by Ronnie Morrison
In my quest to understand the reluctance of so many Scots to vote for independence I looked again at the White Paper on the National Conversation. All the essential elements are there to be addressed – economic policy, social and environmental engineering, health and justice etc. It is a document long on aspiration but short on inspiration
Under economics there is a mention of the advantages of being part of a monetary union – referring to a possible referendum on adopting the Euro; there is a welcome for the freedom to borrow from the financial markets and to collect taxes. If that is all we are to expect from an independent monetary policy then little wonder the electors are sceptical.
The SNP has always avoided any debate on this admittedly tricky subject, preferring instead the uncontroversial option so beloved of all politicians – avoid the issue. Monetary policy is tricky and of course a reserved power. Few people understand its significance, and that includes most MPs. In any case, if and when the time comes there is a well trodden path to follow, the same path used in Westminster, Brussels and Washington. MPs will be guided along this path by a lobby of rich and influential bankers. Why open this Pandora’s Box when such wise counsel is on hand from the Great and the Good?
There are however voices in the electoral wilderness. Voices saying don’t forget how we got into this depression; don’t forget RBS and HBoS; don’t forget Greece and Ireland and Portugal; don’t forget the bankers’ bonuses and don’t forget that printing money causes inflation, unemployment and a stagnant economy. Don’t forget the huge rewards for tax dodgers and financial innovators – nor the lack of overdrafts for small business. Keep in mind the dogma of controlling inflation with interest rates which have destroyed our pensions and any incentive to save, and don’t forget that we need our jobs if we are to pay off the money lenders and borrow even more. And most of all remember that these are same financial advisors who tell us we can’t really afford independence in the first place. Yes, that’s monetary policy.
However all that is the direct effect of monetary policy. The indirect effects are much more subtle. Consider that nowadays our fiat currency is virtually all electronic credit and the only real or tangible money is the cash issued by the state, which amounts to three pence in the pound. That means 97% of all our money is issued as debt. If you wonder where all this debt comes from, then the short answer is from the private banks – which never had this money in the first place. It’s all bank credit guaranteed by the state. That too is monetary policy.
Many years ago government was gullible enough to allow private banks to issue some of the nation’s money. Today, amidst the ruins of an economy destroyed by bankers’ greed, government is not only permitting them to rebuild to the same pattern as before but we taxpayers are being obliged to re-finance them. This is either crass stupidity or blatant corruption. Either way it is monetary policy.
Monetary policy is willfully made complicated by those who benefit from it. To those ordinary citizens who say they do not understand it and do not wish to understand it then it is their choice to opt out – but it is not the right of any MP, MSP or public servant to do so because they accept a salary and expenses for protecting the public interest. Monetary policy presently serves the rich and powerful and it will stay that way until the rest of us wake up to this reality and demand reform.
Nations can get into sovereign debt through an adverse balance of payments . This is a dangerous monetary policy because one day China will expect its debts to be paid. Internal (national) debt is a device of monetary policy to enrich the already rich. It is not a global issue nor is it beyond the aegis of an independent nation to change. Our currency is our own and how we manage it is our business. We may well need to adopt protective measures to keep out speculators and the ogres of shadowy financial markets just as we require measures to keep out other criminals bent upon their own self-interest. Transparency and honesty will serve legitimate international trade better than smoke and mirrors.
An element of instability is inherent in all economies, but unemployment should be regarded as a criminal offence on the part of any government which condones it. Unemployment is a waste of resources yes, but more importantly it destroys people’s self respect and quality of life. The cant that ‘we’ cannot afford to put the unemployed to work on creating useful public assets is brainwashing by monetary policy.
Monetary policy affects every one of us intimately; it dictates how we interact with each other and with the economy. It should discourage measuring literally everything in terms of money and encourage a resurgence of community and national character. It should be the hot topic of the National Conversation. It should be up there in the top three reasons why we need independence. And unlike oil revenues, its dividends will last indefinitely.
We must dare to open up this debate and invite the establishment to defend the status quo. Here we are in the midst of huge progress in science and medicine yet we remain manacled to a feudal monetary policy which cannot see beyond affordability when it comes to social engineering. There is a second Scottish Enlightenment out there waiting for someone to strike the match. Until then independence will stay on the back burner for the simple reason that its greatest potential is being kept under the counter – the right to set our own Monetary Policy.
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