The main characters in the book Enough money, but not for you His academics and activists who, after a thorough study, realize how our financial system works. Often they have had a breakthrough moment, for example during the euro crisis between 2008 and 2012. From that moment on, they tried to change something about that system. They wrote down studies and opinion pieces, founded foundations. They spoke in parliaments, talk show tables and with bankers. They thought: if more people understand where money comes from and how it is divided, more people will naturally want to take our system thoroughly.
Because a large part of the money goes to a very small part of the people. And that ratio is constantly becoming skewed. Banks do get the profits, but barely wear the corresponding entrepreneurial risks: as soon as panic arises because a bank threatens to fall, the government jumps with tax money.
A lot has been said and written about this in the last ten years. But nothing changed. A number of people who followed the financial economist and journalist Thomas Bollen for his book, eventually even returned frustrated from the system and thoroughly distrusted bankers and politicians.
Their most important insight, which is also central to the book, is that commercial banks nowadays create almost all of our money. The Central Bank only prints the coins and the banknotes (the Chartal Money) and has a very limited influence on all the Girale, digital money. Not on how much there is and certainly not who can have it. While that is about 90 percent of what goes around and therefore has a lot of influence on our society. It makes quite a difference or a large part of our money goes to capital or to lower incomes, to fossil industry or to sustainability. The power to create money is thus the power to shape society.
Commercial banks essentially create money by adding some numbers to their balance. They make ‘bank credit’, private money. On the one hand, for example, the bank adds 500,000 euros to the account of a customer, who needs it to buy a house. And on the other hand, a claim on that account holder is noted of 500,000 euros. And then the amount of money in circulation has increased by half a million.
Many people live under the assumption that the function of creating money is in public hands. But that is outdated and becomes further and further outdated, explains bulbs. Because the money creation is becoming increasingly privatized. And although it is often talked about as if that was the natural order of things, that is the result of human action and political choices.
It can also be different
Bollen thinks – just like the academics and activists he spoke – it is necessary to point it out and to argue that things can also be done differently. By creating a system in which the central bank has a much greater role in the money creation, including the issue of digital money. The subtitle of the book is: “How do we reconsider the power over our money.” That power deserves more attention and democratic control, find the main characters in Bollens’ book, and he himself.
That process starts with knowledge. Because there is a good chance that you too, reader, will read the above explanation about money creation, but not believe. And then you are not the only one. Because our money system is extremely complex and not always logical. Moreover, it is full of concealing jargon. Even bankers do not all know how it works and what their own share is in that dynamic, this book shows. That makes it almost impossible to have a healthy democratic debate about it.
So bulb explains a lot, that is no different. But he does it in a tidy tone, with as much color and atmosphere as possible, with repetition and many examples that make the complex matter accessible where necessary. He has been trained as a financial economist and has been publishing money for years. Just like the people he quotes in the book, he has been trying to hunt the conversation about our money system in all sorts of ways. He has done this in recent years with cartographer and visual artist Carlijn Kingma. They made a detailed visualization of the money system, which was shown in museums and at festivals and with which they were toured in almost all Dutch protagonists in the financial world.
The most important observations in the book are not new. After the crisis in the eurozone, there was even a kind of democratic revival on the theme of money. The analysis that the profits were private, while the costs and risks through the treasury are for all of us, sounded broad.
The debates that were then conducted, the papers written and the initiatives that were taken are the beginning of the book and also the common thread in it. In the Netherlands there was the our money foundation and people went en masse to the presentation of the seductors about our money system. In the United Kingdom, the Positive Money Foundation is working on the road.
The critical activists and academics who speak bulbs were often even right, but only when the momentum was already lost. Or if there was no time and attention for reflection and reform, because there was a new crisis and all bankers and politicians were of the opinion that it should be prevented that the existing financial order was to falter. During the Coronapandemie, the sentiment of anti-banks also shifted to anti-government.
More topical than ever
The observations of that time have therefore remained current and bulbs talks about it without becoming cynical or dramatic, although he gives little room to people who do not agree with him. You could even say: the analysis is more topical than ever. Because while the banking world barely reforms and renews, the world therefore changes rapidly. More and more forms of money are being added. Crypto coins and the variant that is called Stablecoin. Tech companies have devoted themselves to that market with surrender. In America, the president himself participates. Europe sees it happen and is shifting about digital central bank money and weakens the plans.
Bollen has no ‘ten -point plan’ for what the reader can do himself. While he has been working on the book for the past nine years, he learned that only in times of crisis will slide. Then we have to wait for the next, he concludes. He ends with the prediction that this waiting will not last long. “Now that tech billionaires and crypto companies are entering the monetary playing field, governments and central banks seem to be awake by their hibernation.”
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