Festival of Ideas for Change.

Two talks given at the Festival of ideas for Change:



There’s a lot of confusion about democracy right now. Since Brexit and the election of Donald Trump, many people are saying that democracy is a bad idea. But I would say that’s a bad joke, because we don’t actually have real democracy anyway!

Democracy means ‘the people rule’. Voting once every few years between well-funded, power-hungry political parties: is that the best we can do?

I think not!

If we choose people to rule for us, we are not doing the ruling ourselves – just as if we hire someone to do our plumbing, we are not doing the plumbing ourselves. It’s as simple as that. For over a hundred years now, we have been taught to think that elections are the whole of democracy, but it’s a lie. Elections never are, and never will be, the whole of democracy. But they could operate in a more democratic way, and as part of a far more democratic system, as I will show.

The reason why it’s important to have some real democracy is this: unless the whole community has a say in making the laws, one group of people – the group with power – will make laws to give themselves an advantage. That’s what’s been happening over many years now. That’s how sixty-two individuals have come to own more than the poorer half of the world’s population; that’s how the health of the world has been put in peril.

Real democracy has existed in the past, and traces of it still exist today. I’m going to outline a few practices which are truly democratic, and which could be more strongly incorporated into our way of doing things.

First, when local assemblies have real powers, communities come alive. People takes an interest. The local assembly here in Brockley is alive and well to the extent that it has a little money to distribute. This money makes a difference: it funds people to do things that make Brockley a better place.

Second, political juries. Truly democratic constitutions use juries not just in courtrooms, but also to decide on political matters. In courtrooms, juries consist of twelve people, selected by lot from the general population. Over many centuries, juries have proved that ordinary people can make good decisions even on difficult and technical subjects – when they have time to consider the facts.

A political jury can consist of any number of people. For an important decision – like ‘should we go to war?’ or ‘should we spend billions on new nuclear submarines?’ it might consist of as many as a thousand people. Just like a jury in a courtroom, a political jury listens to evidence from people who know about the problem in hand from all points of view. It considers what it’s heard, then it makes a decision.

Third, a better and more democratic way of choosing people to represent us is for local assemblies to choose people they actually know to represent them at higher assemblies. This means that good and conscientious individuals get chosen, rather than faithful servants of a political party. The practice could carry on up through various levels, to the highest assembly in the land.

These practices – local assemblies with true power, and political juries – would involve more people in politics. Citizens generally would become more motivated, interested, aware. This means that the fourth democratic institution I’m going to recommend – the Referendum, which has come in for so much abuse recently – would be something we vote in from a position of experience, rather than bemused and befuddled ignorance. We would no longer feel like small children being shouted at by grown-ups.

In Switzerland, referendums are triggered by public demand, when 100,000 signatures have been collected. The proposals are written by ordinary citizens. The result is binding on the political administration. In a normal year between six and ten referendums are held on a variety of different subjects. In these circumstances, a referendum is a very different beast to the kind we are used to, which are written and ordered by those in power, to suit their own (often manipulative) devices.

Another thing that is important to genuine democracy is ‘the scrutiny’. Anyone involved in public life must have their finances open to scrutiny. The public purse is the biggest in any nation, and robbing it has become a national pastime in many so-called democratic countries.

The most important thing we could introduce right away to make our Western countries more democratic would be a review of existing laws, by the kind of political juries I mentioned earlier.

For three hundred years in England, laws have been made to favour rich people, big corporations, and government power. Do voters keep an eye on the details of new laws? No – and they are taken to the cleaners as a result.

How many people know, for instance, that we have laws which allow banks to actually create money?

How many people know that our laws concerning commercial corporations oblige workers to work for as little pay as possible, and often against their own consciences, for the profit of shareholders?

A legal system that robs workers on behalf of those who exploit them will eventually produce crisis. A different kind of politician suddenly appears – a Putin, a Donald Trump – who promises to make everything good, but will actually behave like a demon from hell. It’s the classic modern tale: humiliate and rob people enough, and they will vote for monsters.

Today, we have bureaucracies running the place. We have police and judicial systems enforcing the law. We have diplomatic services smoothing international relations. So long as these people are competent and not corrupt they run things pretty well. So, we might ask: What exactly are politicians for?

Politicians are responsible for making laws and for taking decisions that set the general direction of society. Sadly, the general direction of the world today is towards ecological catastrophe, proliferation of horrendous weapons, war between nuclear powers, mass migration away from man-made desperation. Are our politicians doing a good job? Could we – the people – force them to do better?

Luckily a lot of people around the world are working to introduce democratic ideas into public debate and practice. At last people might wake up to the fact that choosing between pre-existing powers once every four or five years is about as far from being democratic as a constitution can get. Let’s have more discussion, and some true democratic reform, before it’s too late.




Everyone here is probably aware of a statistic similar to this one, published by Oxfam: ‘The world’s eight richest individuals own as much wealth as the poorest half of the world’s population.’ That is, eight individual people own as much as three-and-a-half thousand million people!

