4: Introduction to the New Economy

Analysis of the banking, monetary and economic system reveals structural flaws which were established centuries ago.

The private enclosure of land and resources commenced with the Norman Conquest but really took hold under the reign of Henry VIII some 500 years ago since when the proportion of bounty from the land available for the public good has reduced from around 100% to less than 4% by the early 19th Century (See Fred Harrison’s The Traumatised Society). This private capture of the rents was exacerbated by the banking system formalised with the establishment of the privately owned Bank of England in 1694. Wealthy merchants (early bankers) sought to capture a share of the rents through mortgage lending.

Fractional reserve lending allows banks to create money from nothing to satisfy credit demand while interest on money drives inequality and underpins an economic system which demands exponential growth. (See Margrit Kennedy’s Interest and Inflation Free Money).

Critical Thinking is developing a blueprint for a New Economy, the foundations of which are:
Sharing the surplus (free) bounty of land and resources
Abolishing interest
Citizens income

The work we’re planning in the Critical Thinking project is to properly model and cost the options and consequences.  ie. We want to analyse data on capturing the full surplus value of land (and resources) versus the current fiscal arrangements. Then we need to analyse what the provision of public services (revenue costs not capital infrastructure) would cost bearing in mind that an accelerating proportion of all purchases (public and private) is interest. Abolish interest and the costs plunge. It would then become clear what remaining surplus would be available for citizens’ income.

The advantage of everyone having the basic means to life without needing employment is that it equalises power between capital and labour. The choice of whether to take a job would a free one rather than a matter of survival. Expanding population and rising productivity mean full employment is neither achievable or desirable. Why should we continue to expand production exponentially from diminishing resources? With so many jobs being potentially destructive (eg. the military industrial complex), we’d be better off paying people not to work. Citizens’ income has the added benefit of valuing activities unrecognised nor measured by GDP; eg. occupy, childcare, voluntary work, community activities etc. For 50% of the population, it offers a route to gender equality. People would be free to indulge in practical and creative pursuits which would be for the common good; whether to take paid employment becomes a choice rather than necessity.

The tectonic plates of history are shifting and we have the opportunity to reshape the economic paradigm to resolve the symptoms and consequences, which are a product thereof. The banking and monetary system corrupts politics, media and public institutions. It is driving war, repression of civil liberties and has created banking and corporate behemoths which dominate the global agenda. It sustains the oligarchy and is the source of its power. It creates the situation where big pharma is rewarded for promoting lifetime drug use, not promoting public health, GMO companies are incentivised to roll out the latest technology suppressing research data which show clear risks to human health and the environment. There are many further examples of perverse incentives and malign consequences - they are all around us.