become post-facto OMF. He illustrated this with his view that with the Bank of Japan owning 60% of GDP in Japanese Government Bonds he thought it highly improbable that these would be repaid or sold off by the BoJ. He thinks it will become helicopter money and be shown to be a permanent monetisation of government debt. ''That is going to happen and I would place a bet on it'.

He thinks that we should consider a 2009 UK scenario where a 4% of GDP fiscal deficit was planned and £350bn 'reversible' QE issued. He put it that it might have been announced that 5% would be planned with the extra 1% being OMF money creation and non-reversible. He said that this would send an important signal and be much clearer than the current scenario of whether QE really is reversible.   

Currently the Bank of England is apparently doing two things: 1.Managing interest rates and QE for inflation targeting. 2. Managing bank lending through loan requirements and bank capital requirements, for economic safety and stability all without managing demand.  What he sees as actually happening is that the BoE is starting to manage the allocation capital as seen in the Funding for Lending Scheme to be directed to SME loans.  Five years ago such government allocation of capital was unthinkable! 

The cause of the crisis had been the mis-allocation of capital through private credit creation by banks.  Too much credit chased existing assets rather than to finance productive investment, which Richard Werner calls 'credit for GDP transactions'.   This caused a debt overhang with the danger of deflation.  Beyond the supply of consumer goods to most households,  housing becomes another way to compete between members of society to gain a more attractive home or stay at a hotel. As locations offer varying benefits this competition encourages more debt. Banks encourage this, being biased towards property lending due to the collateral available. Steve Keen pointed out the reverse case of lending to entrepreneurs where, maybe,  four out of five loans might fail with loss of principal. This shows the difficulties that banks can have in lending to productive ventures. 

Lord Turner questioned how widely we might be able to spread a new understanding of the monetary issues being discussed.  In confessional mode, in his new book 'Between Debt and the Devil' he has a chapter 'The crisis I did not see coming'. He had to embark on an intellectual journey to understand themes ignored in his earlier economics education - a frank admission in mid-career from a very high-flying player. He said the very essence of the insight of macroeconomics is that governments and states are not the sum of households. In the personal household economy, books have to be balanced, but the state economy is different. Steve Keen said whilst he was impressed by the new openness at the Bank of England but in contrast the political class think the government should be running a surplus. 'They vie with each other: 'My surplus is bigger than your surplus' ' which is the equivalent of banks believing they should be receiving more loan repayments than they put out in loans. Governments ought to be running a deficit with money creation financing a large part of that.  Clearly from the view of the panel, economics education should be transformed so that these things are understood in universities, but beyond that how easily can the ordinary voter understand it? As to conventional economics theory, the efficient market theory is clearly wrong as no financial trader would get up in the morning if it was, since they would not be able to make any money! But the public needs to know that economics will never give as clear answers in its field as for instance an engineer can give in designing a bridge.

In Q&A I said I was involved in helping to establish a local community bank - Hampshire Community Bank which would lend locally and give its profits to local good causes. Was this a good foil to the problems being discussed that had arisen through centralised, international banks?  By their strong applause the audience clearly appreciated the idea.
Steve Keen thought it was an excellent idea as local knowledge would inform bank decisions on loans. Centralised banking is essentially 'collateral banking' which is dangerous, but as Richard Werner emphasises local banks are the strength of German banking. 

Chris Giles said local banks are obviously good, but that a weakness might be that local firms gain loans merely by being local and not through normal due diligence and good banking practice. (Note: If I had been able to respond a comment could have been that this danger is just as likely with non-local banks! Just look at what happened leading up to the 2008 crisis. Where was careful banking practice by national /international banks then?)  

Richard Spencer, an economist whom Jeremy Corbyn uses to inform his People's QE, said that 5 weeks ago he hadn't heard of Corbynomics but since then he has been credited with writing it!  Jeremy Corbyn asks what does the economy need?  He thinks we need investment in public infrastructure and this needs money and if needed a deficit, and this if fine because people want to buy bonds. However he thinks the banking system is too powerful and People's QE would mean that the bond route would not always be wholly used and banks not needed for some fraction of the money. Corbyn has said that if the economy is booming People's QE would not be needed as the bond route might be wholly enough.  He (RS) largely agrees with Lord Turner's views apart from central bank independence. He said that for politicians to be told by the central bank the amount of OMF needed is not democracy, it would be rather like being told by bankers how much tax is needed. Politician should listen to able technocrats, such as at the Bank of England. But let's not have bankers in charge, let's have democracy in charge. Strong applause.

From the panel: When politicians had control of interest-rate-setting, public opinion (or party opinion) was often targeted very obviously and the high inflation of the 1970's might be seen as a warning that sole political control was dangerous.  'Commitment devices' (e.g. Committee on Climate Change/ Bank of England) agreed by politicians in order to keep a steady course over time ahead even when it hurts, are useful.  However the ECB has been given far too much control as it defines its own terms for price stability, for instance.      

Natalie Bennett the Green MP asked what the money system would look like if consideration for the environment and for addressing inequality (where everyone has enough) were both addressed. Chris Giles thought a monetary system could not create a better society. Lord Turner thinks that money systems are not an appropriate answer to carbon issues - there are enough devices around already.  Progressive taxation is the device to address inequality, not OMF. Steve Keen thinks that money creation is needed to redirect spending to carbon reduction, no-one will do this for a profit.    

Barb Jacobson for the Basic Income Trust asked about the idea of using money creation for cash payments to everyone?  

The panel agreed with the idea: There should be no problem with ensuring a single payment to each person through NI numbers and tax numbers / It should be directed to paying off personal debt first for those who have it / Alastair Darling tried to do it in 2009 but was told it would take 9 months, so he reduced VAT instead / Australia did the same thing in 2 weeks.

Note: 

Chancellor George Osborne understands the subject of the Making Money Work event, as reported in  this blog   Nov 13 2013:
 ' It is theoretically possible for monetary authorities to finance fiscal deficits through the creation of money. This would allow governments to increase spending or reduce taxation without raising corresponding finance from the private sector.'   See Treasury document quoted para 3.34:  Here 

See the Positive Money official post for the event Making Money Work: HERE

Posted by Charles Bazlinton. Author: The Free Lunch - Fairness with Freedom