How did we come to this strange, and wrong, state of things? After all, isn’t money something we get by doing something for someone else?

Well, the answer to that today is very simple: ‘No!’ Money today is conjured out of nothing, by banks, for people who want to make a profit. So it’s hardly surprising that eight people have managed to grab so much wealth!

How money is created today is no secret. You can read what I’m about to say, in slightly more complicated language, on almost any central bank website. But the story is unfamiliar.

We all know what money is. It’s something you can swap for other things which are up for sale. We also know it’s a form of property: my money is mine, yours is yours. We also know that today, money is notes, coins, and numbers in bank accounts. But what makes them different from other bits of paper, metal and numbers? The answer is pretty obvious: the law. Try turning up at a police station and saying someone stole your Monopoly money!

Well, about 300 years ago, our English Parliament, consisting of rich men voted in by other rich men, changed the laws around money. They passed some laws which kick-started a new way of creating money. These laws were corrupt, because they were designed to favour the rich and powerful at the expense of working people. The system which those men created slowly evolved into the method used today, by governments and banks across the world.

The method is a magic trick: it’s baffling until you get it.  This is what a bank does when it creates money. It creates two debts out of nothing, one from itself to a customer, the other from a customer to itself. The trick is, one of the debts is fake. The debt from the customer to the bank is real enough – as I’m sure some of you know. But the debt from the bank is a fake. The bank doesn’t pay any interest. In fact, it charges interest on its own debt! Nor does it pay out anything – except its own debt: because the corrupt laws I mentioned earlier declare that a bank’s debt is money.

That’s right. All the money we use, even cash, is debt from a bank: what bankers to call ‘liabilities’ or ‘promises to pay’. Take a note, like this one. (hold up a note) This is a twenty-pound note. It says, ‘I promise to pay the bearer on demand the sum of twenty pounds.’ Oh, really? What you gonna pay me, banker? It’s fake debt, as Donald Trump might say (– if only he would!) This note pays nothing but itself because this note is money!

So why do rich and powerful individuals and organizations, including the government, like this way of creating money?

First, because citizens pay interest to banks and governments on every penny in existence.

Second, because money can be conjured out of nowhere in huge amounts – and like a hire car, it is parked again once profits have been taken.

Third, because the same laws allowing banks to create money, allow governments to borrow recklessly at the expense of their citizens. Today, massive national debts drain money from those who work to those who accumulate. They also provide governments with free spending money. And they began with exactly those same laws which allow banks to create money.

‘An amazing confidence trick,’ you might say. Yes – surely the greatest ever played! But that is only the beginning of what’s bad about creating money in this way.

When money is conjured out of nothing for pure profit, it’s easy for a lot of bad things to happen. Corrupt payments? Easy! Each Russian kleptocrat owns his own bank – need I say more?

Buying up the assets of smaller, weaker countries to exploit them? Easy! The more powerful you are, the more money you can conjure up because your debts are trusted – your money is trusted.

Going to war? Easy! Governments don’t have to say, ‘we’re going to raise taxes to attack so-and-so’; they just say to a bank: ‘create some money for us: we’ll make sure the taxpayers pay you back!’

New weapons systems, profiting governments and their friends? Easy, for the same reason.

Other bad outcomes are just as obvious. Inequality, debt. Then there’s house prices. Banks create money for profit-taking, so speculative borrowers pump money into property, taking profits as prices go up. Result: ordinary people find it harder and harder to afford a home.

Financial crises began the very moment banks started creating money. Wild speculation took hold. A Dutchman living in England said, ‘It was as if all the lunatics had escaped from the madhouse at once.’ The first two bubbles, the South Sea and Mississippi bubbles, burst in 1720. They haven’t stopped bulging and popping ever since.

But possibly the worst of all the outcomes is who bank-money gives power to: to people who want money and power above everything. Money goes to greedy and careless people and the corporations they remotely own. Ownership of our world is rapidly being swallowed up by people intent on making a quick profit. Are we happy to have the world dominated by these kinds of people? Isn’t that why our world is in such trouble?

Is there an easy way to reform the situation? Yes. The corrupt laws I mentioned said something very simple: that debt could pass from person to person as a form of property. Before these laws were passed, debt was something private, contracted between two people. Courts would help lenders get their money back, but debt could not be sold on to someone else. Reform means simple revolution: turning back the clock to a time when justice was more important than rapacity and greed.

Money would then be exactly the same as it is now, with just this simple difference in law: instead of being fake debt, it would be simple property. It wouldn’t be created and destroyed in huge amounts. It would simply exist, as something we get and spend. It would do what it’s supposed to do: make it easy to exchange goods.

And then, the greatest criminal enterprise ever invented would come to an end.

The crimes committed under this system make all previous crimes of history seem puny. Billions in poverty and debt, millions on the move, their lands possessed and exploited by fictitious money; so many lives ground down by debt, wars and the degradation of our planet; all these are like balloons inflated by the way we create money. And when these balloons burst, where will we be?