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WORK TITLE: Debt or Democracy
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http://www.greattransition.org/contributor/mary-mellor * http://www.schumacherinstitute.org.uk/people/mary-mellor/ * http://www.greeneconomics.org.uk/page45.html * http://press.uchicago.edu/ucp/books/author/M/M/au21632469.html * http://bollier.org/blog/mary-mellor%E2%80%99s-%E2%80%9Cdebt-or-democracy%E2%80%9D-why-not-quantitative-easing-people * http://peacenews.info/node/8296/mary-mellor-debt-or-democracy-public-money-sustainability-and-social-justice
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Female.
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Northumbria University, Newcastle upon Tyne, England, Department of Social Science, emeritus professor. Schumacher Institute, Bristol, England, distinguished fellow. Sustainable Cities Research Institute, founding chair. World Economics Association, founding member.
WRITINGS
SIDELIGHTS
Mary Mellor, an emeritus professor at Northumbria University in England, has written several works on economics, incorporating feminist, socialist, and environmentalist considerations. In Debt or Democracy: Public Money for Sustainability and Social Justice, she asserts that control of finances should be taken from the hands of the banking industry and put under the control of government, which is accountable to citizens. Contrary to popularly held assumptions, she writes, the creation of money by private financial institutions does not always involve tangible transactions for goods or services. Instead, when banks make loans, they create money that did not exist previously, adding to the debt in their nations’ economies, and driving a need for continued growth that can be detrimental to the environment and emphasize corporate profits rather than human needs. Yet when banks take on too much debt, governments often have to rescue them, as happened in the financial crisis of 2007-08, a crisis that Mellor addresses at length in her book. Why, she asks, should the bailout money have gone to the banks rather than the consumers who suffered harm? She contends that is is not only possible but desirable for national governments to manage the money supply and that it will result in a better quality of life for all, without necessarily creating a high rate of inflation, something often brought up as a counterargument to public control of capital.
“Central to the book is a rejection of the concept of ‘handbag economics,'” in other words, that the public sector is analogous to a household, dependent upon external wealth from the private sector,” Mellor explained in a post on publisher Pluto Press’s Web log. “The book challenges handbag economics’ view of money as essentially limited, with all public expenditure presented as either a burden on, or a threat to, private investment and expenditure. Finally, it rejects the idea that the supply of money to the public sector can only originate with the taxpayer or private ‘money markets.” In conclusion, she wrote: “Put in Marxist terms, the monetary power once monopolised by rulers has passed to the capitalist sector. That power needs to be reclaimed and passed to the people. This is not a utopian demand. It is not asserting what could or should exist, it is about recognising and re-orienting what does exist. The power of public money has been made clear through its use to rescue the banks, let it now be used to provision the people.”
Several critics saw much to admire in Debt or Democracy. The book is “tightly packed and insightful,” yet “accessible” even to people with little prior knowledge of economics, remarked M. Perelman in Choice. Mellor, wrote Fiorella Lecoutteux in Peace News, “makes an original and thought-provoking contribution to a rapidly growing list of publications taking on the orthodoxies of mainstream economics.” On the Socialist Review Web site, Dermot Smyth noted that she challenges “the utterly dishonest equating of state finance with ordinary family budgeting” and “gives neoliberal economics a thorough shredding.” He continued: “Mellor’s prose is clear, well structured and lucid in its descriptions of some heavy theory.” He found her at times too polite—for instance, he thought she unfairly criticized left-wing political groups out of a desire to be evenhanded. He concluded, however, that “Debt or Democracy will surely enhance her reputation as a radical socialist academic.” Lecoutteux summed up the book by saying: “Now that the economic status quo is destabilised, works like Debt or Democracy are seeking to imagine viable economic alternatives. This well-researched study will interest anyone wanting to understand our current economic problems in order to take further action.” Perelman added: “No short review can capture the depth and importance of this valuable book.”
BIOCRIT
PERIODICALS
Choice, June, 2016, M. Perelman, review of Debt or Democracy: Public Money for Sustainability and Social Justice, p. 1519.
International Journal of Comparative Sociology, November, 1999, Marta S. Rohatynskyj, review of Feminism & Ecology, p. 491.
NWSA Journal, spring, 2000, Karla Armbruster, review of Feminism & Ecology, p. 210.
Peace News, February-March, 2016, Fiorella Lecoutteux, review of Debt or Democracy.
Socialist Review, February, 2016, Dermot Smyth, review of Debt or Democracy.
ONLINE
David Bollier Web site, http://bollier.org/ (March 31, 2016), David Bollier, “Mary Mellor’s ‘Debt or Democracy’: Why Not Quantitative Easing for People?”
Great Transition Web site, http://www.greattransition.org/ (May 4, 2017), brief biography.
Green Economics Web site, http://www.greeneconomics.org.uk/ (May 4, 2017), brief biography.
Pluto Press Web log, https://plutopress.wordpress.com/ (October 22, 2015), Mary Mellor, “Who Controls Our Money? The Case for Public Money and against Austerity.”
Resilience, http://www.resilience.org/ (April 12, 2016), David Bollier, “Mary Mellor’s ‘Debt or Democracy’: Why Not Quantitative Easing for People?”
Schumacher Institute Web site, http://www.schumacherinstitute.org.uk/(May 4, 2017), brief biography.
University of Chicago Press Web site, http://press.uchicago.edu/ (May 4, 2017), brief biography.*
Mary Mellor
Distinguished Fellows
Department: Distinguished Fellows
Mary Mellor is Emeritus Professor in the Department of Social Science at Northumbria University in Newcastle upon Tyne, UK, where she taught in the areas of sociological theory, research methods and practice, gender, environment and development. She was also founding chair of the Sustainable Cities Research Institute. Her main research areas are money systems, financial inclusion and alternative economic development.
She is a founding member of the newly formed World Economics Association and has published extensively on money and finance, financial exclusion, co-operation, sustainable cities, ecofeminist political economy and social economics. Her books include The Future of Money: From Financial Crisis to Public Resource (Pluto 2010), The Politics of Money: Towards Sustainability And Economic Democracy (Pluto 2002 with Frances Hutchinson and Wendy Olsen) and Feminism and Ecology (Polity 1997).
Mary Mellor
Mary Mellor is Emeritus Professor at Northumbria University, UK, where she was founding Chair of the University’s Sustainable Cities Research Institute. She has published extensively on alternative economics integrating socialist, feminist and green perspectives. Her books include Feminism and Ecology (1997) and The Future of Money: From Financial Crisis to Public Resource (2010), and Debt or Democracy? Public Money for Sustainability and Social Justice (2015). Many of her lectures and presentations on ecofeminism, money, and sustainability can be seen on YouTube.
Quoted in Sidelights: Tightly packed and insightful
No short review can capture the depth and importance of this valuable book.
accessible
Mellor, Mary. Debt or democracy: public money for sustainablity and social justice
M. Perelman
CHOICE: Current Reviews for Academic Libraries. 53.10 (June 2016): p1519.
Copyright: COPYRIGHT 2016 American Library Association CHOICE
http://www.ala.org/acrl/choice/about
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Mellor, Mary. Debt or democracy: public money for sustainablity and social justice. Pluto, 2015. 215p bibl Index afp ISBN 9780745335551 cloth, $60.00; ISBN 9780745335544 pbk, $18.00; ISBN 9781783717187 ebook, contact publisher for price
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MARC
Mellor (emer., Northumbria Univ., UK) has written an important book devoid of the jargon that often accompanies works on money and banking. Tightly packed and insightful, it reflects a deep and wide reading of the relevant literature yet is accessible enough that people without much background in economics will find it quite readable.
