FANTOPIA

01-09-2009

Imagine a world where printing money aka “quantative easing” was used for social good and not just bailing out the duffers in the banks. Barbara Panvel has been reading about a theory ahead of its time.

On the Stirrer’s Forum recently, Nasim asked “Would it not have been better to have used taxpayers' money to fund major infrastructure projects (e.g. rebuild Moseley and Sparkhill Baths / rebuild bits of our inner cities employing local people) rather than bankroll ...the banks?”

James Gibb Stuart, a Scottish businessman, would heartily agree with him.Some years ago he wrote on this theme in Fantopia and in many issues of Prosperity.

Austin Mitchell, the MP for Grimsby, writes: “We all live in Fantopia, a land described in this book where the politicians don't understand the problem, the economists keep quiet for fear of being thought eccentric, the bankers rule - not OK - and personally I feel like the Antiquarian, struggling to understand.

“Whether we live in Fantopia, Scotland or elsewhere, we're all bamboozled by bankers who have shackled us with chains of debt.”

The book describes a form of quantitative easing which ensured that whatever work was socially desirable and physically possible was done.
When it was written, proposals to use this mechanism made by many, including James Gibb Stuart, were dismissed by the Economic Secretary to the Treasury, Anthony Nelson, who said that using it would cause inflation.

Now, however the Treasury has no such reservations and is using quantitative easing to generate ‘debt-free’ money to replenish banks’ coffers, replacing their losses.

What an ignoble purpose compared with that of Austin Mitchell and the 70 MPs from all parties and none, who signed one or more of the early day motions on the subject, advocating that ‘debt-free’ money be used to finance public investment in schools, hospitals, transport, police, social services and defence, reduce carbon emissions and make public buildings, housing and transport carbon neutral.

Instead of doing this, debt accumulated and the private finance initiative and public private partnership contractors were enriched.

Chinese firms have access to almost free finance from the state banking system and this has been invested in the production of solar panels – the Green New Deal in action, not confined to government rhetoric.

Contrast this with the performance of subsidised banks in this country who operate a credit crunch and impose rising interest charges.

Austin Mitchell suggests that people read the book and join the call for action to use the monetary system for the public good.

Fantopia: Ossian Publishers, 268 Bath St, Glasgow, G2 4JR

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