The Production of Money: How to break the power of the bankers
Verso Books £12.99
Church Times Bookshop £11.70
ANN PETTIFOR’s extraordinary achievement in leading the mobilisation of the Jubilee 2000 campaign really changed the political weather about Third World debt. So the thought that she might deploy her talents and her economic wisdom to campaign for real change in the ways in which money is “produced”, and our current system has been diverted in the interests of those in power in the financial sector, is really encouraging. This book might be read alongside Justin Welby’s Dethroning Mammon, occasioning a real debate between these two approaches.
There is no doubt that Pettifor adds substantial economic weight to the widespread conviction that we have systemic problems in relation to money that are not being addressed. She is an ardent Keynesian, convinced that Keynes has been misunderstood in the current political debate and, simply, and wrongly, identified as a believer in “tax and spend”.
With frequent references to Keynes’s General Theory, Pettifor makes the case for a financial system under public and democratic control. She does not seek the abolition of the part played by the private banking sector, but for its regulation and accountability to the public good. In a globalised world, that also means re-establishing controls over international capital flows.
In support of her case, Pettifor sets out in detail the way in which Keynes’s ideas were developed, implemented with good effects on employment and the stability of the economy — and then disregarded in the later years of the last century, with the result that real interest rates rose and inequality grew alarmingly.
The economic nationalism and the rise of populist movements of the present time derive from that disregard, but will not remedy the inequalities that globalisation has caused when there is no public control of the production of money. Pretending that we live in Margaret Thatcher’s father’s grocery shop and that public finances are simply personal finance writ large is a massive deception of the most vulnerable, allows the production of private credit-money to let rip, and plays a significant part in the ecological crisis that we face.
With rather little supporting argument, Pettifor then calls on women and environmental campaigners, in particular, to understand better how money works and how it could work. Whereas Pettifor had a direct and understandable message to such campaigners over international debt two decades ago, this book races around complex economic ideas in a way many potential readers might find hard to follow.
An index would have helped, and the campaign would gain from proper acknowledgement of the work already done (I declare an interest) by Islamic and Christian thinkers. We know from Jubilee 2000 that the faith communities are really effective allies in this cause; the absence of any mention of them is a missed opportunity to make this strong economic case into a real manifesto.
The Rt Revd Dr Peter Selby is a former Bishop of Worcester.