Mellor discusses how money that the banking system creates is not the money that most people think of. Rather, it is "debt-money," while the use of paper money and coins is fast disappearing now that the economy increasingly depends on debt-money that moves about in computer systems. When a person borrows money from a bank, the bank creates an account with that money. The borrower can call upon this "fictitious" money to make purchases or to pay off past debts or even withdraw cash. However, this debt continues to accumulate throughout the economy, creating pressure for economic growth that threatens the environment. In making this case, Mellor shreds the conventional financial ideology that while consumers are encouraged to take on debt, governments must avoid debt like the plague. The resulting starvation of important government policies leads to slow growth and human suffering. No short review can capture the depth and importance of this valuable book. Summing Up: Essential. All readership levels.--M. Perelman, California State University, Chico
Feminism and Ecology
KARLA ARMBRUSTER
NWSA Journal. 12.1 (Spring 2000): p210.
Copyright: COPYRIGHT 2000 Johns Hopkins University Press
http://www.press.jhu.edu
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Feminism and Ecology by Mary Mellor. New York: New York University Press, 1997, 221 pp., $50.00 hardcover, $17.50 paper.
Since ecofeminism emerged in the mid-1970s, it has drawn widespread criticism for its alleged essentialism, usually interpreted as the claim that women share an inherent, biologically-based affinity with the natural world that men lack. While many academic feminists have continued to dismiss ecofeminism since this time, ecofeminist thinking has grown increasingly sophisticated over the years; most contemporary ecofeminists explicitly reject essentialism, basing their philosophy instead on the general conviction that important connections exist between the oppression of women and the destruction and misuse of nonhuman nature within male-dominated cultures. They tend to acknowledge the social construction of these connections and to understand that different women experience them in different ways.
However, teasing out and understanding the very complex nature of the relationship(s) between women and nature has been one of ecofeminist thinkers' most enduring tasks. Three recent books on ecofeminism--Noel Sturgeon's Ecofeminist Natures: Race, Gender, Feminist Theory and Political Action, Mary Mellor's Feminism and Ecology, and noted ecofeminist philosopher Karen Warren's edited collection, Ecofeminism: Women, Culture, Nature--continue this tradition, each providing an interesting new perspective on ecofeminism's oldest, most central question while moving the discussion far beyond the exhausted issue of whether or not ecofeminism is inherently essentialist. Each book also takes on other issues of vital importance to ecofeminism, including ecofeminism's heritage of grassroots activism, its relationship to issues of race, its connections with other radical movements, and its seeming incompatibility with poststructuralist feminist thinking. While the perspective of these books is largely what Mellor calls "Northern" (that of the developed, first world), each also addresses the ways that perspectives and concerns of women and others in the "South" may differ from those in the "North."
Sturgeon's Ecofeminist Natures makes an invaluable contribution to the academic dialogue on ecofeminism by providing an historical/political context for ecofeminist thought as it has developed internationally and in the U.S. It also conducts one of the few thorough discussions of ecofeminism's relation to issues of race--not just in theory, but as it has played out in political movements and discourse. As a cultural critic with experience as an activist in the women's peace movement, Sturgeon seems perfectly positioned to tell what she calls "an interested, contested, disrupted, and unfinished historical narrative" (19) about ecofeminism in a way that connects theory and practice while also critically examining both the problems and potential of ecofeminism as an oppositional movement.
One of Sturgeon's primary concerns is the current "political stalemate between the tropes of essentialism and anti-essentialism within feminism," (11) a stalemate which she sees working to divide ecofeminist theory from practice and ecofeminism from feminism. She not only insists--quite correctly--that ecofeminism's tendencies toward essentialism have been greatly exaggerated by its critics, but also argues that those essentialist tendencies which do exist "must be explained as well as resisted" (59). By asking where these tendencies come from and what purposes they have served, Sturgeon takes the discussion of ecofeminism and essentialism in a new and extremely productive direction. To answer her question, she delves into the historical and political context of ecofeminist activism (feminist antimilitarism for U.S. ecofeminism and "women, environment and development" for international ecofeminism), and consequently ends up confronting race and other issues that have deeply affected ecofeminism in practice and, consequently, ecofeminist theory and discourse.
In her narrative, Sturgeon emphasizes the ways that ecofeminism has functioned as a political intervention into male-dominated discourses such as social ecology, deep ecology, Earth First! and United Nations discussions of environment and development. She shows how the women involved in these interventions, often of profoundly different racial, class, and national backgrounds, used certain symbols and language that could be seen as essentialist to help create urgently needed political alliances among themselves. Sturgeon also discusses essentialist tendencies within ecofeminist approaches to race, focusing on the activist WomanEarth Feminist Peace Institute and theoretical work on "indigenous women." While she finds WomanEarth's efforts to honor racial difference flawed by a binary notion of race and sees the reification of indigenous women as the "ultimate ecofeminists" as an imperialistic reinforcement of white privilege, she also locates in these examples real efforts and desires to come to terms with the implications of race for ecofeminism.
Ecofeminist Natures is also noteworthy for its accessible style, which helps integrate the historical narratives Sturgeon tells with her well-theorized argument "that certain essentialist moments in ecofeminism, given particular historical conditions, are part of creating a shifting and strategic identification of the relation between `women' and `nature' that has political purposes" (11). Students of ecofeminism will find it extremely helpful to have the ideas of major figures such as Ynestra King contextualized by history and politics in a way that is not only informative but also compelling. In this book, Sturgeon expertly conducts a cultural, political, and historical analysis in order to provide a new and extremely useful perspective on ecofeminist theory and practice.
Just as Sturgeon's book is valuable not only for its analysis and argument but also for the historical context it provides, Mary Mellor's Feminism and Ecology offers not just Mellor's own case for a "realist and materialist" ecofeminism but also an excellent overview of the many strands of thought contributing to the current body of ecofeminist theory. In this book Mellor, a sociologist, has constructed one of the most thorough and even-handed summaries and analyses of ecofeminist thinkers ranging from Vandana Shiva to Susan Griffin to Donna Haraway available to date.
She begins by tracing ecofeminism back to the emergence of a number of social movements and perspectives that link women and the environment in both the North and South, then shifts into a discussion of debates within ecofeminism, particularly over whether women have an essential or socially constructed connection to nature. For Mellor, the ecofeminist argument is important not only for bringing together feminist and environmental thinking but also for challenging both. From an ecofeminist perspective, it becomes clear that feminism has failed to address the material fact of human embodiment and its implications for men's and women's relationships to nature and that the environmental movement has neglected the effects of male domination on human interactions with nature.
Emphasizing that ecofeminism is unusual in comparison with other feminisms for attending to the relationship between women and nature at all, Mellor defends the importance of this task, suggesting that ecofeminism can deflect charges of essentialism by using a materialist framework to examine central concepts such as embodiment and its relation to sex and gender. This focus on material reality--and particularly the implications of human embodiment--is Mellor's touchstone throughout Feminism and Ecology, and she deftly uses it to mediate between "wholesale social or cultural constructivism" and "ecological or biological determinism" as she examines ecofeminism and a variety of related schools of thought throughout the book. As she explains, "it is both politically and theoretically vital to understand ... the relationship between socially constructed relationships and physical realities" (7). In insisting upon this relationship as the object of her analysis rather than focusing on either cultural forces or the physical environment, Mellor makes an especially important contribution to conversations not just about ecofeminism, but about all human relationships to nature.
