Event Reinvent.Money 2016: October 14, 16-19h

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On the 14th of October 2016 I organise with Paul Buitink, Richard van der Linde and Studium Generale TU Delft the conference Reinvent.Money. From 16-19 we will explore three topics: the role of central and commercial banks in the digital age, the euro dilemma, and the (necessary?) link between money and states.

First, Bank of England researcher Michael Kumhof will present his latest research on “The macroeconomics of central bank issued digital currencies” and Arnoud Boot (UvA, SFL, WRR) will present his forthcoming report for the Dutch Scientific Research Council (WRR in Dutch) on the influence of financialisation on society. Second, Stephanie Kelton (advisor to Bernie Sanders) will explain the euro dilemma (the choice between making the next step to a fiscal union or leaving the euro) and politicians will debate this dilemma. Third, we explore the link between money and states in the future. Financial activist Brett Scott (author of The Heretic’s Guide to Global Finance. Hacking the Future of Money) will share his ideas and debate with Lex Hoogduin (RUG, former DNB). Finally, the organising committee will attempt to draw some conclusions.

Tickets are free (donation based after the event, you decide what it’s worth to you) and could be ordere here. I hope to see you in Delft on the 14th of October!

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Is money evil?

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Last Tuesday I was invited by VOX Delft, a student run organization that stimulates critical and creative thinking, to comment on five video’s about money and to discuss with the audience. The title of the evening was Is money evil? This refers to a passage form Ayn Rand’s book Atlas Shrugged:

“So you think that money is the root of all evil? […] Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?”

The funniest video was about a new crypto currency, Titcoins, the world’s most beloved and safest currency.

This evening I spoke about the three different theoretical monetary systems, fractional reserve banking, full reserve banking and free banking and promised to share some video’s, articles and books on these three systems:

Fractional reserve banking: the current monetary system where commercial banks create the bulk of the money supply. 
Article Money in the modern economy, Bank of England (2014)
Article Money creation in the modern economy, Bank of England (2014)

Article Finance and money – the basics, New Economic Foundation (2013)
Video Banking Course 101, Positive Money (2013)
Book Where does money come from?, New Economic Foundation (2012) (advanced)

Full Reserve Banking:  a system where the power to create money is in the hands of the state. 
Article Strip banks of their power to create money, Financial Times (2014)
Paper Full Reserve Banking in plain English, Positive Money (2012)
Video Could three simple changes fix the economy?, Positive Money (2014)
Websites Ons Geld (Dutch), Positive Money and International Movement for Monetary Reform.
Paper The Chicago Plan Revisited, IMF (2012) (advanced)

Free Banking:  a system where banks are free to issue their own currency
Video What is free banking, and why should I care? (2013)
Book Denationalization of Money, Hayek (1976) (advanced)

Also NEF’s article What’s wrong with our financial system? is interesting to read. It offers 5 alternatives for the current monetary system and monetary institutions:

1) Public banks
2) Green Quantitative Easing
3) Credit guidance by the government or the central bank
4) Nationalisation of the money supply (this is full reserve banking)
5) Regional or local money systems (this looks like free banking)

It is important to keep in mind that the emergence of our monetary system has very little to do with conscious design in terms of improving social, ecological and economic sustainability. It was the outcome of historical accidents and power relations, particularly those between banks and politicians. Nowadays we have the unique opportunity to develop and to implement better money systems. I think more and more discussion and experiments will come.