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Tag Archives: The Money Trap

The Ikon: the best world money

States cannot create good money. They are interested parties. A good monetary system should discipline states – i.e. hold them to account. A state-run money cannot do that. That is the flaw in proposals such as those made by Positive Money and The International Movement for Monetary Reform. (Let me add, however, that I go…
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Brexit: Britain bows to its historic adversaries

Is there any comparable case of a great country voluntarily, without any need to do so, placing itself at the mercy of its historical adversaries? That is what the UK has done. Britain’s future is now at the disposal of the remaining countries of the European Union. After being weakened by the results of the…
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What Brexit and Trump’s victory have in common

Many facile comparisons have been made between Brexit and the election of Donald Trump today. They have an important element in common. But the commentators have missed it. It is said that both represent a backlash against globalisation. Others say it is a revolt of the uneducated, the marginalised, the people who have been left…
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Are the chances of real reform improving?

  In The Money Trap, I argue that our problems result from the way in which we have applied a particular concept of money – the state theory of money. This dominated government policy in the 20th century. As Keynes said, all modern money is state money – it is seen as a creature of…
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Mad money: parallels with the 1970s

The current debate about monetary policies reminds me of the 1970s. Keynesian policies as then understood involved adjusting the fiscal “stance” of policy to ensure sufficient, but not excessive, effective demand. But these policies no longer had “traction”. The world was changing in ways that economists at the time struggled to understand.  Money was becoming…
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Globalization: a warning from Brexit

  “Yesterday’s vote speaks to the ongoing changes and challenges that are raised by globalization,” President Obama said yesterday in his first comment on the UK referendum. He is right. The “Out” vote should be viewed as part of the geo-political fallout of the financial crisis and the failure of governments and bodies such as…
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Brexit shows need for new rules on money

The vote for Brexit is about much more than the UK and Europe. It shows that new rules to guide the process of globalization are needed. The policies followed since the financial crisis have two major errors. First there is a failure to diagnose the true causes of the crisis. Second, governments have failed to…
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The Money Trap revisited

What is the money trap? How can we get out of it? Let me try to reformulate the thesis of my book in the light of recent developments. Since the 1970s we have been in a period of transition to a new paradigm of monetary policy. Governments have tried various approaches to the challenges of…
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Mistreating money

  Money is a social construct that enables price comparisons, calculations of profits and loss, budgeting and financial planning from individual to enterprise to national and international  levels. Its primary function is as a unit of account, and a given monetary unit has greatest benefit when used by the largest possible number of people and…
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Status quo or needed reforms?

Interests barring change Powerful interests benefit from the existence of the money trap. These interests include the state and the monied elite. They benefit, at least in the short to medium term, from official manipulation of money under the present (IT plus CBI)  regime – the state from cheap finance, the monied elite from the…
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