With this agenda in mind, Mellor explores the points of disagreement and potential common ground between ecofeminists (who argue that women possess a privileged viewpoint in relation to the natural world) and postmodern feminists (who question whether it is possible to claim a privileged epistemological viewpoint on any basis). She also examines the relationship between ecofeminism and green thinking, particularly that of deep ecologists, suggesting that ecofeminism's attention to social difference and inequality can help balance deep ecology's tendency to privilege nature over culture. Finally, she looks at ecoanarchism, ecosocialism and Marxism (focusing on the ideas of Murray Bookchin in particular) in order to show that their neglect of women's work has overly socialized the natural and thus obscured the ecological context of human existence and the material fact of all humans' embodiment.
Throughout these discussions, Mellor interweaves her own argument for what she calls a realist and materialist ecofeminist analysis. While Mellor's excellent discussion of other ecofeminist, feminist, and environmental thinkers tends to obscure the thread of this argument to some extent, ultimately she makes a coherent, convincing case that such an analysis has the potential to move beyond the false choice often presented between radical social constructivism and various forms of universalism and essentialism. Such an analysis acknowledges that humanity is embedded in the natural world but also recognizes that its interrelationship with its environment is an historical process: "As conscious and socially constructive beings, humanity dialectically interrelates with nonhuman nature in different ways over time and across cultures. Neither humanity nor `nature' are determinant; what is inescapable are the consequences of the dynamics between them" (12-13). This point of view accepts that humanity cannot exist without nature but that there is no "natural" way for us to relate to it; thus, "human existence in nature becomes a material, political, and moral question" (188). As Mellor demonstrates, ecofeminism helps address this question by revealing the ways that women play a socially constructed, mediating role between humanity and nature as well as the fact that "relatively few women play this role purely as women, but as people caught in a matrix of oppressions that embrace many men as well" (13).
Karen Warren, whose earlier contributions to ecofeminism include several very influential articles in Environmental Ethics and the collections Ecological Feminism and Ecological Feminist Philosophies, has taken on the task of providing a multidisciplinary perspective on ecofeminism in Ecofeminism: Women, Culture, Nature. The eight essays in its first major section, "Taking Empirical Data Seriously," all highlight the importance and usefulness of empirical data to ecofeminist undertakings around the globe, including struggles by indigenous peoples to overcome colonial legacies, the movement for environmental justice, and the challenges of creating ecocommunities. The second section, "Interdisciplinary Perspectives," is comprised of ten essays which provide perspectives on ecofeminism from scholars in a variety of academic fields and professions, ranging from chemical engineering and biology to anthropology, education, and literary studies. The final section, "Philosophical Perspectives," includes six essays by philosophers on a variety of issues relevant to ecofeminism, including the relationship between androcentrism and anthropocentrism and possible intersections between ecofeminism and the ideas of Kant and Wittgenstein.
In keeping with the book's multidisciplinary focus, many of the essays are by authors with backgrounds in academic, professional, or political areas outside of ecofeminism or philosophy. However, readers familiar with ecofeminism will also find contributions by a variety of well-known ecofeminist figures, including Warren herself, Petra Kelly, Judith Plant, Val Plumwood, Charlene Spretnak, and Susan Griffin. Lori Gruen and Wendy Donner provide notable contributions from the perspective of environmental ethics. Dorceta E. Taylor, in "Women of Color, Environmental Justice, and Ecofeminism," not only provides an overview of the environmental justice movement but also explains why the women of color responsible for that movement find ecofeminism uninviting.
Perhaps the most important work in this collection is Susan Griffin's "Ecofeminism and Meaning." Griffin is best known for her poetic work Woman and Nature: The Roaring Inside Her, which has often been criticized as an example of essentialist thinking because it opposes a singular voice representing woman and nature to the voice of patriarchy. However, careful readers--including the well known socialist ecofeminist Ynestra King--have long understood that Griffin's approach to women's relationship(s) to nature is far more complex and anti-dualistic than such an interpretation suggests. In "Ecofeminism and Meaning," Griffin indirectly takes on many of the past criticisms of her work, revealing a clear grasp of the theoretical debates going on within feminist theory without falling into the dense, theoretical language that often characterizes them. While she criticizes poststructuralist feminists for attempting to deny human dependence on nature, Griffin takes a straightforwardly social constructionist position in this essay. Flatly stating that "[b]iologically women are no closer to nature than men," (222) she goes on to explain that women tend to occupy a socially constructed position in which they mediate between human cultures and the natural processes upon which all humans are biologically dependent. In particular, she demonstrates the contribution an ecofeminist perspective could make to feminist debates over the term woman by showing the ways that the meanings of both woman and nature depend on their relationships with a web of other meanings. She argues that "[t]he solution then is not to erase the words but to see how they change when concealed connections and differences are made evident" (224), including the many intersections of gender, sexual preference, class, and ethnicity. While she accepts the poststructuralist insight that meaning cannot be fixed anywhere, she asserts that the question of meaning is still vital and that an ecofeminist approach can help us understand that "meaning, like life is interdependent.... [and] arises from meeting and connection, from overlapping boundaries, shifting identities" (226).
In taking on the range of topics it does, this collection successfully expands the sense of ecofeminism's value to a variety of grassroots struggles, academic disciplines, and professions. It also demonstrates a real commitment to viewing ecofeminism as an international movement, including essays that focus not only on the U.S., but also on the Persian Gulf, India, the Canadian Arctic, Germany, Brazil, and Kenya. However, as with many anthologies, the book's variety is not only a strength, but also a weakness. Perhaps inevitably, given the contributors' diverse backgrounds, the essays differ radically in length (from eight to forty-four pages), tone (some are very scholarly and others seem directed at a more general readership), and approach (some are rapid overviews of a field, others are in-depth case studies, while still others are abstract theoretical arguments). Less inevitably, the essays display a disconcerting inconsistency in citation style; while this inconsistency may grow out of an ecofeminist tolerance of diversity, it is likely to present some obstacles for readers and could easily have been remedied during the editing process.
While these differences and inconsistencies are significant, it seems possible that a stronger introduction could have woven the disparate parts of the book into a more cohesive whole. In the introduction, Warren characterizes the book's purpose as providing a multidisciplinary approach to ecofeminism: "a plethora of new perspectives on ecofeminist theory and practice--ones which help to undergird the power and promise of ecofeminism" (xvi). The book certainly fulfills this purpose, but the purpose itself seems unnecessarily vague; after finishing the introduction, readers might still wonder how a multidisciplinary perspective relates to major ecofeminist issues and debates and why such a perspective might be particularly important for ecofeminism at this time.
Karla Armbruster is Assistant Professor of English at Webster University in St. Louis. Her research interests include ecofeminism, women's nature writing, representations of animals, and the literature of environmental advocacy. She is currently working on a book on environmental advocacy in American literature and culture and co-editing a collection with Kathleen R. Wallace entitled "Beyond Nature Writing: Expanding Boundaries of Ecocriticism."
