When I ask myself why the world is the way it is, I notice:
- Dr. Yunus points out that
- our institutions have failed us – and will continue to do so unless individuals and / or procedural changes take place
- companies can make a difference – if their commitment to social values is expressed by re-allocating dividends
- individuals can make a difference wherever they are
- women can be trusted to spend money more wisely than men.
- Who controls the controllers? Profit motivation becomes ‘exercising control’ when you look at central banks and financial institutions as the ones who create ‘credit’ as a ‘wealth creating vehicle’. It becomes ‘financial security assurance’ for politicians who are only ‘making a living’ But they have gradually given their power away to create ‘cash’ as a ‘means of payment’ or ‘medium of exchange’. In my reports Sovereignty & Seignorage and Green Credit for Green Purposes you can see how the state’s budget keeps going down, the credit share of the money supply keeps going up and the cash share keeps going down.
- Conclusion: In the UK, Westminster has sold the Nation to the City. In Europe, Governments have handed control over to the European Central Bank. Frankfurt is far away from all Governments. When Monsieur Trichet, the then Governor of the European Central Bank was asked in the House of Lords: what about accountability? his answer was: we invite the finance ministers twice a year, but they tend not to come.
- Controlling development: An economics professor once said to me on the phone that we’re up against a cartel of central banks. Notice how Africa and India were split into ‘nation states’ that all require central banks who control the money supply.
- The mechanism of creating money needs to be monitored and I’m suggesting the Cash : Credit ratio. In the UK, it has gone down from some 30% to less than 3% over the last 30 years or so.
- Public institutions: money, created by banks as credit, has become more and more a ‘financial product’ than a means of exchange to facilitate trade. Money is also used to pay the staff of public institutions. Once their job and pension are guaranteed, the question is whether they have budgets that they can administer to make happen what their label says. In my experience of trying to get funding for my software innovations, the civil servants of public institutions don’t have the ‘power’ of budgets, have an attitude of “can’t” and a consciousness of poverty.
- Social entrepreneurs have an attitude of “will do” and a consciousness of abundance.
- Financial institutions: Since 1996 the Bank of England publishes figures that distinguish between ‘wholesale lending’ and ‘retail lending’. In the Treasury Select Committee it is known that wholesale lending has gone up ‘substantially’ but who measures how much is ‘sustainable’?
- In the light of Northern Rock: who distinguishes between ‘public money’ and ‘taxpayers money’ and publishes statistics?
- Social business in Dr. Yunus’ definition is crucial as it reduces the ‘control by money power’ of investors. In my attempts to seek funding I find the gap between ‘government grants’ and ‘vulture capital’ unbridgeable. I was told by a German banker that before the war German businesses were not run a la equity and shares but workers shared in the profits of the company. Now profit making companies move out of Germany into ‘cheaper’ countries.
- There is a difference between the profit motives of investors and the profit motives of company directors and managers.
- The Sustainable Investment Network is meant to make a difference by integrating people at different levels: initially, investors and traders as software testers. Later, directors / managers AND clients as distributors of profits generated.
I am a fan of Dr. Yunus for he has put into sensible practice what economists teach non-sensibly and bankers practice irresponsibly: control through credit.