“I can guarantee Future Money will change the way people think about today’s crisis – and, hopefully, the way they act.” – Jonathon Porritt, Founder, Forum for the Future You can buy copies of this book through your local bookshop and online from http://www.greenbooks.co.uk/future-money, from Amazon and other online retailers. “James Robertson is the most experienced expert in the vital area of monetary reform, ever more urgent in the continuing financial debacles triggered by Wall Street in 2008. Future Money is his magnum opus, synthesizing his key insights from 30 years of practice and scholarly activism illuminating the role of money in human societies and the secretive politics of money-creation. Robertson’s proposals for reform from global to local are still the most realistic and achievable. Newly energized and activated by the worldwide Occupy movements of aware citizens representing 99% of humanity, Robertson’s sane, humane, ecological monetary systems are at last, flourishing worldwide in many towns, and his lifelong ethical, tenacious crusading is bearing fruit.” – Hazel Henderson, author of Ethical Markets: Growing the Green Economy and President of Ethical Markets Media (USA and Brazil) “If a Martian landed and said take me to your future leader, how much happier we would be if we could lead them to the door of James Robertson. He is the great, creative economic thinker of recent times. Future Money explores how better systems of value and exchange could set us all free.” – Ed Mayo, Secretary General, Co-operatives UK “The shape of the future depends on whether – and how quickly – the world wakes up and realises that the economy must work within ecological limits. Future Money explains why this is the case and is a call to each and every one of us to challenge prevailing assumptions about the economy, as well as to contribute to a different way of thinking and acting. Recommended reading if you think the economy exists in order to benefit people and planet rather than just a tool for the rich to get richer.” – Caroline Lucas, MP “People still ignore the chronic dysfunctionalities at the heart of our money system, and refuse to acknowledge how big a part that ‘failed system’ plays in our current economic crisis. Future Money lays bare those dysfunctionalities with forensic skill, unhesitatingly ‘naming names’ as to who is responsible, and then lays out a programme of radical reform for our money system that is utterly compelling. I can guarantee it will change the way people think about today’s crisis – and, hopefully, the way they act.” – Jonathon Porritt, Founder, Forum for the Future “James Robertson in lucid and clear arguments exposes the unsound system on which money rests. Through his deep analysis of today’s financial crisis, Robertson’s Future Money gives an honest and convincing look at how today’s money system has to change now, before it is too late. An important resource for all of us concerned to act to ensure our collective future.” – Wendy Harcourt, Editor, Development, International Institute of Social Studies, Erasmus University, The Hague “James Robertson is an man of extraordinary experience and eminence. If we are looking for somebody to provide the world with the model it needs to save us from economic anarchy he is an ideal candidate. Unlike the critiques that have been published in their thousands by people who before 2008 had barely thought about what money is, this is a book of depth by a man who has been developing sane and equitable solutions for the past 40 years. He provides practical answers to the management of money systems at local, national and global levels. Every civil servant in the Treasury should be forced to read this book.” – Molly Scott Cato, Reader in Green Economics at the University of Wales Institute, Cardiff (UWIC) and Director of Cardiff Institute for Co-operative Studies “James Robertson has provided clear, convincing and practical proposals for comprehensive modernisation of world monetary systems, a subject on which he has been a leading thinker for four decades. Given the current financial crisis the time has come for economic and political leaders to pay close attention to his wise counsel.” – Mary Mellor, author of The Future of Money: from financial crisis to public resource “Money is a manmade device which dominates our lives. Yet few people really understand how the monetary system actually works. James Robertson has a clear grasp of this complex subject, which makes his latest book, Future Money, both fascinating to read and vitally important in helping us to understand the radical reforms which are urgently required. His explanation of how money is created and how governments collect and spend it will be a revelation