Feminism and Ecology: An Introduction
MARTA A. ROHATYNSKYJ
International Journal of Comparative Sociology. 40.4 (Nov. 1999): p491.
Copyright: COPYRIGHT 1999 Sage Publications, Inc.
http://cos.sagepub.com/
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Mary Mellor, Feminism and Ecology: An Introduction. New York: New York University Press, 1998, 232 pp. Cloth $50.00. Paperback $17.50.
One of the unresolved and nagging dichotomies in the pursuit of feminist studies in academia has been an association made early on, in the second wave of feminism, between women and nature and men and culture. In my discipline, sociocultural anthropology, feminists strongly criticized the reductionism of Levi-Strauss and other French structuralists who propounded this equation with charges of essentialism. The carefully worded proposal of Sherry Ortner, developed on a constructivist base, that this type of an association could constitute a universal was met with the indeterminacy of cultural relativism or the further equation of men and culture with the colonizer and women and nature with the colonized. The implications of such reductionism for women in academia were doubly damning as female academics struggled to claim en masse a place on male dominated turf. Although the struggle for claim to academic authority has evolved and continues, the problem of the association of gender with the culture/nature dich otomy, as having explanatory or even descriptive value in my discipline, has long ceased to command attention. Other problems have gained recognition and feminist researchers currently shy away from the dichotomies of the Enlightenment.
Ecofeminism, as a theory and as social action, constitutes the recent resurfacing of this problematic equation, and the work of Vandana Shiva, and others, has instigated the same sort of criticisms and charges of essentialism precipitated some twenty years ago. The dilemma for feminists concerned with ecological issues and sympathetic to movements that describe themselves as both feminist and green, has been the irreconcilability of a rejection of women's special affinity with nature and environmental concerns, and the commitment to the goals of movements that espouse such a stance.
Mary Mellor's book looking at the link between feminism and ecology develops an analysis that successfully avoids the pitfalls of reductionism and essentialism. She posits that the struggle facing both men and women wherever they are positioned in the global social order is to come to terms with the materiality of human existence. In the introductory chapter she reopens the discussion of women's special relationship to nature and identifies much of the criticism of the ecofeminist stance as reacting to radical/cultural feminist and spiritual feminist positions. She outlines how the realist language of the ecofeminist discourse is incompatible with any social or cultural constructivist understanding of gender and proposes to explore the contribution that the perspective has made to humanity's understanding of its positioning in the material world. She identifies two major themes; that of embeddedness in the environment and that of embodiment, whose various treatments serve to distinguish radical/cultural femi nists, from spiritual feminists, from socialist feminists, from greens both light and deep and so on. For Mellor, environmental concerns are feminist concerns simply because, as the states in the preface, "...it is not possible to understand the ecologically destructive consequences of dominant trends in human development without understanding their gendered nature" (p. vii).
In the following chapter, Mellor historically links feminist concerns with environmental concerns. She reviews the contribution that the pioneering work of Ellen Swallow in "domestic science" could be seen to have made to the development of the study of ecology. She highlights the work of Rachel Carson and Barbara Ward in bringing ecological issues to global attention. Similarly, she traces the evolution of a number of grassroots movements like the Chipko Movement and the crisis at Love Canal in New York State. Finally, she focuses on the complex issues raised by critiques of women in international development and devotes some time to a discussion of the DAWN document and the series of national and international conferences precipitated by a combination of grass roots struggles and published works.
Chapters three to seven are concerned with the unravelling of the complex strands of thought that link various positions in the discourse together but which also distinguish them one from another. Mellor accomplishes this with some skill and clarity. She sets out an analytic framework defined by the concepts of immanence and transcendence. Immanence is a consequence of human embodiment, it is a consequence transcended by some at the expense of others who bear the burden of human materiality. Building on her previous works she develops the notion of mediation and borrows the term, parasitism. In her model, those that transcend their immanence at the expense of others are parasites dependent upon others' mediation which "involves both exploitation and exclusion; it means making time, space or resources for someone else" (p. 189). But, it is not just women who act as mediators; it may also be men with women acting as the beneficiaries. She writes that many people stand in complex networks of mediation based on race, class, gender and ethnicity. Clearly, white, western women may act as mediators within their own households but as parasites in relation to other women whose labour they exploit. Her argument is compelling especially as it grows out of an approach that sees the very problem posed for feminists in the culture/nature opposition and in the sex/gender dualism as resting on the dilemma of human embodiment (p. 182).
Less satisfying is Mellor's use of the concepts of time and space, identifying a dichotomy between biological time and ecological time, and social time and space. She allies women with living in biological and ecological time more frequently than men. She identifies men as having control over social time and space. These are old battle cries come back to haunt us. One has to ask: What of the voluminous literature on the public/domestic divide? What of the conscious effort Mellor herself makes to avoid the false comfort of essentialist dichotomies? This dichotimization is not critical to Mellor's final argument and can be seen as providing a language to name various social activities.
Feminism and Ecology is a rich and rewarding discussion of the complex phenomenon that has taken on the name of ecofeminism. It provides a history of the complex linkage between feminist thought and action and concerns for the environment. It confronts the classic dichotomy between women and men and nature and culture in its latest intellectual and social manifestation. In doing so it deals with a series of critical issues ranging from moral commitment to epistemological indeterminacy. The discussion proceeds at an energetic pace, and Mellor's tone is often light, even humorous. This book would be of interest to a wide audience of feminists, ecologists, social scientists, and committed social activists of all types.
MARY MELLOR’S “DEBT OR DEMOCRACY”: WHY NOT QUANTITATIVE EASING FOR PEOPLE?
By David Bollier, originally published by David Bollier blog
April 12, 2016
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Although it is widely assumed that governments are the source of all new money – through “printing it” – the so-called private sector is the source of most new money put into circulation. In one of the most successful enclosures of the commons in our time, commercial finance institutions have captured the power to create most new money through their discretionary lending. This power has become so normalized and pervasive that hardly anyone acknowledges the startling fact that commercial lending accounts for more than 95% of “new money” created. Government has in effect surrendered its enormous power to use its money-creating authority for the public good.
Perhaps the leading champion for reforming the current money system is Mary Mellor, emeritus professor at Northumbria University in the UK and author of the recently published, eye-opening book Debt or Democracy: Public Money for Sustainability and Social Justice (Pluto Press, 2015, distributed in the US by University of Chicago Press Books).
Mellor recently published an oped piece in The Independent, the British newspaper, that summarizes some of the key themes in her book. Her essay focuses on the “myth of handbag economics” – the idea that government budgets are comparable to household budgets. This distorts our understanding of how the money supply works, says Mellor, and inexorably leads governments to adopt fiscal austerity policies.
The critical political question that is rarely asked, said Mellor at a policy workshop last September, is: Who controls the creation and circulation of money?
She notes that the government, as the sovereign, has the authority to issue new money – an ancient authority known as seignorage. But in practice, governments have surrendered this authority to the commercial banking sector, whose lending creates nearly all of the money in circulation as debt.
Banks create money out of thin air by issuing new loans. They need not have those specific sums of money on hand, in a vault. They need have only a small fraction of reserves of the total sum lent, as required by “reserve banking” standards. In this way, bank lending quite literally introduces new supplies of money into the economy based on strictly private, commercial standards – i.e., banks’ assessments of borrowers’ ability to repay the debt with interest.
