Book review

5   A House of Cards

Gerry Gold & Paul Feldman, Lupus Books, 2007 £3

This book sets out to ‘demystify the financial system and show its inescapable relationship to productive activity’, as Paul Feldman writes.

To do this, it surveys the growth of money and credit through time, and its relationship to production. It notes the growth of debt and credit, the explosion of ‘financial assets’ – hedge funds, derivatives, etc. – and the resulting growth of ‘extreme consumerism’, extreme inequality and climate change.

It identifies all this with the fundamental nature of capitalism, and finally proposes the changes needed: essentially, promotion of co-ownership, cooperation and self-management; but rather than local, self-reliant economies, with global cooperation in exchange of knowledge and mutual support, it envisages a continuation of a global economy, albeit reformed, with a global financial system, and with an eventual possibility of a moneyless society.

Its analysis and proposals have much merit, but the way of transition is not clear; the need, too, for ‘localisation, globally’, to achieve sustainability, is not recognised, nor the extent of the obscene wastefulness of the policy of ‘planned obsolescence’ developed at the end of the Second World War and now almost universally applied. Efficient production for need could satisfy our needs with a small fraction of the efforts now wasted on the ‘economy’. We need fair distribution of entitlement, for which Citizens’ Incomes are the most obvious, simplest way of ensuring it.

A more serious failing is its failure to note the origin of the growth of inequality and debt, in a money supply based on interest-bearing bank-loans; it does not consider the alternative, of a money supply entirely created and spent into circulation by a State body, with banks forbidden to create ‘money’ as debt; this would eliminate nearly all the outstanding debts, and severely restrict the credit-based financial gambling.

If it is read with these caveats borne in mind, it has much to commend it as a summary of the development and problems of capitalist ‘globalisation’, with telling statistics, and of some of the changes we should aim for; though it is short on proposals for effecting the transition needed.

Brian Leslie