to most people – even to many bankers! By reminding us that money is our servant, this book shows how money can be used as the means by which we can create a new economic system that is both just and sustainable. This is a book that has to be read not just by politicians and bankers, but by every citizen who wants to escape the tyranny of money and the austerity regimes that it is currently imposing on us.” – James Skinner, Trustee, Organic Research Centre and Trustee Emeritus, the new economics foundation “James Robertson has long been the voice of wisdom about the critical need to reform how money is created and used. It has now become absolutely urgent for both ourselves and the planet that his voice is heeded. This book brilliantly explains both the current situation and the reforms needed.” – Stewart Wallis, Executive Director, the new economics foundation (nef) “A brilliant and accessible guide to the fundamental flaws in our financial and economic system, with simple but incredibly effective proposals for fixing them!” – Ben Dyson, Founder, Positive Money FUTURE BREAKDOWN OR BREAKTHROUGH? MONEY JAMES ROBERTSON For Alison, without whom this book could not have been written. Words of wisdom “It will often be to no purpose to tell of the superior advantages the subjects of a well- governed state enjoy; that they are better lodged, better clothed, better fed. These considerations will commonly make no great impression. You will be more likely to persuade, if you describe the great system of public policy which procures these advantages; if you explain the connexions and dependencies of its several parts, their mutual subordination to one another, and their general subserviency to the happiness of society; if you show how this system might be introduced . ., what it is that hinders it from taking place at present, how those obstructions might be removed, and all the several wheels of the machine of government be made to move with more harmony and smoothness, without grating upon one another, or mutually retarding one anoth- er’s motions. It is scarce possible that a man should listen to a discourse of this kind, and not feel himself animated to some degree of public spirit. He will, at least for the moment, feel some desire to remove those obstructions and to put into motion so beautiful and so orderly a machine.” (Adam Smith, The Theory of Moral Sentiments, Part IV, Chapter II, pp. 217-218, Cambridge Texts in the History of Philosophy). “O wad some Power the giftie gie us To see oursels as ithers see us!” (Robert Burns) “The toad beneath the harrow knows / Exactly where each tooth-point goes. The butterfly upon the road / Preaches contentment to that toad.” (Rudyard Kipling, “Pagett M.P.”, 1886) “Lord, what fools these mortals be!” (Shakespeare, A Midsummer Night’s Dream) “Uncontrollable laughter arose among the blessed gods.” (Homer, The Odyssey) “Beyond laughter? . The Greek gods were once passionately involved in the affairs of men. Then they confined themselves to looking down from Olympus and laughing. And for ages now they have been asleep.” (Milan Kundera, The Book of Laughter and Forgetting, p.217, Penguin, 1983) “The threatened collapse of our Western civilization has nothing to do with the politi- cal issues between capitalism and communism, but is the consequence of its false money system.” (Frederick Soddy, 1877-1956, Nobel Prize in Chemistry 1921 and author of Wealth, Virtual Wealth and Debt: The Solution to the Economic Paradox, 1926. For reference see http://tinyurl.com/6v8lbb4) “He either fears his fate too much or his deserts are small, who dares not put it to the touch to win or lose it all.” (Earl of Montrose, 1640s) First published in the UK in 2012 by Green Books Ltd, Dartington Space, Dartington Hall, Totnes, Devon TQ9 6EN Copyright © 2012 James Robertson All rights reserved The right of James Robertson to be recognised as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988 Print edition ISBN 978 1 900322 98 0 PDF format ISBN 978 0 85784 084 4 ePub format ISBN 978 0 85784 085 1 Printed by TJ International, Padstow, Cornwall, UK Contents Preface 11 A summary of key points 21 PART ONE: Understanding the money system Summary 25 Introduction: the evolving money system 27 Understanding money as an evolving system; Money is a human invention; Why comparing money values motivates our behaviour; Governments can’t avoid deciding how money works; The prospects for our civilisation; Only connect; Money must be made to work more simply and clearly; Purposes for the money system in the 21st century Chapter 1: Some lessons from the history of money 43 The origins of money; The legacy of ancient Greece and Rome; From feudalism to the revival of money; Providing society