Mellor believes that we need to recover the power of public currency to meet public needs. By “public currency,” she means “the generally recognized and authorized public currency created through a public money circuit that originates in central banks and government spending.” Privately created currency is money designated as public currency that is issued through the banking sector as loans. It is the fact that bankers are creating the public currency when they make loans that makes the state liable to honor that money when banks go into crisis.
Mellor calls this simple-minded and self-serving understanding of money “handbag economics,” an allusion to the prominent handbag that Great Britain’s neoliberal Prime Minister Margaret Thatcher always carried around. “According to handbag economics,” said Mellor, “there is no such thing as public money, nor can public money be created except through private banks.”
To underscore the folly of governments creating money, bankers reflexively cite the ruinous inflation that results when the German Weimar Republic “just printed money.” The assumption is that governments cannot legitimately issue money or create wealth; that can be done only through bank-issued credit, or lending – or so goes the story. Therefore, any public spending that occurs without first collecting the money through taxation is deplored as reckless “deficit spending.” Mellor argues that in practice governments are always spending in advance of taxation. States spend first and tax later. If they taxed first, deficits would never arise.
The standard narrative about banking and money also conveniently ignores the fact that governments routinely supply “basic money” to private banks to keep them afloat, said Mellor. We saw this quite dramatically in the months and years following the 2008 financial crisis. The US Government created hundreds of billions of dollars out of thin air – as “public money” – to bail out the banks and prevent them (and the global economy) from collapsing.
It is always the public capacity to create public currency free of debt that stands behind the private banking system. This is demonstrated again and again as debt bubbles burst and bank runs threaten to ruin the economy. The state always needs to intervene as the lender of last resort. “All formal money systems are essentially public, resting on public trust and public authority,” said Mellor.
This raises an interest point for Mellor: Why should the commercial banking sector be allowed to be parasitic on the public sector? Why do we, as citizens and taxpayers, allow the private finance system to control the public sector? Mellor argues that the obvious answer to taxpayer bailouts and subsidies to private banks is to “harness the democratic right to create money” and use it to serve public purposes.
This is such a heretical thought that many people gasp, spit out their coffee, and exclaim that this is nuts. (Just look at the comments in response to Mellor’s piece in The Independent.) But Mellor argued at the workshop mentioned above:
The power to create money has shifted from sovereigns to the commercial sector, from the ruling class to the merchant class. What is needed is to transfer this power to the public. The central bank must return the sovereign prerogative of money-creation free of debt to the people, for the benefit of the people, as a public resource. That is, money must be democratized. This is particularly the case if we wish to create socially just and ecologically sustainable provisioning systems – a much better concept than “the economy.”
Moving toward this new orientation of “democratized money” requires that we change our understanding of what it means for government to create money. It does not consist of “deficit spending” as presently understood – i.e., money that must be repaid to banks. After all, government creation of money is a sovereign prerogative for meeting public purposes. That why precisely what the “quantitative easing” used by central banks to save troubled commercial banks was all about. It was the issuance of a public currency nominally intended to serve a public purpose (preventing economic collapse) but in effect a private business subsidy.
Funny, we didn’t hear too many bankers complaining about the dangers of government “just printing money” in that instance. If it is acceptable to create public money to sustain private commercial finance (“quantitative easing”), why isn’t “quantitative easing for people” (and the environment, infrastructure, etc.) also a feasible, responsible policy option? Why can’t public currencies be created to serve all sorts of public needs without incurring government debt?
Mellor explains that the problem is largely one of ideological framing: Proponents of “handbag economics” demand that we regard money as a purely commercial asset, not as a public asset. They demand that money creation occur chiefly through the private profit-making of banks (loans), and not through the government as a way to serve public purposes.
Mellor laments that “commentators from both the left and right have largely ignored the democratic potential of money. They focus on the ‘real economy,’ which is generally taken to be the capitalist productive sector. Money is seen as a secondary aspect, whereas it should be seen as an active, politically constructive agent. All money is a credit that represents an entitlement for the holder, but not all money represents debt.”
Because over 95% of money in the more developed national economies is held in bank accounts with only a small amount circulating as cash (coins and notes), private sector debt-based money is perceived to be the unquestionable norm. But Mellor explains that it is entirely responsible to reconceptualize our understanding of money: Instead of seeing money as something that government must borrow from banks, we should see it as a debt-free public supply of currency that could prioritize socially necessary expenditures, without first raising revenues through taxes.
There need be no “deficit”; the money would simply represent a public source of new money, a function that private banks already perform. The difference would be that public currencies would be interest-free and support democratically determined needs – not primarily the commercial priorities of private lenders.
Mellor has called for recognition of the existence of a “public circuit of money” that operates according to a different logic than the dominant monetary system. Unlike money created through a commercial finance circuit, in which money is created as debts that must be repaid, a public money circuit could create money free of debt. There would be no impetus for repayment. What would be requires is a sufficient return of that money to the public circuit – through taxes, charging for government services or selling investment opportunities to the public – in order to prevent inflation.
Mellor agrees that how to set the proper policies for this goal would be a matter of public debate. She imagines an independent monetary authority assessing the overall amount of money that should be retrieved “so as to leave enough to enable all commercial and public payments to be made while avoiding inflationary pressures.”
Mellor’s ideas have great appeal for these times, but they will first require public understanding and political movements to gain sufficient traction. One of their greatest virtues is that “democratic money” could provide the wherewithal to meet all sorts of public needs, especially ecological and social needs, at a time when commercial finance will deign to create new money only if it first meets its high-profit, high-debt criteria.
This is a much longer dialogue than a blog post can manage, of course, which is why I recommend that you chase down Mary Mellor’s fascinating book Debt or Democracy. [Some of this blog post derives from the workshop report, “Democratic Money and Capital for the Commons.”]
Mary Mellor’s “Debt or Democracy”: Why Not Quantitative Easing for People?
Thu, 03/31/2016 - 14:35
Although it is widely assumed that governments are the source of all new money – through “printing it” – the so-called private sector is the source of most new money put into circulation. In one of the most successful enclosures of the commons in our time, commercial finance institutions have captured the power to create most new money through their discretionary lending. This power has become so normalized and pervasive that hardly anyone acknowledges the startling fact that commercial lending accounts for more than 95% of “new money” created. Government has in effect surrendered its enormous power to use its money-creating authority for the public good.
Perhaps the leading champion for reforming the current money system is Mary Mellor, emeritus professor at Northumbria University in the UK and author of the recently published, eye-opening book Debt or Democracy: Public Money for Sustainability and Social Justice (Pluto Press, 2015, distributed in the US by University of Chicago Press Books).
Mellor recently published an oped piece in The Independent, the British newspaper, that summarizes some of the key themes in her book. Her essay focuses on the “myth of handbag economics” – the idea that government budgets are comparable to household budgets. This distorts our understanding of how the money supply works, says Mellor, and inexorably leads governments to adopt fiscal austerity policies.
The critical political question that is rarely asked, said Mellor at a policy workshop last September, is: Who controls the creation and circulation of money?
She notes that the government, as the sovereign, has the authority to issue new money – an ancient authority known as seignorage. But in practice, governments have surrendered this authority to the commercial banking sector, whose lending creates nearly all of the money in circulation as debt.
