Money Talks: Ben Dyson

This week, Ben Dyson of positivemoney.org.uk explains how high street banks create money they never even had in the first place…

The Occupied Times: So Ben, let’s talk money.

BEN DYSON: Money is at the root of all the social problems that we’re facing today: poverty is a lack of money; the lack of jobs is because there’s not enough money moving around the economy.

OT: We’ve seen some ‘Positive Money’ signs around the camp. What’s the Positive Money campaign all about?

BD: We think there’s a huge problem with allowing the private corporations that we all know as ‘banks’ to create the nation’s money supply. When you take out a loan from a bank, the money you borrow doesn’t actually come from anyone else’s savings. Instead, the bank just opens up an account for you in its computer system, and types the numbers in.

Last year alone the banks created £110 billion of brand new money, according to Bank of England figures, and pumped most of this into pushing up house prices and speculating on commodities (i.e. oil and food prices).

And if you ever wondered why there’s so much debt, it’s because almost all of the money we use to run society has to be borrowed from the banks.

OT: What are the social implications of this?

BD: For one thing, inequality is made worse because we as the public have to pay interest on the entire money supply, and most of that interest gets redistributed to the highly-paid guys who are based in the City.

Also, because we don’t have control over how our actual savings are used, then our society and the economy ends up reflecting the short-term priorities of the banks – so without most people realising it, we have pacifists funding bombs, and environmentalists funding Canadian tar sands.

Think what kind of impact it could’ve had if just half of that money had gone into say, reducing poverty, or investing in switching to clean energy.

OT: What brought you to this position?

BD: I simply couldn’t understand where all the money was coming from to fund all the credit cards and personal loans that banks were pushing on people. One day I stumbled across a book,  The Grip of Death, by Martin Rowbotham, and that explained how banks are able to create money out of nothing when they make loans. When I realised that actually all this money was just being created out of nothing, it seemed like a huge problem that needed to be talked about.

OT: Should we be paying off our debts, as David Cameron suggests?

BD: Well, that’s a truly stupid suggestion from the Prime Minister. This is an example of people in power not understanding how the monetary system works. Remember how I said that banks create money when they make loans? Well when someone repays a loan, the opposite happens – the money basically disappears. So if everyone starts paying down our debts, it reduces the amount of money in the system – it’s like sucking the life blood out of the economy.

What we need is to put new money into the economy without increasing the level of debt at the same time, and the only way that can be done is if the government takes back the power to create money from the banks.

OT: Does ‘positive money’ currently exist in any form?

BD: No, unfortunately the vast majority of countries in the world use the same debt-based, privatised money system as the UK, and as a result the vast majority of countries are sinking under the weight of all the debt. The existing system is tried and tested, and every time it’s been tested, it has failed.

That said, this idea of stopping the banks from creating money has been tried in the past. It was tried on a small island about 170 years ago, where the government of the day stopped banks from printing their own paper money, and said that only the state would be allowed to print paper money. The small island was called Great Britain, it was in 1844, and it was a Conservative Prime Minister who passed the law. So there might be hope for the present government!

OT: How would the reforms you suggest help to raise people out of poverty worldwide?

BD: Don’t forget that all this money is just numbers in computer systems, which means that if we could reclaim the power to create money from the banks, then we could cancel much of this ‘third-world’ debt without any of the big banks losing even a single penny.

OT: So, you’re Chancellor of the Exchequer for a day, what’s your first bit of legislation?

BD: Simply this: I’d take the power to create money away from the banks, and make sure that newly-created money is used for the public benefit instead of the benefit of the bankers.