Banks create money out of thin air by issuing new loans. They need not have those specific sums of money on hand, in a vault. They need have only a small fraction of reserves of the total sum lent, as required by “reserve banking” standards. In this way, bank lending quite literally introduces new supplies of money into the economy based on strictly private, commercial standards – i.e., banks' assessments of borrowers’ ability to repay the debt with interest.
Mellor believes that we need to recover the power of public currency to meet public needs. By “public currency,” she means “the generally recognized and authorized public currency created through a public money circuit that originates in central banks and government spending.” Privately created currency is money designated as public currency that is issued through the banking sector as loans. It is the fact that bankers are creating the public currency when they make loans that makes the state liable to honor that money when banks go into crisis.
Mellor calls this simple-minded and self-serving understanding of money “handbag economics,” an allusion to the prominent handbag that Great Britain’s neoliberal Prime Minister Margaret Thatcher always carried around. “According to handbag economics,” said Mellor, “there is no such thing as public money, nor can public money be created except through private banks.”
To underscore the folly of governments creating money, bankers reflexively cite the ruinous inflation that results when the German Weimar Republic “just printed money.” The assumption is that governments cannot legitimately issue money or create wealth; that can be done only through bank-issued credit, or lending – or so goes the story. Therefore, any public spending that occurs without first collecting the money through taxation is deplored as reckless “deficit spending.” Mellor argues that in practice governments are always spending in advance of taxation. States spend first and tax later. If they taxed first, deficits would never arise.
The standard narrative about banking and money also conveniently ignores the fact that governments routinely supply “basic money” to private banks to keep them afloat, said Mellor. We saw this quite dramatically in the months and years following the 2008 financial crisis. The US Government created hundreds of billions of dollars out of thin air – as “public money” – to bail out the banks and prevent them (and the global economy) from collapsing.
It is always the public capacity to create public currency free of debt that stands behind the private banking system. This is demonstrated again and again as debt bubbles burst and bank runs threaten to ruin the economy. The state always needs to intervene as the lender of last resort. “All formal money systems are essentially public, resting on public trust and public authority,” said Mellor.
This raises an interest point for Mellor: Why should the commercial banking sector be allowed to be parasitic on the public sector? Why do we, as citizens and taxpayers, allow the private finance system to control the public sector? Mellor argues that the obvious answer to taxpayer bailouts and subsidies to private banks is to “harness the democratic right to create money” and use it to serve public purposes.
This is such a heretical thought that many people gasp, spit out their coffee, and exclaim that this is nuts. (Just look at the comments in response to Mellor’s piece in The Independent.) But Mellor argued at the workshop mentioned above:
The power to create money has shifted from sovereigns to the commercial sector, from the ruling class to the merchant class. What is needed is to transfer this power to the public. The central bank must return the sovereign prerogative of money-creation free of debt to the people, for the benefit of the people, as a public resource. That is, money must be democratized. This is particularly the case if we wish to create socially just and ecologically sustainable provisioning systems – a much better concept than “the economy.”
Moving toward this new orientation of “democratized money” requires that we change our understanding of what it means for government to create money. It does not consist of “deficit spending” as presently understood – i.e., money that must be repaid to banks. After all, government creation of money is a sovereign prerogative for meeting public purposes. That why precisely what the “quantitative easing” used by central banks to save troubled commercial banks was all about. It was the issuance of a public currency nominally intended to serve a public purpose (preventing economic collapse) but in effect a private business subsidy.
Funny, we didn’t hear too many bankers complaining about the dangers of government “just printing money” in that instance. If it is acceptable to create public money to sustain private commercial finance (“quantitative easing”), why isn’t “quantitative easing for people” (and the environment, infrastructure, etc.) also a feasible, responsible policy option? Why can’t public currencies be created to serve all sorts of public needs without incurring government debt?
Mellor explains that the problem is largely one of ideological framing: Proponents of “handbag economics” demand that we regard money as a purely commercial asset, not as a public asset. They demand that money creation occur chiefly through the private profit-making of banks (loans), and not through the government as a way to serve public purposes.
Mellor laments that “commentators from both the left and right have largely ignored the democratic potential of money. They focus on the ‘real economy,’ which is generally taken to be the capitalist productive sector. Money is seen as a secondary aspect, whereas it should be seen as an active, politically constructive agent. All money is a credit that represents an entitlement for the holder, but not all money represents debt.”
Because over 95% of money in the more developed national economies is held in bank accounts with only a small amount circulating as cash (coins and notes), private sector debt-based money is perceived to be the unquestionable norm. But Mellor explains that it is entirely responsible to reconceptualize our understanding of money: Instead of seeing money as something that government must borrow from banks, we should see it as a debt-free public supply of currency that could prioritize socially necessary expenditures, without first raising revenues through taxes.
There need be no “deficit”; the money would simply represent a public source of new money, a function that private banks already perform. The difference would be that public currencies would be interest-free and support democratically determined needs – not primarily the commercial priorities of private lenders.
Mellor has called for recognition of the existence of a “public circuit of money” that operates according to a different logic than the dominant monetary system. Unlike money created through a commercial finance circuit, in which money is created as debts that must be repaid, a public money circuit could create money free of debt. There would be no impetus for repayment. What would be requires is a sufficient return of that money to the public circuit – through taxes, charging for government services or selling investment opportunities to the public – in order to prevent inflation.
Mellor agrees that how to set the proper policies for this goal would be a matter of public debate. She imagines an independent monetary authority assessing the overall amount of money that should be retrieved “so as to leave enough to enable all commercial and public payments to be made while avoiding inflationary pressures.”
Mellor’s ideas have great appeal for these times, but they will first require public understanding and political movements to gain sufficient traction. One of their greatest virtues is that “democratic money” could provide the wherewithal to meet all sorts of public needs, especially ecological and social needs, at a time when commercial finance will deign to create new money only if it first meets its high-profit, high-debt criteria.
This is a much longer dialogue than a blog post can manage, of course, which is why I recommend that you chase down Mary Mellor’s fascinating book Debt or Democracy. [Some of this blog post derives from the workshop report, “Democratic Money and Capital for the Commons.”]
Quoted in Sidelights makes an original and thought-provoking contribution to a rapidly growing list of publications taking on the orthodoxies of mainstream economics.
Now that the economic status quo is destabilised, works like Debt or Democracy are seeking to imagine viable economic alternatives. This well-researched study will interest anyone wanting to understand our current economic problems in order to take further action.
February - March 2016 | Issue 2590-2591
Mary Mellor, Debt or Democracy: Public Money for Sustainability and Social Justice
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More Reviews
Eileen Flanagan, Renewable: One Woman’s Search for Simplicity, Faithfulness, and Hope
Rebecca Solnit, The Encyclopedia of Trouble and Spaciousness
Voices for Creative Non-Violence UK et al., Fly Kites Not Drones: We all live under the same blue sky
Anna Reading and Tamar Katriel, Cultural Memories of Nonviolent Struggles: Powerful Times
Kate Evans, Red Rosa: A Graphic Biography of Rosa Luxemburg
More Reviews
Also in this Issue
We can stop Trident replacement (Feature)
Pulling together (Feature)
Trident and UK security (Feature)
Transform now! (Feature)
Editorial: Creating energy for ourselves (Comment)
The 2015 Creative Activist Awards (Feature)
Christians whitewash ‘dept for extreme climate change’ (News)
Swiss to vote on Basic Income (News)
Climate Action 2016 (Feature)
Bad arrest, good result (News)
Stop arming the Saudi war in Yemen (News)
Housmans digs deep (News)
When will they ever learn? (News)
Met gives in on eighth undercover police relationship case (News)
Anti-Trident action from Edinburgh to London (News)
Police harass Scottish peace campaigners (News)
Machtivists on trial (News)
Clean up the act (News)
Why I was acquitted (Feature)
On the side of the angels (Feature)
Should we 'call people out'? Or call them in? (Feature)
How to tackle classism... and how not to (Feature)
First to die, to fight, to march (Feature)
Time to cycle (Feature)
With My Hammer (Feature)
The Personal Column: Tales of the Emperor (Comment)
Radical music: 'A Mighty Song of Peace' (Comment)
Eileen Flanagan, Renewable: One Woman’s Search for Simplicity, Faithfulness, and Hope (Review)
Rebecca Solnit, The Encyclopedia of Trouble and Spaciousness (Review)
Voices for Creative Non-Violence UK et al., Fly Kites Not Drones: We all live under the same blue sky (Review)
Anna Reading and Tamar Katriel, Cultural Memories of Nonviolent Struggles: Powerful Times (Review)
Kate Evans, Red Rosa: A Graphic Biography of Rosa Luxemburg (Review)
Activism and ... Luxury (Comment)
40 years ago: Overwhelming Woody (Comment)
Backpack blockading (Feature)
Roouminations (Cartoon)
Almost ... (Cartoon)
Charles Felber, Change Everything: Creating an Economy for the Common Good (Review)
Dorothy Thompson, The Dignity of Chartism (Review)
News in Brief (10)
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Review by Fiorella Lecoutteux
Pluto Press, 2015; 224pp; £17
ImageThis book makes an original and thought-provoking contribution to a rapidly growing list of publications taking on the orthodoxies of mainstream economics. At its heart is the critical question: who controls money?
Since money doesn’t enter the economy naturally, the means by which it is created are contingent on political choices. To expose the ideology behind our financial system, Mellor meticulously debunks four myths about modern finance.
The first is the assumption that national governments cannot, or should not, create money.
The second is the misconception that trade is at the basis of all human relations, while the third conceives of money as having originated in the exchange of valuable metals like gold and silver.
The fourth and final myth is that private banks act as intermediaries between savers and borrowers. For Mellor, prevailing economic common sense is deceitful because it excludes conceptions of social and public money. It falsely differentiates between publicly-authorised money and private credit money when, in fact, the crisis-prone neoliberal system is a direct result of the privatisation of public money by banks.
Thus, contrary to what is commonly assumed, banks have the capacity for the unlimited creation of money through debt (literally, ‘out of thin air’) while states are restricted to borrowing.
Mellor’s sharp analysis of the role of the European central bank (ECB) illuminates this further. Eurozone governments are denied access to the ECB with the result that they are forced to turn to the money markets for loans, with the extra challenge of facing different borrowing systems depending on their commercially-determined credit ratings.
The system therefore wilfully ignores the inequalities between Eurozone states (eg Germany versus Greece) and portrays austerity measures as evidence of profligate public sectors.
Taking the 2007–8 financial crash as a case study, Mellor shows how public institutions actively rescued private banks through quantitative easing. Why, she asks, was this new money used to rescue the private sector, and not the people impacted by the crisis? Clearly, quantitative easing in the private sector, ie using debt-free money to support the privatisation of money as debt, ‘increases speculation and therefore inequality.’
A power shift needs to take place, she argues, from strong private banks to a renewed state sovereignty: a shift that will allow states to regain control of money creation and curb the power of the banks. A shift, in short, from debt to democracy. Her alternative vision views public money as a means for creating social justice and environmental sustainability rather than the profits that drive capitalist regimes. Instead, it would seek ‘public profit’ whereby ‘enough’ is preferable to ‘more’.‘Work that makes a profit need be neither useful nor necessary’, she notes. In a transformed public economy, people would work in activities related to their needs. And, whereas capitalism only provides the consumer with the ‘end product’, a new democratic economic state would involve people in both production and investment decisions, helping to avoid harmful impacts on the environment and on workers.
The last two chapters of the book are dedicated to planning a truly democratic economic system, one where money-creation and circulation is ‘directly put into people’s hands’ through participatory and deliberative institutions.
But while these can easily function on a local or national level, Mellor is careful to explore the difficulties that arise in the context of an unregulated global market. Mellor starts by arguing that ‘there is no basis to the claim that the market is efficient and can bring prosperity to all.’
Now that the economic status quo is destabilised, works like Debt or Democracy are seeking to imagine viable economic alternatives. This well-researched study will interest anyone wanting to understand our current economic problems in order to take further action.
Dermot Smyth
Quoted in sidelights: the utterly dishonest equating of state finance with ordinary family budgeting
gives neoliberal economics a thorough shredding
Mellor’s prose is clear, well structured and lucid in its descriptions of some heavy theory.
Debt or Democracy will surely enhance her reputation as a radical socialist academic.
This book addresses many popular misconceptions about money and debt. Ninety seven percent of money that circulates within the economy has not actually been created by the state, but by private banks, out of thin air, as fractional reserve loans.
Without the constant rolling-over of this debt-based money, there would be no economy. So GDP growth depends on maintaining high public, corporate and individual debt. This is why any level of austerity is a fraud.
Mellor’s phrase for the utterly dishonest equating of state finance with ordinary family budgeting is “handbag economics”. Householders cannot (legally) create national currency. Governments can and do, either via Bank of England franchised banks or by direct issue of notes and coins, plus quantitative easing (QE).
National currency is already effectively “social and public” and should, therefore, work for the benefit of all, not just the few. Mellor proposes “sufficiency provisioning” with a reformed banking and money system, which is pretty similar to the recently dubbed “People’s QE”.
She gives neoliberal economics a thorough shredding and declares the present monetary system incompatible with democracy.
Mellor’s prose is clear, well structured and lucid in its descriptions of some heavy theory. She takes a position on most issues, but not all.
For example, she recognises there is no essential difference between state-issued money and bank-issued money but then backtracks partly with an unhelpful distinction between public and commercial “money circuits”.
She writes, “An historical view of money shows that the monetary reformers and Modern Monetary Theory (MMT) are both right.” Actually, MMT regards all public spending as creating money. Reform movements such as Positive Money don’t.
She dismisses myths about the barter origins of money and the benefits of the gold standard. And she criticises “transitional” remedies such as local or alternative currencies, which, despite being potentially more democratic and socially progressive, can never simply elbow aside national state currencies. Likewise, an international currency would only work with full financial convergence (see Greece vs the euro!).
Doubtless influenced by the ethos of autonomism, Mellor tries to be nice to everyone. Hence the polite if rather unfair, “Left groups had an analysis of a crisis between labour and capital, and a critique of finance capital, but virtually nothing to say on the problem of public money supply in financialised and privatised monetary systems.”
Politically, Debt or Democracy is smudgy in places. This is a pity because most of Mellor’s conclusions are reasonable and could form the basis of a united front type reform package, rather like the One Million Climate Jobs campaign.
Mellor references a well-chosen selection of authors and Debt or Democracy will surely enhance her reputation as a radical socialist academic.
Quoted in Sidelights:
Central to the book is a rejection of the concept of ‘handbag economics’, in other words, that the public sector is analogous to a household, dependent upon external wealth from the private sector. The book challenges handbag economics’ view of money as essentially limited, with all public expenditure presented as either a burden on, or a threat to, private investment and expenditure. Finally, it rejects the idea that the supply of money to the public sector can only originate with the taxpayer or private ‘money markets’.
Put in Marxist terms, the monetary power once monopolised by rulers has passed to the capitalist sector. That power needs to be reclaimed and passed to the people. This is not a utopian demand. It is not asserting what could or should exist, it is about recognising and re-orienting what does exist. The power of public money has been made clear through its use to rescue the banks, let it now be used to provision the people.’
Who Controls our Money? The case for public money and against austerity
Mary Mellor introduces the concepts in her new book Debt or Democracy: Public Money for Sustainability and Social Justice, which is published this month.
‘Debt or Democracy was written to address the current debate about austerity and fiscal Debt of Democracy‘responsibility’. It argues for the necessity of deficit and a thriving public economy, and in doing so, explodes the myths about money that underpin neoliberal ideology. Central to the book is a rejection of the concept of ‘handbag economics’, in other words, that the public sector is analogous to a household, dependent upon external wealth from the private sector. The book challenges handbag economics’ view of money as essentially limited, with all public expenditure presented as either a burden on, or a threat to, private investment and expenditure. Finally, it rejects the idea that the supply of money to the public sector can only originate with the taxpayer or private ‘money markets’.
The book deconstructs mainstream economic presumptions by uncovering neoliberal myths of money as well as mistaken ideas about the origins of money and banking. For example, money did not originate in trade – in fact rulers and public monetary authorities were far more instrumental in the process than conventional economics suggests. Equally, the ‘Janus face’ of central banks obscures this fact by combining the public function of money creation with the commercial role of banker to the banks. The history of public money and central banking reveals two circuits of money in modern economies, one commercial, the other public. Indeed, it is the establishment’s failure to recognise the essential role of the public circuit and the crisis-prone nature of the commercial circuit which lies behind the recent financial crisis.
The privatisation of the public money supply is irrevocably linked to the supply of the public currency and to the supply of bank debt. The current crisis will only be resolved by massive injections of newly-created public money, and, while this was created by central banks out of thin air via ‘quantitative easing’, handbag ideology demanded it only be made available to the banking sector. This public largesse should have been put in the hands of the people to enable public benefit through public infrastructure and services with taxation used to retrieve potentially inflationary money from circulation should the need arise. Debt or Democracy presents a choice between an economy based on debt-free public money, created and circulated for democratically determined social benefit, and the current privatised, crisis-ridden debt-based money supply.
The Unsustainability of Money as Debt
Debt or Democracy rejects the assumption underlying handbag economics of a fixed pool of money contained within a commercial circuit of money which is continually borrowed and repaid. This assumption ignores two important factors: firstly, the ability of banks to create new money, and secondly the need to repay the debt with interest. In reality, money is created as banks make loans which are removed from the circuit as the loan is repaid. Boom and bust occurs when rapid growth in money supply dramatically expands the circuit with equally rapid contraction when credit crunches and crises inevitably emerge. This is when the public money supply comes to the rescue. Therefore, the commercial circuit of money is unsustainable socially, ecologically and economically. Socially, it creates inequality and perverse forms of expenditure. Ecologically it can drive unsustainable growth in the search for profit. Economically it faces the contradiction that the origin of money in loans with interest means that more must be paid back than is lent.
Debt-free Public Money
Despite the claims of neoliberal ideology, Debt or Democracy maintains that a public circuit of money does exist. Public money, as debt-free public currency, can emerge in two ways. Firstly, it is produced ex nihilo by the central bank to provide cash and support for the banking sector. Secondly, money is created and circulated as governments spend in the same way as banks create money as they lend. State expenditure is a continual circuit of spending and taxing in the same way as the commercial circuit creates new loans which are then repaid. The circuit always ends with the money creator, whether bank or state, and only they can re-start the cycle.
Interestingly, how the public circuit of money is viewed depends upon where the circuit is observed. If the starting point is taken as tax this is seen as funding public expenditure. If, however, the expenditure is viewed first, tax can be seen as retrieving that expenditure. Deficits or surpluses only become evident when the two sides of the circuit are accounted, therefore how any deficit is treated then becomes a political decision. Debt or Democracy maintains that both deficit and debt are products of political ideology and historical circumstance. Through a historical survey of the emergence of modern money, and particularly the role of central banks, the origin and ideological nature of sovereign debt and deficit is exposed.
The Democratisation of Money
The democratic potential of money has been largely ignored. Commentators from the left and right have instead focussed on the ‘real economy’ which is generally taken to be the capitalist productive sector. Money is seen as a secondary aspect, whereas it should be seen as an active politically constructed agent. The creation and circulation of money as a public resource can give people access to goods and services in a democratised public economy. A public supply of currency would prioritise socially necessary expenditure, with the commercial sector playing a secondary role based on real investment.
Recognition of the public nature of money reveals that its functioning and operation cannot be treated as a privatised commercial artefact or a technical matter. It is fundamentally a democratic issue. There needs to be a public debate about how money creation should be organised. Debt or Democracy sets out a democratic process for a publicly administered public money supply that would avoid centralisation and maximise participation. The creation of both public and commercial money needs to be transparent and accountable.
Debt-free Public Money for Sufficiency Provisioning
What would be the outcome of a reorganised economy? Democratically administered public money could achieve ‘sufficiency provisioning’ – where we would be ecologically sustainable and egalitarian as sufficiency means no-one has too little or too much. Provisioning embraces what is currently unpaid work. The search for profit and labour through employment would not be the main access to provisioning. Money would not just represent work done, but would be an entitlement to livelihood. Security of needs-led provisioning could allow people to adopt less employment-intensive and consumer-intensive life-styles. This does not mean there would be no paid work, but people would be mainly engaged on democratically determined priorities.
As the primary source of debt-free public currency, Debt or Democracy sees public provisioning as the main creator of wealth in the community, providing work, goods and services as the means of well-being. The private sector would rely on the secondary circulation of publicly created money into a (socially and environmentally regulated) market. Sufficiency provisioning would also require a different way to reflect and measure provisioning activities. It requires that Gross Domestic Product would be replaced by Gross Domestic Provisioning as a measure of overall well-being.
There remains the critical political question of who controls the creation and circulation of the public currency. All money is socially and publicly constructed – there is nothing ‘natural’ about money. All modern currencies consist of ‘fiat money’, which is created out of nothing and sustained by social trust and public authority. Debt or Democracy argues that modern money is an amalgam of public and private monetary structures under which the public power to create money has been privatised. Put in Marxist terms, the monetary power once monopolised by rulers has passed to the capitalist sector. That power needs to be reclaimed and passed to the people. This is not a utopian demand. It is not asserting what could or should exist, it is about recognising and re-orienting what does exist. The power of public money has been made clear through its use to rescue the banks, let it now be used to provision the people.’
————————————–
Mary Mellor is Emeritus Professor at Northumbria University, where she was founding Chair of the University’s Sustainable Cities Research Institute. She has published extensively on alternative economics integrating socialist, feminist and green perspectives. Her books include The Future of Money: From Financial Crisis to Public Resource (Pluto, 2010).
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Debt or Democracy: Public Money for Sustainability and Social Justice is available to buy from Pluto Press here.